Sixty Sutton Corp. v. Illinois Union Insurance Co.

• Citation: 2006 NY Slip Op 08886,34 A.D.3d 386,825 N.Y.S.2d 46
• Decision Date: 30 November 2006
• Docket Number: 8972.
• Parties: SIXTY SUTTON CORP. et al., Plaintiffs, v. ILLINOIS UNION INSURANCE CO. et al., Defendants, and TOWER BUILDING SERVICES, INC., Respondent. ILLINOIS UNION INSURANCE CO., Third-Party Plaintiff-Respondent, v. UTICA FIRST INSURANCE COMPANY, Third-Party Defendant-Appellant.
• Court: New York Supreme Court Appellate Division

34 A.D.3d 386

825 N.Y.S.2d 46

2006 NY Slip Op 08886

SIXTY SUTTON CORP. et al., Plaintiffs, v. ILLINOIS UNION INSURANCE CO. et al., Defendants, and TOWER BUILDING SERVICES, INC., Respondent.

ILLINOIS UNION INSURANCE CO., Third-Party Plaintiff-Respondent, v. UTICA FIRST INSURANCE COMPANY, Third-Party Defendant-Appellant.

8972.

Appellate Division of the Supreme Court of the State of New York, First Department.

Decided November 30, 2006.

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered October 24, 2005, which denied third-party defendant Utica First Insurance Company's motion pursuant to CPLR 3211 (a) (1) and (7) to dismiss the third-party complaint and for summary judgment pursuant to CPLR 3211 (c), unanimously reversed, on the law, with costs, the motion to dismiss pursuant to CPLR 3211 (a) (1) granted, a declaration issued that Utica First Insurance Company has no obligation to defend or indemnify Tower Building Services, Inc. in the underlying action, and the third-party complaint dismissed. The Clerk is directed to enter judgment accordingly.

Julio Yadaicela was injured while doing construction work at a building owned by Sixty Sutton Corporation and managed by Goodstein Management LLC. He brought an action against Sixty Sutton and Goodstein. They subsequently brought a third-party action against Tower Building Services, Inc., the general contractor for the construction project, and its insurance carrier, Illinois Union Insurance Company.

Yadaicela had worked for Jerez Renovations, a subcontractor of Tower. Jerez was insured by Utica First Insurance Company. In a letter dated November 18, 2004, Illinois demanded that Utica defend and indemnify Tower in the underlying personal injury action. That letter also stated that the contract between Tower and Jerez contained an indemnification provision, and that a certificate of insurance was issued to Jerez, listing Tower as an additional insured under Jerez's policy with Utica.

Utica responded to both Tower and Illinois on January 3, 2005. It stated that its policy with Jerez did not require it to provide coverage for any claims arising out of Mr. Yadaicela's accident. Utica cited the "Employee Exclusion" in the policy, which provides:

"This insurance does not apply to:

"bodily injury to any employee of any insured ... if such claim for bodily injury arises out of and in the course of his/her employment or retention of such contractor by or for any insured, for which any insured may become liable in any capacity" (emphasis supplied).

Utica also added that Tower was not a named additional insured under Jerez's policy. Further, Utica informed Illinois that Tower does not fall within the class of entities included in the section of the Utica policy governing "blanket additional insured[s]." That section includes "[a]ny person or organization whom [Jerez is] required to name as an additional insured on this policy under a written contract or written agreement" (emphasis supplied). Utica informed Illinois that nothing in Jerez's contract with Tower required it to procure insurance in favor of the general contractor.

Illinois commenced this action, alleging that Utica's denial of coverage was untimely and improper. It sought a declaration that Utica was required to defend and indemnify Tower in the underlying action. In lieu of interposing an answer, Utica moved to dismiss the complaint pursuant to CPLR 3211 (a) (1) and (7) for failure to state a claim. Utica also requested that the court treat the motion as one for summary judgment pursuant to CPLR 3211 (c), and that it issue a judgment in Utica's favor.

In support of the motion, Utica submitted a copy of the insurance policy, and an affidavit from one of its claims representatives, which stated that Tower was not an insured or an additional insured under the Utica policy. The claims representative also noted that the "employee exclusion" in the Utica policy precluded coverage for Mr. Yadaicela's injuries.

Illinois opposed the motion, and sought further discovery. It claimed that its copy of the Utica policy was not correct or complete. Illinois reiterated that a certificate of insurance indicated that Tower was an additional insured under the Utica policy. Tower also opposed the motion, adopting Illinois' arguments, and relying upon a "blanket endorsement" in the Utica policy, which provided that an insured included "any person or organization whom you...