New York State Court of Claims

New York State Court of Claims

Gonnerman v. THE STATE OF NEW YORK, #2006-014-501, Claim No. 104435, Motion Nos. M-67524, CM-67548


Synopsis


Determination of motion and cross motion pursuant to Court of Claims Act section 9(9-a): the third party defendant is obligated to provide a defense to the claim

Case Information

UID:
2006-014-501
Claimant(s):
SCOTT GONNERMAN
Claimant short name:
Gonnerman
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):
THE STATE OF NEW YORK
Third-party defendant(s):
MERCHANTS INSURANCE GROUP
Claim number(s):
104435
Motion number(s):
M-67524
Cross-motion number(s):
CM-67548
Judge:
S. Michael Nadel
Claimant’s attorney:
Law Offices of Steven CohnBy Andrew M. Lauri
Defendant’s attorney:
Eliot Spitzer, Attorney GeneralBy Assistant Attorney General John M. Shields
Third-party defendant’s attorney:
Baxter & SmithBy Arthur J. Smith
Signature date:
January 10, 2006
City:
New York
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The following papers were read on the third party claimant’s motion against the third party defendant for a declaratory judgment pursuant to Court of Claims Act section 9(9-a), and on the third party defendant’s cross motion to dismiss the third party claim or in the alternative to dismiss the claim: Notice of Motion, Affirmation and Exhibits annexed; claimant’s Affirmation in Opposition; Notice of Cross Motion, Affirmation, Memorandum of Law and Exhibits annexed; claimant’s Affidavit in Opposition to Cross Motion, Exhibits annexed, Memorandum of Law; defendant’s affirmation in Reply in support of Cross Motion to dismiss the claim, Memorandum of Law; third party defendant’s Reply.

The claimant alleges that he was injured when a vehicle owned and operated by Laura Huddleston traveling southbound on the Meadowbrook Parkway lost control rounding an exit ramp and ran off the roadway striking him. At the time, claimant was delivering lamp posts to a construction site adjacent to the east side of the ramp, leading from the southbound Meadowbrook Parkway to the westbound Loop Parkway. The lamp posts were intended for Lighting Maintenance Inc. (“LMI”), which had been awarded a contract by the State to upgrade and install the lighting system on the Meadowbrook Parkway and Loop Parkways in the town of Hempstead.

The claim alleges that the State of New York was negligent in failing to place concrete barriers and post warnings around the construction area; creating or having knowledge/notice of a dangerous, hazardous, defective condition and allowing it to remain without remedying it; and failure to properly supervise the area.

The State moves pursuant to Court of Claims Act § 9(9-a) and CPLR 3212 for a declaratory judgment that the third party defendant Merchants Mutual Insurance Company and Merchants Insurance Group (“Merchants”) is obligated to defend and indemnify the State in the underlying claim. Merchants opposes the application and cross-moves for summary judgment dismissing all claims against it and further moves for an order of dismissal of all claims made by claimant against the State.

The State maintains that the contract with LMI required LMI to purchase and maintain an insurance policy naming the State as an insured, that LMI purchased said insurance from Merchants naming the State as an insured as set forth in certificates of insurance, and that Merchants is therefore required to provide the State with defense and indemnification.

Merchants contends that nothing in the agreement included in the State’s submissions demonstrates coverage for the State by Merchants, since the certificates of insurance merely show that if required, Merchants would provide coverage to the State. Merchants then posits that even if it were required to provide coverage to the State, the facts of this case do not warrant such coverage. Specifically, Merchants argues that any policy would provide coverage for the State based upon work done by LMI in furtherance of the contract, but that in this case claimant alleges that the State failed to properly barricade or protect a work area to prevent vehicles from straying into the work area, and “any insurance which covers the entire scope of a contractor’s work would not cover any claims for the placement of barriers or other traffic control devices as none of these things were required by contract” (Merchants’ cross motion, para 32).

In its reply the State reasserts that Merchants has a duty to defend and indemnify pursuant to the certificates of insurance, the contract, and the Standard Specifications which are specifically incorporated by the contract and certificates of insurance.[1] To this Merchants responds that nothing in the documents proffered by the State establishes that it is entitled to coverage for the underlying incident.

