Utica National Assurance Company v. Amazon.com Services, Inc.

Background

Utica issued a general liability policy to Bond Painting Company covering December 31, 2015, through December 31, 2016. The policy provided additional-insured coverage to a person or entity with which Bond had a written contract, made before the loss, requiring that person or entity to be named as an additional insured.

Abidin Deljanin sued Amazon and others after falling from a scaffold while working for Bond at premises leased by Amazon. Amazon sought coverage from Utica. In 2019, Utica agreed to defend and indemnify Amazon without reserving coverage defenses, based on Amazon’s representations about purchase orders and related terms. Amazon controlled its own defense, while Utica agreed to pay part of the defense costs.

During the underlying lawsuit, witnesses testified that they had not seen the terms and conditions Amazon relied on and did not know whether those terms were part of a purchase order issued before the accident. Utica withdrew its defense in September 2023, stating that no qualifying written contract required Bond to provide additional-insured coverage for Amazon. Amazon disputed the withdrawal and asserted counterclaims seeking a declaration that it was an additional insured or, alternatively, that Utica had waived or was barred from withdrawing its defense.

Motions and legal standard

Both parties moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). That procedure allows judgment when the material facts are undisputed and the pleadings show that one party is entitled to judgment. The court generally views the pleadings in favor of the party opposing the motion, but it may not use the procedure to resolve disputed factual allegations.

Written-contract requirement

The court held that Amazon was barred from relitigating whether a written contract existed between Amazon and Bond before the accident. In the underlying state-court lawsuit, Bond had obtained summary judgment on Amazon’s indemnification claim, and the state court determined that there was no written contract governing indemnification for Deljanin’s accident. The state court rejected Amazon’s reliance on the terms and conditions because the document had not been authenticated and Amazon’s representative had testified that he had never seen it.

The court applied collateral estoppel, a rule that prevents a party from relitigating an issue that was already actually litigated and decided against it when the party had a full and fair opportunity to litigate and the decision was necessary to the prior judgment. The court rejected Amazon’s argument that the state-court ruling was only interlocutory or based on a curable evidence problem. It concluded that the written-contract issue had been fully litigated and decided.

Because there was no written contract between Amazon and Bond in place before the accident, the court held that Amazon was not an additional insured under Utica’s policy. Utica therefore had no duty to defend Amazon.

Waiver

The court rejected Amazon’s waiver argument. Under New York law, waiver is the intentional relinquishment of a known right. The court explained that waiver does not apply to the existence or nonexistence of insurance coverage. Because Amazon’s status as an additional insured involved whether coverage existed, Utica’s initial agreement to defend did not waive its position that Amazon was outside the policy’s coverage.

Estoppel and prejudice

The court also rejected Amazon’s argument that Utica was estopped, meaning legally prevented, from withdrawing its defense because of delay and prejudice. The relevant question was whether Amazon relied on Utica’s conduct to its detriment, particularly by losing control over its defense.

The court found that Amazon had controlled its own defense throughout the underlying lawsuit. Although Utica initially sought to appoint counsel and paid half of Amazon’s defense costs, the record did not show that Utica controlled or influenced Amazon’s litigation decisions. Amazon also did not identify confidential information it provided or explain how providing reports to Utica harmed its defense. The court therefore found no actual prejudice and no basis to prevent Utica from denying coverage.

Disposition

The court granted Utica’s motion for judgment on the pleadings and denied Amazon’s motion for judgment on the pleadings. It declared that Utica had no obligation to defend or indemnify Amazon in the underlying lawsuit, directed the clerk to terminate the pending motions, and closed the case.