FALL

2009
Volume 2
Issue 1

1000 Crossroads Building • Two State Street • Rochester, New York 14614
Telephone: (585) 454-2181 www.trevettlaw.com Facsimile: (585) 454-4026

ARTICLES IN THIS THE INSURANCE DEFENSE UPDATE

ISSUE Breadth Of “Additional Insured” Clause Revisited
Regal Const. Corp. v. National Union Fire Ins. Co. of Pittsburgh, 64 AD3d 461 (1st Dept 2009)

BREADTH OF
“ADDITIONAL In this declaratory judgment action, the Appellate Division, First Department
INSURED” CLAUSE addressed the issue of whether The Insurance Corporation of New York
REVISITED
(“INSCORP”) had an obligation to defend and indemnify the construction

CONSENT-TO-SETTLE manager, URS Corporation (“URS”), hired for the Rikers Island Renovation
AND SUBROGATION- Project (“Rikers”), for an incident allegedly arising out of work performed by its
PROTECTION insured, the project’s prime contractor, Regal Construction Corp. (“Regal”).
PROVISIONS IN SUM
ENDORSEMENT Regal was in the process of supervising the demolition of a bathing area at Rikers
GOVERN ALL when the plaintiff, Ronald LeClair, was allegedly injured by the negligent conduct
SETTLEMENTS of a URS employee. When LeClair sued URS for damages, URS demanded that
BETWEEN INSURED
Regal provide its defense as an “additional insured” under the INSCORP policy.
AND OTHER
TORTFEASORS Although INSCORP eventually accepted URS’ tender, INSCORP agreed to do so
"only with respect to liability arising out of [Regal's] ongoing operations

2009 LAW SCHOOL FOR performed for that [additional] insured."
CLAIMS
PROFESSIONALS The question before the Court was whether INSCORP’s obligation to defend and
indemnify extended only so far as this limiting contractual language provided.

THE FIRST Although three judges at the Appellate Division determined that there was a causal
DEPARTMENT,
connection between LeClair's injury and Regal's work as prime contractor, and
APPELLATE DIVISION,
DEPARTS FROM COURT hence it was determined to be a risk for which coverage should be provided, two
OF APPEALS of the judges on the panel dissented. In discussing the seminal Court of Appeals
PRECEDENT IN LABOR case of BP Air Conditioning, (8 NY3rd 708), the dissent observed that while it is
LAW SECTION 240(1) not necessary to prove the negligence of the named insured when ascertaining
CASE whether additional insured status is awarded, there should at least be some
allegation that Regal’s conduct actually led to the accident at issue. For this reason,

EXCLUSIONARY the dissent noted that the accident arose solely out of URS' operations, not Regal's.
PROVISIONS IN
In light of the Court’s 3-2 split, this decision is ripe for appeal.
INSURANCE POLICY
DEEMED NOT
APPLICABLE Consent-To-Settle And Subrogation-Protection Provisions In Sum Endorsement
Govern All Settlements Between Insured And Other Tortfeasors

CONGRATULATIONS TO
TREVETT CRISTO’S In re Arbitration between Cent. Mut. Ins. Co., 12 NY3d 648 (2009)
FIVE SUPER LAWYERS©! In this case, the Court of Appeals was asked to determine whether consent-to-settle and subrogation-protection
provisions in supplementary SUM endorsements are disregarded once an insured has exhausted the available policy

