The opinion of the court was delivered by: Dennis Jacobs, Chief Judge:
Ment Bros. Iron Works Co. v. Interstate Fire & Casualty Co.
Argued: September 5, 2012
Before: JACOBS, Chief Judge, CALABRESI and CARNEY, Circuit Judges.
29 Ment Bros. Iron Works Co., Inc. appeals from a judgment 30 of the United States District Court for the Southern 31 District of New York (Hellerstein, J.) granting summary 32 judgment in favor of Interstate Fire & Casualty Co. in an 33 insurance dispute. Reversed.
17 This declaratory judgment action disputes liability 18 insurance coverage for property damage alleged to have been 19 caused by the policyholder, a welding subcontractor, during 20 construction of a residential building at 40 Mercer Street 21 in New York City. Forty Mercer was planned and marketed by 22 the developer as a residential condominium, though no units 23 had been sold at the time the damage occurred. The general 24 commercial liability coverage (with an aggregate limit of $2 25 million) excludes property damage "arising out of the 26 construction of 'residential properties,' except 27 'apartments.'" "Residential properties" is defined to 28 include condominiums. An apartment is defined as "a unit of 29 residential real property in a multi-unit residential 1 building or project where all units are owned by and titled 2 to a single person or entity."
3 The policyholder, Ment Bros. Iron Works Co., Inc. 4 ("Ment") filed suit against Interstate Fire & Casualty Co. 5 ("Interstate") seeking a declaration that its insurer is 6 obligated to defend and indemnify. Ment appeals from the 7 judgment of the United States District Court for the 8 Southern District of New York (Hellerstein, J.) granting 9 summary judgment in favor of Interstate. The district court 10 ruled that 40 Mercer was a "residential property" 11 construction but not an "apartment" at the time the damage 12 occurred--meaning that Ment had no coverage. Because we 13 conclude that 40 Mercer was an apartment building as defined 14 in the insurance policy when the damage occurred, Ment was 15 covered by the policy. We therefore reverse.
18 WXIV/Broadway Grand Realty, LLC ("WXIV/Broadway"), a 19 building owner and developer, began construction at 40 20 Mercer Street in 2005, using Pavarini McGovern, LLC 21 ("Pavarini") as general contractor. Pavarini subcontracted 22 the welding to Ment. Ment completed its work between April 1 and July 2006. At the time, WXIV/Broadway was the sole fee 2 owner of the building and project at 40 Mercer.
3 Thereafter, Pavarini discovered damage to the penthouse 4 windows, allegedly caused by welding sparks. Pavarini sued 5 Ment in New York state court. See Pavarini McGovern, LLC v. 6 Ment Bros. Ironworks, Index No. 107637/09 (N.Y. Sup. Ct. 7 2011) (York, J.). Ment called on Interstate to defend the 8 suit and indemnify it. Interstate assigned counsel to 9 defend, but soon reserved its rights on the ground that the 10 damage had occurred during the construction of a 11 condominium, citing the residential construction exclusion.
12 Interstate agreed to furnish a defense until Ment's counsel 13 could file a motion for summary judgment. When Ment's 14 counsel advised Interstate that such a motion was not yet 15 feasible, Interstate gave thirty days' notice that it would 16 relinquish the defense, so that Ment could make its own 17 arrangements.
18 Ment filed a two-count complaint in the Southern 19 District of New York seeking a declaration that Interstate 20 had duties of defense and indemnity on the underlying 21 Pavarini claim. See Ment Bros. Iron Works Co. v. Interstate 22 Fire & Cas. Co., No. 10 Civ. 3043 (Dkt. No. 1) (S.D.N.Y. 1 Apr. 9, 2010) (Hellerstein, J.). Cross-motions for summary 2 judgment were filed on January 18, 2011. At oral argument 3 on June 13, 2011, the district court ruled from the bench.
4 A summary order explained that the residential construction 5 exclusion applied "[f]or the reasons provided on the 6 record," and therefore "grant[ed] summary judgment to 7 Interstate dismissing the Complaint." Summ. Order, at 1 8 (Dkt. No. 46) (S.D.N.Y. June 13, 2011). Ment timely filed a 9 notice of appeal.
12 We review an order granting summary judgment de novo, 13 drawing all factual inferences in favor of the non-moving 14 party. Costello v. City of Burlington, 632 F.3d 41, 45 (2d 15 Cir. 2011). Likewise, we review de novo the interpretation 16 of contracts, including insurance agreements. Fireman's 17 Fund ...