Opinion
21367/06.
Decided June 28, 2010.
Plaintiff-Stout, Julia Porper, Esq., Fortunato Fortunato PLLC, Brooklyn NY.
Plaintiff in DJ, Scott E. Miller, Esq., Miller Associates, NY NY.
Defendat-Zurich, Rippi Gill, Esq, Melito Adolfsen, PC, NY NY.
Defendant-Interstate, Michael A Kotula, Esq., Rivkin Radler LLP, Uniondale NY.
Defendant-A-H, Douglas R Rosenzweig, Esq., French Casey, LLP, NY NY.
Defendant-Evergreene, Susan J Stromberg, Milber Makris Plousadis Seiden LLP, Woodbury NY.
The instant motion and cross-motions addressed in this decision and order are with respect to Index No. 603343/07, a New York County Supreme Court insurance declaratory judgment action, consolidated into an underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06). Plaintiffs, in Index No. 603343/07, TISHMAN CONSTRUCTION CORPORATION (TISHMAN CONSTRUCTION) and TISHMAN INTERIORS CORPORATION (TISHMAN INTERIORS) move, pursuant to CPLR Rule 3212, for summary judgment declaring that: (1) defendant INTERSTATE FIRE AND CASUALTY COMPANY (INTERSTATE) has a duty to defend and indemnify TISHMAN CONSTRUCTION and TISHMAN INTERIORS in the underlying Stout action; (2) defendant ZURICH AMERICAN INSURANCE COMPANY (ZURICH) has a duty to defend and indemnify TISHMAN CONSTRUCTION and TISHMAN INTERIORS in the underlying Stout action; and (3), INTERSTATE and/or ZURICH are obligated to reimburse TISHMAN CONSTRUCTION and TISHMAN INTERIORS for all attorney's fees expended in their Stout action defense.
ZURICH cross-moves, pursuant to CPLR Rule 3212, for summary judgment declaring that: (1) ZURICH has no obligation to defend or indemnify the TISHMAN plaintiffs in the Stout action, because the TISHMAN plaintiffs failed to comply with conditions of the policy of insurance issued by ZURICH requiring timely notice of the occurrence, claim and suit; (2) ZURICH timely issued its late notice of disclaimer to the TISHMAN plaintiffs and therefore, the TISHMAN plaintiffs are not entitled to defense and/or indemnification by ZURICH in the Stout action; (3) ZURICH is not obligated to reimburse the TISHMAN plaintiffs for their defense costs allegedly incurred in the Stout action; and (4), the policy issued to third-party defendant EVERGREENE PAINTING STUDIOS, INC. (EVERGREENE) by INTERSTATE provides primary and non-contributory coverage to the TISHMAN plaintiffs without contribution from ZURICH.
INTERSTATE cross-moves, pursuant to CPLR Rule 3212, for summary judgment, dismissing all claims against it and declaring that: (1) the TISHMAN plaintiffs do not qualify as "additional insureds" under the INTERSTATE insurance policy; and (2), even if the TISHMAN plaintiffs qualify as "additional insureds," the INTERSTATE policy would apply as excess over any other insurance, including the ZURICH policy, and that the INTERSTATE policy would share with a policy issued by AMERICAN INTERNATIONAL GROUP (the AIG policy) to the TISHMAN plaintiffs for amounts in excess of the ZURICH policy
Facts and Procedural History
The instant declaratory judgment action arises from the underlying Stout personal injury action. William Stout, an employee of subcontractor EVERGREENE, alleges that he sustained personal injuries on April 6, 2005 when he fell from a scaffold while performing construction work at 1 East 66th Street, New York. This is part of the premises owned by Stout action defendant CONGREGATION EMANU-EL.
Prior to the April 6, 2005-accident, CONGREGATION EMANU-EL hired TISHMAN INTERIORS as construction manager for a restoration project at its premises. TISHMAN INTERIORS was a named insured under a primary commercial general liability (CGL) policy issued by AIG. The AIG policy period was from January 1, 2005 to January 1, 2006, with a liability limit of one million dollars per occurrence.
Subsequently, TISHMAN INTERIORS subcontracted with ATLANTIC-HEYDT CORPORATION (A-H) on or about October 19, 2004, for A-H to design and erect scaffolding at the premises for the renovation project. The Insurance Rider in the A-H scaffolding contract required A-H to purchase CGL insurance and name, in § B (7), among others, " Tishman Interiors Corporation and their respective parent companies, corporations and/or partnerships . . . as Additional Insureds." In addition, the Insurance Rider provided, in § B (8), that "[c]overage is to be endorsed to reflect that the insurance provided is to be primary for the Contractor, Owner, Construction Manager and all other indemnitees named in the Contract." Further, in ¶ 11 of the contract, A-H agreed to indemnify TISHMAN INTERIORS for any and all claims "arising out of or resulting from the performance of the work, or the contractor's [A-H's] operations."
Then, on or about January 18, 2005, TISHMAN INTERIORS subcontracted with EVERGREENE, Mr. Stout's employer, for EVERGREENE to perform stone and ornamental plaster restoration work in the interior of the synagogue. Similar to the contract between TISHMAN INTERIORS and A-H, the Insurance Rider to this contract, in § B (7), required EVERGREENE to purchase primary CGL liability insurance and to name, among others, " Tishman Interiors Corporation and their respective parent companies, corporations and/or partnerships . . . as Additional Insureds." In addition, the Insurance Rider provided, in § B (8), that "[c]overage is to be endorsed to reflect that the insurance provided is to be primary for the Contractor, Owner, Construction Manager and other indemnitees named in the Contract." Also, in ¶ 11 of the contract, EVERGREENE agreed to indemnified TISHMAN INTERIORS for any and all claims "arising out of or resulting from the performance of the work, or the contractor's [EVERGREENE'S] operations."
The boilerplate indemnification clause, in ¶ 11 of the contracts that the TISHMAN INTERIORS had with A-H and EVERGREENE, is the same. It states:
To the fullest extent permitted by law, the contractor shall indemnify and hold harmless the Owner, Construction Manager [TISHMAN INTERIORS], Indemnitees, Architect-Engineer and their respective parent companies, corporations and/or partnerships and their owned, controlled, associated, affiliated and subsidiary companies, corporations and/or partnerships, and the respective agents, consultants, principals, partners, servants, officers, stockholders, directors and employees thereof, from and against all claims or causes of action, damages, losses and expenses, including but not limited to attorneys' fees and legal costs and expenses arising out of or resulting from the performance of the work, or the contractor's operations . . .
Thereafter, ZURICH issued a CGL policy to A-H for October 1, 2004 through October 1, 2005, with a limit of two million dollars per occurrence. Pursuant to the "Commercial General Liability Coverage Form," Section I, Coverages, "Coverage A Bodily Injury and Property Damage Liability," the "Insuring Agreement" of the ZURICH policy provides, in pertinent part, that:
b. This Insurance applies to "bodily injury" and "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory";
(2) The "bodily injury" or "property damage" occurs during the policy period; and;
(3) Prior to the policy period, no insured listed under Paragraph 1. of Section II — Who is An Insured and any "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period.
Further, the ZURICH policy contains the standard provisions concerning an insured's duties to provide timely notice of an occurrence, offense, claim or suit. Specifically, Section IV of the "Commercial General Liability Coverage Form," entitled "Commercial General Liability Conditions," provides, in pertinent part:
2. Duties in the Event of Occurrence, Offense, Claim or Suit
a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place;
(2) The names and addresses of any injured persons and witnesses; and
(3) The nature and location of any injury or damage arising out of the "occurrence" or offense.
b. If a claim is made or "suit" is brought against any insured, you must:
(1) immediately record the specifics of the claims or "suit" and the date received;
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or "suit" as soon as practicable.
The ZURICH policy also contains an additional insured endorsement, modifying the CGL coverage, providing that this endorsement provides additional insured coverage to "ANY PERSON OR ORGANIZATION WITH WHOM YOU [A-H] HAVE AGREED, THROUGH WRITTEN CONTRACT, AGREEMENT OR PERMIT, EXECUTED PRIOR TO THE LOSS, TO PROVIDE ADDITIONAL INSURED COVERAGE." Moreover, this endorsement provides:
A. Section II — Who is An Insured is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your [A-H's] operations performed for that insured [TISHMAN INTERIORS].
B. With respect to the insurance afforded to these additional insureds, the following exclusion is added:
2. Exclusions
This insurance does not apply to "bodily injury" or "property damage" occurring after:
(1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) to be performed by or on behalf of the additional insured(s) at the site of the covered operations has been completed; or
(2) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.
Subsequently, INTERSTATE issued a CGL policy to EVERGREENE for August 1, 2004 through August 1, 2005, with a limit of one million dollars per occurrence. Pursuant to the "Commercial General Liability Coverage Form," Section I, Coverages, "Coverage A Bodily Injury and Property Damage Liability," the "Insuring Agreement" of the INTERSTATE policy provides, in pertinent part, that:
b. This insurance applies to "bodily injury" and "property damage" only if:
(1)The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; and
(2) The "bodily injury" or "property damage" occurs during the policy period.