COURT OF APPEALS
RESOLVES APPELLATE
limits of a single tortfeasor in a multi-tortfeasor accident.
SPLIT CONCERNING 12 The plaintiff in this action, Beverly Bemiss, was involved in a multi-vehicle accident wherein she was struck by two
NYCRR § 23-9.2(A) AND separate drivers. Each driver that collided with her maintained a $25,000 policy limit, while Bemiss maintained a
ITS ABILITY TO
SUSTAIN LABOR LAW
$100,000 SUM endorsement with Central Mutual Insurance Company (“Central”). Because the plaintiff’s injuries
SECTION 241(6) CLAIMS exceeded each of the individual policies, her SUM coverage was triggered, but SUM benefits are not paid until the
available policy limits of a single tortfeasor is exhausted by payment or settlement. Bemiss chose to settle with each
of the drivers’ insurance carriers, but for less than the full value of their policies. Moreover, when Bemiss settled her
claims, she did not preserve her insurer’s subrogation rights with respect to payments that might be made under her
SUM coverage.
When Bemiss settled with these carriers, Central disclaimed and denied her SUM coverage on the basis that she had
violated her policy conditions since she had settled for less that the full value of each policy without Central’s written
consent. When Central disclaimed, Bemiss demanded arbitration, but Central successfully moved to permanently stay
any such attempts.
The case was eventually heard by the Court of Appeals, where it was determined that, had Bemiss simply settled
against one of the negligent parties, she would have been eligible to collect up to the remaining limit of her SUM
policy. However, since she chose to settle against both responsible parties for less than the full value of their policies,
she was no longer free to compromise Central's subrogation rights unilaterally. The Court determined Bemiss had
violated the terms of her SUM endorsement, and Central, therefore, was entitled to disclaim under the policy.
 2009 Law School For Claims Professionals

Trevett Cristo Salzer & Andolina P.C. is a platinum sponsor of the 2009 Law School
for Claims Professionals seminar, offered in five locations across New York State in
October and November.

Join industry professionals and their counsel for an interactive day exploring topics on
insurance and liability. New York’s most respected attorneys will provide an overview
of premises liability, automobile liability, notice and subrogation issues. Also included
in this year’s seminar is an afternoon workshop session which will address a variety of
legal and insurance issues integrated into fictional scenarios. The workshop will allow
for more detailed and in-depth discussions with the group and attorney panel regarding
situations which you may encounter in your daily insurance practice.

Don’t miss out on this opportunity! The seminar will be offered as follows:

Buffalo Friday, October 16, 2009 Holiday Inn Amherst

New York Friday, October 16, 2009 New York State Insurance Fund

Hauppauge Friday, October 23, 2009 Hyatt Regency Long Island

SALZER & ANDOLINA P.C.

Albany Friday, October 30, 2009 New York State Nurse’s Association

Syracuse Friday, November 6, 2009 Holiday Inn Carrier Circle

TREVETT CRISTO

Please contact Lisa G. Berrittella, Esq., by phone (585) 454-2181, ext. 146, or e-mail
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lberrittella@trevettlaw.com if you would like further information about the program or

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are interested in attending.

We hope to see you there!

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The First Department, Appellate Division, Departs From Court of Appeals Precedent in
Labor Law Section 240(1) Case
N EE Y

Cherry v. Time Warner, Inc., 2009 WL 2497974 (1st Dept 2009)

RN

Over the summer, the First Department departed from a Court of Appeals precedent concerning Labor Law Section 240(1).
OR

In this case, the plaintiff, subcontractor’s employee, was injured when he fell off a baker’s scaffold onto a concrete floor
eight feet below, while securing sheet rock to a ceiling, as part of a construction project. The scaffold he was using lacked
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appropriate guardrails. Apparently there were scaffolds with appropriate guardrails on other floors of the work site.
However, the plaintiff did not observe any other scaffolds with appropriate guardrails at the time of his accident.
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The plaintiff brought a motion for summary judgment and the defendant landowner brought a cross-motion for summary
judgment under the scaffold law, Labor Law Section 240(1). The lower court denied the motions finding there existed triable
issues of fact. The parties cross-appealed, and the First Department affirmed the lower court’s findings.

The First Department held that a worker is not required to actively search for the existence of safety devices that would
provide him proper protection at his worksite. It was enough that he did not observe any such devices. The First Department
similarly held that the defendant landowner must show that safety devices were readily available to the injured worker.
Because the record in this case did not address the issue of how readily available scaffolds with appropriate safety devices
were on the day of the accident, there existed a triable issue of fact which precluded summary judgment.

The decision is distinguishable from the Court of Appeals cases Robinson v. East Medical Center, 6 NY3d 550 (2006) and
Montgomery v. Federal Express Corp., 4 NY3d 805 (2005), in which the Court held that if adequate safety devices are
provided on a work site and a worker either does not use them or misuses them, then there exists no liability pursuant to
Labor Law Section 240(1).

