Lighton Indus., Inc. v. Allied World Nat'l Assurance Co., 16-CV-3812(KAM)(SMG)

Citation348 F.Supp.3d 167
Decision Date28 September 2018
Docket Number16-CV-5302(KAM)(SMG),16-CV-3812(KAM)(SMG)
Parties LIGHTON INDUSTRIES, INC., Plaintiff, v. ALLIED WORLD NATIONAL ASSURANCE COMPANY and Mt. Hawley Insurance Company, Defendants. Hibuild Limited Liability Company, Plaintiff, v. Mt. Hawley Insurance Company, Defendant.
CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)

Gerard G. McCabe, McCabe & Associates, New York, NY, Kathy S. Marks, Sarah Ann Sulkowski, Yankwitt LLP, White Plains, NY, for Plaintiff.

Timothy E. Delahunt, Elsa Johanna Schmidt, Kenney Shelton Liptak Nowak LLP, Buffalo, NY, Alexandra Elizabeth Rigney, Stark Stewart, LLP, White Plains, NY, Jennifer Freda Mindlin, Fleischner Potash Cardali et al., Mineola, NY, for Defendants.

MEMORANDUM & ORDER

KIYO A. MATSUMOTO, United States District Judge

Presently before the court are the parties' cross-motions for summary judgment in Lighton Industries Inc. v. Allied World National Assurance Company et al. , case number 16-CV-3812 (the "Lighton Action") and Hibuild LLC v. Mt. Hawley Insurance Company , case number 16-CV-5302 (the "Hibuild Action"), which have been consolidated pursuant an order issued February 2, 2017 by the Honorable Steven M. Gold, United States Magistrate Judge.1 (See Minute Entry, ECF No. 20.) Both actions relate to the applicability of insurance coverage to an alleged accident on the campus of Brooklyn College on August 16, 2014. Also before the court are an objection to, and a motion to strike, a late-filed Local Rule 56.1 statement, and a motion to authorize the filing of the same statement.

Plaintiff Lighton Industries, Inc. ("Lighton") seeks summary judgment on its claims for declaratory judgment that defendants Allied World National Assurance Company ("Allied") and Mt. Hawley Insurance Company ("Mt. Hawley," and together with Allied, "defendants") have a duty to defend Lighton and a duty to indemnify Lighton with respect to litigation and potential liability arising from the alleged accident. (Lighton Memorandum in Support of Motion for Summary Judgment ("Lighton Mem."), ECF No. 25-1, at 1-2.)

Plaintiff Hibuild Limited Liability Company ("Hibuild," and together with Lighton, "plaintiffs") seeks summary judgment that Mt. Hawley has a duty to defend Hibuild in the same litigation, but does not seek summary judgment regarding indemnification, as Hibuild concedes that issue is not ripe. (Hibuild Memorandum in Support of Motion for Summary Judgment ("Hibuild Mem."), ECF No. 27-1, at 1 and n.1.) Conversely, defendants seek summary judgment that they do not have any duty to defend or indemnify plaintiffs. (Allied Memorandum in Support of Motion for Summary Judgment ("Allied Mem."), ECF No. 23-1, at 1; Mt. Hawley Memorandum in Support of Motion for Summary Judgment ("Mt. Hawley Mem."), ECF No. 24-14, at 1-2.)

Additionally, Allied objects to, Mt. Hawley seeks to strike, and Lighton seeks to have the court receive and consider, Lighton's belatedly-filed Amended Local Rule 56.1 Statement of Undisputed Material Facts. (See Allied Objection to Lighton Amended 56.1 Statement, ECF No. 50; Mt. Hawley Motion to Strike Lighton Amended 56.1 Statement, ECF No. 51.) Lighton filed this statement with its reply papers, in response to Allied and Mt. Hawley's observations that Lighton's initial Local Rule 56.1 statement did not comply with Local Rule 56.1. (See Lighton Amended Rule 56.1 Statement, ECF No. 49-1; Allied Rule 56.1 Counter-statement, ECF No. 26-1; Mt. Hawley Rule 56.1 Counter-statement to Lighton, ECF No. 28.)

Background
I. Factual Background

Except as indicated, the following undisputed facts are drawn from the parties' statements of undisputed material facts pursuant to Local Rule 56.1, and the supporting exhibits set forth in the parties' joint stipulation as to exhibits applicable to all motions ("Joint Stip." or the "joint stipulation," ECF No. 22).

A. Plaintiffs and Relevant Third Parties

This action relates to a masonry repair project (the "James Hall Repairs") at Brooklyn College's William James Hall, a five-story building located at 2900 Bedford Avenue, Brooklyn, New York ("James Hall"). (Mt. Hawley Requests for Admission ("Mt. Hawley RFA"), Joint Stip. Ex. A, ECF No. 22-1, No. 1, 7-8, 11-12; Lighton Responses to Mt. Hawley RFA ("Lighton RFA Resp."), Joint Stip. Ex. B, ECF No. 22-2, No. 1, 7-8, 11-12; Hibuild Responses to Mt. Hawley RFA ("Hibuild RFA Resp."), Joint Stip. Ex. C ECF No. 22-3, No. 1, 7-8, 11-12.)

