Golden Ins. Co. v. Ingrid House, Inc.

• Decision Date: 10 May 2021
• Docket Number: 20-cv-1163 (LJL)
• Parties: GOLDEN INSURANCE COMPANY, Plaintiff, v. INGRID HOUSE, INC., Arch Specialty Insurance Company, and the State Insurance Fund, Defendants.
• Court: U.S. District Court — Southern District of New York

538 F.Supp.3d 293

GOLDEN INSURANCE COMPANY, Plaintiff,

v.INGRID HOUSE, INC., Arch Specialty Insurance Company, and the State Insurance Fund, Defendants.

20-cv-1163 (LJL)

United States District Court, S.D. New York.

Signed May 10, 2021

Timothy Wayne Stalker, Stalker PC, Landenberg, PA, Matthew Ellis Rayburn, George J. Vogrin, Jr., Vogrin & Frimet, LLP, New York, NY, for Plaintiff.

Neal Fellenbaum, Zegen & Fellenbaum, New York, NY, for Defendant Ingrid House, Inc.

OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge:

Plaintiff Golden Insurance Company ("Golden Insurance") and Defendant Ingrid House LLC ("Ingrid House") cross-move for summary judgment pursuant to Federal Rule of Civil Procedure 56.

BACKGROUND

The following facts are undisputed unless otherwise indicated.

A. General Background

Golden Insurance is a risk retention group and liability insurance company incorporated in Nevada and with its principal place of business in Scottsdale, Arizona. Dkt. No. 65 ¶ 1. Ingrid House is a New York limited liability company with its principal place of business in New York. Id. ¶ 2. From prior to December 17, 2015 to the present, Ingrid House has been the owner of premises located at 356 East 8th Street, New York, New York (the "Subject Premises"). Id. ¶ 3.

Ingrid House was engaged in a construction project (the "Project") on the Subject Premises, to expand the Subject Premises from four stories to six. Id. ¶ 18. On or about November 25, 2014, Ingrid House entered into a contract (the "Contract") with Elite Builders Corp. ("Elite Builders") to complete the Project. Id. ¶ 17. Around the same time, NYJC Construction Corp. ("NYJC") and Elite Builders entered into a Subcontract Agreement (the "Subcontract") for the construction at the Subject Premises. Id. ¶ 19.

B. The Insurance Policy

On or about December 17, 2015, Golden Insurance issued Policy GIC1301201 (the "Golden Policy") to Ingrid House to insure the Project. Id. ¶ 4. The Golden Policy provided that: "This insurance applies to ‘bodily injury’ and ‘property damage’ only with regards to the project at 356 E. 8^th Street, New York, NY 10009." Id. ¶ 5.

The "Coverages" portion of the Golden Policy provides as follows:

SECTION I - COVERAGES COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

We will pay those sums that the "insured" becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. This insurance is written on a claims-made and reported basis and applies only if:

a. The "bodily injury" or "property damage" did not occur before the Retroactive Date, if any, shown in the Declarations or after the end of the policy period; and

b. Claim for damages because of "bodily injury" or "property damage" is first made and reported to us against any "insured" during the policy period or any Extended Reporting Period we provide under Extended Reporting Periods; and

c. The "bodily injury" or "property damage" occurred in the coverage territory.

We will have the right and duty to defend the "insured" against any "suit" seeking those damages. However, we will have no duty to defend the "insured" against any "suit" seeking damages for "bodily injury" or "property damage" to which this "insured" does not apply. We may, at our discretion, investigate any "occurrence", "accident", "incident", damages, or loss and settle any claim or "suit" that may result. But the amount we will pay for damages is limited as described in Section III – Limits of Insurance. No other obligation or liability to pay sums or perform acts or services is covered. We have no obligation under this insurance with respect to any claim or "suit" settled without our consent. (See Exhibit "A", Golden Policy).

Id. ¶ 6.

The Golden Policy additionally included two exclusions relevant to this case. Endorsement #30 states:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

EXCLUSION EXTERIOR OPERATIONS

SECTION I- COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

2. Exclusions

This insurance does not apply to:

"Bodily injury" or "property damage" arising out of "your work" on the exterior of any building which its highest point is over three (3) stories in height. This exclusion applies to injury or damage arising out of "your work" during the process of operations and included in the "products-completed operations hazard", regardless of who has performed those operations. Operations includes, but is not limited to the construction, restoration, reconstruction, remodeling, repair, erection, demolition, installation, maintenance, cleaning or servicing of the exterior of the building which its highest point is over three (3) stories in height.

