New York State Court of Claims

New York State Court of Claims

JUAN CASASOLA and KARLA GALINDO v. THE STATE OF NEW YORK, #2009-036-538, Claim No. 113596, Motion Nos. M-76333, M-76525, CM-76623, CM-76644


Synopsis



Case Information

UID:
2009-036-538
Claimant(s):
JUAN CASASOLA and KARLA GALINDO
1 1.The caption has been amended sua sponte to reflect the only proper defendant.
Claimant short name:
JUAN CASASOLA and KARLA GALINDO
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :
The caption has been amended sua sponte to reflect the only proper defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
113596
Motion number(s):
M-76333, M-76525
Cross-motion number(s):
CM-76623, CM-76644
Judge:
MELVIN L. SCHWEITZER
Claimant’s attorney:
GORAYEB & ASSOCIATES, P.C.By: Roy A. Kuriloff, Esq.
Defendant’s attorney:
ANDREW M. CUOMO, ATTORNEY GENERAL
By: Ellen S. Mendelson, Esq. Assistant Attorney General
Third-party defendant’s attorney:
BENJAMIN & VASILATOS, LLC
By: Scott P. Benjamin, Esq.
Attorney for Defendant Eagle Two Construction, Inc.

WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER, LLP
By: Alice L. Brodie, Esq.
Attorney for Defendant James D. Vavas
Insurance Agency

BIVONA & COHEN P.C.
By: Elio M. DiBerardino, Esq. Attorneys for Rutgers Casualty Insurance Co.
Signature date:
August 26, 2009
City:
New York
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision


This is the court’s decision with respect to (1) the motion of third-party defendant Eagle Two Construction, Inc. (“Eagle”) to dismiss the third-party complaint against it; (2) the cross-motion of defendant State of New York (the “State”) for an order and declaratory judgment declaring that Eagle is obligated to defend and indemnify the State; (3) the motion of third-party defendant Rutgers Casualty Insurance Company (“Rutgers”) to dismiss the third-party complaint against it; and (4) the cross-motion of the State for an order and declaratory judgment declaring that Rutgers is obligated to defend and indemnify the State.[2] In this action claimants Juan Casasola (“Casasola”) and his wife Karla Galindo seek to recover damages against the State for claims under Sections 200, 240 (1) and 241 (6) of the New York State Labor Law arising out of Casasola’s being injured on August 10, 2006 while working on a construction project owned by the State while employed by Eagle. The State has brought an impleader action against Eagle, Rutgers and James D. Vavas Insurance Agency (“Vavas”). The State’s third-party claims against Rutgers and Vavas allege that one or both of them issued an insurance policy insuring Eagle which should provide for the State to be treated as an additional insured. The State seeks a declaratory judgment declaring the State’s right to be granted additional insured status. Rutgers opposes the State’s declaratory judgment action on the basis that the policy it issued to Eagle excludes coverage of claims by Eagle’s employees. See infra. The State therefore seeks a declaratory judgment that Eagle “is required to defend and indemnify the State of New York in the within in the event that Rutgers . .. fails to do so.”

While generally this court does not have jurisdiction to grant equitable relief, § 9-a of the Court of Claims Act grants this court jurisdiction as follows:
To make a declaratory judgment as defined in section three thousand one of the civil practice law and rules with respect to any controversy involving the obligation of an insurer to indemnify or defend a defendant in any action pending in the court of claims, provided that the court shall have no jurisdiction to enter a judgment against an insurer pursuant to this subdivision either: (i) for money damages; or, (ii) if the insurer would otherwise have a right to a jury trial of the controversy with respect to which the declaratory judgment is sought.

Thus, the court has jurisdiction to render a declaratory judgment with respect to whether an insurer is required to defend and indemnify a defendant in an action pending in this court.

The issue presented by Eagle’s motion is whether it is deemed to be an “insurer” within the meaning of § 9-a of the Court of Claims Act. Several judges of this court have concluded that a contractor with an obligation to indemnify the State is not an insurer within the meaning of § 9-a and that the court therefore lacked jurisdiction over the contractor in those cases. See Sangirardi v State of New York, 152 Misc 2d 423 [Ct Cl, Weisberg J., 1991]; Lopez v State of New York, Claim No. 84701 [Ct Cl, Silverman J., March 30, 1993]; Neely v State of New York, Claim No. 110262, M-70981, UID No. 2006-016-028 [Marin, J., April 26, 2006]; Scott v State of New York, Claim No. 107168, M-68376, UID No. 2004-013-064 [Patti, J., December 30, 2004]. The State, however, relies upon Gutierrez v State of New York, Claim No. 110205, M-71948, CM-72214, CM-72220, CM-72229 and CM-72231 [Mignano, J., December 19, 2006]. In that case Judge Mignano ruled that a contractor became an insurer not by virtue of its duty to indemnify the defendant but due to the contractor’s decision to act as a self-insurer. The court noted that the contractor agreed to defend the State and to procure primary general liability coverage of $1 million from a licensed insurance carrier, but then obtained a policy providing for self-insurance for liability up to the $1 million requirement and retained adjusters to handle claims. The factors Judge Mignano relied upon in Gutierrez, however, are not present here. Eagle in fact obtained an insurance policy as it was required to do under its agreement with the State (albeit the policy contained an exclusion against coverage for liability to an employee) and did not act as or consider itself to be an insurer as the contractor did in Gutierrez. The court concludes that Eagle is not an insurer within the meaning of § 9-a of the Court of Claims Act and the court has no jurisdiction to grant the State declaratory relief with respect to Eagle. The court thus grants Eagle’s motion to dismiss and denies the State’s cross-motion for a declaratory judgment against Eagle.

