Preview
(FILED: NEW YORK COUNTY CLERK 05/05/2010) INDEX NO. 117722/2009
NYSCEF DOC. NO. 16 RECEIVED NYSCEF: 05/05/2010
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
women rma tnn tenn nanan nnn nn enn nnenennnnnennneennennnnnnnnnnee X
LIBERTY MUTUAL FIRE INSURANCE Index No. 117722/09
COMPANY, as subrogee of Price Chopper Operating
Co., Inc. d/b/a Price Chopper Market Center, Konover
Construction Corp., and Golub Corporation, and KBE AFFIRMATION IN OPPOSITION
BUILDING CORPORATION, formerly known as TO THE MOTION TO DISMISS OF
KONOVER CONSTRUCTION CORP., Individually, DEFENDANTS KELLY & MEENAGH.
LLP, THOMAS F. KELLY and JOHN P
Plaintiffs, MEENAGH, JR.
=e
-against-
Assigned To: Honorable Peter O. Sherwood
DEMCO NEW YORK CORP., KELLY & Returnable: April 23, 2010
MEENAGH, THOMAS F. KELLY, JOHN P
MEENAGH, JR., HARRINGTON OCKO & MONK.
LLP, GLENN A. MONK, ADAM G. GREENBERG.
EDWARD C. HAYNES, and ZURICH AMERICAN
INSURANCE COMPANY,
Defendants.
monn nent ene nnn ee ene en nena ennnnenneeene, Third-Party Index No.: 10/590275
MARYLAND CASUALTY COMPANY and DEMCO :
NEW YORK CORP.,
Third-Party Plaintiffs,
-against-
NATIONAL CASUALTY COMPANY,
Third-Party Defendants
moment neem:
Steven I. Lewbel, Esq., an attomey duly admitted to practice law before the Courts of the State
of New York, affirms the truth of the following statements under the penalties of perjury
1 lam a member of Melito & Adolfsen P.C. attorneys for the defendants/third-party
plaintiffs Demco New York Corp. (“Demco”) and Maryland Casualty Company (“Maryland”) s/h/a
Zurich American Insurance Company in the above captioned matter. I am familiar with the facts and
circumstances of this action, the sources of which are the files and records maintained by this office for
this litigation.
PRELIMINARY STATEMENT.
2 Demco and Maryland submit this affirmation in opposition to the motion filed by
defendants Kelly & Meenagh LLP, Thomas F. Kelly and John P. Meenagh, [collectively “K&M” unless
otherwise indicated] to dismiss the complaint dated December 21, 2009, of the plaintiffs Liberty Mutual
Fire Insurance Company (“Liberty Mutual”) as subrogee of Price Chopper Operating Co., Inc. d/b/a
Price Chopper Market Center (“Price Chopper”), Konover Construction Corp. (“Konover”) and Golub
Corporation (“Golub”) [collectively “plaintiffs”]. K&M contends, inter alia, that the stipulation dated
February 9, 2007, (the “Stipulation”) it drafted and executed dismissing the contractual indemnity action
Price Chopper, Konover and Golub filed against Demco under Sullivan County Index No. 1142A-05
(the “Demco Action”) as part of the Walter Rought litigation (“Rought Action”) is not binding. The
validity of the Stipulation is a complicated issue which should not be decided until National Casualty
Company (‘‘National Casualty”), appears, answers and has an opportunity to respond since National
Casualty’s excess policy covers Demco’s contractual liability exposure.
3 Demco and Maryland are further compelled to respond to certain legal and factual
inaccuracies set forth in Liberty Mutual’s opposition to K&M’s motion to dismiss. Specifically,
Liberty Mutual’s claim that a ruling by this Court deeming the Stipulation nonbinding will result in
Demco owing contractual defense and indemnification to Price Chopper, Konover and Golub in the
Rought Action is incorrect. Vacatur of the Stipulation will at most restore the parties to the status quo in
the Demco Action. That is, Price Chopper, Konover and Golub will be left to their proofs to establish a
contractual indemnity cause of action against Demco. The issue of whether Demco owes contractual
indemnification will then be litigated as part of the Rought Action and not at bar. Principles of collateral
estoppel and law of the case will not apply or preclude Demco’s right to contest any indemnity claim in
the Rought Action.
