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U.S. UNDERWRITERS INS. v. CONGREGATION KOLLEL TISERETH

September 30, 2004.

U.S. UNDERWRITERS INSURANCE COMPANY, Plaintiff,
v.
CONGREGATION KOLLEL TISERETH, TZVI and DEMETRIO MENESES, Defendants.



The opinion of the court was delivered by: DAVID TRAGER, District Judge

MEMORANDUM AND ORDER

Plaintiff U.S. Underwriters Insurance Company ("U.S. Underwriters" or "plaintiff") brought this diversity action against defendants Congregation Kollel Tisereth Tzvi ("the Congregation") and Demetrio Meneses ("Meneses") (collectively "defendants"), seeking a declaration that U.S. Underwriters is not obligated to defend and indemnify the Congregation with respect to a personal injury suit brought by Meneses in state court.

Pending before the court are cross-motions for summary judgment by U.S. Underwriters and the Congregation.*fn1 For the following reasons, U.S. Underwriters' motion is granted, and the Congregation's cross-motion is denied.

  Background

  (1)

  The following facts are undisputed unless otherwise indicated. At all times relevant to this case, the Congregation was the owner of land and property located at 4706 14th Avenue, Brooklyn, New York. (See Declaration of Kirk A. Tzanides ("Tzanides Decl."), Ex. D, ¶ 6.)

  On May 7, 1998, Underwriters issued to the Congregation a commercial liability policy for that property covering the period May 7, 1998 through May 7, 1999. (See Tzanides Decl., Ex. B.) The policy contains four provisions which are of particular relevance to this case.

  First, the policy contains an "Exclusion of Injury to Employees, Contractors and Employees of Contractors," which provides in pertinent part:
This insurance does not apply to:
(i) bodily injury to any employee of any insured, to any contractor hired or retained by or for any insured or to any employee of such contractor, if such claim for bodily injury arises out of and in the course of his employment or retention of such contractor by or for any insured, for which any insured may become liable in any capacity;
(ii) any obligation of any insured to indemnify or contribute with another because of damages arising out of the bodily injury;
. . . .
This exclusion applies to all claims and suits by any person or organization for damages because of such bodily injury, including damages for care and loss of services.
(Id.)
  Second, the policy contains an "Independent Contractors Exclusion" which provides:
It is agreed that this policy shall not apply to Bodily Injury, Personal Injury or Property Damage arising out of operations performed for any insured by independent contractors or acts or omissions of any insured in connection with his general supervision of such operations.
(Id.) According to U.S. Underwriters, the difference between the first "employee exclusion" and the second "independent contractors" exclusion is that the employee exclusion disallows coverage for injuries sustained by contractors and their employees, and the independent contractors exclusion denies coverage for injuries or damage "arising out of" operations performed for the insured by independent contractors, regardless of who is injured or damaged. (See Plaintiff's Memorandum of Law in Support of Its Motion for Summary Judgment ("Pl.'s Mem.") at 14 n. 3.)
  Third, the policy also contains a provision which obligates the insured to notify U.S. Underwriters promptly in the event of an "occurrence, claim or suit." Specifically, the provision states:
2. Duties in the Event of Occurrence, Offense, Claim or Suit
a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place.
(2) The names and addresses of any injured persons and witnesses; and
(3) The nature and location of any injury or damage arising out of the `occurrence' or offense.
b. If a claim is made or "suit" is brought against any insured, you must:
(1) Immediately record the specifics of the claim or "suit" and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or "suit" as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit";
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply.
(Tzanides Decl., Ex. B.)
  Fourth, the policy provides that coverage under the policy is limited to the classification codes listed in the policy. Specifically, this Classification Limitation Endorsement provides, in relevant part:
Coverage under this contract is specifically limited to those classification codes listed in the policy. No coverage is provided for any classification code or operation performed by the Named Insured not specifically listed in the Declarations of this policy.
(Id.) The policy contains the sole classification: "Vacant Building-Not Factory-OTNFP."*fn2 On the Declarations page, "Vacant Building" is defined as "a building not occupied for its intended use." (Id.)

  (2)

  On the Congregation's property at 4712 14th Avenue was a building that was also owned by the Congregation. The building had once been used for storage purposes but was no longer used for storage at the time of the accident. (Sklar Decl., Ex. E at 10-11.) Since pieces of the building were falling down, the Congregation convened an emergency meeting at an unspecified date and decided that it had to be demolished. (Id.)

  The Congregation retained Empire Concrete & Construction ("Empire"), an independent contractor, to perform certain demolition work and/or renovation work at the premises. (Sklar Decl., Ex. E at 15, Ex. F at 11.) *fn3 On June 3, 1998, Empire issued a handwritten Contractor's Invoice which specified the work to be performed:
(1) remove old building at 4712 14th Avenue to ground level fill basement with bricks.
(2) close off sidewalk with plywood fence and backyard side yard plywood.
(3) New side wall 3,500 PSI with wire mesh concrete to be 6" inches thick with driveway opening 75 x 23 x 6"
(See Tzanides Decl. Ex. G.)

  Empire retained an individual named Ramon Acosta ("Acosta") to do the demolition work for the premises. (Id., Ex. H at 21.) Although Acosta was self-employed,*fn4 he had a crew of approximately five or six men, including Meneses, who regularly worked under him for an average of three or four days a week during the year. (Sklar Decl., Ex. H at 6, 12-13, 18, 43.) Meneses was a member of the crew performing demolition work on the Congregation's property. (Id. at 25, 27-29)

  On September 23, 1998, while Meneses working at the premises, a wall collapsed and injured him. Alexander Gross and Mendy Gluck, members of the Congregation, testified in their depositions that they were unaware of the accident at or around that time, as the Congregation did not supervise or generally direct the work that was being performed. At most, the Congregation alleges, their members noticed the progress of the work when they visited the synagogue next door to the site. (See Sklar Decl., Ex. E at 21, 23, 39 & Ex. F at 14.) Gluck ...


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