Please be sure to visit our website at

www.trevettlaw.com for copies of this and
previous insurance defense newsletters,
general legal updates, as well as other
information about this firm and its attorneys!
 Exclusionary Provisions in Insurance Policy Deemed Not Applicable
Pioneer Tower Owners Ass’n v. State Farm Fire & Casualty Co., 12 NY3d 302 (2009)

It is well settled that exclusionary provisions in insurance policies are to be read narrowly, with any ambiguity
being resolved in favor of coverage. The Court of Appeals recently used this notion to rule that two specific
policy exclusions did not bar coverage, despite recognizing “that the literal language of the exclusions describes
what happened here.” Pioneer Tower Owners Ass’n v. State Farm Fire & Casualty Co., 12 NY3d 302, 307
(2009).

The defendant had issued an insurance policy covering plaintiff’s building, which sustained damage, in the form
of cracks, separations and open joints, as the result of excavation work being performed on the adjacent
property. State Farm denied any coverage for the damages, citing policy exclusions for damage caused by earth
movement and for settling, cracking, shrinking, bulging or expansion. Although it agreed that the language of
the exclusions literally covered the situation, the Court nonetheless found an ambiguity. It agreed with the
plaintiff that it was plausible to conclude that an ordinary reader would interpret the earth movement exclusion
to include only earth movement occasioned by natural forces, and not the intentional removal of earth through
excavation by humans. This possible interpretation was based upon the examples listed, which although stated
SALZER & ANDOLINA P.C.

not be exhaustive, contained only natural forces, such as earthquake, landslide and erosion. The Court
concluded that had the drafters intended the exclusion to apply to excavation, which it deemed “a very common
way of moving earth”, they would have explicitly included excavation, rather than less common natural forces.

Without much discussion at all, the Court concluded that it would also be possible to reasonably interpret the
TREVETT CRISTO

exclusion for settling or cracking as not applying where such damages were the immediate and obvious result of
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some other event.

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Although not technically establishing any new law, the Pioneer Towner case provides an extreme example of the
lengths to which the law may go to afford an insured coverage.
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Congratulations to Trevett Cristo’s Five Super

Lawyers©!
N EE Y

Congratulations to partners James C. Gocker (Civil Litigation –

Defense), Lawrence J. Andolina (Criminal Defense), James A.
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Valenti (Family Law), Louis B. Cristo (Personal Injury Defense:

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General) and Thomas N. Trevett (Personal Injury Defense:

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General) for their selection to the 2009 New York State Super
Lawyers – Upstate©.
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Super Lawyers© is an independent publication which researches

and evaluates attorneys on a wide variety of indicators of peer
recognition and professional achievement. The listing is limited to
a maximum of 5 percent of lawyers per jurisdiction.

Court of Appeals Resolves Appellate Split Concerning 12 NYCRR § 23-9.2(a) and Its
Ability to Sustain Labor Law Section 241(6) Claims
Misicki v. Caradonna, 12 NY3d 511 (2009)

In order to benefit from the near strict liability potentially imposed by Labor Law § 241(6) a plaintiff must show
that the defendant violated a rule and regulation of the Department of Labor which imposes sufficiently specific
requirements, as opposed to general guidelines. Not surprisingly, the distinction between general and specific
requirements has spawned a huge amount of litigation. In Misicki v. Caradonna, 12 NY3d 511 (2009), the Court
of Appeals resolved a split among the Appellate Divisions concerning 12 NYCRR § 23-9.2(a).

That rule, which applies to power-operated heavy equipment or machinery used in construction, demolition or
excavation operations, provides, in part, that any discovered defect or unsafe condition in such equipment be
corrected by necessary repairs or replacement. A divided court held that this portion of the regulation imposed a
sufficiently specific requirement to support liability under Section 241(6). In this particular case it was claimed
that a handle of an angle grinder was missing, but that plaintiff was instructed by his supervisor to continue
working anyway. As the Appellate Division had held that the regulation was not sufficiently specific, the Court
of Appeals remanded for a determination as to whether a violation had occurred.