81 A.D.2d 106 | N.Y. App. Div. | 1981
The facts are undisputed. In 1972, Zandri Construction Co., Inc. (Zandri) entered into a contract for the construction of a church in Ballston Lake, New York. About two years after the church was completed the owners thereof commenced an action against Zandri and others wherein, with respect to Zandri, the general contractor, it is alleged that because of the defective work product resulting from its failure to construct the church in accordance with the plans and specifications, and to use materials set forth in said plans and specifications and to install said materials and perform its labor in a workmanlike manner, said structure became unsafe and unfit for occupancy. As a consequence of Zandri’s defective work product, the plaintiffs alleged that they had to vacate the building and conduct religious services elsewhere at additional costs, and, further, that they will be required to spend great sums of .money to repair said building in order to make it safe for occupancy.
Zandri carried both comprehensive general liability insurance (CGL) and contractual liability insurance with Lumbermen’s Mutual Casualty Company (Lumbermen’s) and with Firemen’s Insurance Company of Newark (Firemen’s). Both insurers refused to provide Zandri with a defense to the church’s action. A declaratory judgment action was commenced by Zandri against both carriers seeking a declaration that both Lumbermen’s and Firemen’s were obligated to defend and to indemnify Zandri for any damages awarded the church. Motions for summary judgment by all parties resulted in summary relief in favor of Zandri. This appeal by both insurers ensued.
Turning first to the question of whether the contractual liability policies of both carriers require them to provide Zandri with a defense, we have no difficulty in concluding that they do not. Each policy contains identically worded exclusionary provisions that such insurance does not apply to property damage to the named insured’s products, to property damage to work performed by or on behalf of the named insured arising out of the work, or any portion
Ironically, this definition of “contractual liability” contained in the contractual liability policies and which has the effect of excusing the insurers’ obligation to defend, is contained in the CGL policies of both carriers as an exclusion, and, arguably, creates an ambiguity as to coverage and, again arguably, triggers the general rule that any such ambiguity as to coverage must be resolved in favor of the insured (Sincoff v Liberty Mut. Fire Ins. Co., 11 NY2d 386, 390). The CGL policies of both insurers contain the same exclusions as are set forth in the contractual liability policies. However, in the CGL policies there is an* exception to the exclusionary provisions labeled “(a)” which states: “[b]ut this exclusion does not apply to a warranty of fitness or quality of the named insured’s products or a waranty that work performed by or on behalf of the named insured will be done in a workmanlike manner.” Special Term, finding that “(a)”, at the very least, created an ambiguity with respect to the application of the three exclusionary provisions in the CGL policies, followed the general rule that any such ambiguity as to coverage must be resolved in favor of the insured (Lipton, Inc. v Liberty Mut. Ins. Co., 34 NY2d 356, 361). We disagree.
The so-called “doctrine of ambiguity” is a rule of construction and is intended as an aid in the interpretation of policy terms when the intent of the contracting parties is unclear. It is not a rule of law to be rigidly applied when there is a de minimus conflict that readily gives way when a full reading of the policy makes the intent of the parties
The amended order should be reversed, on the law, with costs, and judgment directed to be entered declaring that neither Lumbermen’s Mutual Casualty Company nor Firemen’s Insurance Company of Newark is required to provide a defense for Zandri Construction Co., Inc.
Main, Mikoll, Yesawich, Jr. and Herilhy, JJ., concur.
Amended order reversed, on the law, with costs, and judgment directed to be entered declaring that neither Lumbermen’s Mutual Casualty Company nor Firemen’s Insurance Company of Newark is required to provide a defense for Zandri Construction Co., Inc.
Labeled exclusionary provisions “ (i) ”, “ (j) ”, and “ (k) ”, in the Lumbermen’s policy and “(j)”, “(k)”, and “(1)” in the Firemen’s policy.