CATLIN INSURANCE COMPANY v. Kingston Buildings Inc., Defendant. (2025)

Order, Supreme Court, New York County (Gerald Lebovits, J.), entered November 1, 2023, which, to the extent appealed from as limited by the briefs, denied the motion of plaintiffs Catlin Insurance Company, Sandy Clarkson LLC, and McAlpine Contracting Co. for summary judgment declaring that defendant Colony Insurance Company must cover Sandy Clarkson as an additional insured in an underlying action, granted Colony's cross-motion for summary judgment declaring that Colony is not obligated to cover Sandy Clarkson, and that Colony is not obligated to indemnify McAlpine, unanimously reversed, on the law, without costs, the declaration vacated, plaintiffs’ motion granted, Colony's motion denied, and it is declared that Colony must cover Sandy Clarkson as an additional insured on a primary, noncontributory basis with Catlin's coverage and must reimburse plaintiffs’ defense costs in the underlying action.

In this insurance coverage action, the court should have found that Sandy Clarkson is entitled to additional insured coverage under Colony's primary and excess policies issued to defendant Kingstone Builders Inc.

Colony's additional insured endorsement states:  “Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule [stating “All persons or organizations as required by written contract with the Named Insured”], but only with respect to liability for ‘bodily injury’ ․ caused, in whole or in part, by:  1. [Kingstone's] acts or omissions;  or 2. The acts or omissions of those acting on [Kingstone's] behalf.”

The “plain and ordinary meaning” (Broad St., LLC v. Gulf Ins. Co., 37 A.D.3d 126, 130, 832 N.Y.S.2d 1 [1st Dept. 2006]) of Colony's additional insured endorsement extends coverage to Sandy Clarkson, because Sandy Clarkson was an organization required by written contract with Colony's named insured, Kingstone, to be named as an additional insured.  The written contract is the Kingstone subcontract with McAlpine, which requires Kingstone to name Sandy Clarkson and McAlpine as additional insureds.  This endorsement's language is sufficiently broad to require coverage here despite there being no contract between Sandy Clarkson and Kingstone (see generally Netherlands Ins. Co. v. Endurance Am. Specialty Ins. Co., 157 A.D.3d 468, 66 N.Y.S.3d 441 [1st Dept. 2018];  compare Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Mar. Ins. Co., 143 A.D.3d 146, 149, 151, 38 N.Y.S.3d 1 [1st Dept. 2016] [where policy endorsement provides coverage to “any person or organization with whom you [the named insured] have agreed to add as an additional insured by written contract,” it “requires that the named insured execute a contract with the party seeking coverage as an additional insured”], affd 31 N.Y.3d 131, 74 N.Y.S.3d 162, 97 N.E.3d 711 [2018]).

Colony's duty to defend is implicated because the allegations of the underlying complaint raise a reasonable possibility of coverage (see Old Republic Gen. Ins. Corp. v. Consolidated Edison Co. of N.Y. Inc., 193 A.D.3d 595, 597, 146 N.Y.S.3d 620 [1st Dept. 2021]).  Given Colony's policy, the duty to defend is on a primary and noncontributory basis with Catlin's coverage (see WDF Inc. v. Harleysville Ins. Co. of N.Y., 193 A.D.3d 667, 668, 146 N.Y.S.3d 128 [1st Dept. 2021]).  As Colony's duty to defend on a primary basis has been triggered, plaintiffs are also entitled to reimbursement of defense costs (see Titan Indus. Servs. Corp. v. Navigators Ins. Co., 223 A.D.3d 426, 428, 203 N.Y.S.3d 267 [1st Dept. 2024]).

In light of this Court's order in the underlying action modifying to find material issues of fact as to Kingstone's culpability (Gamez v. Sandy Clarkson LLC, 222 A.D.3d 482, 482, 202 N.Y.S.3d 63 [1st Dept. 2023]), entered after the entry of the order now on appeal, it is premature to rule on indemnification, which must await a determination of liability in the underlying personal injury action (see 79th Realty Co. v. X.L.O. Concrete Corp., 247 A.D.2d 256, 257, 668 N.Y.S.2d 599 [1st Dept. 1998]).