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Admiral Indemnity Company v. Travelers Casualty and Surety Company of America

August 9, 2012

ADMIRAL INDEMNITY COMPANY, PLAINTIFF,
v.
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,
DEFENDANT.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

OPINION AND ORDER

The plaintiff, Admiral Indemnity Company ("Admiral"), brings this action against Travelers Casualty and Surety Company of America ("Travelers"), for declaratory judgment that Travelers is obligated to pay all or part of the costs Admiral incurred in defending 315 East 69th Street Owners Corporation ("Owners Corp.") in a state court action. Owners Corp. was insured by both Admiral and Travelers. Admiral and Travelers have each moved for summary judgment.

Because Admiral was the primary insurer for the defense costs of the state court action, and Travelers only provided excess coverage, Travelers is entitled to summary judgment dismissing the claim that it participate in the defense costs of that action.

I.

The following facts are undisputed unless otherwise noted.

A.

In 2005, Owners Corp., a condominium association, purchased insurance from both Admiral and Travelers. (Pl.'s R. 56.1 Stmt. at ¶¶1, 12; Def.'s R. 56.1 Stmt. at ¶¶1, 12.) Admiral issued Owners Corp. a commercial general liability insurance policy ("Admiral Policy"). (Pl.'s R. 56.1 Stmt. at ¶¶12-15; Def.'s R. 56.1 Stmt. at ¶¶12-15.) The Admiral Policy covered "bodily injury," "property damage," and "personal and advertising injury" among other things. (Pl.'s R. 56.1 Stmt. at ¶¶14-16; Def.'s R. 56.1 Stmt. at ¶¶14-16.) The Admiral Policy was an occurrence policy that applied to any occurrence "during the policy period." (Admiral Policy, Affidavit of Jessica M. Mendelsohn, sworn to Oct. 12, 2011 ("Mendelsohn Aff."), Ex. 5, at 5.) "Occurrence" is defined by the policy as "an accident, including continuous or repeated exposures to substantially the same general harmful conditions." (Admiral Policy, Mendelsohn Aff. Ex. 5, at 18.)

Travelers issued Owners Corp. Non-Profit Management and Organization Liability Insurance ("Travelers Policy"). (Pl.' s R. 56.1 Stmt. at ¶1; Def.'s R. 56.1 Stmt. at ¶1.) The Travelers Policy provided Owners Corp. with directors and officers liability coverage. (Compl. ¶9.) The Travelers Policy provided coverage on a "claims made" basis, for claims first made against the insured and reported to Travelers during the policy period or during a further three-year discovery period. (Pl.'s R. 56.1 Stmt. at ¶¶3; Def.'s R. 56.1 Stmt. at ¶4.)

The policy periods for both the Admiral Policy and the Travelers Policy initially ran from February 1, 2005, until February 1, 2006. (Pl.'s R. 56.1 Stmt. at ¶¶1,12; Def.'s R. 56.1 Stmt. at ¶¶1,12.) Both Travelers and Admiral issued identical successor policies for the period from February 1, 2006 until February 1, 2007. (Pl.'s R. 56.1 Stmt. at ¶¶10-11,18-19; Def.'s R. 56.1 Stmt. at ¶¶10-11,18-19.)

Both the Admiral Policy and the Travelers Policy contain "Other Insurance" clauses. The Admiral Policy Other Insurance clause provides:

This insurance is primary except when [a number of conditions which are not relevant in this case occur.]

If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. (Pl.'s R. 56.1 Stmt. at ¶20; Def.'s R. 56.1 Stmt. at ¶20.)

In contrast, the Travelers Policy Other Insurance clause states:

If any Loss otherwise covered under this Policy is Insured under any other valid and collectible Policy or policies, then this Policy shall apply only in excess of the amount of any deductibles, retentions and limits of liability under such other insurance, whether such other insurance is stated to be primary, contributory, excess, contingent, or otherwise unless such other insurance is written specifically excess of this Policy by reference in such other Policy to the Policy Number of this Policy. (Pl.'s R. 56.1 Stmt. at ¶9; Def.'s R. 56.1 Stmt. at ¶9.) "Loss" under the Travelers Policy includes defense costs. (Pl.'s R. 56.1 Stmt. at ¶7; Def.'s R. 56.1 Stmt. at ¶7.)

The Other Insurance clauses of the Admiral and Travelers Policies remained unchanged when the policies were reissued from 2006 to 2007. (Pl.'s R. 56.1 Stmt. at ¶¶10-11,18-19; Def.'s R. 56.1 Stmt. at ¶¶10-11,18-19.) However, in 2007, Admiral issued a revised policy that succeeded the Admiral 2006-2007 Policy and ran from February 1, 2007, until March 1, 2008 ("Revised Admiral Policy"). In the Revised Admiral Policy, Admiral altered its Other Insurance clause. The Revised Admiral Policy Other Insurance clause provides:

If other valid and collectible insurance is available to the insured for a loss we cover.[t]his insurance is in excess over.[a]ny other valid and collectible ...


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