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United States Underwriters Insurance Co. v. United Pacific Assiates

May 16, 2006


The opinion of the court was delivered by: Joseph F. Bianco, District Judge


Plaintiff U.S. Underwriters Insurance Company ("U.S. Underwriters") brought this action, pursuant to this Court's diversity jurisdiction, against defendants United Pacific Associates, LLC ("UPA"), Jose Sandoval, and GJL Development Co., Ltd. ("GJL"), seeking a declaration that U.S. Underwriters is not obligated to defend or indemnify the defendants with respect to a personal injury suit brought by Sandoval in New York State court. The plaintiff moves for summary judgment. For the reasons stated below, the motion is denied.


The following facts are undisputed unless otherwise indicated. In an underlying state court action,*fn1 Sandoval alleges that, on January 24, 2004, he suffered injury as the result of a slip and fall on a sidewalk in front of 108-18 and 108-20 37th Avenue, in Corona, New York. (See Declaration of Mark Shockley ("Shockley Decl."), Ex. A, ¶¶ 26-28.) Specifically, Sandoval claims that his injury was caused by the negligent removal of snow and ice on the sidewalk.

At the time of the fall, UPA was building residences on the two plots, pursuant to a contract with the then owners of the property, GJL. (Id., ¶ 23.) Under the contract, UPA was serving as a general contractor in relation to the construction of the residences. (See Shockley Decl., Ex. E.) The contract specifically indicated that UPA was required to perform tasks involving, inter alia, demolition and excavation, laying of foundation, floor framing, exterior brick work, roofing, installation of windows, balconies, doors, staircases, as well as plumbing, electrical, kitchen and bathroom work. (See id.) Robert Lin, one of the partners of UPA, testified that the company was formed for the sole purpose of constructing the two residences, and that the company performed general construction tasks in relation to the job. (See Shockley Decl., Ex. D, at 9-10.) Lin further testified that in January 2004, around the time of the accident, UPA employees would regularly remove snow from the front of the building so that they could access it to perform work on the interior. (See id., at 65-66.) According to Lin, during that time period, construction on the main structures was completed, and UPA employees were painting and performing other "interior work." (See id., at 46-47.)

At the time of Sandoval's accident, UPA was insured by a commercial liability policy issued by U.S. Underwriters. (See Shockley Decl., Ex. B.) The policy, number CL 3067314, contains a Classification Limitation Endorsement, which reads:

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 Declaration of the policy.

(Id.) Under a section entitled "Premium Computation," the policy specifically lists two classifications: "Carpentry," and "Carpentry-Interior." (See id.) Although no further definition of the terms appear within the policy itself, the classifications were accompanied by code numbers, "91342" for "Carpentry," and "91341" for "Carpentry-Interior." (See id.) These code numbers correspond with entries in the Insurance Services Office (ISO) Classification Table. (See Shockley Decl., Ex. C.)

On June 24, 2004, U.S. Underwriters received a New Loss report, notifying it of Sandoval's claim. (See Shockley Decl., Ex. F.) By July 7, 2004, U.S. Underwriters retained the services of a claim service to investigate the claim and prepare a report. (See Shockley Decl., Ex. G.) U.S. Underwriters received letters reporting on the status of the investigation on July 12, 2004 and August 23, 2004, and received a letter from UPA's counsel on July 27, 2004, which provided information regarding the accident. (See Shockley Decl., Exs. H, I, J.) On August 17, 2004, U.S. Underwriters disclaimed coverage, and filed the instant declaratory judgment action on February 24, 2005. (See Shockley Decl., Ex. K.)


A. Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56(c), a court may not grant a motion for summary judgment unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); Globecon Group, LLC v. Hartford Fire Ins. Co., 434 F.3d 165, 170 (2d Cir. 2006). The moving party bears the burden of showing that he or she is entitled to summary judgment. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2005). The court "is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Amnesty America v. Town of West Hartford, 361 F.3d 113, 122 (2d Cir. 2004); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (stating that summary judgment is unwarranted if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."). Once the moving party has met its burden, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts . . . [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial." Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). "[W]hen the meaning of the contract is ambiguous and the intent of the parties becomes a matter of inquiry, a question of fact is presented which cannot be resolved on a motion for summary judgment." Postlewaite v. McGraw-Hill, Inc., 411 F.3d 63, 67 (2d Cir. 2005)

B. New York Insurance Law

"Under New York law, a court must give unambiguous provisions of insurance contracts their plain and ordinary meaning." U.S. Underwriters Ins. Co. v. Congregation B'nai Israel, 900 F. Supp. 641, 644 (E.D.N.Y. 1995), aff'd 101 F.3d 685 (2d Cir. 1996); see also Hiraldo v. Allstate Ins. Co., 8 A.D.3d 230, 231, 778 N.Y.S.2d 50 (N.Y. App. Div. 2004). The language of a contract or an insurance policy is unambiguous if it has "a definite and precise meaning, unattended by danger of misconception in the purport of the policy itself, and concerning which there is no reasonable basis for a difference of opinion." Breed v. Ins. Co. of North America, 46 N.Y.2d 351, 355 (N.Y. 1978). Although coverage is not to be afforded for liability for which insurance has not been purchased, see Tartaglia v. Home Ins. Co., 240 A.D.2d 396, 397, 658 N.Y.S.2d 388 (N.Y. App. Div. 1997), ambiguous terms in an insurance policy are to be interpreted against the insurer and in favor of coverage for the insured. See U.S. Fidelity & Guar. Co. v. Annunziata, 67 N.Y.2d 229, 232 (N.Y. 1986); see also Miller v. Continental Ins. Co., 40 N.Y.2d 675, 678 (N.Y. 1976). "If the complaint contains any facts or allegations which bring the claim even potentially within the protection purchased, the insurer is obligated to defend." Inc. Village of Cedarhurst v. Hanover Ins. ...

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