Ansano Construction Corp. v. Mt. Hawley Insurance Company

Background

Ansano Construction Corp. owned premises in the Bronx that it leased to Citibank. In December 2022, Iris Rivera, a security guard contracted by Citibank, tripped and fell in Citibank’s parking lot. Rivera sued Citibank, Ansano, and Ansano’s CEO in New York state court, alleging negligent maintenance and control of the premises.

Ansano was insured under a commercial general liability policy issued by Mt. Hawley Insurance Company. The policy contained a “Conditions of Coverage Endorsement” stating that Mt. Hawley would have no duty to defend or indemnify an insured for injuries arising directly or indirectly from a commercial tenant’s use or maintenance of leased premises unless all listed conditions were satisfied.

The conditions required, among other things, that Ansano obtain certificates showing that Citibank had primary commercial general liability coverage; that the lease contain specified indemnification language; that the lease require Citibank to obtain additional-insured coverage; and that Citibank’s insurer agree to defend and indemnify the relevant insureds on a primary basis. Ansano notified Mt. Hawley of the Rivera Action. Mt. Hawley investigated and asked Ansano for a certificate of insurance from Citibank. Ansano did not provide one and represented that Citibank was self-insured. Mt. Hawley then disclaimed coverage and declined to defend Ansano.

Ansano sued Mt. Hawley in New York state court for allegedly breaching its duty to defend. Mt. Hawley removed the case to federal court. After discovery, Mt. Hawley moved for summary judgment, which is a procedure allowing judgment without a trial when there is no genuine dispute over a fact important to the case. Ansano opposed and filed a cross-motion for summary judgment.

Ruling

The Court applied New York law under the policy’s choice-of-law provision. It held that the policy’s conditions were clear and required strict compliance because the endorsement stated that “each and every” condition had to be satisfied.

The Court found no genuine dispute that the first condition was not satisfied. Mt. Hawley had found no certificate or other evidence that Citibank had the required liability insurance, and Ansano admitted that Citibank was self-insured and that Ansano had not produced a certificate.

The second condition also was not satisfied. The lease required Citibank to indemnify Ansano for claims connected to Citibank’s acts, omissions, or negligence, but it did not expressly provide indemnification “to the fullest extent permitted by law,” as the policy required.

The third and fourth conditions were likewise not satisfied because Citibank had no liability insurer. The lease did not require Citibank to obtain additional-insured coverage for Ansano, and no insurer had agreed to defend and indemnify Ansano on a primary basis. The Court rejected Ansano’s argument that Citibank’s self-insured status substantially complied with the policy. It also rejected Ansano’s reliance on its CEO’s belief that Citibank had compliant coverage, explaining that the policy required actual evidence rather than a subjective belief.

The Court further ruled that Mt. Hawley did not need to show prejudice from Ansano’s failure to satisfy the conditions. Under the applicable New York law, failure to comply with an express condition precedent allowed the insurer to disclaim without proving prejudice.

Finally, the Court rejected Ansano’s argument that the endorsement did not apply because Rivera’s injury did not arise from Citibank’s use of the premises. Rivera fell in Citibank’s parking lot while providing security for Citibank, which was enough of a connection under the policy language.

Disposition

Mt. Hawley’s motion for summary judgment was GRANTED, and Ansano’s cross-motion for summary judgment was DENIED. The Court directed the Clerk to enter judgment consistent with the opinion, terminate open motions, and close the case.