Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Transportation Insurance Co. v. AARK Construction Group

December 7, 2007

TRANSPORTATION INSURANCE COMPANY, PLAINTIFF,
v.
AARK CONSTRUCTION GROUP, LTD., D/B/A/ AARK INTERSTATE CONTRACTORS, INC., DEFENDANT.
AARK CONSTRUCTION GROUP, LTD., D/B/A/ AARK INTERSTATE CONTRACTORS, INC., DEFENDANT/ THIRD-PARTY PLAINTIFF,
v.
WEBSTER INSURANCE, S/H/A WEBER INSURANCE, ALL TRADE ENTERPRISES, INC., DISANO CONSTRUCTION CO., INC., FALL CREEK CONTRACTORS, INC., GARDEN STATE ELEVATOR INDUSTRIES, INC., MAV CONSTRUCTION CORP., S&S ROOFING, INC., SELECT ENVIRONMENTAL SYSTEMS, INC., T/A SELECT MAINTENANCE SERVICE, INC., T/A DALE SHEET STREET, AND STAT FIRE SUPPRESSION, INC. THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Glasser, United States Senior District Judge

MEMORANDUM AND ORDER

INTRODUCTION

Plaintiff Transportation Insurance Company ("Transportation") seeks a declaratory judgment that it does not owe Defendant AARK Construction Group, Ltd. ("AARK") a duty to defend and indemnify it in connection with an underlying suit. Webster Insurance ("Webster"), joined as a third-party defendant by AARK, similarly seeks a declaration that it is not responsible, as AARK's insurance broker, for any losses that AARK might incur in the underlying suit. Both motions have been brought before this Court pursuant to Federal Rule of Civil Procedure 56. For the reasons explained below, the Court grants Transportation and Webster's motions.

BACKGROUND

On October 29, 1999, AARK and Dollar Rent-A-Car ("Dollar") entered into a contract whereby AARK was hired to act as the general contractor for the construction of a parking garage located near LaGuardia Airport. See Webster Rule 56.1 Statement of Undisputed Facts ("Webster 56.1"), dated July 19, 2007, ¶ 1.*fn1 AARK did not perform any of the construction, but rather subcontracted out the entirety of the work. See Certification of William C. Kelly ("Kelly Cert."), dated July 19, 2007, Ex. E. at 24:20-25. Its duties with regards to the subcontractors are described in its contract with Dollar, which provides:

The Contractor shall supervise and direct the Work, using the Contractor's best skill and attention. The Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract . . . [and] [t]he Contractor shall be responsible to [Dollar] for acts and omissions of the Contractor's employees, Subcontractors and their agents and employees, and other persons performing portions of the Work under a contract with the Contractor.

Id., Ex. D ¶¶ 3.3.1-3.2. AARK's subcontractors completed the garage by February, 2001. See Affidavit of Eduardo Dutra ("Dutra Aff."), dated August 21, 2007, ¶10.

AARK, through its insurance broker Webster, procured a commercial general liability ("CGL") insurance policy from Transportation for the construction project, and such policy included products-completed operations hazard ("PCOH") coverage. Webster 56.1 ¶ 10; Affidavit of Trevor Claybaugh ("Claybaugh Aff."), dated January 12, 2007, Ex. A at Transp 058. The policy required that AARK notify Transportation of any "occurrence" of property damage "as soon as practicable." Claybaugh Aff., Ex. A at Transp 068.

On June 30, 2001, a truck delivering fuel to the completed garage fell through the first floor to the basement. See Transportation Rule 56.1 Statement of Undisputed Facts ("Transportation 56.1"), dated January 12, 2007, ¶ 4. The collapse caused substantial damage to the garage. Id. ¶ 5. AARK learned of the collapse that same day, and its Chief Executive Officer, Ray Carlisle, inspected the garage immediately after the incident. Id.

¶¶ 6-7. AARK's President, Eduardo Dutra, who was out of the country at the time, visited the site a few weeks later. See Kelly Cert., Ex. E at 30:12-22, 32:13-21. AARK was also hired to repair the damage.

On July 5, 2001, just five days after the accident, AARK wrote a letter to the subcontractor that had designed and manufactured the pre-cast concrete system for the garage floors, New Stress International, Inc. ("New Stress"). See Affirmation of Erik W. Drewniak ("Drewniak Aff."), Ex. G. The letter alerted New Stress of the incident and informed it that the accident "involved the structural failure of the precast system," and further advised New Stress to "notify all appropriate parties." Id.

On May 6, 2003, nearly two years after the accident, AARK received a letter from Dollar's property insurer, Northland Insurance Company ("Northland"), notifying AARK that it was liable to Northland for the damage and repair of the garage, totaling $1.4 million, due to the negligence of AARK, its agents, servants and/or its employees in failing to properly oversee and supervise the construction of the garage. Id., Ex. F. On May 20, 2003, Webster received from AARK a copy of the May 6, 2003 letter, as well as an accord general liability notice of occurrence/ claim form regarding the June 30, 2001 accident. Id., Ex. H. Webster faxed the notice to Transportation. Webster 56.1 ¶ 12.

Transportation, in response, began an investigation into the claims and retained counsel to defend AARK. Transportation 56.1 ¶ 29. It also sent a letter to AARK on June 24, 2003, stating that it would defend and indemnify AARK with respect to the claims asserted against it by Dollar's property insurer, but that it reserved its rights to deny coverage at any point that it discovered that the claims involved in the lawsuit were not covered pursuant to the policy and that it would be entitled to have a court decide whether it was required to defend and indemnify AARK. See Affidavit of Anthony M. Napoli ("Napoli Aff."), dated August 22, 2007, Ex. E. The letter also explained the policy's exclusions with regards to property damage coverage. See id.

On June 16, 2004, Northfield, a sister company of Northland, and subrogee of Dollar, commenced suit against AARK, New Stress, and several other parties for, inter alia, failure to supervise, failure to comply with New York City building codes, and failure to properly construct a structure that would adequately support vehicles entering the garage (the "Northfield action"). See Drewniak Aff., Ex. I. On January 12, 2007, Transportation commenced this action seeking a declaration that it need not defend or indemnify AARK in the Northfield action because the accident at issue did not constitute an "occurrence" under the insurance policy, that if it did, the property damage at issue was exempt from the policy, and even if it was not, AARK's late notice of the occurrence defeated a condition precedent to coverage. See id., Ex. A. AARK responded by filing a third-party complaint against Webster for false representation as to the insurance policy that it procured on ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.