Specific Non-Contribution Policy Language will Determine Priority in Competing “Excess” Terms

Pennsylvania Lumbermens Mut. Ins. Co. v Zurich American Ins. Co., (N.Y. Sup. Ct.; December 6, 2013)

This declaratory judgment action stems from an underlying personal injury action commenced by Philip Gallagher against the general contractor and subcontractor of a building site where he fell during an inspection. The general contractor, S. Donadic, Inc., carried primary and umbrella insurance with Pennsylvania Lumbermens Mutual Insurance Company (PLM). The subcontractor, Coffey Contracting, Inc., carried CGL insurance with Scottsdale Insurance and umbrella insurance with Zurich American Insurance Company.

Pursuant to an agreement between Donadic and Coffey, Coffey was required to indemnify Donadic for any damages and add Donadic as an additional insured on both the Scottsdale CGL policy and the Zurich umbrella policy. PLM commenced this declaratory judgment action, and moved for summary judgment, seeking a declaration that PLM was not required to contribute to any possible damages unless the coverage limit of the Zurich umbrella policy was reached first. Zurich crossmoved, arguing that PLM was to contribute ratably to any damages that exceed the coverage limit of the Scottsdale primary policy.

The court agreed with PLM and found that PLM was not required to contribute ratably to the damages because its policy contained non-contributory language while specifically referring to other excess insurance policies. The court noted that the PLM policy stated that it “shall not contribute” with any other insurance, and was excess to other insurance, including other excess insurance. In contrast, while the Zurich policy stated that it was excess to “other insurance,” it did not have the “shall not contribute” language and did not state that it was excess to other excess policies.