Ment Bros. Iron Works Co. v. Interstate Fire & Casualty Co.
702 F.3d 118
2d Cir.2012Background
- Ment Bros. Iron Works subcontracted welding work on 40 Mercer Street, a building developed by WXIV/Broadway, to Ment; the owner planned a condominium project but no units were sold at the damage time.
- Damage allegedly from welding sparked in the penthouse windows during construction; Pavarini McGovern sued Ment in NY state court for damages.
- Interstate Fire & Casualty Co. provided a defense to Ment but reserved rights, citing a residential construction exclusion; eventually moved to summary judgment.
- The district court held the residential construction exclusion applied and dismissed Ment’s complaint for lack of coverage.
- On appeal, the Second Circuit held the apartment exception to the exclusion applied, determining 40 Mercer was an apartment building at the time of damage and thus Ment was covered.
- The court noted that condominium status was not created until a condominium declaration was filed in February 2007, after Ment finished its work.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether exclusion applies to residential construction | Ment | Interstate | Yes, exclusion applies but no, exception may apply |
| Whether the apartment exception preserves coverage | Ment | Interstate | Yes, apartment exception applies |
| Burden of proof on exclusions and exceptions under NY law | Ment | Interstate | Burden shifts to insured to show exception after exclusion established |
Key Cases Cited
- New York v. Blank, 27 F.3d 783 (2d Cir. 1994) (burden-shifting in insurance exclusions and exceptions)
- Northville Industries Corp. v. National Union Fire Insurance Co. of Pittsburgh, 89 N.Y.2d 621 (1997) (burden shifts to insured to prove exception after exclusion)
- Belt Painting Corp. v. TIG Ins. Co., 100 N.Y.2d 377 (2003) (ambiguity in insurance terms resolved against insurer)
- Admiral Ins. Co. v. Joy Contractors, Inc., 19 N.Y.3d 448 (2012) (developer’s intent not controlling for coverage under residential exclusion)
- Mount Vernon Fire Ins. Co. v. Belize NY, Inc., 277 F.3d 232 (2d Cir. 2002) (interpretation of insurance contracts; use plain meaning)