Travelers Property Casualty Company of America v. Netherlands Insurance Company

Background

Travelers Property Casualty Company of America brought a declaratory-judgment action against Netherlands Insurance Company. Travelers sought a ruling that Netherlands had to defend and indemnify J.T. Magen & Company, Inc., Mayer Brown LLP, and 1221 Avenue Holdings, LLC, in a New York state-court personal-injury lawsuit. A housekeeper, Hajdine Shuku, alleged that she was injured when a bathroom-stall door fell and struck her while she was cleaning bathrooms in Mayer Brown’s offices.

Travelers insured J.T. Magen, the construction company hired for renovations in Mayer Brown’s offices. Netherlands insured Division Ten, a subcontractor involved in the project. Division Ten’s work under a purchase order was to install toilet partitions, although its subcontractor, Met Sales & Installation Corp., performed the on-site installation. That work was completed by December 19, 2014. Shuku’s alleged injury occurred on March 10, 2015.

Travelers had tendered the defense of J.T. Magen, Mayer Brown, and 1221 Holdings to Netherlands, which denied that it had a duty to defend or indemnify them. Travelers moved for partial summary judgment on Netherlands’s duty to defend. Netherlands cross-moved for summary judgment on the entire dispute, seeking a declaration that it owed neither a duty to defend nor a duty to indemnify.

Insurance-policy provisions

The court applied New York law to interpret the Netherlands policy. The dispute primarily concerned whether the three entities qualified as additional insureds under three policy endorsements: the Scheduled Person Endorsement, the Blanket Additional Insured Endorsement, and the Completed Operations Endorsement.

The Scheduled Person and Blanket Additional Insured Endorsements excluded coverage for bodily injury occurring after the relevant portion of Division Ten’s work had been put to its intended use by someone other than a contractor or subcontractor working on the same project. The Completed Operations Endorsement required a written contract or agreement adding an additional insured to be signed before the injury occurred.

Scheduled Person and Blanket Additional Insured Endorsements

The court held that the bathroom partitions had been put to their intended use before Shuku’s alleged injury. Shuku was cleaning the bathrooms as an outside janitorial worker, and the record showed that people had used the bathroom stalls before the injury. Emails sent four days before the incident reported that people had become stuck in bathroom stalls and asked a contractor to service the bathroom locks.

Travelers argued that references to punch-list or warranty work showed that Division Ten’s work was still ongoing. The court rejected that argument. It concluded that later corrective work did not prevent the bathroom facilities from having resumed their ordinary use. The court also found that the record did not create a genuine factual dispute about whether the specific portion of work involved in the injury had been put to its intended use.

The court therefore held that the two endorsements did not extend liability coverage to the relevant entities as additional insureds.

Completed Operations Endorsement

The parties agreed that the only possible written agreement triggering this endorsement was the purchase order. As of Shuku’s injury, Division Ten had signed the purchase order, but J.T. Magen had not; J.T. Magen signed it years later, and Mayer Brown and 1221 Holdings never signed it.

The court held that the word “signed” in the policy was unambiguous and required a physical manifestation or marking, such as a signature. Evidence that the parties may have intended to be bound through their conduct could not replace the policy’s signature requirement. The court further held that because the purchase order was a bilateral agreement, it required signatures from both parties—not merely Division Ten’s signature—to satisfy the policy provision.

Because the purchase order lacked the required signatures before the injury, the court held that it could not confer additional-insured status on J.T. Magen, Mayer Brown, or 1221 Holdings under the Completed Operations Endorsement.

Disposition

Judge Engelmayer denied Travelers’s partial motion for summary judgment. He granted Netherlands’s cross-motion for summary judgment and declared that Netherlands did not owe J.T. Magen, Mayer Brown, or 1221 Holdings a duty to defend or indemnify them in the underlying personal-injury action. Because none of those entities qualified as an additional insured, the court did not reach the separate question of which insurer’s coverage would be primary.

The court left unresolved whether Netherlands sought costs and disbursements, including fees and costs associated with defending this declaratory-judgment action. It directed Netherlands to submit a letter by March 15, 2023, if it wished to pursue that relief, with a response from Travelers due by March 27, 2023. The clerk was directed to terminate the pending motions.