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Ostrowski v. American Safety Indemnity Co.

September 30, 2010


The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge


Plaintiff Andrzej Ostrowski initiated this action against defendant American Safety Indemnity Company ("American") seeking to collect the amount due under a settlement agreement and Confession of Judgment entered into with American's insured, Hi-Tower Contractors, Inc. ("Hi-Tower"). Before the court are the parties' cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56(c). For the reasons set forth below, the court grants plaintiff's motion in part and denies defendant's motion in its entirety.

I. Background

The Congregation Chasidei Belz of Boro Park, Inc. ("Congregation") was conducting renovation work on a building located at 50-15 15th Avenue in Brooklyn, New York, during the summer of 2003. The Congregation employed Hi-Tower to act as either a "general contractor" or "construction manager" at the building site. (Compare Pl.'s Local Rule 56.1 Stmt. in Supp. of Summ. J. Mot. ("Pl.'s 56.1 Stmt.") at ¶ 8, with Def.'s Local Rule 56.1 Stmt. in Opp'n to Summ. J. Mot. ("Def.'s 56.1 Stmt.") at ¶ 8.) The ENY Mechanical Corp. ("ENY"), of which Ostrowski was an employee, was hired (by either Hi-Tower or the Congregation) to perform plumbing work at the construction site. (Compare Pl.'s 56.1 Stmt. at ¶ 9, with Def.'s 56.1 Stmt. at ¶ 9.) On August 29, 2003 Ostrowski was severely injured in a fall from scaffolding in the course of his employment at the construction site. (Kovner Aff. Ex. B at 42-3, 73.)

On September 21, 2003, Ostrowski brought an action in New York Supreme Court, Kings County against Hi-Tower, among others, to recover for the bodily injuries he sustained from the fall. On or about January 28, 2004, Ostrowski's attorney served a copy of the Summons and Verified Complaint upon Apex Insurance Managers ("Apex"), the authorized agent/representative for Hi-Tower's insurance carrier, American. (Dachs Aff. Ex. K.) On March 2, 2004, Apex consultant Eugene Chang conducted a preliminary evaluation of the case and noticed potential coverage issues regarding the Breach of Representations and Warranties Endorsement ("Warranty") section of Hi-Tower's insurance policy. (Dachs Aff. Ex. M.) The pertinent provision of the policy reads:

1. The Named Insured requires that all contractors maintain commercial general liability insurance issued by an "A" rated or better domestic carrier on the following items:

a. Limits of insurance equal to or greater than the limits provided by this policy;

b. Coverage at least as broad as the insurance on this policy;

c. Contractual liability coverage, including but not limited to tort liability assumed in a written contract; and

d. Coverage for the Named Insured as an additional insured. (Dachs Aff. Ex. J at 128.) At some point, Chang noticed the possibility that Hi-Tower had not been named as an "additional insured" on ENY's policy pursuant to the requirements of the Warranty. (Dach's Aff. Ex. M.) Consequently, Apex issued a disclaimer notice to Hi-Tower on April 23, 2004, denying coverage for Hi-Tower's failure to comply with the Warranty, but offering to provide a defense to the state court action. (Dachs Aff. Ex. Q.) Subsequently, Apex enlisted the services of attorney Lewis Silverman to defend Hi-Tower in the action.(Dachs Aff. Ex. L.)

Prior to the commencement of the trial, Ostrowski and Hi-Tower reached a settlement agreement ("agreement") in which Hi-Tower agreed to pay Ostrowski $495,000 and execute a Confession of Judgment for that amount. Additionally, Hi-Tower assigned all of its rights under the policy to Ostrowski so that he "might obtain payment of the judgment from American Safety." (Dachs Aff. Ex. CC at¶ 5.) As part of the agreement, Ostrowski agreed not to execute the judgment against Hi-Tower or to enter the judgment for one year following its execution. (Id. at ¶ 11.)

On September 24, 2007, Ostrowski filed the instant action seeking a judgment against American in the amount of $495,000 along with pre-judgment interest. (Dachs Ex. E at ¶ 15.) On January 21, 2010 plaintiff moved, and on February 12, 2010 defendant cross-moved, for summary judgment.

II. Discussion

A. Summary Judgment Standard

Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view all facts in the light most favorable to the nonmoving party, but "only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380 (2007). "When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Id. A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

B. Entry of Judgment

New York State Insurance Law ยง ...

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