Shelton Liptak Nowak LLP, Buffalo (Timothy E. Delahunt of
counsel), for appellant.
Harwood Reiff LLC, New York (Simon W. Reiff of counsel), for
Acosta, P.J., Renwick, Manzanet-Daniels, Kapnick, Webber, JJ.
Supreme Court, New York County (Robert D. Kalish, J.),
entered August 8, 2016, which granted plaintiff's motion
for summary judgment declaring that defendant RLI Insurance
Company (RLI) is required to indemnify it for its damages and
pay any outstanding reasonable attorneys' fees and
defense costs it incurred in defending an underlying action
in excess of those legal fees and costs already paid by
nonparty New York State Insurance Fund (SIF), and denied
RLI's cross motion for summary judgment, affirmed,
is the managing agent of a commercial office building located
at 622 Third Avenue. Defendant RLI is plaintiff's primary
commercial general liability (CGL) insurance carrier.
October 3, 2008, nonparty engineer David Vasquez fell and
fatally hit his head while replacing tile in the drop ceiling
of the building's loading dock. On the date of the
accident, plaintiff's vice president of management
contacted plaintiff's insurance broker for the CGL
policy. She was advised by the broker that the accident was a
work-related fatality, and thus, a workers' compensation
matter. She was assured that the CGL policy was inapplicable
and that "nothing further needs to be done." (The
CGL policy expressly excluded from coverage "[a]ny
obligation of the insured under a workers' compensation,
disability benefits or unemployment compensation law or any
similar law, " as well as bodily injury to "[a]n
employee of the insured arising out of and in the course of:
(a) [e]mployment by the insured; or (b) [p]erforming duties
related to the conduct of the insured's business.")
Neither the broker nor plaintiff notified RLI of the
promptly notified its workers' compensation carrier, the
State Insurance Fund (SIF). SIF agreed to defend and
March 6, 2009, the decedent's administratrix obtained an
order to show cause to conduct discovery for the purposes of
"framing a complaint" against plaintiff sounding in
negligence and violations of the Labor Law. Plaintiff gave
notice to RLI.
letter dated April 1, 2009, RLI denied coverage on grounds of
late notice and Vasquez's status as an
"employee" at the time of the accident.
2009, the decedent's administratrix commenced an action
against plaintiff. SIF defended plaintiff in the underlying
lawsuit, and paid workers' compensation benefits to
Vasquez's estate. Plaintiff chose to retain its own
counsel instead of SIF's law firm. SIF contributed $150
per hour toward payment of Greenberg Traurig's rate, with
plaintiff paying the difference.
this Court's decision in Vasquez v Cohen Bros. Realty
Corp. (105 A.D.3d 595');">105 A.D.3d 595');">105 A.D.3d 595');">105 A.D.3d 595 [1st Dept 2013]), holding that
issues of fact required trial of Cohen Brothers'
"special employer" defense, the Vasquez
litigation was settled for $2.5 million. Plaintiff paid $1
million; its excess insurer paid the remaining $1.5 million.
commenced this declaratory judgment insurance coverage action
against its broker and RLI on or about July 26, 2011. The
motion court granted plaintiff's motion for a declaration
that RLI was obligated to defend and indemnify it in the
Vasquez litigation, and we now affirm.
delay in notifying RLI was due to a reasonable, good faith
belief that Vasquez's work-related fatality was outside
the scope of the CGL policy, excusing the late notice
(see Great Canal Realty Corp. v Seneca Ins. Co.,
Inc., 5 N.Y.3d 742');">5 N.Y.3d 742 ). 
Tesler v Paramount Ins. Co. (220 A.D.2d 334, 334
[1st Dept 1995]), this Court held that the insureds
demonstrated a "good-faith and reasonable belief"
in their nonliability where the belief had been predicated
upon the incorrect advice of their insurance agent. RLI's
argument that Tesler is no longer good law is
unpersuasive. National Union Fire Ins. Co. of Pittsburgh,
Pa. v Great Am. E & S Ins. Co. (86 A.D.3d 425');">86 A.D.3d 425 [1st
Dept 2011]) explicitly distinguished Tesler on the
ground that in Tesler "the insurance agent
specifically advised the insured that there was no indication
a claim could be brought against it, " whereas in
National Union "there was no evidence that [the
insured] was advised by any insurance agent as to
nonliability" (id. at 427). Similarly,
Macro Enters., Ltd. v QBE Ins. Corp. (43 A.D.3d 728');">43 A.D.3d 728
[1st Dept 2007]) did not involve a situation where an
insured's failure to timely ...