K&M’S MOTION TO DISMISS
THE COMPLAINT IS PREMATURE
4 K&M’s motion to dismiss under CPLR Section 3211(a)(7) and (a)(1) is based in part on
extrinsic documents rather than purely the sufficiency of Liberty Mutual’s pleadings. In this vein, the
appropriate standard of review is whether the proponent of the pleading has a cause of action not
whether one is stated. IIG Capital LLC v. Archipelago, LLC, 36 A.D.3d 401, 829 N.Y.S.2d 10 (1*
Dept. 2007).
IF NECESSARY, DEMCO HAS THE
RIGHT TO CONTEST THE INDEMNITY
CLAIMS IN THE ROUGHT ACTION
5 Per the Stipulation, the Demco Action was discontinued with prejudice. However,
Liberty Mutual’s opposition contends that if this Court finds the Stipulation is not binding, then Demco
will owe contractual indemnity to Price Chopper, Konover and Golub in the Rought Action. Liberty
Mutual’s contentions are both gratuitous and erroneous . For starters, the letter dated November 17,
2006, cited by Liberty Mutual, does not state that Demco or Maryland agreed to contractually
defend/indemnify Price Chopper, Konover and Golub in the Rought Action. (Exhibit “A”). No such
promise was made or agreement ever reached. Maryland’s letters to Liberty Mutual accepting the tender
expressly state that Maryland agreed to provide coverage to Price Chopper and Konover under the
Maryland policy issued to Demco. (Exhibit “B”). The letters make no reference to contractual
indemnity. (Id.). Moreover, neither Maryland nor defense counsel Harrington, Ocko & Monk, LLP
(“HOM”) were in a position to bind Demco’s excess carrier National Casualty to any agreement to
provide contractual indemnification. Both K&M and Liberty Mutual were fully aware of National
Casualty’s position as excess to all primary coverage, including Liberty Mutual’s, before K&M
executed the Stipulation. (Exhibit “C”). In sum, Maryland agreed solely to afford additional insured
coverage to Price Chopper, Konover and Golub up to the limits of the Maryland Policy for the Rought
Action.
6 Liberty Mutual has further misconstrued the effect of voiding the Stipulation. Assuming
the Stipulation is ultimately found not binding, the interested parties revert back to their previous
positions in the Rought Action. In that event, Price Chopper, Konover and Golub may prosecute the
third-party indemnity action against Demco. Vitiating the Stipulation does not, as Liberty Mutual
contends, “result in a finding that Demco must contractually indemnify Price Chopper, Konover and
Golub in the Rought Action.” The issue of indemnity will be litigated in the Rought Action.
7 The two cases Liberty Mutual cites on the issue of collateral estoppel/law of the case are
not applicable in this circumstance. The doctrine of collateral estoppel applies to issues of law and fact
necessarily decided by a court of competent jurisdiction upon the parties in all subsequent litigations.
Ginezra Associates LLC v. Ifantopoulos, 70 A.D.3d 427, 895 N.Y.S.2d 355 (1 Dept. 2010); Om: sky
y. Gurland, 4 A.D.3d 104, 771 N.Y.S.2d 501 (1* Dept. 2004) (collateral estoppel did not bar subsequent
action based on distinct allegations not adjudicated on merits in prior action). The issue of whether
Demco owes contractual indemnity will not be litigated or adjudicated in this case but in the Rought
Action. Moreover, Walter Rought is not a party to this action and neither he nor fact witnesses to the
accident or jobsite conditions/practices will be deposed in this case. Therefore, no party will have full
and fair opportunity to contest in this action any indemnification owed by Demco in the Rought Action.
See Lukowsky v. Shalit, 110 A.D. 563, 487 N.Y.S.2d 781 (1% Dept. 1985).
8 Similarly, the law of the case doctrine will not preclude Demco from contesting any
indemnity duty to Price Chopper, Konover or Golub because the issue of fault for Rought’s accident will
not be resolved in this litigation. Liberty Mutual’s citation to Gee Tai Chong Realty Corp. v. GA Ins.
