Employer’s Liability Insurer Has No Obligation to Defend Third-Party Action In the Absence of A Grave Injury

In a decision dated March 16, 2015, Hon. Shlomo Hagler declared that our client, Insurance Company of the State of Pennsylvania (“ICOP”), is not obligated to defend or indemnify its insured Barrana Construction Corp. as a third-party defendant in a personal injury action brought under New York’s Labor Law. The injured worker sued the owner of the premises, L.C. Driggs Corp., which in turn brought a third-party action for common law indemnification against Barrana. ICOP first learned of the action when a default judgment was taken against Barrana. ICOP assigned counsel to attempt to get the default vacated while it investigated the loss. When the default was upheld, ICOP disclaimed on late notice grounds as well there being no coverage for the third-party claim in the absence of an allegation of a grave injury. After issue was joined by L.C. Driggs, ICOP moved for summary judgment. L.C. Driggs opposed on the grounds that the issue was not ripe for determination because there was no money judgment against Barrana. Judge Hagler held that ICOP need not wait for the entire underlying action to proceed in order to obtain a declaration of its rights and obligations. He granted ICOP’s motion and declared that ICOP has no obligation to defend or indemnify Barrana in the underlying action.

Ins. Co. of the State of Pa. v. Barrana Constr. Corp. et al., Index No. 650576/13 (N.Y. Co. Sup. Ct. March 16, 2015)

Categorised in:

This post was written by fcllp