Chelsea Associates, LLC v. Laquila-Pinnacle

Order, Supreme Court, New York County (Paul G. Feinman, J.), entered February 2, 2004, which denied plaintiffs’ motion for summary judgment seeking a declaration that defendant Gerling America Insurance Company was required to defend and indemnify plaintiffs in an underlying personal injury action, reversed, on the law, without costs, the motion granted and a declaration made that Gerling is obligated to defend and indemnify plaintiffs and to pay all reasonable defense costs and disbursements and the settlement amount of the underlying action. This appeal involves (1) whether a general contractor is entitled to insurance coverage as an additional insured despite claims that the injured worker was not engaged in an insured activity; (2) whether the general contractor was itself negligent; and (3) even assuming the general contractor should be covered, whether a hearing must be conducted by the IAS court to determine the reasonableness of the settlement in the underlying personal injury action. Plaintiff Turner Construction Company, as general contractor, contracted with plaintiff Albanese Development Corporation for the construction of a high-rise apartment building [740] owned by plaintiff Chelsea Associates. Plaintiff Liberty Mutual Insurance Company insured Turner, Chelsea and Albanese. Turner subcontracted the concrete work to defendant LaquilaPinnacle. The subcontract contained an indemnification provision wherein Laquila agreed to defend, indemnify and hold Turner harmless from all claims of bodily injury by Laquila’s employees, regardless of any negligence on Turner’s part. Laquila was required to procure general liability insurance naming Turner and Chelsea as additional insureds, and such insurance was to be primary. Gerling thereafter issued the insurance Laquila was required to obtain. Subsequently, Vincent Langella, a laborer employed by Laquila, commenced an action against Turner, Chelsea and Albanese (collectively, the Turner group) arising from injuries allegedly sustained when, en route to his work, he tripped on plywood used as a temporary ramp near the entrance to the job site. The Turner group commenced the instant third-party action against Laquila based on separate indemnification and breach of contract causes of action. Following unsuccessful summary judgment motions by Langella and the Turner group, which were denied on findings that there existed various disputed issues of material fact, the latter settled with Langella for $305,000 and moved for summary judgment against Laquila and Gerling for defense and settlement costs incurred in the Langella litigation. The IAS court denied the Turner group’s motion, finding: (1) there was a question of fact regarding the Turner group’s negligence liability to Langella, (2) there was no conclusive determination that Langella was actually injured while working, and (3) the Turner group’s previous motion for indemnification had been denied. There is no dispute that the three members of the Turner group were additional insureds on Laquila’s policy with Gerling and that such insurance was deemed primary. It is clear that Gerling was legally obligated to defend and indemnify the Turner group in the Langella action (see e.g. Structure Tone v Component Assembly Sys., 275 AD2d 603 [2000]; Consolidated Edison Co. of N.Y. v United States Fid. & Guar. Co., 266 AD2d 9 [1999]). It is further undisputed that Langella was injured as he was entering the job site, en route to his work assignment. The “contract could not be performed, of course, unless [the subcontractor’s] employees could reach and leave their workplaces on the job site,” and therefore the “instant injuries, occurring during such a movement, must be deemed as a matter [741] of law to have arisen out of the work” (O’Connor v Serge El. Co., 58 NY2d 655, 657-658 [1982]). Any negligence by the Turner group is not material to an additional insured endorsement (see Consolidated Edison Co. of N.Y. v United States Fid. & Guar. Co., 263 AD2d 380, 382 [1999]). It is undisputed that the subcontract expressly exempted the Turner group from any disclaimer of coverage based on its own negligence. As to the contrary argument, the dissent itself acknowledges that several of our prior cases, starting with Consolidated Edison Co. of N.Y. v Hartford Ins. Co. (203 AD2d 83 [1994]), have declined to adopt its position, and we see no reason to adopt it now. Finally, neither Laquila nor Gerling raised the issue now pressed on appeal, that the settlement amount of $305,000 agreed to by the Turner group to resolve the personal injury action was unreasonable, so a hearing on this issue would now be unwarranted (see Serio v Public Serv. Mut. Ins. Co., 7 AD3d 277 [2004]; Tishman Constr. Corp. of N.Y. v American Mfrs. Mut. Ins. Co., 303 AD2d 323 [2003]). We have considered the other claims raised by defendants and find them to be without merit. Concur—Buckley, P.J., Friedman and Marlow, JJ.