Co. of New York, 283 A.D.2d 295, 727 N.Y.S.2d 388 (1 Dept. 2001), is puzzling because in Gee, the
First Department reversed the trial court and refused to apply the law of the case doctrine. The Gee
court found the parties were not afforded full and fair opportunity to litigate the salient insurance issue
in the earlier proceeding. Likewise, at bar, the issue of whether Demco will owe contractual indemnity
will not be litigated in this action but in the Rought Action. See People v. Evans, 94 N.Y.2d 499, 706
N.Y.S.2d 678 (2000).
9. Liberty Mutual’s claim reliance on law of the case/collateral estoppel to compel Demco
to indemnify to the extent this Court voids the Stipulation is devoid of merit. If necessary, Demco
reserves all defenses to indemnity of Price Chopper, Konover and Golub in the Rought Action.
WHEREFORE, Demeo and Maryland respectfully requests the Court deny K&M’s motion to
dismiss the complaint, together with such other and further relief deemed just, proper and equitable.
Dated: New York, New York
April 20, 2010 Yours etc.,
MELITO & ADOLFSEN P.C.
By GZ
Steven
—<—
ewbel, Esq.
233 Broadway- 28" Floor
New York, New York 10279-0118
Telephone: (212) 238-8900
Attorneys for Defendants/Third-Party Plaintiffs
Maryland Casualty Company s/h/a
Zurich American Insurance Company
and Demco New York Corp.
TO:
JAFFE & ASHER LLP TRAUB LIBERMAN STRAUSS
600 Third Avenue & SHREWSBERRY LLP
New York, New York 10016 Mid- Westchester Executive Park
Telephone: (212) 687 3000 Seven Skyline Drive
Attorneys for Plaintiffs Hawthorne, New York 10532
LIBERTY MUTUAL FIRE INSURANCE Telephone: (914) 347-2600
COMPANY, as subrogee of Price Chopper Attorneys for Defendants
Operating Co., Inc. d/b/a Price Chopper Market Harrington Ocko & Monk, LLP, Glenn A. Monk,
Center, Konover Construction Corp., and Golub Adam G. Greenberg and Edward C. Haynes
Corporation, and KBE BUILDING
CORPORATION, formerly known as
KONOVER CONSTRUCTION CORP.
FURMAN, KORNFELD & BRENNAN, LLP
545 Fifth Avenue
New York, New York, 10013
Telephone: (212)867-4100
Attorneys for Thomas F. Kelly, John P
Meenagh, Jr. and Kelly & Meenagh
81372/25 13/222
EXHIBIT A
(Page 1 of 1)
Harrington, Ocko & Monk
A LIMITED LIABILITY PARTNERSHIP
White Plains Office Attorneys at Law New York City Office
‘
81 Main Street — Suite 215
White Plains, NY 10601 52 Duane Street, 7 Floor
Tel: (914) 686-4800 New York, NY 10007
Fax: (914) 686-4824 Tel: (212) 227-8004
Edward C. Haynes, Esq.
e-mail: chaynes@homlegal.com Reply to White Plains Office
November 17, 2006
Kelly & Meenagh, Esqs.
135 North Water Street
P.O. Box 1031
Poughkeepsie, NY 12602
Re: Rought v. Price Chopper Operating Co., Inc. v.
Demco New York Corporation
Index No. :
1142/05
Our
Se File NO
No. 0 51-196
31-19611
Dear Counselors:
As you know, we represent third- party defendant, Demco New York
Corporation, in the
above-referenced action.
Please be advised that Demco New York Corporation and Zurich North
n America
Insurance have fully accepted the tender of Konover C ‘onstruction and Price
Choppers to Demco,
subject to the transfer of your file to us.
Please forward to us a coy py of your entire file and an executed Consent to
Change
Attorney’s stipulation.
Thank you for your anticipated cooperation.
Very truly yours,
Edward C. Haynes
ECH/ed
cc: Popish, Heller, Reiff& Walsh, P.C.
