Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Mar. Ins. Co.
38 N.Y.S.3d 1
| N.Y. App. Div. | 2016Background
- Samson Construction (named insured) procured a CGL policy from Liberty for a DASNY project; the policy included an endorsement "Additional Insured — By Written Contract."
- Samson’s prime contract with DASNY required Samson to name the Construction Manager (Gilbane/TDX JV) as an additional insured; the contract included a sample certificate of insurance listing the JV.
- Damage to adjacent buildings from Samson’s work led to litigation; Perkins Eastman sued Samson and later impleaded the JV; the JV sought defense/indemnity from Liberty in 2011.
- Liberty denied coverage, arguing the JV was not an additional insured under the policy language and that notice was untimely; lower court ruled the JV was an additional insured.
- The Appellate Division majority reversed, holding the endorsement unambiguously requires a written contract directly between the named insured and the party seeking additional-insured status; because Samson and the JV lacked such a direct contract, JV was not covered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether endorsement covers parties for whom the named insured agreed to provide coverage (i.e., beneficiaries of a third-party contract) | The endorsement requires only that Samson agree by written contract to procure coverage (which Samson did in its contract with DASNY naming the JV on the certificate), so JV qualifies | The endorsement covers only persons/orgs "with whom" the named insured has agreed by written contract — i.e., requires direct contractual privity between Samson and JV | Endorsement unambiguous: requires a written contract directly between named insured and additional insured; JV not covered |
| Whether late notice by JV bars coverage | JV relied on Samson’s prior notice and reasonable delay to secure policy docs; no separate notice obligation for additional insureds in policy | Late notice (JV notified insurer five months after being impleaded) violated policy notice conditions and prejudiced insurer | Court did not reach notice issue because JV failed to establish additional-insured status (threshold failure) |
Key Cases Cited
- Bovis Lend Lease LMB, Inc. v. Great American Insurance Co., 53 A.D.3d 140 (1st Dep't 2008) (coverage controlled by policy language, not underlying trade contract)
- Pecker Iron Works of N.Y. v. Travelers Ins. Co., 99 N.Y.2d 391 (Court of Appeals) (when policy references subcontract insurance provisions, those provisions may define scope of additional-insured coverage)
- AB Green Gansevoort, LLC v. Peter Scalamandre & Sons, Inc., 102 A.D.3d 425 (1st Dep't 2013) (similar endorsement construed to require direct written agreement between named insured and putative additional insured)
- Linarello v. City Univ. of N.Y., 6 A.D.3d 192 (1st Dep't 2004) (same interpretation of comparable endorsement language)
- Hartford Acc. & Indem. Co. v. Wesolowski, 33 N.Y.2d 169 (Court of Appeals) (summary judgment and contract-interpretation standards where ambiguity exists)
- Greenfield v. Philles Records, 98 N.Y.2d 562 (Court of Appeals) (clear, unambiguous contracts must be enforced according to plain meaning)
- Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470 (Court of Appeals) (courts may not add or excise contract terms under guise of interpretation)
- Caporino v. Travelers Ins. Co., 62 N.Y.2d 234 (Court of Appeals) (equitable considerations cannot extend coverage beyond policy's fair intent and meaning)