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Employers Insurance Co. of Wausau v. Kingstone Insurance Co.

United States District Court, S.D. New York

December 4, 2019

Employers Insurance Company of Wausau, Plaintiff,
Kingstone Insurance Company, Defendant.




         Before the Court is a motion by Plaintiff Employers Insurance of Wausau (“Plaintiff” or “Wausau”), pursuant to Fed.R.Civ.P. 56, for partial summary judgment seeking a declaration that Defendant Kingstone Insurance Company (“Defendant” or “Kingstone”) owes a duty to defend in an underlying state court lawsuit and that Defendant's insurance coverage applies on a primary basis before coverage under Wausau's policy.[1] (Pl. Not. of Mot., ECF No. 34.) Also before the Court is a motion by Defendant, pursuant to Fed.R.Civ.P. 56, for summary judgment dismissing Plaintiff's Complaint in its entirety.[2] (Def. Not. of Mot., ECF No. 40.)

         For the reasons set forth below, I respectfully recommend that Plaintiff's motion for partial summary judgment be GRANTED and that Defendant's motion for summary judgment be DENIED.


         I. The Underlying Action

         On or about June 16, 2015, James Nunziato (“Nunziato'”) commenced the action entitled James Nunziato v. The Port Authority of New York and New Jersey, Bombardier Transportation (Holdings) USA Inc. and Capital Cleaning Contractors, Inc. of New York, Index No. 23303/2015E, which is pending in the Supreme Court of the State of New York, County of Bronx (the "Underlying Action"). (Pl. 56.1 ¶ 1; Def. Counter 56.1 ¶ 1; Def. 56.1 ¶ 1; Pl. Counter 56.1 ¶ 1.) Port Authority of New York and New Jersey (“PANYNJ”), Capital Cleaning Contractors, Inc., of New York (“Capital Cleaning”) and Bombardier Transportation (Holdings) USA Inc. (“Bombardier”) are defendants in the Underlying Action. (Pl. 56.1 ¶ 2; Def. Counter 56.1 ¶ 2.) In the Underlying Action, Nunziato alleges that he slipped and fell on the platform of the walkway of the AirTrain Station at Terminal One of JFK International Airport, located in Jamaica, New York, on July 14, 2014, and sustained bodily injuries. (Pl. 56.1 ¶ 3; Def. Counter 56.1 ¶ 3; Def. 56.1 ¶ 2; Pl. Counter 56.1 ¶ 2.)

         In the Underlying Action, in his initial Complaint and Amended Complaint, Nunziato alleges that PANYNJ “owned” and “operated” the premises located at the AirTrain Station (Potashner PMSJ Decl., Ex. 8, Verified Compl. ¶¶ 11-12; McCauley MSJ Decl., Ex. L, Am. Verified Compl., ¶ 11-12); that Bombardier was contracted to “provide security and surveillance services, ” “provide cleaning and maintenance services” and “operate a public transportation station” at the AirTrain station (Verified Compl. ¶¶ 13-15; Am. Verified Compl. ¶ 13-15); and that Capital Cleaning was contracted to “provide cleaning and maintenance services” and “operate a public transportation station” at the AirTrain station. (Verified Compl. ¶¶ 16-17; Am. Verified Compl. ¶¶ 16-17.)

         In Nunziato's Amended Complaint in the Underlying Action, he added North Mountain Contractor's Inc. (“North Mountain”) as a defendant. (Pl. 56.1 ¶ 7; Def. Counter 56.1 ¶ 7; Def. 56.1 ¶ 3; Pl. Counter 56.1 ¶ 3.) He alleges that North Mountain was contracted to “provide cleaning and maintenance services” and “operate a public transportation station” at the AirTrain station. (Am. Verified Compl. ¶¶ 18-19.) On or about November 26, 2016, a default judgment was entered against North Mountain by PANYNJ, Bombardier and Capital Cleaning on their cross-claims for indemnification. (Pl. 56.1 ¶ 10; Def. Counter 56.1 ¶ 10.)

         The Verified Bill of Particulars in the Underlying Action states that “the incident occurred while the plaintiff was exiting the Airtrain and was caused to slip and fall as a result of a wet, slippery, hazardous condition on the platform.” (Pl. 56.1 ¶ 8; Def. Counter 56.1 ¶ 8.) Nunziato alleged in the Underlying Action that the incident “was caused solely and wholly by reason of the carelessness and negligence of the defendants, their officers, agents, servants and/or employees.” (Verified Compl. ¶ 30; Am. Verified Compl. ¶ 35.)

         II. Relevant Agreements

         On or about September 1, 2013, Bombardier entered into a Services Agreement with Capital Cleaning. (Pl. 56.1 ¶ 12; Def. Counter 56.1 ¶ 12.) Pursuant to the Services Agreement, Capital Cleaning agreed to “maintain the JFK AirTrain System . . . to a high level of cleanliness;” basically, Capital Cleaning agreed to provide janitorial service for the AirTrain Stations at JFK airport. (Pl. 56.1 ¶ 13; Def. Counter 56.1 ¶ 13.)

