Yonkers Lodging Partners, LLC v. Selective Ins. Co. of Am.

158 A.D.3d 732

72 N.Y.S.3d 104

YONKERS LODGING PARTNERS, LLC, et al., appellants,

v.SELECTIVE INSURANCE COMPANY OF AMERICA, respondent, et al., defendants.

2015–06216

Index No. 52306/13

Supreme Court, Appellate Division, Second Department, New York.

Argued—October 30, 2017

February 14, 2018

Baxter Smith & Shapiro, P.C., White Plains, N.Y. (Sim R. Shapiro of counsel), for appellants.

Hurwitz & Fine, P.C., Buffalo, N.Y. (Dan D. Kohane of counsel), for respondent.

MARK C. DILLON, J.P., RUTH C. BALKIN, ROBERT J. MILLER, HECTOR D. LASALLE, JJ.

DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendant Selective Insurance Company of America is obligated to defend and indemnify the plaintiff Yonkers Lodging Partners, LLC, in an underlying action entitled Benitez v. Cali South West Realty Associates, L.P., pending in the Supreme Court, Dutchess County, under Index No. 4117/10, the plaintiffs appeal from an order and judgment (one paper) of the Supreme Court, Westchester County (Connolly, J.), dated June 21, 2015, which granted the cross motion of the defendant Selective Insurance Company of America for leave to serve and file an amended answer, denied their motion for summary judgment, in effect, declaring that the defendant Selective Insurance Company of America is obligated to defend and indemnify the plaintiff Yonkers Lodging Partners, LLC, in the underlying action, and, upon searching the record, awarded summary judgment to the defendant Selective Insurance Company of America, declared that the defendant Selective Insurance Company of America is not obligated to defend and indemnify the plaintiff Yonkers Lodging Partners, LLC, in the underlying action, and, in effect, dismissed the complaint insofar as asserted against the defendant Selective Insurance Company of America.

ORDERED that the order and judgment is modified, on the law, by deleting the provision thereof which, upon searching the record, awarded summary judgment to the defendant Selective Insurance Company of America, declared that the defendant Selective Insurance Company of America is not obligated to defend and indemnify the plaintiff Yonkers Lodging Partners, LLC, in the underlying action, and, in effect, dismissed the complaint insofar as asserted against the defendant Selective Insurance Company of America; as so modified, the order and judgment is affirmed, without costs or disbursements, and the complaint is reinstated insofar as asserted against the defendant Selective Insurance Company of America.

The plaintiff Yonkers Lodging Partners, LLC (hereinafter YLP), entered into a contract with the defendant Tritec Hospitality, LLC (hereinafter Tritec), to perform construction services on YLP's premises and the premises of the adjacent property owner, the defendant Mack–Cali South West Realty Associates, LLC (hereinafter Mack–Cali). Tritec subsequently entered into a subcontract with the defendant Lea Rome, Inc. (hereinafter Lea Rome), pursuant to which Lea Rome agreed to, among other things, perform asphalt paving for the construction project. Pursuant to the subcontract, Lea Rome agreed to indemnify and hold harmless Tritec and YLP for any claims arising out of the performance of the subcontracted work, but only to the extent caused by the negligence or omission of Lea Rome. Additionally, Lea Rome was required to procure and maintain a commercial general liability insurance policy naming YLP and Tritec as additional insureds.

The defendant Selective Insurance Company of America (hereinafter Selective) issued a policy to Lea Rome which contained an exclusion for bodily injury or property damage liability assumed under a contract. However, this section further stated that "[t]his exclusion does not apply to liability for damages: ... [a]ssumed in a contract or agreement that is an ‘insured contract.’ " The policy's definition of an "insured contract" included, inter alia, "[t]hat part of any other contract or agreement pertaining to your business ... under which you assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization." The policy also included an endorsement entitled "Blanket Additional Insureds—Broad Form Vendors—As Required By Contract" specifying that "Who Is An Insured is amended to include as an additional insured any person or organization with whom you have agreed in writing in a contract, agreement or permit that such person or organization be added as an additional insured on your policy."

In April 2009, Carlos Benitez, and his wife suing derivatively, commenced an action against Tritec and Mack–Cali to recover damages for personal injuries he allegedly sustained while he was working at the construction site as an employee of Lea Rome. In October 2010, Tritec commenced a third-party action against Lea Rome for contractual indemnity, common-law indemnity, and contribution. In June 2011, Mack–Cali commenced a second third-party action against, among others, YLP, alleging that it had breached a contract pursuant to which it agreed to indemnify...