Order, Supreme Court, New York County (Michael D. Stallman, J.), entered January 12, 2009, which, to the extent appealed from as limited by the briefs, denied plaintiff's motion for summary judgment, and upon a search of the record, granted defendants summary dismissal of the third cause of action of the complaint, reversed, on the law, without costs, the motion for summary judgment granted, and it is declared that Nautilus Insurance Company has no obligation to defend or indemnify Matthew David Events, Ltd. and Timothy Shea in the underlying action. The Clerk is directed to enter judgment accordingly.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Mazzarelli, J.P., Saxe, Moskowitz, Renwick, Richter, JJ.
In the underlying action, Timothy Shea, defendant herein, seeks monetary damages for alleged personal injuries sustained while working at a corporate party held on Randall's Island and sponsored by Bloomberg, LLC and Bloomberg, Inc. (Bloomberg). Bloomberg had entered into an agreement with defendant Matthew Davis Events (MDE) for MDE to plan, design and manage the event for Bloomberg.
MDE also entered into an agreement with United Stage Service, Inc. (Stage) to perform work, labor and services for the Bloomberg event at Randall's Island. Shea, then an employee of Stage, worked as a stagehand at the event. He alleges that he was injured as a result of an on-the-job accident when he fell off a utility vehicle in which he had been riding.
On the date of the accident, June 27, 2004, MDE was insured by plaintiff Nautilus Insurance Company under a commercial liability policy. Almost three years after the accident, on June 25, 2007, Shea commenced a personal injury action against Bloomberg and MDE, among others. The next day, on June 26, 2007, MDE sent notice about the accident to Nautilus. Immediately, Nautilus disclaimed coverage on the grounds that MDE failed to provide timely notice of the claim and that Shea's injury was excluded under the terms of the policy.
Upon denying coverage, Nautilus commenced this action against MDE, among others, seeking a declaration that no coverage was owed to MDE for the claims asserted in the Shea action. The first and second causes of action of the complaint allege that pursuant to the terms of the policy, Nautilus was not required to defend or indemnify MDE because of its failure to provide timely notice of the occurrence or suit. The third cause of action alleges that the policy did not apply to liability as a result of bodily injury to an employee of the insured arising out of and in the course of employment or performing duties related to the conduct of MDE's business. Specifically, the complaint alleges that at the time of the accident, Shea was working for Stage, a company performing duties relating to MDE's work. Because Shea was performing duties related to MDE's work at the time of the accident, and was thus an "employee" of MDE, as the word was defined by the policy, the policy did not provide defense or indemnity coverage to MDE in the underlying action and Nautilus was entitled to a declaration that no coverage was owed to MDE for any claims asserted by Shea.
On May 16, 2008, Nautilus moved for summary judgment and for a declaration that it was under no obligation to defend or indemnify MDE and/or Shea in the underlying action, and to dismiss all counterclaims against it. In opposition, MDE averred, inter alia, that the language of the employee exclusion was ambiguous since it was not clear whether or not employees of a contractor were included. MDE also argued that the motion was premature since discovery had not yet commenced and it was necessary to determine the relationship between MDE and Stage. Nautilus replied that the language of the employee exclusion was clear, and since Shea was an "employee" of MDE at the time of the accident, recovery under the policy was precluded.
The motion court denied Nautilus's motion for summary judgment holding that the employee exclusion was inapplicable. The court then, upon a search of the record, dismissed the third cause of action of the complaint. The court stated that exclusions from coverage in an insurance policy must be specific and clear in order to be enforced, and ambiguities were construed against the insurer. In this case, the court found that it was not clear whether Shea, as Stage's employee, would be a person "contracted for" by MDE and excluded from coverage. Inasmuch as the policy did not define the phrase "contracted for," the court concluded that it was susceptible to more than one meaning. The court noted that, for instance, the phrase could be narrowly defined to include only a temporary worker whom MDE contracted from a temporary employment agency. We reverse.
" [C]courts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies'" (Sanabria v American Home Assur. Co., 68 NY2d 866, 868 , quoting State of New York v Home Indem. Co., 66 NY2d 669, 671 ), whose unambiguous provisions must be given "their plain and ordinary meaning" (United States Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232  [internal quotations marks and citations omitted]; see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 471-473 ; Catucci v Greenwich Ins. Co., 37 AD3d 513, 514 ). "An exclusion from coverage must be specific and clear in order to be enforced' (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 ), and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" (Guachichulca v Laszlo N. Tauber & Assoc., LLC, 37 AD3d 760, 761 ; see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 ; Ruge v Utica First Ins. Co., 32 AD3d 424, 426 , lv denied 7 NY3d 716 ). However, the plain meaning of the policy's language may not be disregarded to find an ambiguity where none exists (see Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470, 471 , lv dismissed 3 NY3d 696 ; Garson Mgt. Co. v Travelers Indem. Co. of Ill., 300 AD2d 538, 539 , lv denied 100 NY2d 503 ).
In this case, Nautilus met its burden of demonstrating that the exclusion provision relied upon by the court to dismiss the third cause of action clearly applies to the underlying action. The policy contained an "Employee Exclusion," which excluded from coverage bodily injury to an "employee" of the insured "arising out of and in the course of: (a)[e]mployment by the insured; or (b)[p]erforming duties related to the conduct of the insured's business." The employee exclusion is very broad. The exclusion defined "employee" as including but not limited to, any person or persons "hired by, loaned to, leased to, contracted for, or volunteering services to the insured, whether or not paid by the insured." Moreover, the exclusion was applicable whether the insured was liable as an employer or in any other capacity and applied to any obligation to share damages with or repay someone else who must pay damages because of the injury.
We agree with Nautilus that giving the words "contract for" their plain and ordinary meaning, MDE's retention of a subcontractor to perform work for the Bloomberg event at Randalls' Island constituted services for the insured and thus falls within the scope of the employee injury exclusion. Indeed, the "contract for" language of the Employee Exclusion clearly contemplates that a contractor could be retained by a party other than the insured on the insured's behalf, and that an injury to that contractor or its employee would fall within the scope of the exclusion (see U.S. Underwriters Ins. Co. v Beckford, 1998 WL 23754, 1998 US Dist LEXIS 574 [ED NY 1998]). The argument that this language may be interpreted to apply only to persons who contract directly to work for MDE renders the explanatory language that the term "employees" includes those providing "services to the insured, whether or not paid by the insured" a nullity. It is a well settled principle of contract law that a court should not adopt a construction of a contract "which will operate to leave a provision of a contract . . . without force and effect. An interpretation that gives effect to all the terms of an agreement is preferable to one that ignores terms or accords them an unreasonable interpretation" (Ruttenberg v Davidge Data Sys. Corp., 215 AD2d 191, 196  [internal quotation marks and citations omitted]; see also Consolidated Edison Co. of NY, Inc. v United Coastal Ins. Co., 216 AD2d 137 , lv denied 87 NY2d 808 ).
All concur except Mazzarelli, J.P. and Richter, J. who dissent in part in a memorandum by ...