Lighton and Hibuild are both construction companies involved in the James Hall Repairs. Specifically, the Dormitory Authority of the State of New York ("DASNY") retained Lighton to serve as general contractor for the James Hall Repairs. (Mt. Hawley RFA No. 15; Lighton RFA Resp. No. 15; Hibuild RFA Resp. No. 15.) Lighton, in turn, retained Hibuild to serve as subcontractor and/or project manager. (Mt. Hawley RFA Nos. 16-17 (asserting Hibuild was subcontractor or project manager); Lighton RFA Resp. Nos. 16-17 (admitting Hibuild was subcontractor); Hibuild RFA Resp. Nos. 16-17 (admitting Hibuild was Project Manager).) Additionally, Hibuild retained non-party Rock Scaffolding Corporation ("Rock") to serve as a subcontractor.2 (Mt. Hawley RFA No. 18; Lighton RFA Resp. No. 18; Hibuild RFA Resp. Nos. 18.)

The specific contractual arrangements involving DASNY, Lighton, Hibuild, and Rock are as follows: on December 14, 2012, Lighton entered into a construction contract with the Dormitory Authority of the State of New York ("DASNY"). (See Contract, Joint Stip. Ex. F, ECF No. 22-6.) The contract referenced a job order and required Lighton to, in relevant part, "perform the tasks required by each individual Job Order issued pursuant to" the contract. (Id. at 1.) DASNY subsequently issued a job order on November 5, 2013 calling for Lighton to carry out "[c]ornice repair" at James Hall building (i.e. , the James Hall Repairs). (Job Order, Joint Stip. Ex. G, ECF No. 22-7, at 002.) More specifically, Lighton was to "[p]rovide the labor[ ] and equipment to remove and replace the deteriorated areas on ... the James Hall Building on the south, north, and east sides." (Id. at 004.)3

On December 21, 2012, Lighton entered into a subcontracting agreement with Hibuild for the James Hall Repairs. (See Subcontracting Agreement, Joint Stip. Ex. H, ECF No. 22-8.) The subcontracting agreement called for Hibuild to "provide all necessary equipment, material and labor to complete all work as per individual work orders issued under DASNY JOC Contract 173254/CR276" (Subcontracting Agreement Art. 8), which the DASNY Job Order indicates is the contract between Lighton and DASNY relevant to this action. (See Job Order at 002.)4

Hibuild, in turn, entered into a subcontracting agreement with Rock. The agreement states that it is "[f]or the following Project: JOB ORDER CONTRACT REGION-1 CONTRACT NO. 173254CR276." (Rock-Hibuild Subcontracting Agreement, Joint Stip. Ex. J, ECF No. 22-10, at 1.) Further, pursuant to the agreement between Rock and Hibuild, Rock was to "[p]rovide all Plant, Labor, Material, Equipment, tools and supervision (English speaking) necessary to perform work outlined in individual Work Order also known as Individual Job Order [sic]." (Id. Art. 8.)

B. The James Hall Repairs

James Hall is a five-story building with brick pillars lining the exterior walls. (Mt. Hawley RFA Nos. 1, 5, 7-8, 11-12; Lighton RFA Resp. Nos. 1, 5, 7-8, 11-12; Hibuild RFA Resp. Nos. 1, 5, 7-8, 11-12.)

As noted above, the Job Order between DASNY and Lighton for the James Hall Repairs stated that the project involved, inter alia , "cornice repair" on the exterior of the building (Job Order, Joint Stip. Ex. G, at 002), but Lighton and Hibuild both deny that the Project actually involved repairs to a cornice on the exterior of James Hall. (Mt. Hawley RFA No. 6; Lighton RFA Resp. No. 6; Hibuild RFA Resp. No. 6.) The parties agree that the James Hall Repairs also involved masonry patching work on the exterior of the building, repointing and/or restoration of the brick pillars on the exterior walls, and the erection of a scaffold that scaled the full height, i.e. five stories, of the building on at least one of its sides. (Mt. Hawley RFA Nos. 4, 5, 7, 8; Lighton RFA Resp. Nos. 4, 5, 7, 8; Hibuild RFA Resp. Nos. 4, 5, 7, 8.) Notably, the James Hall Repairs involved no interior work. (Mt. Hawley RFA No. 9; Lighton RFA Resp. No. 9; Hibuild RFA Resp. No. 9.)

C. The Insurance Policies

Allied and Mt. Hawley are both insurance companies. Allied issued one insurance policy, and Mt. Hawley issued two insurance policies, relevant to the instant action.

1. The Allied Policy

Allied issued Policy No. 5050-0003 (the "Allied Policy") to Lighton for the policy period of April 14, 2014 to April 14, 2015. (Allied Policy, Joint Stip. Ex. RR, ECF No. 22-52.) The Allied Policy includes a coverage limit of $1,000,000 per occurrence and, as well as a $2,000,000 "General Aggregate Limit." (Id. at AW000241.)5 By endorsement, the named insured under the Allied Policy was amended to include both Lighton and Lighton Electric, Inc. (Id. at AW000247.)

Additionally, the Allied Policy contains an endorsement that creates an exclusion for work by "uninsured or underinsured subcontractors" (the "Subcontractor Exclusion"). (See id. at AW000312-13.)6 The Subcontractor Exclusion provides as follows:

Solely with respect to operations or work performed in the State of New York , SECTION I – COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions is amended to include the following additional exclusion:
This insurance does not apply to:
Work Done On Your Behalf By Uninsured or Underinsured Subcontractors
Any claim, "suit", demand or loss that alleges "bodily injury" to any "worker" that in any way, in whole or in part, arises out of, relates to or results from operations or work performed on your behalf by a subcontractor, unless such subcontractor:
(1) Has in force at the time of such injury or damage a Commercial General Liability insurance
...

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