Steelfab, Inc. v. Lancer Ins. Co., Index No. 308284/10
| Decision Date | 09 May 2014 |
| Docket Number | Nassau Co. Index No. 005207-2010,Index No. 308284/10 |
| Citation | 2014 NY Slip Op 31652 (U) |
| Parties | Steelfab, Inc., Plaintiff v. Lancer Insurance Company, Defendant Lancer Insurance Company, Plaintiff v. Mark Riccardi, Kelly Riccardi, and Rock Equipment Corporation, Defendants |
| Court | New York Supreme Court |
In the first-entitled action plaintiff Steelfab Inc. ("Steelfab") seeks a declaration that it is an insured under a policy of commercial auto insurance issued by Lancer Insurance Company ("Lancer") to Speedway Transportation, Inc., ("Speedway"), and as such, the insurer has a duty to defend against liability and indemnify Steelfab in connection with a personal injury action commenced by Mark Riccardi ("Riccardi") In the second above-entitled action1 commenced in Nassau County, the insurer seeks a declaration that the Speedway policy does not provide coverage to Rock Equipment Corporation ("Rock") in connection with the Riccardi action. Rock has defaulted in the action.
It is alleged that at a public school renovation project while off-loading steel railings he was employed to install, Riccardi fell from a trailer. The causative defect alleged is the dangerous condition of the trailer itself, specifically , its floor, which contained holes , and was missing plarjks [Verified Complaint ¶ 39]. The trailer was owned by Rock Equipment Corporation ("Rock")2, and the railings, which Riccardi was off-loading for later installation3 in a safety ramp, were fabricated and then loaded onto the flatbed trailer by Steelfab employees at its Newburgh, New York facility. Steelfab had retained Speedway4 to use its tractor to haul the loaded trailer to the Bronx County worksite. At the time of the unloading which was performed by plaintiff, and DutchessIron co-workers, and one Steelfab employee, Rock's trailer was attached to Speedway's tractor, parked at the worksite.
Riccardi commenced an action in this court against the City of New York, and its Construction Authority, and both its Board and Department of Education, as well as the general contractor, Andron Construction Corporation ("Andron"), and Steelfab, Rock, and Speedway, alleging that his injuries had resulted from their negligence, and violations of Labor Law §§200, 240(1), and 241(6)5.
In pertinent part, the complaint alleges that Steelfab directed or controlled the renovation project, and as a contractor, or an agent of the owner, was required by the statute, to furnish devices for plaintiff's protection, and failed to do so. The common law negligence claim alleges that Steelfab maintained the subject "premise" in a defective and unsafe condition, and failed to provide lifting or hoisting equipment, or safety devices to prevent falls, or a safe means by which to access the materials to be unloaded [ Twentieth -Fourth Cause of Action, ¶¶ 209-214].
The negligence causes of action asserted against Rock and Speedway are identical to each other and to that asserted against Steelfab, with the additional allegation that each provided an unsafe and defective trailer [Twenty-Fifth and Twenty-Sixth Cause of Action].
Lancer issued a policy of insurance to Speedway effective 06/16/2008 to 6/16/2009 extending coverage for commercial autos . By its terms the insurer was required to "pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto' ." [Section II - Liability coverage - A. Coverage].
Subdivision 1 of Part A of Section II - Liability Coverage defines an insured to include the following.
1. Who is An Insured
The following are "insureds":
Also as pertinent here, the policy provides the following definition for symbol "46"
-"Specifically Described 'Autos'":
Only those "autos" described in Item Three of the Declarations For which a premium charge is shown (and for Liability Coverage any "trailers" you don't own while attached to any power unit described in Item Three).
Both Speedway and Lancer move for dispositive relief, and the motions are consolidated for purposes of disposition.
