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Paynes Cranes, Inc. v. American States Insurance Co.

United States District Court, E.D. New York

March 26, 2014

PAYNES CRANES, INC., and CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, subscribing to Policy No. SRSGLNY06126, Plaintiffs,
v.
AMERICAN STATES INSURANCE COMPANY, Defendant.

MEMORANDUM & ORDER

ROSLYNN R. MAUSKOPF, District Judge.

In this action, plaintiffs Paynes Cranes, Inc. ("Paynes") and its insurer, Certain Underwriters at Lloyd's, London, seek a declaration that defendant, American States Insurance Company ("American"), must defend and, if necessary, indemnify Paynes in a personal injury suit pending in state court. American removed the case to this Court on July 16, 2012, and the parties cross-moved for summary judgment on August 5, 2013. ( See Doc. Nos. 32-42, 43.) Since these cross-motions address the same issues, the Court addresses both in this Memorandum and Order. For the reasons explained below, both motions are denied.

BACKGROUND[1]

As its name implies, Paynes supplies cranes for construction projects. In August 2007, a company called Intermetal Fabricators, Inc. ("Intermetal"), hired Paynes to provide a crane for the construction of a store in Oneonta, New York.[2] Paynes did so, supplying both the crane and an employee to operate it. On or about August 17, 2007, one of the construction workers on the project was injured while working with the crane. The injured worker sued several defendants - including Paynes - in a state personal injury action.[3] In this case, Paynes seeks a judicial declaration that American, which insured Intermetal during the relevant period, must defend and, if necessary, indemnify Paynes in the suit brought by the injured worker.[4]

The central issue in this case, of course, is whether the insurance policy American provided to Intermetal also covers Paynes.[5] But that relatively straightforward inquiry is complicated here by the language of the provision under which Paynes claims coverage. Because the policy does not explicitly list Paynes as an insured party, the issue of coverage turns on whether Paynes qualifies as an "Additional Insured" under the policy's terms.[6] In relevant part, the policy provided that:

Any person or organization... for whom you [Intermetal] are required by written contract, agreement or permit to provide insurance is an insured, subject to the following additional provisions:
a. The contract, agreement or permit must be in effect during the policy period... and must have been executed prior to the "bodily injury, " "property damage, " "personal and advertising injury."

(Decl. of Richard H. Yaus ("Yaus Decl.") (Doc. No. 43-5), Ex. 1 at 48 (ECF Pagination).) The crux of the parties' dispute is whether, within the meaning of this provision, a written contract existed between Paynes and Intermetal prior to the injured worker's accident. Paynes argues that there was a contract because, at the end of each day that Paynes provided a crane for the project, an agent of Intermetal signed a "job ticket" presented by Paynes that provided, in pertinent part, the following on its reverse side:

1. PARTIAL INDEMIFICATION - Lessee [Intermetal] agrees to partially indemnify and save lessor [Paynes], its employees and agents harmless from claims for death or injury to persons, including lessor's employees, of loss, damage or injury to property, including the equipment, arising in any manner out of lessee's operation.
[...]
2. INSURANCE - The lessee agrees to purchase the following insurance coverages prior to the equipment's arrival on the job site. The lessee shall purchase the following coverages for lessor: a.) worker's compensation and employer's liability insurance, with limits of at least the statutory minimum or $1, 000, 000, whichever is greater; b.) primary non-contributory commercial general liability insurance on an occurrence basis, including bodily injury and property damage coverage with minimum limits of $1, 000, 000 per occurrence and $2, 000, 000, in the aggregate; c.) excess/umbrella non-contributory insurance in the amount of $5, 000, 000.... f.) the lessor and all affiliated partnerships, joint ventures, corporations, and anyone else who lessor is required to name as an additional insured, are to be included as additional insureds on all liability insurance policies, including excess/umbrella policies.... To the extent that the lessee may perform under this lease without obtaining the above coverages, such an occurrence shall not operate, in any way, as a waiver of the lessor's right to maintain any breach of contract action against the lessee.

(Yaus Decl., Ex. 7 (Doc. No. 43-11) at 5 (ECF Pagination).) Notably, although each ticket had two spaces for signatures clearly labelled "HAVE SIGNED AT START OF JOB" and "HAVE SIGNED AT END OF DAY, " the tickets were signed only once in the latter space at the end of each work day. Additionally, all other information reflected on the signed tickets - including the equipment rented, the date and time it arrived, and the cost of the rental - was inserted by Paynes' personnel subsequent to the ticket being signed.

American argues that its policy does not cover Paynes because the job tickets did not create a contract between Intermetal and Paynes. Specifically, American argues that the job tickets did not create a valid contract because the person who signed the job tickets lacked the authority to enter into any contractual agreement on behalf of Intermetal. American also urges that any such contract would be void ...


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