222 Broadway, 19" Floor
New York, NY 10038
Via Email: Sharon.Defina@ZurichNA.com
Ms. Sharon Defina
EXHIBIT B
(Page1 of 2)
@
ZURICH
November 9, 2006
Melissa Egan
Liberty Mutual
PO Box 9101
Weston MA 02493
RE: Our Insured: DEMCO
Our Claim #: 9640145987
Claimant: Walter Rought
Zurich North America, Date of Loss: 6/25/02
Your Client: Konover Construction Corporation
Claims Your File #: P103 033809 01
PO Box zz
Jamaica, NY Dear Ms, Egan:
11430-0022
Telephone (800) 396-6677 Please be advised we have revisited your tender reques
Fax (631) 845-2530 t with respect to the
hltp sw zurichna com above -mentioned case.
Maryland Casualty Insurance Company provides commercial general
liability coverage under policy number CON 58537763
with effective dates
of December 1, 2001 to December 1, 2002 with apolic
y limit of $1 million
occurrence and $2 million aggre; gate. Please be advise
d that this policy will
respond to your request to di lefend and indemnify your
client in this pending
litigation.
Please arrange for your counsel to discontin ue the
third party action against
our insured DEMCO as well as a dis conti nuance
with the Declaratory
Judgment action that has been brought for rth. We
ask that your counsel
forward their complete file to the Law Fi nm of
Harrington Ocko & Monk,
who will substitute as counsel for your ins' ured.
Please contact Edward Haynes of that law firm to
arrange for a substitution
of counsel. He can be reached at 914-686-4800,
Please feel free to contact me with an 'y concems that
you may have,
regarding this matter. Thank you for your kind attention.
(Page2 of 2)
otee
November 9, 2006
Page 2
Respectfully,
Sharon DeFina
Casualty Claims Specialist IIT
631-845-2463
ce;
Harrington Ocko & Monk
81 Main Street
Sute 215
White Plains NY 10601
Attn.: Edward Haynes
Melito & Adolfsen
Woolworth Building
233 Broadway
New York NY 10279-0118
Attn.: Tania Gondiosa
(Page 1 of 2)
. .
ZURICH
November 28, 2006
Melissa Egan
Liberty Mutual
PO Box 9101
Weston MA 024903
Re: Our Insured: DEMCO
Our Claim No.: 964 0145987
Claimant: Walter Rought
Date of Loss: 6/25/02
Zurich North America, Your Client: Konover Construction Corporation
Your File #: P103 033809 01
Claims
PO Box zz Dear Ms. Egan:
Jamaica, NY
11430-0072
Please let this serve as a follow up to our letter
Telephone (800) 396-6577 dated November 9, 2006.
Fax (631) 845-2530
hitp/www 2utichna com Maryland Casual! ity Insurance Company provides commerci
al general
liability covera ge under policy number CON 58537
763 with effective
d lates of December 1, 2001 to December 1, 2002
with a policy limit of
$1million occurrence and $2million aggregate. Please be advised that this
policy will respond to your request to defend
and indemnify Price
Chopper Operatin, ig Co., Inc, d/b/a Price Chop
per Market Center, Konover
Construction Cor p and Golub Corporation.
Please feel free to contact me with any concerns
that you may have,
regarding this matter. Thank you for your kind attention to this matte
r,
Sane
Respectfully,
Sharon DeFina
Casualty Claims Specialist III
(Page2 of 2)
.
November 28, 2006
Page 2
ce:
Harrington Ocko & Monk
81 Main Street
Ste 215
White Plains NY 10601
Attn.: Edward Haynes
Melito & Adolfsen
Woolworth Building
233 Broadway
New York NY 10279-0118
Attn.: Tania Gondiosa
EXHIBIT C
‘ :
NATIONAL CASUALTY COMPANY
Claims Division
P.O, Box 4120 480-365-4000
8877 North Gainey Center Drive
Scottsdale, AZ 85261-4120 (800) 423.7675
Scottsdale, Arizona 85258 FAX 480-483-6752
LJ A Natlonwide* Company
June 1, 2006
CERTIFIED MAIL/RETURN RECEIPT REQUESTED
Mr. Peter Donohoe, Jr.
