881 F. Supp. 2d 570
S.D.N.Y.2012Background
- Admiral issued a primary CGL policy to Owners Corp; Travelers issued an excess D&O policy; both cover 2005-2007 periods.
- Gallup v. 315 East 69th Street Owners Corp. (Gallup Action) asserted multiple claims arising from greenhouse repairs and related issues.
- May 2006: Travelers disclaimed coverage for Gallup; Admiral partially disclaimed but agreed to defend all Gallup claims under its policy.
- 2007: Admiral issued a Revised Admiral Policy with an altered Other Insurance clause; Travelers remained excess insurer.
- Admiral seeks declaratory relief that Travelers must contribute to defense costs; court applies NY law and Fieldston framework.
- Court concludes Admiral was primary and Travelers excess; Other Insurance clauses were complementary, not shared defense duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Travelers must defend or contribute to Gallup Action costs | Admiral asserts Other Insurance clauses require Admiral to defend; Travelers must contribute as excess only for excess costs. | Travelers argues its duty is excess-only and lacks defense obligation; Admiral’s defense costs are covered by Admiral policy; Fieldston controls. | Travelers has no duty to defend or contribute. |
| Whether Fieldston controls allocation of defense costs between primary and excess insurers | Fieldston implied primary insurer defends entire action; excess insurer bears no defense costs. | Fieldston distinguishable or ignored; argues no joint defense duty where Admiral already primary. | Fieldston dictates no contribution; defense costs are borne by primary insurer, none from excess. |
| Impact of Revised Admiral Policy on defense-cost allocation | Revised clause makes Admiral’s defense excess over other insurance, potentially sharing costs with Travelers. | No, because defense duty arose under 2005-2006 policy before the 2007 revision; revision cannot alter ongoing duty. | Revised clause does not alter pre-existing defense duty; Travelers remains excess with no obligation to defend. |
Key Cases Cited
- Fieldston Property Owners Ass’n v. Hermitage Ins. Co., 16 N.Y.3d 257 (N.Y.2011) (duty to defend may require defense of entire action; independent insurers may be precluded from contribution)
- Fieldston, Hermitage Ins. Co. v. Federal Ins. Co., 920 N.Y.S.2d 763 (N.Y.2011) (primary insurer defends; excess insurer not required to contribute under complementary clauses)
- Cablevision Sys. Dev. Co. v. Fed. Ins. Co., 836 F.2d 54 (2d Cir.1987) (illustrates distribution of costs among primary insurers; not supportive of post-hoc excess-sharing)
- New York v. Blank, 820 F. Supp. 697 (N.D.N.Y.1993) (policy interpretation and overlapping coverages; bearing on allocation of defense costs)
- Emons Indus., Inc. v. Liberty Mut. Fire Ins. Co., 481 F. Supp. 1022 (S.D.N.Y.1979) (early considerations of concurrent/primary coverage and defense obligations)
- Consolidated Edison Co. of N.Y. v. Allstate Ins. Co., 98 N.Y.2d 208 (N.Y.2002) (interpretation of insurance policies and other-insurance concepts in NY law)
- J.P. Realty Trust v. Public Service Mut. Ins. Co., 102 A.D.2d 68 (N.Y.1984) (allocation of defense costs under overlapping policies)