Summary
In Valentin (supra, at 344), a case arising out of the death of a contractor's employee, we applied Michalak to preclude a third-party claim for indemnification and contribution against the contractor, which had procured insurance in favor of the City, up to the limits of the policy, applying the so-called "preindemnification" rule.
Summary of this case from Travelers Indemnity Co. v. LLJV Development Corp.Opinion
November 17, 1992
Appeal from the Supreme Court, New York County (Alice Schlesinger, J.).
This action arises out of an accident in which plaintiff's decedent, an employee of third-party defendant EMD Construction Corp., was killed when he fell off the roof of a school building while engaged on a construction project. A suit alleging negligence and breach of statutory duty was subsequently commenced against defendants, the City of New York and the New York City Board of Education, the owner and operator of the building. Defendants thereafter impleaded EMD for common-law indemnity, as well as contribution, on the ground that EMD was solely responsible for failing to provide a safe place to work. It should be noted that pursuant to the contract between EMD and the Board of Education, EMD obtained for defendants' benefit a liability insurance policy with National Union Fire Insurance Company of Pittsburgh, which has a $3 million limit for personal injury and property damage for each occurrence. In addition, EMD purchased another policy from National Union covering its own liabilities. Consequently, EMD moved for summary judgment dismissing the third-party complaint against it, contending that defendants were not entitled to indemnification/contribution in view of the existence of the insurance policy in their favor.
The Supreme Court appropriately found that Pennsylvania Gen. Ins. Co. v Austin Powder Co. ( 68 N.Y.2d 465) and Michalak v Consolidated Edison Co. ( 166 A.D.2d 213, lv dismissed 77 N.Y.2d 989) preclude third-party plaintiffs' claim for indemnification/contribution against third-party defendant up to the limit of the insurance policy procured by EMD for third-party plaintiffs. The law is settled that by requiring the acquisition of insurance on their behalf, third-party plaintiffs have waived any right of common-law indemnity up to the limit of the subject policy (Michalak v Consolidated Edison Co., supra, at 214). As the Court of Appeals stated in Pennsylvania Gen. Ins. Co. v Austin Powder Co. ( 68 N.Y.2d 465, 468, supra), "[a]n insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered. This rule applies even where the insured has expressly agreed to indemnify the party from whom the insurer's rights are derived and has procured separate insurance covering the same risk" (see also, Fowler v Stillwater Assocs., 169 A.D.2d 226). If third-party plaintiffs were permitted to maintain their action against EMD to the extent that they seek indemnification/contribution for the $3 million worth of protection afforded by the insurance policy, they would be compelling National Union to demand subrogation from its own insured, EMD, for exactly the sort of claim for which EMD purchased the policy in the first place.
None of the cases cited by third-party plaintiffs, such as Hawthorne v South Bronx Community Corp. ( 78 N.Y.2d 433), Hartford Acc. Indem. Co. v Michigan Mut. Ins. Co. ( 61 N.Y.2d 569), or Rocovich v Consolidated Edison Co. ( 167 A.D.2d 524, affd 78 N.Y.2d 509), support the proposition urged by them that a different result is indicated herein since third-party plaintiffs are insured under a separate contract rather than as additional insured under the same policy. In that regard, there is simply no authority that would restrict the clear holding of the Court of Appeals in Pennsylvania Gen. Ins. Co. v Austin Powder Co. (supra) to a single policy, and, indeed, the broad language therein undercuts the contention to that effect by third-party plaintiffs.
However, as third-party plaintiffs seek to recover an amount in excess of the policy limitations, the third-party claim should have been dismissed only insofar as it requests indemnification/contribution for the amount covered by the insurance obtained by EMD (see, Goffredo v Bay St. Landing Assocs., 179 A.D.2d 799).
Concur — Carro, J.P., Milonas, Ellerin and Asch, JJ.