The INTERSTATE policy contains an additional insured endorsement, stating that "THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY," and In consideration of the premium charged:
The following provision is added to Section II, PERSONS INSURED, of the Comprehensive General Liability Coverage Part:
(f) any entity the Name Insured [EVERGREENE] is required in a written contract to name as an insured (hereinafter called Additional Insured) is an insured but only with respect to liability arising out of work performed by or on behalf of the Named Insured for the Additional Insured . [ Emphasis added ]. The insurance afforded by this provision shall be excessover any other insurance . [ Emphasis added ]
The INTERSTATE policy also contains the following "other insurance" clause in Section IV of the "Commercial General Liability Coverage Form":
4. Other Insurance
If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:
a. Primary Insurance
This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below.
b. Excess Insurance
This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis:
(1) That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work";
(2) That is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner . . .
When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit." If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of:
(1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and
(2) The total of all deductible and self-insured amounts under all that other insurance. We will share the remaining loss, if any, with other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part.
The original ¶ 4. c. for "Method of Sharing" in the "Commercial General Liability Form Coverage Form," was "deleted in its entirety and replaced by the following [CONDITION 4, OTHER INSURANCE, AMENDED — NON CONTRIBUTORY]":
c. If all of the other insurance permits contribution by equal shares, we will follow this method unless the insured is required by contract to provide insurance that is primary and non-contributory, and the "insured contract" is executed prior to any loss. Where required by a contract, this insurance will be primary only when and to the extent as required by that contract. However, under the contributory approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first.
If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each Insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of all insurers.
As mentioned previously, Mr. Stout alleges that he sustained personal injuries after falling from a scaffold at the subject premises, on April 6, 2005. The TISHMAN plaintiffs contend that by letter, dated June 6, 2005, their primary carrier, AIG, tendered the TISHMANS' defense and indemnification to ZURICH. It is undisputed that ZURICH did not respond to this letter. Then, AIG sent another tender letter to ZURICH, dated August 21, 2006. By letter dated October 3, 2006, Ms. Patricia Manero, a ZURICH Claim Case Manager, acknowledged receipt of the August 21, 2006 tender and advised Mr. Jeffrey Lawrence, Claims Specialist III with Chartis Claims, Inc., (formerly AIG Domestic Claims, Inc.), that she could not locate any prior tender. Further, the letter states that "[a]lthough your letter refers to the contractual obligations of the Atlantic-Heydt Corp. the contract was not enclosed. Consequently, I am unable to respond to your tender. Please forward a copy of the complete contract and certificate of insurance. Upon receipt and review of the contract and certificate of insurance and my investigation, I will respond to your tender."
Subsequently, by letter dated October 27, 2006, Ms. Manero on behalf of ZURICH disclaimed coverage, stating that it had not received the August 21, 2006 tender until September 25, 2006. ZURICH's sole basis for disclaiming coverage was TISHMANS' failure to provide timely notice of the occurrence, claim and suit. For unknown reasons, the first page of the ZURICH disclaimer letter is dated October 27, 2006, and pages two through four are dated November 3, 2006. Further, the first page of the disclaimer letter annexed to plaintiffs' motion contains a "Received" stamp with the date "November 8, 2006."
Mr. Stout, on or about July 18, 2006, commenced the underlying personal injury action, Index No. 21367/06, alleging common law negligence and violation of Labor Law §§ 200, 240 (1) and 241 (6). Defendants SPRING SCAFFOLDING and OUTDOOR INSTALLATIONS, LLC were subsequently dismissed from the underlying action. Then, in November 2006, Mr. Stout filed a supplemental summons and complaint in the underlying action and, on or about October 20, 2006, the TISHMAN defendants interposed their answer to the supplemental summons and complaint.
The TISHMANS, on or about November 13, 2006, commenced their third-party action against EVERGREENE in the Stout action, seeking, among other things, contractual and common-law indemnification and contribution.
Then, on or about October 11, 2007, the TISHMAN plaintiffs commenced the instant declaratory judgment action in Supreme Court, New York County, against ZURICH, INTERSTATE, A-H and EVERGREENE, seeking additional insurance coverage for themselves in the Stout action, pursuant to the CGL policies issued by ZURICH to A-H and INTERSTATE to EVERGREENE.
ZURICH, on or about December 13, 2007, joined issue and served its answer to the amended complaint, raising various affirmative defenses, including late notice. Then, on or about December 14, 2007, INTERSTATE joined issue and served its answer to the amended complaint.
Subsequently, EVERGREENE moved to dismiss the TISHMAN plaintiffs' amended complaint and all cross claims insofar asserted against it, pursuant to CPLR Rule 3211(a) (4), claiming that there was another action pending in Kings County for the same relief — the TISHMAN third-party action. By order entered August 1, 2008, Supreme Court, New York County (Kapnick, J.)granted the motion "to the extent of consolidating [the New York County action] for joint discovery and ultimate disposition with the Stout action pending in Kings County." The Court further directed that "[u]pon service of a copy of this order with notice of entry, the Clerk of this Court shall transfer the papers on file in this action to the Clerk of the Supreme Court, Kings County to consolidate it with Index No. 21367/06."
The parties, after the completion of discovery, made the instant motion and cross-motions presently before the court.
Instant summary judgment motion and cross-motions
The TISHMAN plaintiffs, in the instant summary judgment motion, seek a declaration that INTERSTATE and ZURICH have a duty to defend and indemnify them in the underlying Stout action and reimburse them for attorney's fees they expended in the underlying Stout action. The TISHMAN plaintiffs make several arguments. First, plaintiffs contend that INTERSTATE failed to issue any disclaimer. Second, plaintiffs argue that ZURICH's disclaimer was untimely as a matter of law since 1577 days elapsed since their initial June 6, 2005. 1577 days is presumably the time period from June 6, 2005 until plaintiff's made the instant summary judgment motion on October 5, 2009. In their reply, the TISHMAN plaintiffs assert that the time period between the June 6, 2005 tender and the October 27, 2006-disclaimer is 498 days.
Further, the TISHMAN plaintiffs assert that even if ZURICH did not receive the June 6, 2005 tender, ZURICH did not respond to the August 21, 2006 tender until either October 27, 2006 or November 3, 2006 (depending on whether the first page of the disclaimer letter bearing the October 27th date or the second through fourth pages of the letter bearing the November 3rd date is used to determine the date of disclaimer), which constituted a delay of either 67 or 74 days. As noted previously, the first page of ZURICH's disclaimer letter is dated October 27, 2006, and pages two through four of the letter are dated November 3, 2006. Moreover, the first page of the disclaimer letter contains a "Received" stamp with the date "November 8, 2006."
The TISHMAN plaintiffs contend that even assuming that the August 21, 2006 tender was not received until September 25, 2009, Zurich's delay in disclaiming was either: 32 days if ZURICH's disclaimer letter is dated October 27, 2006; 39 days if ZURICH's disclaimer letter is dated November 3, 2006; or, 44 days if ZURICH'S disclaimer letter is dated October 27, 2006 and the Court finds that it was received by AIG on November 8, 2006 because of the received stamp date. Thus, plaintiffs argue that pursuant to any possible calculation, ZURICH failed to disclaim coverage within the 30 days that are generally considered reasonable as a matter of law when the only grounds for disclaiming is late notice.
Next, plaintiffs assert that they are entitled to a defense in the Stout action from both INTERSTATE and ZURICH because the allegations of the Stout complaint clearly suggest the "reasonable possibility of coverage." ( See Regal Const. Corp. v National Union Fire Ins. Co. of Pittsburgh, ___ NY3d ___, 2010 NY Slip Op 04661 [June 3, 2010]; Automobile Ins. Co. of Hartford v Cook , 7 NY3d 131 , 137; Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 68).
Last, the TISHMAN plaintiffs argue that they are entitled to additional insured coverage based upon the clear language of the additional insured endorsements in the INTERSTATE and ZURICH policies.
ZURICH, in opposition to this branch of plaintiffs' motion and in support of its cross-motion for an order declaring that it has no duty to defend and indemnify plaintiffs, argues that it never received plaintiffs' June 6, 2006 tender, asserting that there is no evidence that the alleged tender was ever mailed to it by AIG, because plaintiffs did not provide copies of the return receipt requested card. Moreover, ZURICH argues that the affidavit submitted by Jeffrey Lawrence, Claims Specialist III with Chartis Claims, Inc., (formerly AIG Domestic Claims, Inc.), does not demonstrate a presumption of proper mailing. ZURICH notes that Ms. Kristine DiLullo, its Manager of Claims Administration, states in her affidavit that the ZURICH claim file does not contain the earlier June 6, 2005 tender from plaintiffs or AIG.