Steelfab contends that it is an insured because it was permissively "using" the tractor-trailer at the time of the accident. To the extent that the insurer employed that termas opposed to more restrictive ones such as "operation ", Steelfab argues that the term must be construed against the insurer, in favor of coverage in accordance with the broad interpretation recognized by such appellate authority as Hertz Corp. v. GEICO, 250 A.D.2d 181, 683 N.Y.S.2d 483 [1st Dept. 1998], and New York State Supt. of Ins. v. New York Cent. Mut. Fire Ins. Co., 98 A.D.3d 856, 951 N.Y.S.2d 1 [1st Dept. 2012]. With respect to the criteria argued to have been established by such precedent, Steelway argues that both are met here, i.e., 1) that the tractor -trailer was clearly operated to serve Steelfab's purposes, and 2) the vehicle was under the supervision and control of Steelfab in so much as its employee "was present at all times to oversee the unloading of the steel." (Memorandum of Law pp.6-7).
Steelfab, which is being defended in the underlying action by NGM Insurance Company under the terms of a contractor's policy that includes coverage for general liability and hired and non-owned auto liability, also maintains that upon comparison of its policies, for purposes of the Riccardi litigation, as a matter of law, the coverage to which it is entitled under the Lancer policy, is primary, and the NGM, excess.
Lancer contends that it is entitled to judgment as a matter of law declaring that neither Rock nor Steelfab is an insured under the terms of the Speedway auto policy.
Concerning the former, Lancer notes that Rock has defaulted in the action,7 butin light of the co-defendants' contention Ithat Rock is also an insured under the policy, seeks an award of summary judgment declaring that it has no duty to defend or to indemnify Rock.
It is the insurer's contention that the policy covers five categories of insureds: 1) the named policy-holder, Speedway; 2) certain permissive users of covered autos; 3) the owner of a covered trailer while attached to a covered tractor; 4) the owner of certain tractors, and 5) someone vicariously liable for the acts of another insured.
Lancer argues that the only category of insured under which Rock could claim coverage would be the third category; i.e., "c" of the "Who is an Insured " definition8, and on the record here, it cannot as a matter of law qualify because there is no evidence to raise a triable issue of fact that Speedway leased the trailer from Rock, or paid the owner for the use of it, or entered into any separate agreement by which the owner authorized the hauler to use the trailer for its own purposes. Having been hired to deliver a manufacturer's loaded trailer, and in so: doing, Speedway asserts that it neither borrowed nor hired Rock's trailer (see, Fisher v. Tyler, 284 Md. 100 394 A.2d 1199 [Court of Appeals, Md. 1978]; Pennsylvania Threshermen &: Farmers Casualty Ins.Co v. Hartford Accident &Indemnity Co., 310 F.2D 618 [4th Cir. 1962]; see also, 5 A.L.R.4th 636).
The insurer also argues that under the terms of the policy, the trailer is covered only so long as it is attached to the covered power unit, and the allegations against Rock devolve not from that period, but from the owner's conduct preceding it, specifically, in inadequately maintaining the trailer 9, and providing it to plaintiff and his co-workers in an unsafe condition.
2) Lancer contends that Steelfab does not qualify as an insured because it was, in essence, a shipper, hiring a motor carrier to haul its product. The manufacturer was not using the covered vehicle to perform the transportation, nor otherwise controlling or possessing it such as to qualify as a perrhissive user (see, Kolby v.Northwest Produce Co., 505 N.W.2d 648 [Minn.Ct.App. 1993]). The fact that Steelfab chose the delivery destination does not rise to the level of supervisory control sufficient to support a finding that the shipper was "using" the tractor-trailer at the time of the accident.
With respect to the precedent cited by Steelfab, Lancer argues that while the term "use" in automobile insurance polijcies is to be broadly interpreted, the facts in Hertz Corp. v. GEICO , op. cit, and New York State Superintendent of Insurance v. New York Central Mutual Ins. Co., op.cit., each concerning the legal responsibility for the use of a leased vehicle by a party absent frorh that vehicle at the time of the accident, aredistinguishable . There is here no evidence that Steelfab leased the covered vehicle, or exercised any control over designating the driver or the hauling route. Neither the appellate authority cited, nor other controlling precedent support Steelfab's assertion that even without such indicia of control oyer the vehicle , it can still be found to have been using the covered auto simply because:it had been operated by the insured for Steelfab's benefit.
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