Demco New York Corporation
6701 Manlius Center Road .
East Syracuse, NY 13057
RE: Claim No.: 1028390-186
Insured: Demco New York Corporation
Date of Loss: June 25, 2002
Plaintiff: Walter Rought
Policy No.: UMO0029036
Dear Mr. Donohoe:
National Casualty Com pany acknowledges receipt from you
on May 12, 2006, of the Third-Party
Summons and Verified Complaint, Index No. 1142-05, filed on or about March 17, 2006,
in the
Sullivan County, New York, Supreme Court, entitled Konover Construction.
nonover Corp ration, Third-
vonsiruction. Corporation, Third-
Pai Plaintiff, v: s. Demco New York Corporation. Third-Pa Defendant.
Complaint is filed in an underlying action entitled Walter Rought, The Third-Party
Plaintiff, vs. Price Cho) er
Operatin: Compan Inc. d/b/a_Price Chopper Market Center
Corporation, and Golub Corporation, Defendants, filed ori Konover. Construction
or about April 21, 2005. In his
underlying Complaint, Waiter Rought alleges that he suffered
injtries o n June 25, 2002, at a job
site located at the Price Chopper Market Center at 39 North
Plank Ro: ad, Newburgh, New York,
Plaintiff alleges he was employed by Demco as a laborer when
he was caused to suffer bodily
injury as a result of defective work conditions. His Complain
t states Causes of Action for
negligence and violation of various New York State labor laws, :
In their Verified Third-Party Complaint, Konover Construction Corpora
tion states three Causes
of Action for Negligence, Indemnity/Contribution and Breach of
Contract for Failure to Procure
Insurance. Both the underlying Plaintiff and the Third-Plaintiff seek unspeci
fied damages.
National Casualty Com pany affords Demco New York Corporation with Umbrella
coverage
Liability
fora one-yea:r term from December 1, 2001 to December 1, 2002, under Policy
No. UMO0029036, with limits of insurance in the amount of $1 0,000,000.00 each occurren
ce
with a $10,000,000.00 g jeneral aggregate limit. This coverage limit
is excess to a retained limit
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 2
of $10;000.00 or underlying insurance limits of $1,000,000.00 each occurrence with a
$2,000,000.00 general aggregate limit provided by Zurich Insurance Company. The purpose of
this letter is to acknowledge our receipt of this’ litigation and to inform you of the coverages
afforded by your National Casualty Company policy.
Commercial Umbrella coverage is provided to you in Form UM-P-2 (7-96), which states the
following policy language and Insuring Agreements:
COMMERCIAL UMBRELLA COVERAGE FORM
Throughout this policy, the words “you,” “your” and “Named
Insured” refer to any person or organization identified as a
“Named Insured” under INSURING AGREEMENT ill. The
words “insured” or “insureds” refer to any person or
organization qualifying as an “insured” under INSURING
AGREEMENT Ill. The words “we,” “us,” “our” and “Company”
refer to the COMPANY providing this insurance.
INSURING AGREEMENTS
L COVERAGE
A. We will pay on behalf of the “insured” those
sums in excess of the “retained limit” which the
“insur " becomes legally obligated to pay as
damages because of “bodily injury,” “property
damage,” “personal injury,” or “advertising
injury” arising out of an “occurrence” during
the policy period stated in Item 2. of the
Declarations (the “Policy Period”).
B. The amount we pay for damages is limited as
described in INSURING AGREEMENT V.
c, If we are prevented by law or statute to “pay on
behalf of the insured,” we will, in accordance
with A. and B. above, indemnify the “insured”
for those sums in excess of the “retained limit.”
By Endorsement No. UM-2303-NY (2-97), the Defense Settlements Section Ii of the Insuring
Agreements is replaced by the following language:
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 3
CHANGES—NEW YORK
Paragraphs A. and B. of section Il. DEFENSE
SETTLEMENT of the INSURING AGREEMENTS are
replaced by the following:
A. We shall have the right and duty to defend any
“claim” or “suit” seeking damages covered by
the terms and conditions of this policy, even if
the allegations of the “claim” or “suit” are
groundless, false or fraudulént, when:
a The applicable limits ‘of insurance of the
underlying insurance policies set forth in
Schedule A and to be maintained by you
in accordance with Condition M of this
policy (Maintenance of: Underlying
Insurance), plus the applicable limits of
other insurance have been exhausted by
payments; or
(2) Damages are sought for “bodily injury,”
“property damage,” “personal injury,” or
“advertising injury” which are not
covered by “underlying insurance” or
other insurance. *
When we assume the defense of any “claim” or
“suit,” at our sole discretion we may investigate
and negotiate any “occurrence,” “claim,” “suit”
or trial. We.will pay our expenses in addition to
the applicable “Limits of Insurance” under this
policy, subject to the provisions of
subparagraph IIE.