         By Independent Contractor Agreement (the “North Mountain Agreement”), dated February 20, 2013, Capital Cleaning engaged North Mountain to perform janitorial service/floor maintenance services. (Pl. 56.1 ¶ 14; Def. Counter 56.1 ¶ 14; Def. 56.1 ¶ 4; Pl. Counter 56.1 ¶ 4.) Pursuant to the North Mountain Agreement, North Mountain agreed to “provide the day to day management and services” and to “[furnish] at their expense all supervision, labor, equipment, materials, and supplies to provide the services and [to] maintain all equipment in satisfactory condition and safe working order.” (Pl. 56.1 ¶ 16; Def. Counter 56.1 ¶ 16.) The North Mountain Agreement provides, in part, as follows:

a) Independent Contractor [North Mountain] shall pay [sic], at his/her expense, carry adequate insurance as set forth herein to fully protect Independent Contractor, Capital and the project owner from any and all claims of any nature for damage to property and for personal injury, including death, which may arise from the performance of this contract. Such policy, at Capital's option, may be subject to the prior approval of Capital. All policies must name Capital and the project owner as an additional insured. Said policy shall contain a provision that it may not be cancelled or materially changed by Independent Contractor without thirty (30) days written notice to Capital.
b) During the term of this Agreement, Contractor shall, at its own expense, provide and maintain in full force and effect, “occurrence” based form insurance of the type, kind and amount hereinafter specified:
i. Comprehensive General Liability insurance for a combined bodily injury, property damage, and personal injury limit of at least $1, 000, 000 per occurrence. The policy shall contain all endorsements of Insurance Services Office (ISO) - 1994 Form including but not limited to explosion, collapse, underground hazard, independent contractors, hazard fire damage, blanket contractual and expanded personal injury coverage.
c) Certificates of insurance must be supplied by Independent Contractor prior to the commencement of work. Said certificate must be signed by an authorized representative of the insurance carrier or producer, indicating the Additional Insured's and Named Insured's as required herein, and expressly reference the inclusion of all required endorsements, including liability and worker's compensation insurance. Upon expiration of the policy, or change in coverage, Independent Contractor shall immediately supply a Certificate of Insurance verifying coverage in accordance with the terms of this Agreement. Independent Contractors are responsible to be in compliance with insurance requirements in all States in which they perform work under this Agreement.

(Pl. 56.1 ¶ 17; Def. Counter 56.1 ¶ 17 (emphasis in original).)

         III. Kingstone Policy

         Kingstone issued a Crafts/12K Pak insurance policy, No. CP 5011704, with a policy period from March 26, 2014 to March 26, 2015, to North Mountain as the Named Insured (the “Kingstone Policy”). (Pl. 56.1 ¶ 18; Def. Counter 56.1 ¶ 18.) The Kingstone Policy was issued on March 27, 2014. (Pl. 56.1 ¶ 19; Def. Counter 56.1 ¶ 19.) The Kingstone Policy has an Each Occurrence Limit of $1 million. (Pl. 56.1 ¶ 20; Def. Counter 56.1 ¶ 20.)

         The General Liability Coverage Manufacturers' and Contractors Liability Insurance Agreement, which is part of the Kingstone Policy, contains a liability insuring agreement that provides, in relevant part, as follows:

We pay, up to the limit of liability, all sums when the insured is legally obligated to pay damages because of bodily injury and/or property damage caused by an occurrence to which the coverage applies. . . . We shall have the right and duty to defend the insured against any suit seeking covered damages, even if any of the allegations of the suit are groundless, false or fraudulent, provided the suit seeking covered damages originates from bodily injury and/ or property damage not otherwise excluded.

(Pl. 56.1 ¶ 21; Def. Counter 56.1 ¶ 21 (emphasis in original).)

         The Kingstone Policy contains an endorsement entitled “ADDITIONAL INSURED - CONTRACTUAL OBLIGATION (CONTRACTORS), ” which provides as follows:

The definition of insured in the General Liability Coverage is amended to include any person(s) or organization(s) for whom you are performing operations under contract and for whom you are contractually obligated to furnish additional insured coverage.
This endorsement covers only liability arising out of your work involving ongoing operations performed for the additional insured(s) and is limited to vicarious liability arising from the hazards covered by this policy. We do not provide coverage for any liability arising out of any acts or omissions of any additional insured(s), their employees or any other person or organization with which the additional insured(s) has/have a contract or other relationship. Coverage under this endorsement ceases on expiration of the policy or on completion of your operations for that insured.

(Pl. 56.1 ¶ 22; Def. Counter 56.1 ¶ 22 (emphasis in original).)

         The Kingstone Policy contains an “Other Insurance” provision that provides, in part, as follows:

7. Insurance Under More Than One Policy
a. Insurance under this General Liability Coverage is primary except [as] provided under paragraph 7c below, or unless otherwise stated in this policy. The amount of our liability is not reduced because of other insurance which applies to the loss on an excess basis.

         c. Insurance under this General Liability Coverage is excess over any other insurance:

1. if the other insurance, whether primary, excess, contingent or on any other basis, provides:
a. fire, extended coverage, builders' risk, installation risk or similar coverage for your work; or
b. fire insurance for premises rented to you; or
2. if the other insurance applies to any loss arising out of the maintenance of use of aircraft, autos or watercraft which may be covered by this policy.

(Pl. 56.1 ¶ 23; Def. Counter 56.1 ¶ 23 (emphasis in original).)

         Kingstone's Crafts/12 PAK Guidelines provides, in part, as follows:


(Pl. 56.1 ¶ 40; Def. Counter 56.1 ¶ 40 (emphasis in original).)[3]

         IV. W ...

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