The certificates of insurance (Exhibit C, Motion) reference the contract, name LMI as Insured Contractor, name Merchants as Insurance Company, and list several types of insurance in force, including protective liability in the name of the People and the State of New York. They also reference section 107-06 of the Standard Specifications.

The Standard Specifications (Exhibit B, State Reply) require that the contractor purchase “Protective Liability Insurance issued to and covering the liability for damages imposed by law upon The People of the State of New York, the State of New York . . . with respect to all operations under the agreement by Contractor or by his subcontractors including omissions and supervisory acts of the State” (section 107-06). The Standard Specifications are made part of the contract in Article 2 of the agreement between the State and LMI (Exhibit B, Motion).

Whether Merchants’ has a duty to defend the underlying claim depends on whether the facts alleged in the claim come within the terms of the policy, construed as a whole, to effect the apparent intent of the parties. A. Meyers & Sons Corp. v Zurich American Insurance Group, 74 NY2d 298; Seaboard Surety Co. v Gillette Co., 64 NY2d 304.

The claim alleges that the State failed to properly barricade or protect a work area to prevent vehicles from straying into the work area. Merchants argues that it is not required to defend because the contract did not require LMI to install any protective barriers, signage or other traffic controls.

While nothing in the record before the Court contradicts Merchants’ assertion that the placement of barriers or other traffic control devices were specifically required by the contract, that is not dispositive of Merchants’ obligation to defend the claim. Nor would the ultimate resolution of whether there was a failure to properly protect the site, whether by temporary barriers or otherwise, affect that obligation.

It is well settled that where an insurance policy includes the insurer’s promise to defend the insured against specified claims as well as to indemnify for actual liability, the insurer’s duty to furnish a defense is broader than its obligation to indemnify (see International Paper Co. v Continental Cas. Co., 35 NY2d 322, 326; Lionel Freedman, Inc. v Glens Falls Ins. Co., 27 NY2d 364, 368). “So long as the claims, even though predicated on debatable or even untenable theory, may rationally be said to fall within policy coverage, whatever may later prove to be the limits of the insurer's responsibility to pay, there is no doubt that it is obligated to defend [citation omitted]” (Schwamb v Fireman's Ins. Co. of Newark, N.J., 41 NY2d 947, 949)

Upon the record before the Court, and contrary to Merchants’ contention, the acts and omissions alleged to be a breach of the State’s duty do fall within “all operations under the agreement by the Contractor or by his subcontractors including omissions and supervisory acts of the State” with respect to which section 107-06 of the Standard Specifications require “Protective Liability Insurance issued to and covering the liability for damages imposed by law upon The People of the State of New York, the State of New York . . . .”

At the same time, upon examination of the record, including the deposition testimony of two State employees (Cross Motion, Exhibits E and F), it is apparent that an issue of fact exists as to whether there was a failure to properly protect the site, whether by temporary barriers or otherwise. Reliance on Weiss v Fote, 7 NY2d 579, and its progeny, in support of the argument that the claim must be dismissed on the ground of qualified immunity, is not supported by the record. This claim sounds in common law negligence as codified in Labor Law § 200, and thus the State “is not entitled to qualified immunity because its alleged negligence was not limited to a planning decision [citations omitted]” (Iacampo v State of New York, 267 AD2d 963, 964).

The State’s motion against Merchants is granted, the cross motion is denied.

Accordingly, it is ORDERED and DECLARED that the third party defendant is obligated to provide a defense to Claim Number 104435.


January 10, 2006
New York, New York

HON. S. MICHAEL NADEL
Judge of the Court of Claims




[1].The case on which Merchants bases its argument that the Court should not consider the additional supporting documents in the State’s reply is distinguishable. Here the State’s reply does not introduce new arguments or new grounds for the application, but rather addresses arguments made in Merchants’ cross-motion (cf. Azzopardi v American Blower Corp., 192 AD2d 453).