We will not settle any “claim” or “suit” without
your consent. If, however, you refuse to
consent to any settlement received by us and
you elect to contest or continue any legal
proceedings, our liability for the “claim” or
“suit” shall not exceed the amount for which
the “claim” or “suit” could have been so
settled, plus our expenses incurred up to the
date of such refusal.
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 4
The policy states the following Definitions:
Iv. DEFINITIONS
c “Bodily injury” means bodily injury, sickness,
disease, disability, shock, mental anguish,
mental injury or humiliation, including resulting
death.
“Occurrence” means:
(1) An accident, including continuous or
repeated exposure to substantially the
same general harmful conditions, that
results in “bodily injury” or “property
damage” that is not expected or not
intended by the “insured.”
All damages that arise from continuous
or repeated exposure to substantially the
same general conditions are considered
to arise from one “occurrence.”
(2) An offense that results in “personal
injury.”
All damages that arise from exposure to
the same act, publication or general
conditions are considered to arise from
one “occurrence.”
8) An offense that results in “advertising
injury.”
All damages that arise from exposure to
the. same publication, misappropriation,
infringement, harmful material or act are
considered to arise from one
“occurrence” regardless of:
(a) The frequency of repetition;
(b) - The number, kind or type of media
used; or
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 5
{c) The number of claimants.
“Retained limit” means whichever of the
following is applicable:
(1) With respect to any “occurrence” that is
covered by “underlying insurance” or
any other insurance, the total: of the
applicable limits of the “underlying
insurance” plus the applicable limits of
any‘other insurance; or
@) With respect to any “occurrence” that is
not covered .by “underlying insurance”
or any other insurance, the amount of
the Retained Limit stated in item 4.D.(2)
of the Declarations, This is the amount
the “insured” will pay for any “claims” or
“suits” covered by this policy and to
which no “underlying insurance” or
other insurance applies.
“Underlying insurance” means the policies
listed in Schedule A—Schedule of Underlying
Insurance and any other policies purchased or
issued for any newly acquired or formed
organization not more restrictive than ‘the
terms, conditions, endorsements, and limits of
liability of the policies listed in Schedule A and
to be maintained by you in accordance with
Condition M of this policy.
“Yourwork” means:
(1) Work or operations performed by you or
on your behaif; and
-
(2) Materials, parts or equipment furnished
in connection with such work or
operations.
“Your work” includes warranties ‘or
representations made at any time with respect
to the fitness, quality, durability, performance
or use of items described in subparagraph (1)
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 6
or (2) above and the providing of or failure to
provide warnings or instructions.
The policy states the following Named and Named Insured language:
UL NAMED INSURED AND INSURED
B. The term “insured” means the “Named Insured”
and:
.
(1) Any person, organization, . trustee or
estate that has obligated you by written.
contract to provide the insurance that is
afforded by this policy, but only with
respect to liability: arising out of “your
work,” “your product” and to property
owned or used by you;
(2) At your option and subject to the terms.
of this policy, any person, organization,
trustee, or estate (other than the “Named
Insured”) included as an additional
“insured” in the “underlying insurance,”
but only with respect to liability arising
out of “your work,” “your product,” or
property owned or used by you;
The policy states the following Exclusion:
EXCLUSIONS
This policy does not apply to:
B. Any obligation for which the “insured” or any of its
Insurers may ‘be held liable under any workers
compensation, unemployment compensation,
disability benefits or similar laws.
The policy states the following Conditions:
CONDITIONS
H. Other Insurance. If there is any other collectible
insurance available to the “insured” (whether such
insurance is stated to be primary, contributing, excess
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 7
or contingent) that covers a loss that is also covered
by this policy, the insurance provided by this policy
will apply in excess of, and shall not contribute with,
such insurance. This Condition H does not apply to
any insurance policy purchased specifically (and
which is.so specified in such insurance policy) to
apply in excess of this policy.