The court now turns to Rutgers’ motion to dismiss and the State’s cross-motion for declaratory relief.

The State’s third-party claim against Rutgers seeks a declaration that Rutgers has a duty to defend and indemnify the State as an additional insured on a policy issued by Rutgers to Eagle in connection with the August 10, 2006 Casasola accident. The Rutgers policy at issue (Policy No. SKP 3105205) covers the period from 12/11/05 through 12/11/06, and the State was added as an additional insured on the policy. The policy for that period was the second renewal of the initial policy. The initial policy contains an employee exclusion which Rutgers contends bars coverage for any employee of Eagle who is injured while working within the scope of his employment.[3] Although a copy of the relevant policy was provided to Rutgers’ agent who in turn provided it to Vavas, apparently neither Eagle nor the State were made aware of the employee exclusion. Rutgers now relies upon the exclusion to deny coverage and to seek a dismissal pursuant to CPLR 3211 (a) (7).

The employee exclusion provides as follows:
This insurance does not apply to:

  1. “bodily injury” to any “employee” of any insured arising out of or in the course of:
a) Employment by any insured; or
b) performing duties related to the conduct of any insured’s business;

  1. “bodily injury” to any contractor or any “employee” of any contractor arising out of or in the course of the rendering or performing services of any kind or nature whatsoever by such contractor or “employee” of such contractor for which any insured may become liable in any capacity; or
  1. Any obligation of any insured to indemnify or contribute with another because of damages arising out of such “bodily injury”; or
  1. “bodily injury” sustained by the spouse, child, parent brother or sister of any “employee” of any insured, or of a contractor, or any “employee” of any contractor as a consequence of any injury to any person as set forth in paragraph (i) and (ii) of this endorsement.

This exclusion applies to all claims and suits by any person or organization for damages because of such “bodily injury”, including damages for care and loss of services.


As used herein the definition of “employee” includes a “leased worker” and a “temporary worker”.


This exclusion replaces the exclusion relating to “bodily injury to employees and relatives of “employees” contained in the Exclusions Section of the policy to which this endorsement is attached and the definition fo “employee” in said policy.


All other terms and conditions remain unchanged.

See
Ex. G to Rutgers’ Affirmation in Support of its Motion to Dismiss, dated April 9, 2009.

The State does not contend that the exclusion is ambiguous. Rather, it argues that based upon the Certificate of Insurance issued by Vavas, Rutgers represented that it had provided the insurance coverage required by Eagle’s contract with the State, when in fact it had not, and, therefore, it should be estopped from denying coverage. See Affirmation of Cross-Motion and in Opposition to Third-Party Defendant Rutgers Motion, dated May 5, 2009 (“Opposition Affirmation” ¶ 19). Vavas, however, who issued the Certificate of Insurance, is not an agent of Rutgers, but rather an agent of Eagle. Accordingly, the representation contained in the Certificate of Insurance does not bind Rutgers, and the employee exclusion must be given effect. The court grants Rutgers’ motion to dismiss the third-party complaint against it and denies the State’s cross-motion for declaratory relief against Rutgers.


August 26, 2009
New York, New York

HON. MELVIN L. SCHWEITZER
Judge of the Court of Claims




[2].In connection with these motions the court has read and considered the Notice of Motion to Dismiss, dated February 24, 2009, Affirmation in Support of Motion to Dismiss, dated February 24, 2009, and Affidavit in Support, sworn to February 24, 2009, together with exhibits annexed thereto; Notice of Cross-Motion to Dismiss and Affirmation in Support, dated April 29, 2009, together with exhibits annexed thereto; Amended Notice of Cross-Motion for Declaratory Judgment, dated May 7, 2009; Affirmation in Opposition to State of New York’s Cross-Motion to Dismiss and in Reply on Eagle’s Motion, dated May 6, 2009, together with exhibits annexed thereto; and Reply Affirmation, dated May 13, 2009; and the Notice of Motion to Dismiss the Third-Party Claim Against Rutgers and Affirmation in Support, dated April 9, 2009, together with exhibits annexed thereto; Notice of Cross-Motion for Declaratory Relief and Affirmation in Support, dated May 5, 2009, together with exhibits annexed thereto; Rutgers’ Reply in Further Support of its Cross-Motion to Dismiss and in Opposition to the State’s Cross-Motion for a Declaratory Judgment & Cross-Motion to Dismiss, dated May 8, 2009, together with exhibit annexed thereto; Affirmation in Opposition to Rutgers’ Motion to Dismiss, dated May 7, 2009; Rutgers’ Reply in Further Support of its Cross-Motion to Dismiss and in Reply to Eagle’s Opposition, dated May 11, 2009, together with exhibit annexed thereto.
[3].The State does not deny that the policy at issue continued to contain the same employee exclusion.