| Vassar Coll. v Diamond State Ins. Co. |
| 2011 NY Slip Op 04042 [84 AD3d 942] |
| May 10, 2011 |
| Appellate Division, Second Department |
| Vassar College et al., Appellants, v Diamond StateInsurance Company et al., Respondents, et al., Defendant. |
—[*1] Nicoletti Gonson Spinner & Owen LLP, New York, N.Y. (Edward S. Benson of counsel), forrespondent Diamond State Insurance Company. Milber Makris Plousadis & Seiden, Woodbury, N.Y. (Lorin A. Donnelly of counsel), forrespondent Scottsdale Insurance Company. Couch White, LLP, Albany, N.Y. (Harold D. Gordon and Donald J. Hillmann of counsel),for respondent Kirchhoff Construction Management, Inc.
In an action, inter alia, for a judgment declaring the priority of insurance coverageobligations, the plaintiffs appeal from an order of the Supreme Court, Dutchess County (Sproat,J.), dated June 15, 2010, which granted the motion of the defendant Scottsdale InsuranceCompany for partial summary judgment declaring that, in an underlying personal injury actionentitled McGlinchey v Vassar Coll., commenced in the Supreme Court, Bronx County,under index No. 7089-2005, the coverage provided to the plaintiff Vassar College, under acertain policy of insurance issued by the defendant Scottsdale Insurance Company to thedefendant Kirchhoff Construction Management, Inc., is excess to the coverage provided to theplaintiff Vassar College under a certain policy of umbrella liability insurance issued by theplaintiff United Educators Insurance, and granted the cross motion of the defendant DiamondState Insurance Company for partial summary judgment declaring that, in the same underlyingpersonal injury action, the coverage provided to the plaintiff Vassar College, under a certainpolicy of insurance issued by the defendant Diamond State Insurance Company to the defendantKirchhoff Construction Management, Inc., is excess to the coverage provided to the plaintiffVassar College under the same policy of umbrella liability insurance issued by the plaintiffUnited Educators Insurance.
Ordered that the order is reversed, on the law, with one bill of costs payable by therespondents, the motion for partial summary judgment and the cross motion for partial summaryjudgment are denied, upon searching the record, partial summary judgment is awarded to theplaintiffs declaring that the policy of umbrella liability insurance issued to the plaintiff VassarCollege by the plaintiff United [*2]Educators Insurance is excessto any coverage provided to the plaintiff Vassar College by the defendants Diamond StateInsurance Company and Scottsdale Insurance Company, and the matter is remitted to theSupreme Court, Dutchess County, for further proceedings on the remaining causes of action, andthe entry thereafter of an appropriate judgment, including a declaration in accordance herewith.
In 2003, the plaintiff Vassar College (hereinafter Vassar) hired the defendant KirchhoffConstruction Management, Inc. (hereinafter Kirchhoff), to perform certain construction work onpremises owned by Vassar. At all relevant times, Vassar was insured by the plaintiff UnitedEducators Insurance (hereinafter United Educators), under a primary general liability insurancepolicy (hereinafter the UE primary policy), as well as an umbrella liability insurance policy(hereinafter the UE umbrella policy). Kirchhoff had a commercial general liability insurancepolicy issued by ACE Property and Casualty Insurance Company (hereinafter ACE), a policydenominated as a commercial umbrella liability policy issued by the defendant Diamond StateInsurance Company (hereinafter Diamond), and an excess liability policy issued by the defendantScottsdale Insurance Company (hereinafter Scottsdale). The contract between Vassar andKirchhoff required Kirchhoff to have Vassar named as an additional insured on its policies.
A Kirchhoff employee, who allegedly was injured while performing work pursuant toKirchhoff's contract with Vassar, commenced a personal injury action against Vassar. ACEaccepted coverage, as did United Educators under the UE primary policy. Diamond andScottsdale, however, disclaimed coverage on late-notice grounds.
