The Travelers Indemnity Company v. Trisura Specialty Insurance Company

Background

This was an insurance-coverage dispute arising from a personal-injury lawsuit pending in state court. The injury allegedly occurred on May 16, 2019, when an employee of Statewide Demolition Corp. was using a crowbar to move a steel plate during work at 300 Cadman Plaza West, also known as 1 Pierrepont Plaza. The project involved gutting the interiors of floors 2 through 5 of the nineteen-story building.

The building was owned by the City of New York, and Forest City Pierrepont Associates was the tenant. FCPA had contracted with R.P. Brennan General Contractors and Builders, Inc. for demolition work, and R.P. Brennan had subcontracted with Statewide. The injured employee later sued R.P. Brennan, Brennan Operating, Inc., the City, and FCPA in state court.

Trisura issued a general-liability policy to Statewide, and Travelers issued a general-liability policy to R.P. Brennan. Travelers was providing a defense to R.P. Brennan and Brennan Operating. Travelers asked Trisura to provide defense and indemnity coverage for R.P. Brennan, Brennan Operating, the City, and FCPA. Trisura denied coverage, relying on a demolition exclusion and arguing that Brennan Operating and FCPA were not additional insureds.

The parties filed cross-motions for summary judgment. Summary judgment is a decision entered without a trial when the record shows that no genuine dispute of important facts exists and one party is entitled to judgment under the law. The parties agreed that New York law governed the insurance policies.

Demolition Exclusion

The Trisura policy excluded bodily injury arising from “the demolition of any building or structure” with an original ground height exceeding three stories or 36 feet, whichever was less. The court held that the exclusion was unambiguous and referred to the destruction or razing of an entire building or structure. It did not cover the destruction of interior fixtures, finishes, or portions of a building while the building remained standing.

The court relied on the policy’s wording and the surrounding provisions, which referred to activities such as use of a wrecking ball and destruction involving walls and adjoining property. It also relied on New York decisions interpreting similar exclusions as applying to complete tearing down, razing, or destruction of an entire building. Because the work occurred on four floors of a nineteen-story building that remained standing, the court characterized it as interior renovation rather than partial or total razing.

The court rejected Trisura’s argument that the exclusion applied because the injury occurred on the fifth floor. The height requirement modified the building or structure being demolished; it did not make destructive activity on an upper floor excluded. The court also declined to consider extrinsic evidence to vary the meaning of the facially unambiguous policy language.

On this issue, Travelers’ motion for summary judgment was granted and Trisura’s motion was denied. The court held that the demolition exclusion did not bar coverage for the incident in the underlying action.

Additional Insureds

Trisura did not dispute that R.P. Brennan and the City were additional insureds under its policy. The dispute concerned FCPA and Brennan Operating. The Trisura policy listed Statewide as the named insured and contained an endorsement adding as insureds the persons or organizations shown in a schedule. The schedule stated “Per Written Contract.”

The court held that FCPA was an additional insured. The subcontract required Statewide to name R.P. Brennan and “Indemnitees” as additional insureds. The subcontract defined an indemnitee to include parties that R.P. Brennan was obligated to indemnify, defend, and hold harmless. Because the prime contract required R.P. Brennan to indemnify FCPA, FCPA qualified as an indemnitee and therefore as an additional insured under the Trisura policy.

The court held that Brennan Operating was not an additional insured. Travelers cited allegations that Brennan Operating was R.P. Brennan’s wholly owned subsidiary and that R.P. Brennan did business as Brennan Operating, but Travelers did not identify record evidence showing that R.P. Brennan was obligated to indemnify Brennan Operating. The court therefore granted Travelers’ motion in part and denied Trisura’s motion in part as to FCPA, while granting Trisura’s motion in part and denying Travelers’ motion in part as to Brennan Operating.

Priority of Coverage

The court addressed the order in which the Travelers and Trisura policies applied to R.P. Brennan, the City, and FCPA. Trisura did not dispute that its coverage for R.P. Brennan was primary and non-contributory. As to the City and FCPA, the court held that Trisura’s coverage was primary and Travelers’ coverage was excess.

The Trisura policy stated that its insurance was primary except in specified circumstances. The court found that the relevant exception did not apply because Travelers’ policy did not provide primary coverage to the City or FCPA. Although Travelers’ policy included the City and FCPA as additional insureds, its endorsement made coverage excess when the additional insured was also an additional insured under other insurance. Because the City and FCPA were additional insureds under Trisura’s policy, Travelers’ coverage was excess to Trisura’s coverage.

The court rejected Trisura’s argument that Travelers’ coverage was primary and contributory. The provision making Travelers’ coverage primary when required by a written contract applied to other insurance covering the additional insured as a named insured. The City and FCPA were not named insureds on the Trisura policy.

Disposition

The court’s conclusion was as follows: Travelers’ motion was granted and Trisura’s motion was denied concerning the demolition exclusion. Regarding additional-insured status, summary judgment was granted in part and denied in part to each party because the City and FCPA were additional insureds under the Trisura policy, while Brennan Operating was not. Regarding priority of coverage, Travelers’ motion was granted and Trisura’s motion was denied because Trisura’s coverage for R.P. Brennan, FCPA, and the City was primary and Travelers’ coverage was excess.

The court directed the parties to file a joint letter proposing next steps by June 14, 2024, and directed the clerk to close the two motions.