ZURICH also argues that plaintiffs cannot prove that they mailed the August 21, 2006 tender on August 21, 2006 because plaintiffs did not: (1) provide the return receipt requested card for that tender, and (2), demonstrate that ZURICH received the August 21, 2006 tender prior to September 25, 2006. Thus, ZURICH maintains that since plaintiffs conceded on April 20, 2009, in response to ZURICH's interrogatories, that they were aware of the April 6, 2005 Stout accident when it happened, but did not notify ZURICH until the August 21, 2006-tender (which was received September 25, 2006), the delay of 17 months was not "practicable" pursuant to the ZURICH policy. Thus, ZURICH argues that the delay in notifying it of the occurrence vitiates coverage and relieves it of any obligation to defend and indemnify the TISHMAN plaintiffs in the Stout action. Also, in the alternative, ZURICH argues that its October 27, 2006-disclaimer, issued 32 days after it received plaintiffs' August 21, 2006 tender, was nevertheless timely under Insurance Law § 3420 (d) because it needed to "properly analyze and investigate the claim prior to issuing a disclaimer."
Finally, ZURICH asserts that the TISHMAN plaintiffs do not qualify as additional insureds under the ZURICH policy because the accident did not "arise out of" the work of A-H, its named insured.
INTERSTATE, in opposition to plaintiffs' motion and ZURICH's cross-motion, and in support of its own cross-motion, also argues that the TISHMAN plaintiffs do not qualify as additional insureds under the additional insured endorsement of the INTERSTATE policy, because the accident did not "arise out of" the work of EVERGREENE, its named insured.
Further, as to the timeliness of ZURICH'S disclaimer, INTERSTATE argues that ZURICH did not respond to plaintiffs' June 6, 2005 and August 21, 2006 tenders until November 3, 2006, which was nearly 17 months after the June 6, 2005 tender and 74 days after the August 21, 2006 tender. Thus, INTERSTATE asserts that ZURICH waived any late notice defense it may have, pursuant to Insurance Law § 3420 (d). INTERSTATE also maintains that ZURICH did not present any evidence to overcome the presumption of mailing and receipt of plaintiffs' tenders. Moreover, INTERSTATE argues that even if ZURICH did not receive either of plaintiffs' two tender letters until September 25, 2006, ZURICH did not disclaim until November 3, 2006, which is 39 days later and untimely as a matter of law, pursuant to Insurance Law § 3420 (d). In this regard, both INTERSTATE and the TISHMAN plaintiffs argue that ZURICH failed to demonstrate that it undertook a good faith investigation once it received plaintiffs' August 21, 2006 tender or that the additional information it requested in its October 3, 2006-letter related to a late notice defense.
Also, both INTERSTATE and plaintiffs contend that Mr. Lawrence's affidavit supports the presumption that the original tender was sent on June 6, 2005 and that the affidavit of Ms. DiLullo, ZURICH's claim manager, must be rejected because she has no personal knowledge of the facts. Finally, INTERSTATE argues that the TISHMAN plaintiffs qualify as additional insureds under the ZURICH Policy, and that the INTERSTATE policy is excess over any other insurance, including the ZURICH policy.
Untimeliness of Disclaimers
"The requirement that an insured notify its liability carrier of a potential claim as soon as practicable' operates as a condition precedent to coverage." ( White by White v City of New York, 81 NY2d 955, 957). "[I]t is settled law in New York that [a]bsent a valid excuse, a failure to satisfy the notice requirement vitiates the policy . . . and the insurer need not show prejudice before it can assert the defense of noncompliance.'" ( American Home Assur. Co. v International Ins. Co., 90 NY2d 433, 440, quoting Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d 436, 440).
With respect to an insurer's duty to timely disclaim coverage, "Insurance Law § 3420 (d) requires an insurer to provide a written disclaimer as soon as is reasonably possible." ( Sirius America Ins. Co. v Vigo Constr. Corp. , 48 AD3d 450 , 452 [2d Dept 2008], quoting Insurance Law § 3420[d]). In this regard, "[t]he reasonableness of any delay in providing such written disclaimer is measured from the time when the insurer has sufficient knowledge of facts entitling it to disclaim, or knows that it will disclaim coverage.'" ( Id. quoting First Fin. Ins. Co. v Jetco Contr. Corp. , 1 NY3d 64 , 66). "While Insurance Law § 3420 (d) speaks only of giving notice as soon as is reasonably possible,' investigation into issues affecting an insurer's decision whether to disclaim coverage obviously may excuse delay in notifying the policyholder of a disclaimer." ( First Fin. Ins. Co. at 69, quoting Insurance Law § 3420[ d]). "It is the responsibility of the insurer to explain its delay." ( Id. at 70). "When the explanation offered for the delay is an assertion that there was a need to investigate issues that will affect the decision on whether to disclaim, the burden is on the insurance company to establish that the delay was reasonably related to the completion of a necessary, thorough, and diligent investigation." ( Quincy Mut. Fire Ins. Co. v Uribe , 45 AD3d 661 , 662). "Moreover, an insurer's explanation is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of the delay." ( First Fin. Ins. Co. at 69).
Plaintiffs, in the instant action, make a prima facie showing that they tendered their notice to ZURICH by letter, dated June 6, 2005. To support this, plaintiffs submit the affidavit of Claims Specialist III Jeffrey Lawrence, who states that "[o]n June 6, 2005, after receiving notice of the accident, but before any suit was filed" he "tendered Tishman's defense to Zurich," and that he "placed the June 6th tender letter in an envelope . . . and sent the tender via Certified Mail/Return Receipt Requested, which is the ordinary custom and practice for tender letters sent by Chartis Claims, Inc." Mr. Lawrence also asserts that the certified mail receipt card was misplaced and that he has been unable to locate it.
"Generally, proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee.'" ( Dune Deck Owners Corp. v JJ P Assoc. Corp. , 71 AD3d 1075 , 1077 [2d Dept 2010], quoting New York Presbyt. Hosp. v Allstate Ins. Co. , 29 AD3d 547 , 547 [2d Dept 2006], quoting Matter of Rodriguez v Wing, 251 AD2d 335, 336 [2d Dept 1998]). "The presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed.'" ( Id. quoting Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). ( See also Commissioners of State Ins. Fund v Munkacs Car Serv. Ltd. , 11 Misc 3d 802 , 809 (Civ Ct, Kings County 2006]).
ZURICH argues that Mr. Lawrence's affidavit fails to create a presumption that the June 6, 2005 tender was mailed because Mr. Lawrence stated only that he "sent" the tender and he does not explains Chartis' standard office practices. However, Mr. Lawrence states that the return receipt requested card had been misplaced and he placed the June 6th tender letter in an envelope himself and sent the tender via certified mail, return receipt requested. This is the ordinary custom and practice for tender letters sent by Chartis Claims, Inc. Sending a letter certified mail, return receipt requested creates a a presumption of proper mailing. In Dune Deck Owners Corp., at 1077, plaintiff established proof of actual mailing through testimony of its vice-president, who personally addressed and mailed the required notices to the defendants via certified mail, return receipt requested. Nevertheless, Ms. DiLullo, the ZURICH Manager of Claims Administration, avers in her affidavit that the ZURICH claim file did not contain the tender and plaintiffs may not rely on the June 6, 2005 tender to measure the timeliness of ZURICH's disclaimer.
With respect to the August 21, 2006 tender, it is undisputed that ZURICH received the tender on September 25, 2006. ZURICH properly argues that the TISHMAN plaintiffs fail to demonstrate by admissible evidence that the tender was sent on that date. Ms. DiLullo attests in her affidavit that ZURICH received the tender on September 25, 2006. As to the disclaimer date, the ZURICH disclaimer letter is dated October 27, 2006. Thus, according to ZURICH, it disclaimed 32 days after it received the second tender. INTERSTATE and the TISHMAN plaintiffs contend that ZURICH's disclaimer took place either 32, 39 or 44 days after it received plaintiffs' second tender. Thus, under any possible calculation, ZURICH's disclaimer is untimely.
"[M]ost often the question whether a notice of disclaimer has been sent as soon as is reasonably possible' will be a question of fact, dependent on all of the circumstances of a case that make it reasonable, or unreasonable, for an insurer to investigate coverage." ( First Fin. Ins. Co. at 70, quoting Insurance Law § 3420 [d]). In the instant action, ZURICH had sufficient information concerning its late notice defense when it received the second tender on September 25, 2006, since the tender attached the initial pleadings in the Stout action, which identified the date of the accident and alleged that plaintiffs negligently caused the accident. Therefore, ZURICH's delay in its disclaimer, even if 32 days, is unreasonable as a matter of law. The Court, in West 16th Street Tenants Corp. v Public Service Mut. Ins. Co. ( 290 AD2d 278, 279 [1d Dept 2002]), instructed that:
[p]laintiff's delay in notifying defendant of the occurrence giving rise to the claim, the sole ground on which defendant disclaimed coverage, was obvious from the face of the notice of claim and the accompanying complaint, and defendant had no need to conduct an investigation before determining whether to disclaim. Defendant's 30-day delay in disclaiming coverage was therefore unreasonable as a matter of law under Insurance Law § 3420 (d).
