FRANKLIN v. STILLWATER HYDRO PARTNERS (1998)

As limited by its brief, third-party defendant, Newric Construction Company, Inc. (Newric), appeals from an order insofar as it denied Newric's motion for summary judgment dismissing the third-party complaint of defendant-third-party plaintiff, Stillwater Hydro Partners, L.P. (Stillwater).   Newric's sole contention is that Newric is an “additional insured” under a policy issued to Stillwater by Great American Insurance Company (Great American), which is defending Stillwater in the action and is prosecuting the third-party complaint against Newric on behalf of Stillwater.   Newric thus contends that Stillwater's third-party action against Newric is barred by the antisubrogation rule.

Supreme Court properly denied Newric's motion.   The action against Stillwater arises out of personal injury to an employee of Newric.   An exclusion to the Great American policy withholds coverage for claims arising out of personal injury to an employee of an insured.  “Because the bodily injury to an employee exclusion in the general liability policy renders that policy inapplicable to the loss, the antisubrogation rule does not apply” (Zahno v. Urquart, 213 A.D.2d 1004, 1006, 625 N.Y.S.2d 111, citing North Star Reins. Corp. v. Continental Ins. Co., 82 N.Y.2d 281, 604 N.Y.S.2d 510, 624 N.E.2d 647 and State of New York v. U.W. Marx, Inc., 209 A.D.2d 784, 618 N.Y.S.2d 135;  see also, Monteleone v. Crow Constr. Co., 242 A.D.2d 135, 140, 673 N.Y.S.2d 408;  National Union Fire Ins. Co. v. State Ins. Fund, 222 A.D.2d 369, 371-372, 636 N.Y.S.2d 31).

Order unanimously affirmed with costs.

MEMORANDUM: