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Travelers Property Casualty Co. of America v. Selective Ins. Co. of New York

Supreme Court of New York, New York County

September 11, 2013

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA and Plaza Construction Corporation, Plaintiffs,
SELECTIVE INSURANCE COMPANY OF NEW YORK and American International Specialty Lines Insurance Company, Defendants. No. 101537/12.

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

Lazare Potter & Giacovas, LLP., New York, for the Plaintiff.

Law Ofcs of Michael F. Klag, Brooklyn, Cascone & Kluepfel, LLP, Garden City, for the defendant.


This declaratory judgment action arises from an underlying personal injury action entitled Zunno v. Gotham Constr. Corp., Marburt Holding Corp., f/k/a 1125 Assocs., Inc., and Plaza Constr. Corp., index no. 113242/2008 currently pending in the Supreme Court, New York County (the underlying action). In the underlying action, a journeyman electrician, Albert T. Zunno (Zunno), an employee of defendant Selective Insurance Company of New York's (Selective) named insured, Belway Electric (Belway), allegedly sustained injury on June 9, 2008, when he slipped and fell on a small piece of pipe while working at a demolition/renovation project (the project) at 250 Hudson Street, New York, New York (the premises).

In motion sequence number 002, Selective moves, pursuant to CPLR 3212(a), for conditional summary judgment declaring that, should a trier of fact in the underlying action render a factual determination that Zunno's accident " arose out" of the work of codefendant American International Specialty Lines Insurance Company's (American) named insured, Tri-State Dismantling Corporation (Tri-State), then American must provide plaintiff Travelers Property Casualty Company of America's (Travelers) named insured, plaintiff Plaza Construction Corporation (Plaza), with a defense and indemnification on a primary and non-contributory basis.

BACKGROUND On the date of the accident, Plaza owned the premises where the accident took place. That morning, Zunno, along with his coworkers, reported to their Belway foreman for their work assignment for that day. Belway served as the electrical subcontractor on the project underway at the premises. After they received their assignments, they all went to the sixth floor of the premises to retrieve their tools from the Belway gang box. Zunno testified that, as he began walking to the gang box, he " stepped with [his] left foot and the next thing [he] knew [he] was laying on the floor" (Notice of Motion, exhibit K, Zunno transcript [tr.] at 249-250).

Following his accident, one of Zunno's coworkers, who had witnessed the accident, pointed out to Zunno the approximately six-inch long and one-half-inch thick piece of used black iron or steel pipe (the pipe) that had caused Zunno to fall. Zunno testified that the pipe was not an electrical pipe or conduit, but the type of pipe typically used by " steamfitters or plumbers" ( id. at 253).

Plaza's former job superintendent, Michael Walsh (Walsh), testified that Tri-State, which was hired by Plaza to perform demolition work at the premises, " was responsible for removing the demo debris" (Notice of Motion, exhibit L, Walsh tr. at 52). Tri-State's field supervisor, Andrew Scherel (Scherel), also testified that Tri-State was responsible for clearing up any and all debris created as part of its work. Scherel explained that, if there was not enough debris to fill up an open top container, Tri-State workers would center pile the debris for removal during the next shift. In addition, Tri-State was also responsible for the removal of the HVAC ducts, the bathroom plumbing and the sprinkler systems/piping throughout the various floors of the building. The sprinkler pipes, which were dismantled and removed by Tri-State, were black in color. After dismantling the sprinkler pipes, Tri-State would " drop [them] to the floor" (Notice of Motion, exhibit M, Scherel tr at 95).

Belway's electrical foreman, Anthony Ferraro (Ferraro), testified that on the date of the accident, the project was still in the " beginning stages," with demolition actively going on at the premises (Notice of Motion, exhibit N, Ferraro tr. at 59). At this time, Tri-State was involved in the removal of debris " [a]ll over the building" ( id. at 62). Ferraro, who witnessed Zunno's accident, testified that he examined the pipe which caused Zunno to fall immediately after the accident. Ferraro described the pipe as approximately one-half inch thick and black in color. Ferraro maintained that the pipe was part of the sprinkler system, which was dismantled and demolished by Tri-State ( id. at 140). In addition, Ferraro observed Tri-State " dismantling, performing demolition work on the sprinkler system prior to Zunno's accident on the sixth floor" ( id. at 141). Ferraro noted that on, and prior to the date of the accident, there were no onsite contractors using half-inch-thick pipe in the performance of their work.

The Relevant Agreements and Insurance Policies

Pursuant to a subcontractor agreement dated January 1, 2008, Plaza retained Tri-State to perform demolition work at the project (the Plaza/Tri-State agreement). An insurance procurement provision included in the Plaza/Tri-State agreement contractually obligated Tri-State to obtain and maintain additional insured coverage for Plaza, in the amounts of $1 million in primary coverage per occurrence and $10 million in umbrella coverage. At some point prior to the date of the underlying loss, under policy number PROP2189059, with effective dates of coverage of January 22, 2008 to January 22, 2009, American issued a Commercial General Liability (CGL) policy of insurance to Tri-State, providing it with $1 million in coverage per occurrence and $2 million in aggregate (the American policy a/k/a the Chartis policy).

Relevant to the present motion, the American policy contains the following additional insured endorsement, which states, in pertinent part, as follows:


This endorsement modifies insurance provided under the following:

In consideration of an additional premium of $INCLUDED it is hereby agreed that the following is included as an Additional Insured as respects Coverage A and B but only as respects liability arising out of your work for the Additional Insured by or for you.

Additional Insured:

This does not apply to bodily injury or property damage arising out of the sole negligence or willful misconduct of, or for defects in design furnished by, the Additional Insured.
As respects coverage afforded by the Additional Insured, this insurance is primary and non-contributory, and our obligations are not affected by any other insurance carried by such Additional Insured whether primary, excess, contingent or on any other basis.
This endorsement does not increase the Company's limits of liability as specified in the Declarations of this policy.
All other terms, conditions, and exclusions shall remain the same" (Notice of Motion, exhibit E, American policy, American policy ...

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