All terms, conditions and provisions of the General Liability coverage form, and its forms and endorsements apply.¹

Id. ¶ 7

Endorsement #10 provides:

EXCLUSION- EARTH MOVEMENT OR SUBSIDENCE

The following exclusion is added to Paragraph 2., Exclusions of Section I-Coverage A- Bodily Injury and Property Damage Liability:

2. Exclusions

This insurance does not apply to:

Earth Movement or Subsidence:

"Bodily injury" or "property damage" arising out, resulting from, contributing to or aggravated by the subsidence, settling, expansion, sinking, slipping, falling away, caving in, shifting, eroding, consolidating, compacting, flowing, rising, tilting or any other similar movement of earth or mud or expansion of soils, regardless of whether such movement is a naturally occurring phenomena or is man-made. We will have no duty to investigate or defend any suit brought against you or pay any costs or expenses if such investigation and defense for liability, claims, damage or loss.

Id. ¶ 8.

C. The Accident

Luis Alberto Pomboza Chicaiza ("Chicaiza") was an employee of NYJC. Id. ¶ 23. On or about December 24, 2015, Chicaiza was working at the construction site at the Subject Premises. Id. ¶ 22. While Chicaiza was working at the job site, as the result of a wall collapse, he fell from the fourth floor of the Subject Premises. Id. ¶¶ 24-25.

D. The Coverage Dispute

On January 20, 2016, the law firm of Ginsburg & Misk, LLP, prior counsel for Ingrid House, notified Golden Insurance and American Claims Management, Inc. ("ACM"), the claim administrator for Golden Insurance, of the December 24, 2015 accident. Id. ¶ 26; Ex. I. The letter informed Golden Insurance and ACM of the claim, stating that "[d]uring construction at the [Subject Premises] an employee of one of the subcontractors ... was unfortunately killed as a result of an accident" and asked Golden to inform the insured "of their acceptance of the tender of this claim at [its] earliest convenience." Dkt. No. 65, Ex I at 2. The letter attached a demand letter from Chicaiza's estate with the request that the insurance carrier be put on notice of the accident at the construction site. Id. at 3-4.

By letter of March 4, 2016, the law firm of Smith Mazure, Golden Insurance's counsel, responded to Ingrid House's claim. Id. ¶ 27; Ex. J. Its letter invoked Endorsement #30 and stated "[a]s the work involved included the exterior of the building and the building was over three stories in height, the above referenced exclusion applies. As such, no coverage, neither defense, indemnity, nor any benefit under the policy will be provided to Ingrid Home, LLC [sic], the estate of Louis Pomboza, Louis Pomboza, nor to any other individual or entity in reference to this matter." Id. at 3. The letter also invoked Endorsement #10 and stated that it was counsel's "understanding that this incident may have been caused by a full or partial building collapse" and to the extent that such endorsement applied, Golden Insurance would not provide coverage, a defense or indemnity. Id. at 4. The March 4, 2016 letter stated "Golden Insurance hereby denies coverage, defense and indemnity and any benefit under the policy to Ingrid Home, LLC [sic] ..." Id. at 5. The March 4, 2016 letter further provided: "It is our understanding that a Summons and Complaint has not yet been served or filed in this matter. Should same be served or filed, please provide a copy of same so that it may be separately be [sic] evaluated". Dkt. No. 65 ¶ 28; Ex. J at 3.

On or about December 21, 2017, Francisco Pomboza and Adam Stein, as co-administrators of Chicaiza's estate, filed an action (the "Underlying Matter") against NYJC, Elite Builders, Ingrid House and H&R Estate Realty Corp. for the injuries and ultimate death of Mr. Chicaiza in the Supreme Court of New York, Kings County, bearing index number 524610/2017 (the "Underlying Complaint"). Id. ¶ 29 (See Exhibit "K", Underlying Complaint). The Underlying Complaint alleged that Chicaiza "was caused to fall down an elevator and/or stairway shaft as a result of a wall collapsing and sustained severe and permanent injuries, including among other things, blunt force trauma and his wrongful death." Dkt. No. 65, Ex. K ¶ 51.

On January 24, 2018, Smith Mazure responded on behalf of Golden Insurance by sending a "reservation of rights/partial disclaimer" letter to Ingrid House ("January 24, 2018 Letter"). Dkt. No. 65-13. The letter "acknowledge[d] an obligation" to Ingrid House, but stated that "said defense will be subject to reservation of rights/partial disclaimer in relation to indemnity." Id. at 3. The January 24, 2018 Letter noted Endorsement #30 and that "[t]he work involved included the exterior of the building and it is known the building was over three stories in height," but added "it is unknown at this time whether the bodily injury set forth arose out of your work on the exterior of the building." Id. The January 24, 2018 Letter further stated, "[t]o the extent it is determined that the above-referenced exclusion is applicable in this matter, Golden reserves its right to deny coverage, deny a defense, and provide no indemnification or benefit under the Policy Ingrid Home, LLC [sic] nor to any other individual or entity in reference to this matter." Id. The ...