In Sirius America Ins. Co. v Vigo Constr. Corp. ( 48 AD3d 450 , 452 [2d Dept 2008]), the Court held that absent an explanation for a disclaimer delay, a 34-day delay in disclaiming coverage "was unreasonable as a matter of law and thus ineffective." The Court, in Allstate Ins. Co. v Swinton ( 27 AD3d 462 [2d Dept 2006]), instructed that "the 34-day delay by proposed additional respondent . . . in issuing a disclaimer was unreasonable," because the additional insurer failed to demonstrate that the delay was attributable to the claims adjustor's investigation of whether the insured attempted to notify insurer of the accident through an insurance agent. It was ascertainable from the policy that the person driving the vehicle at the time of the accident was not listed as a driver on the policy. In Pav-Lak Industries, Inc. v Arch Ins. Co. ( 56 AD3d 287 , 287-288 [1d Dept 2008]), the Court held that the insurer's 45-day delay in disclaiming coverage was "unreasonable as a matter of law" because there was no need for an investigation, because the basis for the disclaimer was "readily apparent" from other insurer's tender letter.
Nevertheless, ZURICH argues that an investigation was necessary because the second tender, dated August 21, 2006, contained the notation "2nd Request. Summons/ Complaint Enclosed," which suggested that an earlier tender has been sent. ZURICH asserts that under the circumstances it was not clear from the face of the tender if late notice applied, since there was a possibility that an earlier tender had been made which would warrant further investigation into the late notice issue prior to disclaiming. ZURICH states that it took action upon receipt of the August 21, 2006 tender by sending the October 3, 2006-letter, in which Ms Manero noted "I cannot locate any prior request," and requested a copy of the complete TISHMAN INTERIORS and A-H construction contract and certificate of insurance.
Although the October 3, 2006-letter indicates that ZURICH could not locate any prior tender, it does not request any information relating to a late notice defense. There is no evidence in the record that ZURICH investigated the defense prior to its disclaimer, nor did ZURICH produce any claim notes or an affidavit of its claim representative which supports this contention. In New York City Housing Authority v Underwriters at Lloyd's, London ( 61 AD3d 726, 727 [2d Dept 2009]), the Court held that "the defendant [insurer] did not establish the need for the investigation, nor did it provide detailed information demonstrating that the investigation was conducted diligently." "When the explanation offered for the delay is an assertion that there was a need to investigate issues that will affect the decision on whether to disclaim, the burden is on the insurance company to establish that the delay was reasonably related to the completion of a necessary, thorough, and diligent investigation." ( Quincy Mut. Fire Ins. Co. at 662). ZURICH's October 27, 2006-disclaimer letter does not suggest that Zurich investigated whether a prior tender existed. ZURICH merely advised the TISHMAN plaintiffs and AIG that it would reconsider its disclaimer if AIG possessed any verification of any earlier notice.
For the same reasons, ZURICH'S contention that its disclaimer was timely, pursuant to Insurance Law § 3420 (d), because it needed to "properly analyze and investigate" the claim prior to issuing a disclaimer must also be rejected. As noted above, ZURICH requested a copy of the construction contract and the certificate of insurance but the letter does not request any information relating to a late notice defense. In fact, as noted above, ZURICH disclaimed on late notice grounds several weeks later, and there is no evidence in the record that it did so based an any additional information or investigation, which renders this argument without merit. "[D]elay simply to explore other sources of insurance for the policyholder — an excuse unrelated to the insurer's own decision to disclaim — is [not] permissible." ( First Fin. Ins. Co. at 69). "[T]he obligation to provide prompt notice under Insurance Law § 3420 (d) is triggered when the insurer has a reasonable basis upon which to disclaim coverage, and cannot be delayed indefinitely until all issues of fact regarding the insurer's coverage obligations have been resolved." ( Republic Franklin Ins. Co. v Pistilli , 16 AD3d 477 , 479 [2d Dept 2005]).
The cases upon which ZURICH relies to support its claim that it was justified in disclaiming 32 days after receiving plaintiffs' second August 21, 2006 tender are distinguishable from the instant case because the insurers therein engaged in prompt, good faith investigations of the insureds' claims. ( See, e.g., Structure Tone, Inc. v Burgess Steel Products, Corp., 249 AD2d 144, 145 [1d Dept 1998]). ZURICH, but for sending one letter to AIG requesting a contract that was readily obtainable from A-H, its own insured, fails to demonstrate that it conducted any meaningful investigation into whether it had grounds for a disclaimer based upon late notice. Thus, ZURICH's disclaimer was untimely as a matter of law. Therefore, "any purported failure on the part of the plaintiff to provide the defendant with timely notice of the underlying claim did not excuse the defendant's unreasonable delay in disclaiming." ( New York City Housing Authority v Underwriters at Lloyd's, London at 727).
Also, the TISHMAN plaintiffs make a prima facie showing that INTERSTATE did not issue a disclaimer. INTERSTATE fails to rebut this. However, INTERSTATE argues, at footnote 4 in its memorandum of law in opposition to ZURICH's cross-motion, that ZURICH erroneously contends that INTERSTATE "has a duty to defend Tishman simply because Interstate has not issued a disclaimer." Further, INTERSTATE argues that "[b]ecause an additional insured endorsement is an addition, rather than a limitation, of coverage, the endorsement is part of the coverage part and is not waivable under New York Insurance Law § 3420 (d)." However, this applies only where the claim falls outside the policy's coverage. ( National Abatement Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa. 33 AD3d 570, 571 [1d Dept 2006]). As discussed below, this is not the case in the instant matter.
Duty to Defend
The TISHMAN plaintiffs argue that both INTERSTATE and ZURICH are obligated to defend them in the underlying Stout action. With respect to INTERSTATE, plaintiffs point out that the underlying complaint alleges that Mr. Stout, an employee of EVERGREENE, INTERSTATE's named insured, was injured in the course of his employment with EVERGREENE. With respect to ZURICH, plaintiffs assert that the underlying complaint alleges, among other things, that A-H was the scaffold subcontractor in charge of erecting, controlling, operating, maintaining and managing the scaffolds at the premises. Therefore, since Mr. Stout was allegedly injured in the course of his employment with INTERSTATE's named insured, EVERGREENE, on scaffolding allegedly erected and controlled by ZURICH's named insured, A-H, there exists a "reasonable possibility of coverage." Thus, both INTERSTATE and ZURICH are obligated to provide the TISHMAN plaintiffs with a defense. ( See Automobile Ins. Co. of Hartford at 137). "This standard applies equally to additional insureds and named insureds." ( Regal Const. Corp. at *3). "The well-understood meaning of the term [additional insured] is an entity enjoying the same protection as the named insured.'" ( Sport Rock Intern., Inc. v American Cas. Co. of Reading, PA , 65 AD3d 12 , 17 [1d Dept 2009], quoting BP A.C. Corp. v One Beacon Ins. Group , 8 NY3d 708 , 714-715). "Thus, the standard for determining whether an additional named insured is entitled to a defense is the same standard that is used to determine if a named insured is entitled to a defense.'" ( Id. quoting BP A.C. Corp. at 715). Specifically, "[a]n insurer's duty to defend is broader than its duty to indemnify' and arises whenever the allegations of the complaint suggest . . . a reasonable possibility of coverage.'" ( Id. quoting Automobile Ins. Co. of Hartford at 137). Moreover, "if any of the claims against [an] insured arguably arise from covered events, the insurer is required to defend the entire action." ( Id. quoting Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98 NY2d 435, 443).
The duty to defend is clearly triggered when, as in the instant action, the "facts alleged in the complaint fall within the scope of coverage intended by the parties at the time the contract was made.'" ( Tishman Interiors Corp. of New York v Fireman's Fund Ins. Co., 236 AD2d 385, 387 [2d Dept 1997], quoting New Hampshire Ins. Co. v Jefferson Ins. Co., 213 AD2d 325, 326-327 [1d Dept 1995]). ( See Town of Massena, 98 NY2d at 443).
As noted above, the complaint in the underlying Stout personal injury alleges that Mr. Stout, an employee of INTERSTATE's named insured, EVERGREENE, was injured in the course of his employment by EVERGREENE, while working on a scaffold erected and maintained by A-H, ZURICH's named insured. Therefore, the facts alleged in the complaint fall within the scope of coverage intended by the parties at the time their contracts were executed. The fact that the complaint alleges that Mr. Stout fell from a scaffold alleged to have been erected and maintained by A-H does not absolve INTERSTATE of its duty to defend, since Mr. Stout was working in the furtherance of the TISHMAN INTERIORS and EVERGREENE contract when the accident occurred. ( See Consolidated Edison Co. of New York v Hartford Ins. Co., 203 AD2d 83, 83 [1d Dept 1994]). Accordingly, that branch of plaintiffs' motion for a declaration that INTERSTATE and ZURICH have a duty to defend them in the Stout action is granted.
Duty to Indemnify
The TISHMAN plaintiffs also seek a declaration that both INTERSTATE and ZURICH have a duty to indemnify them in the underlying Stout action. Plaintiffs, in support of this branch of their motion, assert that: INTERSTATE failed to disclaim coverage; ZURICH's disclaimer was untimely; the underlying complaint establishes "the reasonable possibility of coverage"; and, the respective additional insured endorsements in each of the subject policies clearly entitle them to additional insured coverage.
