New Hampshire Insurance Company v. The Travelers Indemnity Company

Background

New Hampshire Insurance Company sued The Travelers Indemnity Company seeking a declaration about insurance coverage and reimbursement for defense expenses. New Hampshire was defending NYU Hospitals Center and Turner Construction Company in an underlying New York state-court lawsuit brought by Joseph LoPalo. LoPalo alleged that he was injured after falling into a trench through an unsecured plank on a walkway at the Kimmel Pavilion construction site. He asserted negligence and New York Labor Law claims against NYU and Turner.

New Hampshire had an owner-controlled general liability policy with NYU, and Turner qualified as an additional insured under that policy. E-J Electric Installation Company and E-J Power, LLC had a subcontract with Turner requiring E-J to obtain commercial general liability insurance and name NYU and Turner as additional insureds. Travelers issued that policy to E-J. The Travelers policy covered additional insureds only for liability for bodily injury caused by acts or omissions of E-J or its subcontractors in performing E-J’s work. It also provided that coverage would be primary if the written contract requiring insurance called for primary coverage.

Turner’s contract with NYU assigned Turner responsibility for safety at the entire worksite, including securing openings, maintaining walkways, inspecting for hazards, and monitoring entrances and exits. E-J’s work involved electrical installation. The evidence showed that E-J was not working in the area where LoPalo fell, did not install or control the plank or walkway, and had no safety responsibility for that area. E-J employees were working elsewhere, including on the seventh floor and outside the building away from the accident location.

The Parties’ Motions

Travelers moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is a decision without a trial when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to win under the law. Travelers asked the court to declare that it had no duty to defend or indemnify NYU and Turner and to dismiss New Hampshire’s complaint.

New Hampshire opposed Travelers’ motion and filed a cross-motion for partial summary judgment. New Hampshire argued that the allegations and other available facts created a reasonable possibility that E-J’s acts or omissions caused LoPalo’s injury, triggering Travelers’ duty to defend. It also asked the court to rule that NYU and Turner were additional insureds and that Travelers’ coverage was primary to New Hampshire’s coverage.

Duty to Defend and Indemnify

Applying New York law, the court explained that an insurer’s duty to defend is broad and arises when the underlying allegations or facts known to the insurer create a reasonable possibility of coverage. The court considered the underlying complaint, the first third-party complaint against E-J, and evidence outside those pleadings.

The court concluded that the underlying complaint did not create a reasonable possibility that E-J proximately caused LoPalo’s injuries. The complaint attributed the accident to NYU, Turner, and their contractors in general terms, but did not identify any act or omission by E-J. The court found that the general reference to “contractors” was too vague and conclusory to trigger coverage.

The first third-party complaint also did not establish a reasonable possibility of coverage. Although it alleged that E-J’s negligence caused the injury, it did not identify the relevant acts or omissions or provide supporting facts. The court held that simply labeling conduct negligent was insufficient.

The extrinsic evidence likewise did not support coverage. E-J’s subcontract required it to prevent accidents involving workers engaged upon or near E-J’s electrical work, but the evidence showed that LoPalo was injured at a separate exit-door and walkway area where E-J was not working. Turner had sole and specific responsibility for maintaining safe access and egress routes and for addressing the type of trench and walkway hazards involved in the accident. E-J had no responsibility for the plank or the area where LoPalo fell.

The court rejected New Hampshire’s argument that E-J’s general safety responsibilities, safety manager, inspections, or authority over its own employees created a reasonable possibility of coverage regardless of the accident’s location. Because E-J had no safety obligations at the injury site and did not create or control the relevant hazard, the court found no reasonable possibility that E-J proximately caused the injury.

The court also ruled that NYU and Turner qualified as additional insureds under the Travelers policy, an issue Travelers did not dispute. But additional-insured status did not provide coverage for this accident because the policy required the bodily injury to be caused by E-J’s acts or omissions in performing its work.

Because Travelers had no duty to defend, the court held that it also had no duty to indemnify. The court further concluded that Travelers’ policy did not cover the accident and therefore was not primary to New Hampshire’s policy.

Disposition

Judge Colleen McMahon granted Travelers’ motion for summary judgment and denied New Hampshire’s cross-motion for partial summary judgment. The court dismissed New Hampshire’s complaint in its entirety and directed the clerk to terminate the motions and the case.