| National Union Fire Ins. Co. of Pittsburgh, PA v Greenwich Ins.Co. |
| 2013 NY Slip Op 01000 [103 AD3d 473] |
| February 14, 2013 |
| Appellate Division, First Department |
| National Union Fire Insurance Company of Pittsburgh, PA,et al., Appellants-Respondents, v Greenwich Insurance Company,Defendant/Third-Party Plaintiff-Respondent-Appellant. Erie Insurance Company,Third-Party Defendant-Respondent. |
—[*1] Law Offices of Todd M. McCauley, LLC, New York (David F. Tavella of counsel),for respondent-appellant. Smith, Sovik, Kendrick & Sugnet, P.C., Syracuse (Kenneth T. Boyd of counsel), forrespondent.
Order, Supreme Court, New York County (Anil C. Singh, J.), entered February 14,2012, which, insofar as appealed from, denied plaintiffs' motion for summary judgment,denied defendant/third-party plaintiff's motions for summary judgment, and grantedthird-party defendant's motion for summary judgment dismissing the third-partycomplaint, unanimously modified, on the law, to grant plaintiffs' motion and declare thatdefendant is obligated to reimburse plaintiffs for their defense and settlement costs in theunderlying personal injury action, with interest, and otherwise affirmed, without costs.
The additional insured endorsement of the policy that defendant issued to nonparty(to this action) Associated (the Greenwich policy) applies only if there is a writtencontract or agreement. Defendant contends that the only written contract in effect at thetime of Draper's injury was for material only and thus inapplicable. This argument isunavailing; the contract clearly states, "This Agreement contains the terms and conditionsunder which Contractor i.e., Associated] agrees to provide materials and/or performservices" (emphasis added). Contrary to defendant's claim, the contract is notambiguous. Hence, extrinsic evidence such as deposition testimony cannot beconsidered, especially since the contract contains a merger clause and ano-oral-modification clause (seee.g. Cornhusker Farms v Hunts Point Coop. Mkt., 2 AD3d 201, 203-204 [1stDept 2003]).
The additional insured endorsement in the Greenwich policy applies to bodily injury[*2]caused, in whole or in part, by Associated's acts oromissions or the acts or omissions of those acting on Associated's behalf in theperformance of Associated's ongoing operations for plaintiff NVR, Inc. The phrase"caused by" "does not materially differ from the . . . phrase, 'arising out of' "(W & W Glass Sys., Inc. vAdmiral Ins. Co., 91 AD3d 530, 530 [1st Dept 2012]). In turn, the phrase"arising out of" focuses "not on the precise cause of the accident but the general nature ofthe operation in the course of which the injury was sustained" (Regal Constr. Corp. v NationalUnion Fire Ins. Co. of Pittsburgh, PA, 15 NY3d 34, 38 [2010] [internalquotation marks omitted]). Defense counsel admitted below that the underlying personalinjury action arose out of an accident that occurred while Draper was acting on behalf ofAssociated in the performance of its ongoing operations. Thus, the condition set forth inthe additional insured endorsement was satisfied, and summary judgment should havebeen granted in plaintiffs' favor (see e.g. Hunter Roberts Constr. Group, LLC v Arch Ins. Co., 75AD3d 404 [1st Dept 2010]); it is not necessary to try the issue of causation.
"[I]n the event of a breach of the insurer's duty to defend, the insured's damages arethe expenses reasonably incurred by it in defending the action after the carrier's refusal todo so" (Sucrest Corp. v Fisher Governor Co., 83 Misc 2d 394, 407 [Sup Ct, NYCounty 1975], affd 56 AD2d 564 [1st Dept 1977]). Defendant did not respond toplaintiffs' letters; however, Associated (defendant's insured) refused tender on June 30,2008, and sent a copy of this letter to defendant. Under the circumstances of this case,defendant is responsible for NVR's defense costs from June 30, 2008. NVR is entitled tointerest from the date it paid each legal bill (see La Pierre, Litchfield & Partners vContinental Cas. Co., 32 AD2d 353, 356 [1st Dept 1969]). Plaintiffs are also entitledto interest on the settlement from the date of payment (see Sucrest, 83 Misc 2d at406).
Defendant/third-party plaintiff contends that Associated is an additional insuredunder the policy that third-party defendant issued to Mr. Draper doing business as DraperConstruction (the Erie policy), specifically, paragraph 4 of "Who Is An Insured."However, this language covers only vicarious liability (see e.g. Long Is. Light. Co. vHartford Acc. & Indem. Co., 76 Misc 2d 832, 836 [Sup Ct, Nassau County 1973];Huber Engineered Woods, LLC v Canal Ins. Co., 364 NC 413, 413, 700 SE2d220, 221 [2010] [adopting the dissenting opinion of the NC Court of Appeals];Garcia v Federal Ins. Co., 969 So 2d 288, 289, 291-292, 294 [Fla Sup Ct 2007];Transportation Ins. Co. v George E. Failing Co., A Div. of Azcon, 691 SW2d 71,73 [Tex Ct App 1985]; Canal Ins. Co. v Earnshaw, 629 F Supp 114, 120 [D Kan1985]). In Draper, NVR alleged that Associated was negligent; it did not allegethat Associated was vicariously liable for Draper's negligence. Hence, Associated is notan additional insured under the Erie policy (see e.g. Garcia, 969 So 2d at 289,292; [*3]Transportation Ins., 691 SW2d at 73;Canal, 629 F Supp at 120).
In light of the foregoing, it is not necessary to consider the applicability of thecontractual liability and employers' liability exclusions of the Erie policy.Concur—Mazzarelli, J.P., Friedman, Manzanet-Daniels, Román and Clark,JJ.