| B.F. Yenny Constr. Co., Inc. v One Beacon Ins. Group |
| 2008 NY Slip Op 03745 [50 AD3d 1477] |
| April 25, 2008 |
| Appellate Division, Fourth Department |
| B.F. Yenny Construction Company, Inc., Plaintiff, v One BeaconInsurance Group, Defendant and Third-Party Plaintiff-Appellant. Selective Way InsuranceCompany, Third-Party Defendant-Respondent. |
—[*1] Coughlin & Gerhart, L.L.P., Binghamton (Keith A. O'Hara of counsel), for third-partydefendant-respondent.
Appeal from a judgment (denominated order) of the Supreme Court, Onondaga County(Anthony J. Paris, J.), entered April 3, 2007 in a declaratory judgment action. The judgment, interalia, denied the motion of defendant and third-party plaintiff for summary judgment.
It is hereby ordered that the judgment so appealed from is unanimously reversed on the lawwithout costs, the cross motion is denied, the third-party complaint is reinstated, the motion isgranted, and judgment is granted in favor of defendant and third-party plaintiff as follows:
"It is ADJUDGED and DECLARED that third-party defendant is obligated to provideprimary coverage and to share equally with defendant and third-party plaintiff in the costs ofplaintiff's defense and indemnification in the underlying action."
Memorandum: Plaintiff, the general contractor on a construction project, commenced thisaction seeking judgment declaring that defendant and third-party plaintiff, One Beacon InsuranceGroup (One Beacon), is obligated to defend and indemnify plaintiff in the underlying personalinjury action. Plaintiff had entered into a subcontract with Syracuse Mosaic Terrazo, Inc.(Syracuse Mosaic) to perform tile work on the construction project, and an employee of SyracuseMosaic and his wife commenced the underlying action seeking damages for injuries sustained bythe employee at the work site. Pursuant to the terms of the subcontract, Syracuse Mosaic agreedto name plaintiff as an additional insured on its commercial general liability policy, which wasissued by One Beacon. Supreme Court previously granted plaintiff's motion seeking summaryjudgment and declared, inter alia, that One Beacon is obligated to defend and indemnify plaintiffin the underlying action.[*2]
While plaintiff's motion was pending, One Beaconcommenced a third-party action alleging that third-party defendant, Selective Way InsuranceCompany (Selective), is obligated to defend and indemnify plaintiff in the underlying actionpursuant to the commercial general liability policy issued by Selective to plaintiff, and seekingjudgment declaring that Selective's coverage obligation is coprimary to that of One Beacon. Weconclude that the court erred in denying One Beacon's motion seeking summary judgmentgranting the declaration sought in the third-party complaint and in granting Selective's crossmotion seeking, inter alia, summary judgment dismissing the third-party complaint and awardingSelective $13,656.90 to reimburse it for attorney's fees and costs incurred in the underlyingaction. In granting Selective's cross motion, the court erred in determining, without reference tothe terms of the One Beacon and Selective policies, that coverage of plaintiff as an additionalinsured under the One Beacon policy was exclusively primary and that Selective's coverage wasexcess. "In order to determine the priority of coverage among different policies, a court mustreview and consider all of the relevant policies at issue" (BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 716[2007]). Contrary to the court's determination, the terms of the One Beacon and Selectivepolicies are controlling, not the terms of the subcontract between plaintiff and Syracuse Mosaic(see United States Fid. & Guar. Co. v CNA Ins. Cos., 208 AD2d 1163, 1165 [1994];U.S. Liab. Ins. Co. v Mountain Val. Indem. Co., 371 F Supp 2d 554, 558-560 [2005]).Pursuant to the "other insurance" and "method of sharing" provisions of those policies, both OneBeacon and Selective have an obligation to provide primary coverage and to share equally in thecosts of plaintiff's defense and indemnification in the underlying action (see Jefferson Ins. Co.of N.Y. v Travelers Indem. Co., 92 NY2d 363, 372 [1998]; Pennsylvania Gen. Ins. Co. vAetna Cas. & Sur. Co., 306 AD2d 906 [2003]).
Finally, we reject Selective's contention that One Beacon is collaterally estopped fromlitigating the parties' respective obligations as coinsurers. The doctrine of collateral estoppel doesnot apply because the issue in the third-party action was not raised in connection with plaintiff'smotion for summary judgment in the main action nor was it actually litigated in that action(see National Union Fire Ins. Co. of Pittsburgh, Pa. v Hartford Ins. Co. of Midwest, 93NY2d 983, 986 [1999]; Merchants & Bus. Men's Mut. Ins. v Savemart, Inc., 213 AD2d607, 609 [1995]). Present—Scudder, P.J., Martoche, Smith, Green and Gorski, JJ.