Triborough Scaffolding and Hoisting Services v. Southwest Marine & General…

Background

An employee of non-party RHG Manpower, Inc. allegedly fell from a scaffold on October 3, 2018, while working on a construction project at property owned by Shangri-La Astoria. New York Fast was the general contractor, Triborough arranged for scaffolding, and Triborough subcontracted the scaffolding work to RHG. The injured worker sued Triborough, Shangri-La, and New York Fast in New York state court. Those parties asserted that they were additional insureds under commercial general-liability and excess policies issued to RHG by Southwest Marine and Endurance.

Southwest declined coverage, and Endurance did not respond to the plaintiffs’ coverage claims. The plaintiffs then sued the insurers in this action. Plaintiffs sought a declaration that they were additional insureds and that the insurers owed duties to defend and indemnify them in the underlying state-court case. The insurers sought summary judgment, which is judgment without a trial when no genuine dispute of important fact exists, dismissing the plaintiffs’ claims.

Insurance-policy language

Southwest’s policy contained an endorsement extending general-liability coverage to “all entities required by written contract to be included as additional insureds,” but only for operations performed by RHG or on RHG’s behalf. The court held that this language did not require a direct contract between RHG and every additional insured. The policy also contained a narrower endorsement requiring a written insured contract between RHG and the entity seeking coverage. The court concluded that it did not need to address the narrower endorsement because the first endorsement potentially provided coverage.

Endurance’s excess policy followed the form of the Southwest policy. In the summary-judgment proceedings, Endurance did not dispute that entities qualifying as additional insureds under the Southwest policy would also qualify under the Endurance policy, and the court treated that argument as waived.

The RHG-Triborough agreement

Triborough and RHG signed a two-page agreement in December 2017. It required RHG to defend and indemnify Triborough, entities Triborough was required to indemnify, and the property owner. It also required RHG to obtain insurance protecting those entities for claims arising from RHG’s work under the agreement. The agreement specifically named Triborough as an additional insured but did not name Shangri-La or New York Fast.

The agreement did not define “Owner,” “Work,” or “Contract Agreement.” It did not identify a particular project, describe the work, or state when covered work began or ended. The plaintiffs argued that it was a master agreement covering all projects for which Triborough hired RHG, including the project where the worker was injured. The insurers argued that the agreement did not show that the project was covered.

The court held that the agreement expressly and specifically required additional-insurance coverage for Triborough and entities Triborough was required to indemnify and defend. But the court also held that the agreement was ambiguous about what “Work under this Contract Agreement” meant. It was unclear whether the agreement applied to one project or multiple projects.

Disputed evidence

Because the agreement was ambiguous, the court considered evidence outside the agreement concerning the parties’ intent. That evidence included conflicting testimony from RHG’s former president and from Triborough’s officers and bookkeeper. Some testimony supported the plaintiffs’ position that the agreement covered all of RHG’s projects for Triborough during 2018. Other testimony indicated that the parties ordinarily used project-specific agreements or that a new agreement was expected for 2018.

The court declined to resolve those conflicts on summary judgment. Determining which witnesses were credible and what the parties intended was a task for the jury. The court also declined to disregard later declarations under the rule against creating a false factual dispute through testimony that contradicts earlier sworn testimony, finding that the declarations were not actually contradictory in the relevant respects.

The court further ruled that Shangri-La and New York Fast did not lose their potential additional-insured status merely because they were not specifically named in the RHG-Triborough agreement. Their coverage depended on whether the agreement applied to the project and required RHG to insure the entities covered by its indemnity obligations. That too was a factual question for the jury.

Disposition

The court denied the plaintiffs’ motion for summary judgment and denied the defendants’ motion for summary judgment. The court did not finally decide whether the plaintiffs were additional insureds or whether Southwest and Endurance owed duties to defend and indemnify them. Those issues remain dependent on resolving the factual dispute about whether the RHG-Triborough agreement covered the project at the time of the accident.