Court Declares GL and Excess Insurers for Bankrupt Subcontractor Must Defend and Indemnify General Contractor in Labor Law Personal Injury Action

In a decision dated October 3, 2014, Justice Debra A. James granted the summary judgment motion of our client CCA Civil-Halmar International, LLC, declaring that subcontractor Mimosa Construction Inc.’s general liability (Endurance American Insurance Company) and excess (Admiral Insurance Company) carriers must defend and indemnify CCA Civil-Halmar International, LLC in a personal injury action brought by an employee of Mimosa. The injured allegedly fell from a bucket while working as a bridge painter. The bucket was permanently attached to a van which was parked under a bridge pier. The bucket’s lockable hinged pivot allegedly gave way, causing him to fall. Endurance, Mimosa’s GL carrier, disclaimed, relying on the auto exclusion in its policy issued to Mimosa. Allstate, Mimosa’s auto liability carrier, also disclaimed coverage, asserting that the van was not a “covered auto”. Admiral, the excess insurer, took the position that if there was no coverage under either primary policy, it owed no coverage.

CCA sought a declaration that one or both carriers must defend and indemnify it as an additional insured under Mimosa’s policies and that Admiral had a duty to indemnify excess of whichever primary policy applies. The Court found that CCA was an additional insured on all three of Mimosa’s policies, the worker’s injuries arose out of Mimosa’s work, and the bucket from which plaintiff fell was “mobile equipment” under the Endurance policy. Relying on Progressive Cas. Ins. Co. v. Yodice, 276 A.D.2d 540, 714 N.Y.S.2d 715 (2d Dep’t 2000), the Court found that the plaintiff’s injuries were not caused by the “use” of an automobile, but by the plaintiff’s “operation” of the bucket. Consequently, the Court held that Endurance, as the general liability insurer, must defend and indemnify CCA in the underlying personal injury action. The Court also held that Admiral is obligated to indemnify CCA excess of the Endurance policy.

CCA Civil-Halmar Int’l v. Allstate Ins. Co. et al., Index No. 107476/2011 (N.Y. Co. Sup. Ct., Oct. 3, 2014)

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