The policy contains a Contractors Limitation Endorsement, Form UM-0340 (7-96), which reads,
inpart, as follows:
THIS ENDORSEMENT CHANGES THE POLICY.
PLEASE READ IT CAREFULLY.
CONTRACTOR’S LIMITATION ENDORSEMENT
A. Except to the extent that such coverage is provided in
the “underlying insurance,” this policy does not apply
to.
(2) “Bodily injury,” “property damage,” “personal
injury” or “advertising injury” for which any
“insured” is obligated to pay damages by
reason of the assumption of liability in any
contract or agreement.
B This policy does not apply to “bodily injury,”
“personal injury,” “advertising injury,” or “property
damage” arising out of:
‘
() Any project insured under a “wrap-up” or
similar rating plan; or
The policy contains aContractual Liability Limitation Endorsement, Form UM-0360 (74 96), which
states:
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE
READ IT CAREFULLY
CONTRACTUAL LIABILITY LIMITATION
Except to the extent that such coverage is provided in the
“underlying insurance,” this policy does not apply to “bodily
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 8
injury,” “property damage,” “personal injury,” or “advertising
injury” for which any “insured” is obligated to pay damages
by reason of the assumption of liability in any contract or
agreement.
The policy contains a Cross-Liability Exclusion — New York Endorsement, Form UM-0380-NY
(7-96), which states:
THIS: ENDORSEMENT CHANGES, THE POLICY. PLEASE
“READ IT CAREFULLY.
CROSS LIABILITY EXCLUSION—NEW YORK
This policy does not apply to “bodily injury,” “property
damage,” “personal injury,” or “advertising injury” arising
out of any “claim” or “suit” brought by any “insured” against
another “insured” under this policy.
NATIONAL CASUALTY COMPANY'S COVERAGE POSITION
Our policy affords coverage to you in excess of the retained limit for those sums which you
become legally obligated to pay as damages because of bodily injury arising out of an
occurrence. during the policy period. We have no duty to defend you in this litigation unless and
until the underlying insurance policy has been exhausted by payments. Our limits of insurance
are $10,000,000.00 per occurrence with a $10,000,000.00 general aggregate limit, and is
excess to the underlying $1,000,000.00 afforded to.you by Maryland Casualty Company,a
Zurich company.
The Third-Party Complaint allegés negligence, and seeks contribution and indemnity for
contractual indemnification and alleges breach of contract for failure to procure insurance.
Breach of contract for failure to procure insurance is not an occurrence resulting in bodily injury
or property damage or an offense of personal injury or advertising injury, therefore, there is no
coverdge under your policy for any judgment awarded to the Plaintiff or the Third-Party Plaintiff
for your alleged breach of contract. We will not indemnify you for any costs or awards
associated with this Cause of Action
We are requesting that you provide us with a copy of your contract with Konover Construction
Corporation and by carbon copy to Zurich we aré requesting that they copy us on any coverage
position letters issued to Konover Construction Corporation in response to Konover’s demand
for defense and indemnification from Demco. We ask that Zurich inform us as to whether or not
Konover is entitled to additional insured status under the Zurich policy and/or whether they are
entitled to contractual indemnification and coverage under the Zurich policy. We will then issue
a supplemental coverage letter stating our position.
Mr. Peter Donohoe, Jr.
June 1, 2006
Page 9
Pursuant to the Named Insured and Insured language of your Umbrella policy, Konover wouid
be entitled to insured status under our policy assuming you have contractually agreed to provide
them with insurance but only with respect to liability arising out of your work. In the alternative,
and at your option, any organization that is included as an additional insured in the underlying
insurance policy qualifies as an insured but only with respect to liability arising out of your work.
We need additional information in order. to make a determination as to whether or not Konover
is entitled to insured status under our policy. We, therefore, request information be provided by
you and by Zurich so that we may make a final determination on this issue. ‘We have cited the
Other Insurance language of our policy so that all parties understand that our policy is excess
coverage and applies in excess of, and does not contribute with, other such available insurance
that is available either to Demco or Konover.
Plaintiff's Complaint seeks unspecified damages. We will not be résponsible for the payment of
any amount in excess of our limits of insurance in the settlement of this claim or satisfaction of
any judgment w