Specifically, plaintiffs argue that Mr. Stout's accident arose out of EVERGREENE's work for the TISHMAN plaintiffs, and that the scaffold constructed by A-H, ZURICH's named insured, was a contributing cause of the accident. Therefore, plaintiffs contend that since liability in the underlying action "arises out of" work performed by both EVERGREENE and A-H for plaintiffs, as required by the additional insured endorsements in the INTERSTATE and ZURICH policies, they are entitled to indemnification pursuant to the terms of each of the policies' respective additional insured endorsements.
INTERSTATE, in support of its cross-motion and in opposition to this branch of plaintiffs' motion, argues that TISHMAN CONSTRUCTION does not qualify as an additional insured under the INTERSTATE policy, because EVERGREENE was performing work for TISHMAN INTERIORS, not TISHMAN CONSTRUCTION. Further, INTERSTATE asserts that the phrase "work performed by or on behalf of the named insured" in its additional insured endorsement generally requires the named insured (EVERGREENE) to perform "contracted-for services" for the additional insured, or requires the named insured (EVERGREENE) to be employed by the additional insured before the additional insured endorsement applies. Therefore, INTERSTATE argues that TISHMAN CONSTRUCTION does not qualify as an additional insured under the INTERSTATE policy.
INTERSTATE, in the alternative, relying principally upon Worth Constr. Co., Inc. v Admiral Ins. Co. ( 10 NY3d 411 ), claims that the TISHMAN plaintiffs do not qualify for additional insured coverage under the INTERSTATE policy because liability in the underlying Stout action does not "arise out of" EVERGREENE's work as required by the additional insured endorsement. Specifically, INTERSTATE relies upon the Worth Constr. Co., Inc. holding that "[t]he focus of a clause such as the additional insured clause here is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained.'" ( Worth Constr. Co., Inc. at 416, citing Impulse Enterprises/F V Mechanical Plumbing Heating v St. Paul Fire Marine Ins. Co., 282 AD2d 266, 267 [1d Dept 2001]). Thus, INTERSTATE argues that the "general nature of the operation in the course of which the injury was sustained" in the Stout action was the scaffolding work which was solely "within the operations performed by ZURICH's insured [A-H]," not the operations of EVERGREENE, its named insured. Therefore, INTERSTATE contends that the liability at issue did not "arise out of" EVERGREENE's work as required by the additional insured endorsement in the INTERSTATE policy, but "arises out of" A-H's allegedly defective scaffolding, which Mr. Stout alleges caused or contributed to his accident. Although INTERSTATE argues that the TISHMAN plaintiffs fail to demonstrate that EVERGREENE was performing work for TISHMAN CONSTRUCTION, it concedes that EVERGREENE was performing work for TISHMAN INTERIORS.
Both the TISHMAN plaintiffs and ZURICH disagree with INTERSTATE's arguments. First, with respect to INTERSTATE's contention that TISHMAN CONSTRUCTION does not qualify as an additional insured under the INTERSTATE policy, plaintiffs and ZURICH argue that the INTERSTATE policy provides additional insured coverage "where required by written contract." The TISHMAN plaintiffs and ZURICH note that the TISHMAN INTERIORS contract with EVERGREENE provides for, in ¶ 11, indemnification and additional insured coverage for TISHMAN INTERIORS and all of its "respective parent companies, corporations and/or partnerships and their owned, controlled, associated, affiliated and subsidiary companies, corporation and/or partnerships, and the respective agents, consultants, principals, partners, servants, officers, stockholders, directors and employees thereof,"
The TISHMAN plaintiffs and ZURICH also contend that well-settled case law establishes that Mr. Stout's accident "arises out of" EVERGREENE's work. Plaintiffs, in this regard, argue that INTERSTATE seeks to confuse this issue by claiming that Mr. Stout's accident arises solely out of the work of A-H, the named insured under the ZURICH policy, while ignoring the role of EVERGREENE, its own insured, in the underlying accident.
As previously stated, the additional insured endorsement in the INTERSTATE policy provides that "any entity the Name Insured [EVERGREENE] is required in a written contract to name as an insured (hereinafter called Additional Insured) is an insured but only with respect to liability arising out of work performed by or on behalf of the Named Insured [EVERGREENE] for the Additional Insured [TISHMAN plaintiffs] [Emphasis added]. " Further, the TISHMAN INTERIORS contract with EVERGREENE, in ¶ 11, requires that:
To the fullest extent permitted by law, the contractor shall indemnify and hold harmless the Owner, Construction Manager [TISHMAN INTERIORS] Indemnitees, Architect-Engineer and their respective parent companies, corporations and/or partnerships and their owned, controlled, associated, affiliated and subsidiary companies, corporation and/or partnerships, and the respective agents, consultants, principals, partners, servants, officers, stockholders, directors and employees thereof, from and against all claims or causes of action, damages, losses and expenses, including but not limited to attorneys' fees and legal costs and expenses, arising out of or resulting from the performance of the work, or the contractor's operations . . .
The additional insured endorsement of the ZURICH policy similarly provides coverage where required by contract, but "only with respect to liability arising out of your [A-H] ongoing operations performed for that insured [TISHMAN INTERIORS]." The TISHMAN INTERIORS contract with A-H also required A-H to provide CGL insurance with TISHMAN INTERIORS as an additional insured.
With respect to whether TISHMAN INTERIORS and TISHMAN CONSTRUCTION are entitled to additional insured coverage under the additional insured endorsement of the INTERSTATE policy, the Court finds that TISHMAN CONSTRUCTION does not qualify as an additional insured pursuant to INTERSTATE's additional insured endorsement. Plaintiffs argue, that the INTERSTATE policy provides additional insured coverage "where required by contract" and that the contract between TISHMAN INTERIORS and EVERGREENE provides for indemnification and additional insured coverage for TISHMAN INTERIORS and all of its affiliates and corporations, which would include TISHMAN CONSTRUCTION. However, no evidence has been provided by plaintiffs that EVERGREENE was performing work for TISHMAN CONSTRUCTION, a necessary requirement for additional insured coverage under the additional insured endorsement. Therefore, TISHMAN CONSTRUCTION is not entitled to additional insured coverage under the INTERSTATE policy.
The same is not true with respect to TISHMAN INTERIORS. First, INTERSTATE concedes that EVERGREENE was performing work for TISHMAN INTERIORS. Second, analysis of the INTERSTATE policy and relevant case law supports the conclusion that TISHMAN INTERIORS is entitled to additional insured coverage from INTERSTATE. The language of the additional insured endorsement, which contains the phrase "arising out of," means "originating from, incident to, or having connection with . . . and requires only that there be some causal relationship between the injury and the risk for which coverage is provided." ( Worth Constr. Co., Inc. at 415). Moreover, as cited earlier, the focus of such a clause "is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained." ( Id. at 416, citing Impulse Enterprises/F V Mechanical Plumbing Heating at 267).
Accordingly, INTERSTATE'S additional insured endorsement and those additional insured endorsements which are similarly-worded are applicable when an employee of the named insured or one of its subcontractors has been injured while performing work for the additional insured, and "any negligence by the additional insured in causing the accident underlying the claim is not material to the application of the additional insured endorsement." ( Consolidated Edison Co. of New York v United States Fid. Guar. Co., 263 AD2d 380, 382 [1d Dept 1999]. "The above quoted policy language focuses not upon the precise cause of the accident . . . but upon the general nature of the operation in the course of which the injury was sustained." ( Consolidated Edison Co. of New York, Inc. v Hartford Ins Co., 203 AD2d 83, 83 [1d Dept 1994]. ( See William Floyd School Dist. v Maxner, 68 AD2d 982, 985 [2d Dept 2009]; David Christa Constr., Inc. v American Home Assur. Co. , 59 AD3d 1136 , 1139 [4d Dept 2009], lv denied 12 NY3d 713; IBEX Constr., LLC v Utica Natl. Assur. Co. , 57 AD3d 245, 245 [1d Dept 2008]; Longwood Cent. School Dist. v American Employers Ins. Co. , 35 AD3d 550 , 552 [2d Dept 2006]; Chelsea Assoc., LLC v Laquila-Pinnacle , 21 AD3d 739 [1d Dept 2005], lv denied 6 NY3d 742; AIU Ins. Co. v American Motorists Ins. Co., 292 AD2d 277, 278 [1d Dept 2002]; Impulse Enterprises/F V Mech. Plumbing Heating at 267; Structure Tone, Inc. v Component Assembly Sys., 275 AD2d 603, 603-604 [1d Dept 2000]; Tishman Constr. Corp. of New York v CNA Ins. Co., 236 AD2d 211, 211 [1d Dept 1997]).