Vassar then commenced the instant action, eventually joining United Educators as a plaintiff.The complaint, inter alia, sought a judgment declaring that any coverage afforded to Vassarunder the UE umbrella policy was excess to any coverage provided by Diamond or Scottsdale.Scottsdale then moved for partial summary judgment declaring that any coverage obligation onits part would not be triggered until the limits of all other policies, including the UE umbrellapolicy, had been exhausted. Diamond cross-moved for partial summary judgment declaring thatany coverage obligation on its part would not be triggered until the limits of all other policies(with the exception of the Scottsdale policy), including the UE umbrella policy, had beenexhausted. The Supreme Court granted the motion and the cross motion, and the plaintiffsappeal.
The Supreme Court erred in its determination of the priority of coverage. The insuringagreement of the UE umbrella policy provides that coverage under that policy is triggered onlyafter exhaustion of the UE primary policy and "any other insurance available to the Insured."Contrary to the Supreme Court's determination, certain language appearing elsewhere in theinsuring agreement does not transform that policy, for all purposes, into a policy of primaryinsurance. Interpreting the insuring agreement in that fashion would render the clause referring to"any other insurance" a nullity. "An insurance contract should not be read so that someprovisions are rendered meaningless" (County of Columbia v Continental Ins. Co., 83NY2d 618, 628 [1994]; see Nautilus Ins.Co. v Matthew David Events, Ltd., 69 AD3d 457, 460 [2010]; Bretton v Mutual ofOmaha Ins. Co., 110 AD2d 46, 49 [1985], affd 66 NY2d 1020 [1985]).
The policy issued by Diamond provides that Diamond will pay the excess of the "retainedlimit," which is defined, in pertinent part, as the sum of the underlying insurance provided by theACE policy (which is primary insurance) and "[o]ther collectible primary insurance"(emphasis added). As noted above, the UE umbrella policy is not a policy of primary insuranceand, in contrast to the language of the Diamond policy, provides that it is not triggered untilexhaustion of the UE primary policy and "any other insurance available to the insured"(emphasis added), be it primary or otherwise. "[A]n insurance policy which purports to be excesscoverage but contemplates contribution with other excess policies or does not by the languageused negate that possibility must contribute ratably with a similar policy, but must be exhaustedbefore a policy which expressly negates contribution with other carriers, or otherwise manifeststhat it is intended to be excess over other excess policies" (State Farm Fire & Cas. Co. vLiMauro, 65 NY2d 369, 375-376 [1985]; see Jefferson Ins. Co. of N.Y. v TravelersIndem. Co., 92 NY2d 363, 372 [1998]). Here, the UE umbrella policy is clearly intended tobe excess over the Diamond policy, whereas the [*3]Diamondpolicy contemplated contribution with other excess policies. Accordingly, the Diamond policymust be exhausted before the UE umbrella policy is triggered.
Additionally, because the indemnity obligation under the Scottsdale policy accruesimmediately after the Diamond policy is exhausted, the Scottsdale policy must also be exhaustedbefore the UE umbrella policy is triggered.
In light of our determination, we need not address the parties' remaining contentions.
Accordingly, Scottsdale's motion and Diamond's cross motion should have been denied.Furthermore, since the issue of the priority of insurance coverage obligations was the subject ofthe motion and cross motion before the Supreme Court, and there are no triable issues of factregarding the proper priority, we search the record and award the plaintiffs partial summaryjudgment declaring that the UE umbrella policy is excess to any coverage provided to Vassar byDiamond and Scottsdale (see CPLR 3212 [b]; Dunham v Hilco Constr. Co., 89NY2d 425 [1996]; Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106[1984]).
Since this is, in part, a declaratory judgment action, we remit the matter to the SupremeCourt, Dutchess County, for further proceedings on the remaining causes of action, and the entrythereafter of an appropriate judgment, inter alia, declaring that the policy of umbrella liabilityinsurance issued to Vassar by United Educators is excess to any coverage provided to Vassar byDiamond and Scottsdale (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appealdismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Prudenti, P.J.,Angiolillo, Dickerson and Roman, JJ., concur.