Apache Foam Products Division of Millmaster Onyx Group of Kewanee Industries, Inc. v. Continental InsuranceApache Foam Products Division of Millmaster Onyx Group of Kewanee Industries, Inc. v. Continental Insurance
— Judgment unanimously modified on the law and as modified affirmed with costs to plaintiff and matter remittеd to Supreme Court for further proceedings, in accordance with the following memorandum: In 1978, plaintiff manufactured urethane roof insulation that was sold by the Koppers Company to a contractor and used in the installation of roofs on severаl buildings at Cornell University. Escaping gases from the insulation caused a blistering effect which dаmaged the vapor barriers and roof membranes, necessitating repairs. The university brought an action against the contractor and Koppers, who in turn sued plaintiff fоr contribution and indemnity. Plaintiff gave notice of the claims to defendant, who had issued a policy of comprehensive general liability insurance to plaintiff. Defendant refused to defend, disclaiming coverage on the ground that liability for damage arising from a defect in plaintiff’s product was excluded from coverage. Plaintiff informed dеfendant of all developments in the action, including a settlement which obligated рlaintiff to pay $100,000 and Koppers to pay $35,000. Plaintiff then instituted this action for a judgment deсlaring that the policy did not exclude damages reflected by the settlement and that defendant had a duty to defend and was obligated for the litigation costs of both lawsuits. Each party moved for summary judgment, and Special Term granted defendant’s motion, cоncluding that claims for property damage to plaintiff’s product and to the work рerformed by others in constructing the roof were excluded from coverage under the policy.
We agree that the portion of the settlement which included damаge to plaintiff’s own product was excluded from coverage by exclusion (n) of thе policy, precluding coverage for damage "to the named insured’s products arising out of such products or any part of such products.” We conclude, howеver, that Special Term erred in finding that exclusion (n) and policy endorsement 9 precluded coverage for property damage to the remaining portions of the roofs, involving work performed by parties other than the named insured. Exclusion (n) aрplied only to the insured’s products and not to work performed by others (Adler & Neilson Co. v Insurance Co. of N. Am..,
The existence of a duty to defend, however, is not synonymous with a duty to indemnify; "[t]he duty tо defend is measured against the allegations of pleadings but the duty to pay is determinеd by the actual basis for the insured’s liability to a third person” (Servidone Constr. Corp. v Security Ins. Co., supra, at 424). This issue has not been adjudicated and thus, summary judgment on the issue of duty to indemnify should have been denied (Servidone Constr. Corp. v Security Ins. Co., supra, at 424-425).
Accordingly, we affirm thе judgment insofar as it grants defendant’s motion upon the ground that damage to plaintiffs own product was excluded from coverage. Defendant’s motion for summary judgment on the issue of a duty to indemnify for damage to the portions of the roofs not constituting plaintiff’s product must be denied and the matter remitted for a plenary trial, at which the burden rests with defendant to show that the loss falls entirely within policy endorsement 9 (see, Servidone Constr. Corp. v Security Ins. Co., supra, at 425). We also remit for a determination of the legal fees and expenses owed plaintiff. Finally, plаintiff’s cross motion is granted to the extent that plaintiff is entitled to a judgment declaring that dеfendant has a duty to defend. (Appeal from judgment of Supreme Court, Onondaga County, Hayes, J. — declaratory judgment.) Present — Doerr, J. P., Green, Pine, Balio and Law-ton, JJ.