Nevertheless, as noted above, INTERSTATE argues, relying upon Worth Constr. Co., Inc., that neither of the TISHMAN plaintiffs qualifies for additional insured coverage under its additional insured endorsement because the liability at issue does not "arise out of" EVERGREENE's work, but rather arises out of A-H's work. INTERSTATE contends that Worth Constr. Co., Inc. "clarified that it is the general nature of the operation in the course of which the injury was sustained' that governs the question of additional insured coverage under the arising out of' language, not the injured person's employment status." Further, INTERSTATE asserts that Worth Constr. Co., Inc. "calls into question" pre-Worth Constr. Co., Inc. appellate court decisions, several of which are cited above, which construed the phrase "arising out of" in additional insured endorsements to apply whenever an employee of the named insured is injured in the workplace.
These claims are rejected. In Worth Constr. Co., Inc. the injured plaintiff was employed by a subcontractor not hired by Worth, the general contractor. The injured plaintiff slipped on fireproofing material on a staircase after the staircase had been erected by a different subcontractor, which had been hired by Worth and named Worth as an additional insured in its CGL policy. Thus, Worth Constr. Co., Inc. is distinguishable from the instant case. The injured plaintiff in the underlying action in Worth Constr. Co., Inc. was not employed by the name insured, the subcontractor who built the staircase, but was an employee of an unrelated subcontractor. Therefore, INTERSTATE's argument that cases decided before Worth Constr. Co., Inc. lack precedential value is rejected. Notably, many of these pre- Worth Constr. Co., Inc. decisionsrely upon the same reasoning applied in Worth Constr. Co., Inc., which is that "the focus of a policy clause [in the additional insured endorsement] is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained." ( See Impulse Enterprises/F V Mech. Plumbing Heating at 267; Structure Tone, Inc. at 603-604; Tishman Constr. Corp. of New York v CNA Ins. Co. at 211; Consolidated Edison Co. of New York, Inc. v Hartford Ins Co. at 83-84).
Further, unlike the instant case, the named insured in Worth Constr. Co., Inc. played no role in either contracting for or applying the fireproofing material upon which the injured plaintiff slipped, nor did it subcontract with the fireproofing subcontractor who applied the fireproofing material for the performance of any work at the site. In addition, the named insured in Worth Constr. Co., Inc. only built the staircase, and an entirely separate subcontractor was responsible for applying the fireproofing material. Also, the named insured was not at the job site at the time of the accident. Finally, Worth, the general contractor and additional insured, conceded that its claims of negligence against the named insured were without factual merit. Based upon the foregoing, the Court of Appeals concluded that there was no connection between the accident and the risk for which coverage was intended. ( Worth Constr. Co., Inc. at 416). In the Stout action, Mr. Stout was performing masonry work in furtherance of EVERGREENE's contract with TISHMAN INTERIORS when loose planks on the scaffold allegedly caused him to fall. Thus, there was a "causal connection between [Mr. Stout's] injury and [TISHMAN INTERIORS] work as a [construction manager]," the risk for which coverage was provided." ( See Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA , 64 AD3d 461 , 463 [1d Dept 2009], affd ___NY3d___, 2010 NY Slip OP 0466 [June 3, 2010], citing Worth Constr. Co., Inc. at 416]). In addition, "[t]he focus of a clause such as the additional insured clause here is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained." ( Id. at 463 [internal quotation marks omitted]).
Accordingly, liability "arises out of" work performed by EVERGREENE for TISHMAN INTERIORS. This affords TISHMAN INTERIORS additional insured coverage under the INTERSTATE additional insured endorsement. ( See David Christa Construction, Inc. at 1139; Impulse Enterprises/F V Mechanical Plumbing and Heating, at 267; Structure Tone, Inc. 603-604; Consolidated Edison Co. of New York, Inc. v Hartford Ins Co. at 83-84). Therefore, even assuming that Worth Constr. Co., Inc. sets forth a new standard upon which the language of additional insured endorsements similar to the one at bar must be evaluated, the Court nevertheless finds that liability in the underlying Stout action "arises out of work performed by the named insured [EVERGREENE] for the additional insured [TISHMAN INTERIORS]." ( See Regal Constr. Corp., 64 AD2d at 463).
Based upon the foregoing, TISHMAN INTERIORS makes a prima facie showing that INTERSTATE must indemnify TISHMAN INTERIORS in the Stout action if TISHMAN INTERIORS is ultimately found liable in the Stout action. Thus, that branch of plaintiffs' motion seeking a declaration that INTERSTATE must indemnify them is granted to the extent that INTERSTATE must indemnify TISHMAN INTERIORS. That branch of INTERSTATE's cross-motion for a declaration that plaintiffs do not qualify as additional insureds under the INTERSTATE policy is granted to the extent that TISHMAN CONSTRUCTION does not qualify as an additional insured.
Next, the Court addresses that branch of plaintiffs' motion for a declaration that ZURICH has a duty to indemnify them in the Stout action. In opposition to that branch of plaintiffs' motion, and in support of its cross-motion, ZURICH, relying upon Worth Constr. Co., Inc., argues that when there is an injury to someone other than the insured's employee, courts have held that a declaration that an insurer has a duty to indemnify an additional insured requires a determination that the underlying accident arose out of the named insured's performance of work under its contract with the additional insured, and that this determination must generally await a determination of liability in the underlying action. Further, continuing to rely on Worth Constr. Co., Inc., ZURICH argues that the mere fact that A-H's scaffold was involved in the accident is not dispositive of whether it must indemnify plaintiffs. Rather, ZURICH claims that it must be shown that A-H's work was a contributing cause of the occurrence. ZURICH notes that since discovery is still ongoing, the issue of whether the scaffold was defective and contributed to the accident has yet be resolved and thus this branch of plaintiffs' motion must be denied.
Plaintiffs, in opposition, argue that ZURICH has conceded that it has a primary duty to provide additional insured coverage to plaintiffs, because ZURICH states in opposition to INTERSTATE's cross-motion that "[w]hile Zurich does not dispute that its policy would also provide primary coverage that would result in a co-insurance situation only in the absence of its late notice defense, the Interstate policy, by virtue of its policy terms and contract requirements, is also primary, and not excess." Plaintiffs also assert that ZURICH's reliance upon Worth Constr. Co., Inc. is distinguishable because in the instant action, unlike in Worth Constr. Co., Inc., Mr. Stout's own testimony clearly establishes that the scaffold constructed by A-H was a contributing cause of his accident, and not merely the situs of the accident, as was the staircase in Worth Constr. Co., Inc.
INTERSTATE also opposes this branch of ZURICH's cross-motion, claiming that in light of the allegations of the complaint and the evidence in the underlying action, ZURICH cannot reasonably dispute that plaintiffs qualify as additional insureds under the ZURICH policy because liability, as alleged in the Stout complaint, "arises out of" A-H's ongoing operations performed for plaintiffs. Mr. Stout testified at his deposition that he was standing on the scaffolding erected by A-H when a loose floor plank not properly tied down "went down," which caused him to fall. Further, plaintiffs' witness, John Millen, testified that A-H alone designed and erected the scaffold at issue, including the installation of all scaffolding planks.
The branch of plaintiffs' motion which seeks a declaration that ZURICH must indemnify them is granted. That branch of ZURICH's cross-motion seeking a declaration that is has no obligation to indemnify plaintiffs is denied. The additional insured endorsement of ZURICH's policy provides coverage where required by contract, but "only with respect to liability arising out of [A-H's] ongoing operations performed for [plaintiffs]." Based upon the allegations in Mr. Stout's complaint with respect to A-H's involvement in his accident, it is clear that liability arises out of A-H's ongoing operations performed for plaintiffs. The allegations of the complaint establish that Mr. Stout was performing masonry work while standing on scaffolding erected by A-H. Thus, Mr. Stout was performing work in furtherance of A-H's contract with TISHMAN INTERIORS when loose planks on the scaffold allegedly caused him to fall. As such, there was a "causal connection between [Mr. Stout's] injury and [TISHMAN INTERIORS] work as a [construction manager], the risk for which coverage was provided." ( See Regal Constr. Corp., 64 AD2d at 463). Accordingly, the TISHMAN plaintiffs are entitled to additional insured coverage under ZURICH's additional insured endorsement should plaintiffs be held liable in the underlying Stout action.
Reimbursement of attorney's fees
That branch of plaintiffs' motion for a declaration that the TISHMAN plaintiffs are entitled to reimbursement of attorney's fees expended in the defense of the underlying Stout action from INTERSTATE and ZURICH is granted. Since "[t]he complaint in the underlying action contains allegations that fall within the scope of the subject policies . . . the duty to defend was triggered, and the insurers breached that duty when they failed to provide a defense to [plaintiffs]. They are, therefore, liable for the defense costs previously incurred by the [plaintiffs] in defending the action. ( Town of Oyster Bay v Employers Ins. of Wausau, 269 AD2d 387, 388 [2d Dept 2000]). Thus, INTERSTATE is "liable for the defense costs previously incurred by [TISHMAN INTERIORS] in defending the action." ( Id.). ZURICH is "liable for the defense costs previously incurred by [the TISHMAN plaintiffs] in defending the action." ( Id.). Both INTERSTATE and ZURICH fail to address this branch of plaintiffs' motion in their opposition papers.
