Opinion
32725/2006.
February 2, 2009.
YORK RESTORATION CORP., BARRY, McTIERNAN MOORE, NEW YORK, NEW YORK, ATTORNEYS FOR PLAINTIFF.
SIRIUS AMERICA INSURANCE CO., MARONEY O'CONNOR LLP, NEW YORK, NEW YORK, ATTORNEYS FOR DEFENDANT.
Plaintiff, York Restoration Corp. ("York"), commenced this action seeking a declaratory judgment that the defendants, Solty's Construction, Inc. ("Solty's") and Sirius America Insurance Co. ("Sirius") are obligated to defend and indemnify York in an underlying personal injury action. York moves for summary judgment pursuant to CPLR 3211 and/or 3212 against the defendants and Sirius cross-moves pursuant to CPLR 3211(a) and 3212 to dismiss the complaint on the basis of documentary evidence.
Background
On February 15, 2004, York and Solty's entered into a contract whereby Solty's, as a subcontractor to York, would perform exterior restoration work on the premises located at 201 East 28th Street, New York, New York. Pursuant to the contract, Solty's was obligated to obtain and keep in force, insurance policies, including general liability policies insuring Solty's and providing York with coverage for contractual liability and personal injury liability. The contract also required that Solty's policy of insurance would name York as an additional insured. Specifically, the Contract stated:
"10.(1)Subcontractor shall maintain Commercial General Liability coverage for itself and all additional insureds for the duration of the project and maintain Completed Operations coverage for itself and each additional insured for at least (1) year after the completion of work."
and
"(3) Additional Insureds — Liability insurance policies must provide York and/or owner and other parties required by the Owners Contract, using ISO Additional Insured Endorsement CG 10 20 11 85 OR AN ENDORSEMENT providing equivalent coverage to the additional insureds. Coverage shall apply as Primary insurance before any insurance maintained by the additional insured."
On October 29, 2004, Jan Samboroski, an employee of Solty's, was allegedly injured when he was struck in the head by a bucket of falling bricks. On December 16, 2004, York's insurance carrier, Illinois Union Insurance Company ("LIU") first learned of Samboroski's claim. ILU tendered the defense of the action to Sirius on January 10, 2005. On March 28, 2005, Sirius disclaimed coverage on the grounds of late notice.
In his complaint dated July 11, 2005, Samboroski commenced the underlying personal injury action against several defendants, including York. York, in this summary judgment motion, argues that the notice was timely and, as an additional insured under Solty's' policy, that Sirius is obligated to indemnify and defend York. Sirius opposed the motion, and subsequently cross-moved for summary judgment, on the grounds that York was not an additional insured at the time of the loss. In support of the cross-motion Sirius submitted documentary evidence that the policy endorsement naming York an additional insured did not become effective until December 6, 2004. York does not dispute that it was not named as an additional insured on the date of the loss, October 29, 2004. But, York argues that Sirius is obligated to defend and indemnify York pursuant to the February 15, 2004 subcontractor's agreement between York and Solty's.
Discussion
It is undisputed that there is a subcontractor's agreement between York and Solty's and, that it requires Solty's to obtain insurance that provides York with contractual and general liability coverage. Solty's insurance contract with Sirius states:
"2. Exclusions
This insurance does not apply to:
a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured.
This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property.
b. Contractual Liability
"Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
. . .
(2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided:
(a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and
(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged"
York argues that its contract with Solty's is an insured contract within the meaning of the insurance contract between Solty's and Sirius. The insurance contract states:
""Insured contract" means:
f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "propertydamage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement."
Because the subcontractor's agreement between York and Solty's is an insured contract, Sirius is obligated to indemnify and defend York pursuant to its insurance contract with Solty's.
Sirius argues that it should not be required to indemnify and defend York because there has not yet been a determination that the indemnity provision in the subcontractor's agreement is valid. Sirius does not, however, offer an argument as to why the indemnity provision is invalid. Sirius also argues that the indemnity provision is irrelevant at this time because there has not yet been a determination that there was "any breach of statutory duty or any willful or negligent act or failure to act" as is required to give rise to liability under the indemnity provision. However, It is well-settled that "an insurer's duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy" ( Fitzpatrick v. American Honda Motor Co., Inc., 78 NY2d 61, 65). The facts alleged in the complaint in this case give rise to a reasonable possibility of recovery. Accordingly, Sirius has a duty to defend.
Sirius also argues that the complaint should be dismissed because it did not receive timely notice of the claim."It is well settled that where an insurance policy requires an insured to provide notice as soon as practicable' of an occurrence, such notice must be provided within a reasonable time under all the circumstances"( Lukralle v. Durso Supermarkets, 238 AD2d 318, 319 [2d Dept 1997][ citations omitted]). The accident occurred on October 29, 2004. ILU was notified of the claim by York on December 16, 2004, and the defense was tendered to Sirius on January 10, 2007. This was a reasonable time under all of the circumstances herein.
Conclusion
Based on the foregoing, the cross-motion by Sirius to dismiss the complaint is denied and the motion by York for summary judgment is granted. Settle judgment on notice.