Pro Con, Inc. v. Interstate Fire & Casualty Co.
794 F. Supp. 2d 242
D. Me.2011Background
- Pro Con was general contractor for Bowdoin Project; Canatal subcontracted CCS to perform structural steel work, with Canatal requiring CCS to name Pro Con as additional insured.
- CCS procured the Interstate Commercial General Liability policy; policy endorsed adding additional insureds for ongoing operations and primary/non-contributory status under certain conditions.
- Canatal/CCS subcontract required Canatal to obtain policies naming Pro Con as additional insured and to include waiver of subrogation; CCS was the entity that contracted with Pro Con.
- A COI issued November 14, 2007 listed Pro Con as additional insured/on primary basis but stated it conferred no rights and did not amend the policy.
- Williams, a CCS employee, was injured on December 5, 2007 at Bowdoin project; Williams sued Pro Con in Maine state court alleging premises liability and negligence; Pro Con tendered defense to CCS’s carrier, Interstate, which denied coverage for Pro Con.
- Canatal later assumed Pro Con’s defense in the Williams action; Williams matter remained stayed pending mediation and settlement negotiations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pro Con is an additional insured under Interstate policy | Pro Con is added as an additional insured by the AIE language | AIE requires privity; no direct written contract with CCS | Yes, Pro Con is an additional insured under Interstate policy |
| Whether Interstate has a duty to defend Pro Con in Williams action | AIE language covers injuries arising from CCS's ongoing operations for Pro Con | Policy language limits coverage to vicarious liability for named insured's acts/omissions | Duty to defend exists; Williams allegations could arise from CCS operations for Pro Con |
| Whether Pro Con may recover attorneys' fees and costs for defense under Count II | Requests full reimbursement for defense costs | Record incomplete; issues of primary vs excess coverage unresolved | Count II denied on summary judgment due to undeveloped record; not decided here |
Key Cases Cited
- Merchants Ins. Co. of NH, Inc. v. United States Fidelity & Guaranty Co., 143 F.3d 5 (1st Cir. 1998) (AIE coverage for your work includes own negligence of added insured)
- Boise Cascade Corp. v. Reliance Nat’l Indem. Co., 129 F.Supp.2d 41 (D. Me. 2001) (discusses limitations when coverage is for conduct of named insured)
- MacArthur v. O'Connor Corp., 635 F.Supp.2d 112 (D.R.I. 2009) (interpretation of ‘liable for your acts or omissions’ endorsement)
- Venable v. Hilcorp Energy Co., Inc., 2010 WL 1817757 (E.D. La. 2010) (read privity requirement in some AIE endorsements; distinguishable fact pattern)
- Wright-Ryan Constr., Inc. v. AIG Commercial Insurance Co. of Canada, 2009 WL 4508443 (D. Me. 2009) (endorsement coverage for liability arising out of named insured’s premises/operations)
- Centennial Ins. Co. v. Patterson, 564 F.3d 46 (1st Cir. 2009) (interpretation of insurance facts at pleading stage)
- Am. Policyholders’ Ins. Co. v. Cumberland Cold Storage Co., 373 A.2d 247 (Me. 1977) (duty to defend analyzed by pleading standard)
- Bucci v. Essex Ins. Co., 393 F.3d 285 (1st Cir. 2005) (duty to defend decided in insured’s favor when potential coverage exists)
- Gibson v. Farm Family Mut. Ins. Co., 673 A.2d 1350 (Me. 1996) (pleading comparison approach for duty to defend)