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Home Insurance Company in Liquidation v. Travelers Indemnity Co.

February 4, 2008

THE HOME INSURANCE COMPANY IN LIQUIDATION, PLAINTIFF,
v.
THE TRAVELERS INDEMNITY COMPANY, AKA THE TRAVELERS INDEMNITY COMPANY OF CONNECTICUT, AKA TRAVELERS INSURANCE COMPANY, AKA TRAVELERS PROPERTY & CASUALTY INSURANCE COMPANY, AKA ST. PAUL TRAVELERS, DEFENDANT.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

OPINION AND ORDER

Plaintiff The Home Insurance Company in Liquidation ("Home") brought this declaratory judgment action, seeking reimbursement for the settlement of an underlying action in New York state court. Defendant The Travelers Indemnity Company of Illinois now known as Travelers Property Casualty Company of America ("Travelers") now moves for summary judgment.*fn1

Specifically, Travelers moves for an Order declaring "(1) Travelers did not breach its obligations under the policy issued to Tishman Construction; and (2) Travelers is not obligated to reimburse Home for the amount it paid to settle the [underlying] action; and (3) Home waived its right to seek indemnification from Travelers; or, in the alternative, (4) Home's claim for indemnification is limited to $49,444.44." Travelers's Mem. 24. Home opposes the motion for summary judgment. For the reasons stated below, Travelers's motion is GRANTED.

I. Background

Unless otherwise noted, the following facts are undisputed and are derived from the parties' Local Civil Rule 56.1 Statements. All inferences have been drawn in favor of Home.

A. The Action Before this Court

This is a declaratory judgment action commenced by Home, seeking to recoup from Travelers the entire amount of its payment to the settlement of an underlying action. Travelers's 56.1 Stmt. ¶ 3. Home was an insurance company incorporated in New Hampshire and duly licensed and authorized to conduct the business of insurance in New York. On June 13, 2003, Home was liquidated pursuant to an Order of Liquidation issued by the New Hampshire Superior Court. Verified Compl. ¶¶ 1, 3. Travelers is an insurance company incorporated in and with its principal place of business in Connecticut. Travelers is authorized to conduct the business of insurance in New York. Verified Answer ¶ 2.

B. The Galloway Action

On February 28, 1990, an accident occurred at a construction site located at 575 Lexington Avenue, New York, New York. Home's 56.1 Counterstmt. ¶ 1. A laborer at the site, Mr. Galloway, slipped and fell on an unsecured, snow-covered block of wood being used as a step outside of an access window. Id. As a result of this fall, Mr. Galloway was injured and required several surgical procedures. Id. ¶¶ 2, 3. Mr. Galloway filed suit against Tenth City Associates ("Tenth City"), owner of the building at 575 Lexington Avenue, and Bevin D. Koeppel ("Koeppel"), principal of the building's managing agent, Koeppel & Koeppel. Id. ¶ 4.

Mr. Galloway's lawsuit precipitated numerous claims, counterclaims, and cross-claims. Flour City Architectural Metals ("Flour City") was joined as a third-party defendant. Flour City was responsible for installing new windows and re-cladding the building at 575 Lexington Avenue. Home's 56.1 Counterstmt. ¶ 5; Travelers's Resp. to Home's 56.1 Counterstmt. ¶ 6. Heydt Contracting Corporation ("Heydt"); Inspeco, Inc. ("Inspeco"); and Tishman Construction Corporation ("Tishman") were joined as fourth-party defendants. Home's 56.1 Counterstmt. ¶¶ 6, 7, 10, 11, 12; Travelers's Resp. to Home's 56.1 Counterstmt. ¶¶ 7, 8, 11, 12, 13. Flour City hired Heydt to perform work at the construction site. Home's 56.1 Counterstmt. ¶ 6; Travelers's Resp. to Home's 56.1 Counterstmt. ¶ 7. Inspeco served as the Site Safety Manager and Permit Consultant. Home's 56.1 Counterstmt. ¶ 7; Travelers's Resp. to Home's 56.1 Counterstmt. ¶ 8. Tishman served as the Construction Manager for the project and as an agent for Tenth City. Home's 56.1 Counterstmt. ¶ 8; Travelers's Resp. to Home's 56.1 Counterstmt. ¶ 9.

Three parties to the Galloway action asserted cross-claims against Tishman: Flour City, Heydt, and Inspeco. Home's 56.1 Counterstmt. ¶¶ 10, 11, 12; Travelers's Resp. to Home's 56.1 Counterstmt. ¶¶ 11, 12, 13. Flour City asserted cross-claims against Tishman for contribution, contractual indemnification, and common law indemnification. Home's 56.1 Counterstmt. ¶ 12. Heydt asserted cross-claims against Tishman for contribution and common law indemnification. Home's 56.1 Counterstmt. ¶ 10; Travelers's Resp. to Home's 56.1 Counterstmt. ¶ 11. Inspeco asserted cross-claims against Tishman for contribution and common law indemnification. Home's 56.1 Counterstmt. ¶ 11.

C. Home's and Travelers's Involvement in the Galloway Action

It is undisputed that the direct defendants, third-party defendant, and fourth-party defendants were all required to have liability insurance policies for the construction site. Travelers's 56.1 Stmt. ¶ 35. Home insured Tenth City, Koeppel, and Tishman. Id. ¶¶ 6, 9, 59. Home provided coverage to Tishman through a commercial general liability policy. Home's Ex. B. Home's general liability policy provided coverage for contractual indemnification claims. Staley Aff. ¶ 3. Travelers provided coverage to Tishman through a Workers Compensation and Employer's Liability Policy, which covered Mr. Galloway's claim for compensation benefits. Travelers's 56.1 Stmt. ¶ 22. The Employer's Liability portion of this policy also provided ...


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