Priority of Coverage
INTERSTATE and ZURICH, in their cross-motions, argue whether the costs of defending the TISHMAN plaintiffs in the underlying action should be allocated between them or, pursuant to their policies' respective "other insurance clauses," imposed on only one of them on a primary basis. The dispute is whether, pursuant to the terms of the respective policies, INTERSTATE's coverage of TISHMAN INTERIORS as an additional insured is primary with ZURICH's primary coverage of the TISHMAN plaintiffs as additional insureds or whether INTERSTATE's coverage of TISHMAN INTERIORS is excess to ZURICH's coverage.
INTERSTATE correctly states that plaintiffs qualify as named insureds under the AIG policy and as additional insureds under the ZURICH policy. Further, INTERSTATE argues that even assuming that the TISHMAN plaintiffs qualify as additional insureds under its own policy, its policy would be excess over any other insurance, including ZURICH's policy. INTERSTATE points out that the additional insured endorsement in its policy contains an "other insurance" provision expressly providing that "[t]he insurance afforded by this provision shall be excess over any other insurance," and argues that this provision controls over the "other insurance" provisions in the INTERSTATE policy. Further, INTERSTATE notes that the additional insured endorsements in the ZURICH policy do not contain any "other insurance" clauses. Thus, the "other insurance" clause on page 11 of the ZURICH policy's CGL Coverage Form states "[t]his insurance is primary except when b. below applies." INTERSTATE argues, and ZURICH does not dispute, that ¶ b. relates to insurance not applicable here, including fire insurance, auto insurance, tenant's insurance, and insurance procured for A-H on an additional insured basis. Therefore, INTERSTATE asserts that the ZURICH policy affords primary coverage to plaintiffs while its own policy affords excess coverage to plaintiffs after the ZURICH policy is exhausted.
Additionally, INTERSTATE contends that because the AIG policy issued to the TISHMAN plaintiffs provides primary insurance coverage but purports to be excess over any insurance afforded to the TISHMAN plaintiffs on an additional insured basis, the AIG policy would share with the INTERSTATE policy for amounts in excess to the ZURICH policy. Moreover, INTERSTATE argues that the ZURICH policy affords coverage to the TISHMAN plaintiffs on a primary basis and the INTERSTATE policy, if applicable, affords coverage on an excess basis together with the AIG policy. Further, because the excess provisions in the INTERSTATE policy and the AIG policy conflict, INTERSTATE asserts that both policies share on a pro rata basis for amounts in excess of the ZURICH policy's coverage. INTERSTATE also argues that while AIG is not formally named in the declaratory judgment action, the Court may make a determination with respect to AIG because AIG is the real party in interest in connection with the TISHMAN plaintiffs' appearance herein, which the TISHMAN plaintiffs do not dispute.
ZURICH does not dispute that in the absence of its late notice defense, its policy provides primary coverage that would require it to provide insurance on a co-primary basis with INTERSTATE if the INTERSTATE policy provides additional insured coverage to TISHMAN INTERIORS. However, based upon a different endorsement in the INTERSTATE policy, ZURICH asserts that INTERSTATE has an obligation to provide primary non-contributory coverage to plaintiffs as additional insureds under the INTERSTATE policy, without its own contribution. Specifically, Zurich relies upon the INTERSTATE endorsement quoted earlier, "Condition 4, Other Insurance, Amended-Non Contributory," which amended ¶ 4. c., and states, in effect, that INTERSTATE will contribute in equal shares with all other primary insurance, unless EVERGREENE is required by contract to provide insurance to TISHMAN INTERIORS that is primary. ZURICH argues, relying upon the Court's holding in Pecker Iron Works v Traveler's Ins. Co. ( 99 NY2d 391), at 393, "that coverage for additional insureds' [is] primary coverage unless unambiguously stated otherwise," and "additional insured' is a recognized term in insurance contracts . . . [and] the well-understood meaning' of the term is an entity enjoying the same protection as the named insured.'" Therefore, ZURICH argues that § B (8) of the Insurance Rider in the TISHMAN INTERIORS contract with EVERGREENE, stating that "[c]overage is to be endorsed to reflect that the insurance provided is to be primary for the Contractor [EVERGREENE], Owner [CONGREGATION EMANU-EL], Construction Manager [TISHMAN INTERIORS] and all other indemnitees named in the Contract," requires EVERGREENE to provide primary insurance for TISHMAN INTERIORS.
INTERSTATE, in reply, argues, among other things, that the endorsement amending ¶ 4. c. (the "method of sharing" endorsement), applies only in the limited event that INTERSTATE's policy and another insurance policy are both primary. Thus, INTERSTATE contends that this endorsement has no application when, as in this case, the INTERSTATE policy is "excess over any other insurance" and an entity such as TISHMAN INTERIORS claims that it qualifies as an additional insured under its additional insured endorsement.
"In order to determine the priority of coverage among different policies, a court must review and consider all of the relevant policies at issue." ( BP A. C. Corp. at 716). ( See State Farm Fire Cas. Co. v LiMauro, 65 NY2d 369). Thus, "[i]n insurance contracts the term other insurance' describes a situation where two or more insurance policies cover the same risk in the name of, or for the benefit of, the same person." ( Great Northern Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682, 686-687, citing Ostrager and Newman, Insurance Coverage Disputes, § 11.01, at 581 [9th ed]). The Appellate Division, First Department, instructed in Sport Rock Intern. Inc. at 18, that:
Where the same risk is covered by two or more policies, each of which was sold to provide the same level of coverage (as is the casehere), priority of coverage (or, alternatively, allocation of coverage) among the policies is determined by comparison of their respective "other insurance" clauses [citations omitted]. An "other insurance" clause "limit[s] an insurer's liability where other insurance may cover the same loss." (15 Couch on Insurance 3d § 219:1). This may be accomplished by providing that the insurance provided by the policy is excess to the insurance provided by other policies, in which case the "other insurance" clause is known as an excess clause. (15 Couch on Insurance 3d § 219:33; 23 Holmes' Appleman on Insurance 2d § 140.2 [B] [1]). Alternatively, an "other insurance" clause may limit the insurer's liability by providing that, if other insurance is available, all insurers will be responsible for a stated portion of the loss; an "other insurance" clause of this kind is known as a pro rata clause. (15 Couch on Insurance 3d § 219:27-28; 23 Holmes' Appleman on Insurance 2d § 140.2 [A]).
In the instant action, the "other insurance" clause of the INTERSTATE policy is an excess clause which expressly provides that "[t]he insurance afforded by this provision shall be excess over any other insurance," which includes the ZURICH policy. Further, the heading of the endorsement provides that "THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY." On the other hand, the additional insured endorsements in the ZURICH policy do not contain any "other insurance" clauses. Further, reference to the "other insurance" clause on page 11 of the CGL Coverage Form of the ZURICH policy states that "[t]his insurance is primary except when b. below applies." However, it is undisputed that ¶ b. relates to insurance which is not applicable here. Moreover, ZURICH concedes that its policy provides primary coverage to TISHMAN INTERIORS, absent its late notice defense. Therefore, since the Court has already determined that the TISHMAN plaintiffs are additional insureds under the ZURICH policy, the ZURICH policy affords primary coverage to the TISHMAN plaintiffs while the INTERSTATE policy affords excess coverage to TISHMAN INTERIORS after the ZURICH policy is exhausted.
The language of the additional insured endorsement controls the "other insurance" provisions in the INTERSTATE policy. "[I]t is settled that in construing an endorsement to an insurance policy, the endorsement and the policy must be read together, and the words of the policy remain in full force and effect except as altered by the words of the endorsement." ( County of Columbia v Continental Ins. Co., 83 NY2d 618, 628). Further, the plain wording of the "other insurance" clause of the INTERSTATE policy renders that policy excess with respect to the ZURICH policy. "[I]f one party's policy is primary with respect to the other policy, then the party issuing the primary policy must pay up to the limits of its policy before the excess coverage becomes effective." ( Osorio v Kenart Realty, Inc. , 48 AD3d 650 , 653 [2d Dept 2008], citing Great Northern Ins. Co. at 687). "When a policy provides only excess coverage, the duty to defend or indemnify is not triggered until coverage under the primary policy has been exhausted or otherwise terminated." ( L B Estates, LLC v Allstate Ins., 71 AD3d 834, 836 [2d Dept 2010]). Therefore, the ZURICH policy, with a primary "other insurance" provision must provide coverage to the TISHMAN plaintiffs before the INTERSTATE policy provides excess coverage to plaintiff TISHMAN INTERIORS. ( See Great Northern. Ins. Co., at 689; Pav-Lak Indus., Inc. at 288; Bovis Lend Lease LMB, Inc. v Great Am. Ins. Co. , 53 AD3d 140 , 150 [1d Dept 2008]; Harleysville Ins. Co. v Travelers Ins. Co. , 38 AD3d 1364 , 1366-1367 [4d Dept 2007], lv denied 9 NY3d 811; Government Employees Ins. Co. v Shlomy, 305 AD2d 504, 507-508 [2d Dept 2003]; Tishman Constr. Corp. of New York v Am. Mfrs. Mut. Ins. Co., 303 AD2d 323, 324 [1d Dept 2003]).
ZURICH's argument that INTERSTATE's coverage of the TISHMAN plaintiffs is primary because of the language in the "method of sharing" endorsement in the INTERSTATE policy is rejected. As set forth previously, the "other insurance" provision in the INTERSTATE POLICY has three parts, ¶ 's 4. a., 4. b., and 4. c. ZURICH relies upon the amended ¶ 4. c. (the original ¶ 4. c. was deleted in its entirety and replaced by the new ¶ 4. c., entitled "Condition 4, Other Insurance Amended — Non Contributory"), which states:
c. Method of Sharing
If all of the other insurance permits contribution by equal shares, we will follow this method unless the insured is required by contract to provide insurance that is primary and non-contributory, and the "insured contract" is executed prior to any loss. Where required by a contract, this insurance will be primary only when and to the extent as required by that contract. However, under the contributory approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first.
If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each Insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of all insurers.
However, ¶ 4. c. only applies in the limited instance when the INTERSTATE policy and another insurance policy are also primary. INTERSTATE correctly notes that ¶ 4. c. is only referenced in ¶ 4. a., and is only implicated when "[t]his insurance is primary" and "any of the other insurance is also primary." In this event, ¶ 4. a. states "[t]hen, we will share with all that other insurance by the method described in c. below." The amended ¶ 4. c. merely provides that "[i]f all of the other insurance permits contribution by equal shares, we will follow this method" and that this general rule will not apply if "the insured is required by contract to provide insurance that is primary and non-contributory." Then, in the latter event, "[w]here required by a contract, this insurance will be primary only when and to the extent as required by that contract." Therefore, when there are two insurance policies affording primary coverage (the INTERSTATE policy and another insurance policy), and there is a contract requiring the insured to provide primary and non-contributory insurance, the INTERSTATE policy will be primary "only when and to the extent as required by that contract." However, since the INTERSTATE policy is "excess over any other insurance," and the TISHMAN plaintiffs are claiming that they qualify as additional insureds, the INTERSTATE policy is not primary, but excess. Under these circumstances, coverage under the ZURICH policy, which is primary, must be exhausted before INTERSTATE is required to contribute under its policy. The Appellate Division, Second Department in Government Employees Ins. Co. v Shlomy at 507-508, held:
In situations such as the instant case, where one policy provides, in effect, that it is an excess policy and another policy provides for pro rata contribution with other valid and collectible insurance, the Court of Appeals has held that the excess policy is secondary because the effect of the policy which requires pro rata contribution "was only to require pro rata contribution by other primary insurance'" ( State Farm Fire Cas. Co. v LiMauro, 65 NY2d 369, 373 [1985], quoting General Acc. Fire Life Assur. Co. v Piazza, 4 NY2d 659, 669 [1958]).
INTERSTATE properly argues that ZURICH's interpretation of the INTERSTATE policy would render the language of the additional insured endorsement without force or effect. Further, ZURICH's construction of the "Method of Sharing" endorsement would impermissibly allow it to determine whether the INTERSTATE policy is primary, which is not the purpose of this provision. ¶ 4. c. exists to address the circumstance where the INTERSTATE policy is primary and another insurance policy also provides primary insurance. As INTERSTATE asserts, the endorsement deleting and replacing ¶ 4. c. only alters ¶ 4. c, not ¶ 's 4. a. or 4. b.
ZURICH, relying on Pecker Iron Works, argues that the INTERSTATE policy should share with the ZURICH policy because the TISHMAN INTERIORS contract with EVERGREENE required the additional insured coverage procured by EVERGREENE to be primary. It is true that Pecker Iron Works looked to the underlying subcontractor's insurance procurement provisions to determine whether the general contractor's coverage as an additional insured under the subcontractor's policy was primary or excess, because the insurance policy expressly provided that the terms of the subcontract would determine whether the additional insured coverage was primary or excess. It is also undisputed that the INTERSTATE policy references the TISHMAN INTERIORS contract with EVERGREENE, which contains a provision defining the priority of coverage provided to additional insureds by referencing the requirements of the subcontract, and that the ZURICH policy does not contain such a provision. However, Pecker Iron Works is not controlling in this situation because it does not involve a policy which contains an additional insured endorsement providing that any additional insured coverage is "excess over any other insurance," or an endorsement modifying ¶ 4. c., which addresses the "method of sharing" when two policies are primary. If the INTERSTATE policy did not contain the additional insured endorsement, ¶ 4. c. would apply and Pecker Iron Works would permit the Court to review the TISHMAN INTERIORS contract with EVERGREENE to determine how the ZURICH and INTERSTATE policies would share. There is nothing in the instant action allowing the TISHMAN INTERIORS contract with EVERGREENE to alter the express language of the additional insured endorsement in the INTERSTATE policy.
The ZURICH policy, based upon the foregoing, affords coverage to the TISHMAN plaintiffs on a primary basis, and the INTERSTATE policy affords coverage to TISHMAN INTERIORS on an excess basis. Upon exhaustion of the ZURICH policy, by ZURICH having paid its limit of liability for a settlement or judgment, if any, in the Stout action, the INTERSTATE policy shall contribute on an excess basis to its policy limits.
The Court declines to make a determination with respect to the AIG policy as AIG is not a named party in this action and the complete AIG policy has not been included in the record. ( See BP A. C. Corp. at 716; Tower Ins. Co. of New York v T G Contracting Inc. , 44 AD3d 933 , 933 [2d Dept 2007]).
Conclusion
Accordingly, it is ORDERED, the motion for summary judgment by plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION, pursuant to CPLR Rule 3212, is granted to the extent of declaring that: (1) defendant INTERSTATE FIRE AND CASUALTY COMPANY has a duty to defend and indemnify plaintiff TISHMAN INTERIORS COPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); (2) defendant ZURICH AMERICAN INSURANCE COMPANY has a duty to defend and indemnify plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); (3) defendant INTERSTATE FIRE AND CASUALTY COMPANY shall reimburse plaintiff TISHMAN INTERIORS CORPORATION for all attorney's fees expended in the labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); and (4), defendant ZURICH AMERICAN INSURANCE COMPANY shall reimburse plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION for all attorney's fees expended in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); and it is further
ORDERED, that the cross-motion of defendant ZURICH AMERICAN INSURANCE COMPANY for summary judgment, pursuant to CPLR Rule 3212, declaring that: (1) it has no obligation to defend and indemnify plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); (2) it timely issued its notice of disclaimer to plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); (3) it is not obligated to reimburse plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION for their defense costs in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); and (4), the insurance policy issued to EVERGREENE PAINTING STUDIOS, INC. by defendant INTERSTATE FIRE AND CASUALTY COMPANY provides primary and non-contributory coverage to plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION without contribution from defendant ZURICH AMERICAN INSURANCE COMPANY in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); is denied in its entirety; and it is further
ORDERED, the cross-motion of defendant INTERSTATE FIRE AND CASUALTY COMPANY for summary judgment, pursuant to CPLR rule 3212, declaring that: (1) plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION do not qualify as "additional insureds," under the subject insurance policy given by INTERSTATE FIRE AND CASUALTY COMPANY to EVERGREENE PAINTING STUDIOS, INC., in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); and (2), even if plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION qualify as "additional insureds" under the subject insurance policy given by INTERSTATE FIRE AND CASUALTY COMPANY to EVERGREENE PAINTING STUDIOS, INC., in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06), the subject insurance policy given by INTERSTATE FIRE AND CASUALTY COMPANY to EVERGREENE PAINTING STUDIOS, INC. would share with a policy issued by AMERICAN INSURANCE GROUP to plaintiffs TISHMAN CONSTRUCTION CORPORATION and TISHMAN INTERIORS CORPORATION for amounts in excess of the policy issued by defendant ZURICH AMERICAN INSURANCE COMPANY to ATLANTIC-HEYDT CORPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06); is granted to the extent that: (1) plaintiff TISHMAN CONSTRUCTION CORPORATION does not qualify as an "additional insured" under the subject insurance policy given by INTERSTATE FIRE AND CASUALTY COMPANY to EVERGREENE PAINTING STUDIOS, INC. in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06), and (2) the subject insurance policy given by INTERSTATE FIRE AND CASUALTY COMPANY to EVERGREENE PAINTING STUDIOS, INC. policy in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06), is excess to the policy of insurance issued by defendant ZURICH AMERICAN INSURANCE COMPANY to ATLANTIC-HEYDT CORPORATION in providing coverage to plaintiff TISHMAN INTERIORS COPORATION in the underlying labor law action, William Stout v 1 East 66th Street Corporation, et al. (Supreme Court, Kings County, Index No. 21367/06).
This constitutes the Decision and Order of the Court.