Dryden Mutual Insurance Company, Appellant,v.Stanley Goessl, et al., Defendants, AP Daino & Plumbing, Inc. et al., Respondents.

Brief

N.Y.April 28, 2016

Court of Appeai~ To be argued by: Bruce R. Bryan 30 minutes DRYDEN MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, VS. STANLEY GOESSL, d/b/a S & K PLUMBING; ANDREW SMOLNIK and CATHERINE SMOLNIK, APL- 2014 - 00231 Index No. 10-1933 Defendants, AP DAINO & PLUMBING, INC., THE MAIN STREET AMERICA GROUP, Defendants-Respondems. Reply Brief BRUCE R. BRYAN, ESQ. Attorney for Plaintiff-Appellant, Dryden Mutual Ins. Co. 333 East Onondaga Street Syracuse, New York 13202 (315) 476-1800 (315) 474-0425facsimile PETER W. KNYCH, ESQ. Attorney for Plaintiff-Appellant, Dryden Mutual Ins. Co. One Park Place, Suite 404 Syracuse, NY 13202 (315) 472-1175 (315) 234-4119facsimile Dated: February 4, 2015 TABLE OF CONTENTS Table of Authorities ..................................................................................................v Preliminary Statement ...............................................................................................1 Argument: POINT I Main Street Fails To Persuasively Dispute That Goessl And Main Street Had A Reasonable Expectation That Goessl Was Covered Under The Main Street Policy ......................... Ao The reasonable expectations to be drawn from the language of the Main Street policy ......................3 Bo The reasonable expectations, or lack thereof, to be drawn from Goessl’s alleged oral agreement with Daino .................................7 Co Main Street fails to make a persuasive argument that the trial court erred in finding that Goessl was an employee of Daino at the time of the accident, and thus covered under Main Street’s policy ..........................11 Main Street ignores strong public policy reasons why Main Street is not entitled to the windfall of a finding of no coverage .......................12 POINT II Main Street Agrees That The Common Law Meaning Of An Employee Governs, But Ignores The Overwhelming Evidence That Goessl Was An Employee Under The Main Street Policy ............... . .......................................... 14 Main Street agrees the common law meaning of employee determines its policy coverage obligation to a Daino worker 14 B. The key factor is direction and control ..........................15 Co Main Street’s flawed analysis bearing on direction and control .............................................19 Do Main Street relies heavily on facts that have little bearing on whether A. P. Daino directed and controlled Goessl’s work ..........................27 POINT III The Dryden Policy, Which Unambiguously States That It Only Insured Goessl When He Did Business As A Sole Proprietor, Not When He Worked As An Employee For A.P. Daino, Did Not Cover Goessl For The Accident In Issue .......................................29 No The Appellate Division majority did not find Dryden’s policy language to be ambiguous ..........................................................30 Bo The language of the policy governs Dryden’s obligations ..........................................................30 C° The language of the Dryden policy was clear and unambiguous and therefore must be enforced according to its terms ...............................31 Do The term "employee" as used in the Dryden policy has a direct bearing on the meaning of the term "sole proprietor" as used in the Dryden policy ......................................................33 ii Eo Main Street asks this Court to ignore well- settled precedent of this Court that the "actual relationship" between an employer and employee governs, and not a label that the employee is an "independent contractor" .........................................35 Fo There is longstanding case precedent that insurance policy obligations are interpreted based on an insured’s "reasonable" expectations and not subjective expectations .......................................................39 Go In addition, the oral agreement between Daino and Goessl could not modify the coverage in the Dryden policy because Dryden as not a party to the agreement, did not know about the agreement, and did not agree to it ...............................................44 Ho The alleged oral agreement between Goessl and Daino has little to no evidentiary weight in deciding insurance coverage because Goessl did not know whether he was an employee or an independent contractor .....................47 Policy concerns weigh heavily against enforcement of the oral agreement fictitiously labeling Goessl as an "independent contractor" .......................................48 POINT IV Alternatively, If Both Dryden And Main Street Have A Coverage Obligation To Goessl, Then The Insurers Are Co-Primary Insurers For The Accident ...........................................................................51 A. Applicable New York law ....................................51 iii Bo The "other insurance" clauses of the Dryden and Main Street policies .............................52 Co The Dryden policy and Main Street policy purport to be excess of the other .....................55 POINT V Main Street Erroneously Asserts That The Appellate Division Did Not Make New Factual Findings ..........................................................57 A° Main Street asserts that the Appellate Division did not make new factual findings ............................................................57 Bo The Appellate Division’s majority decision is based on new findings of fact .....................58 Conclusion .................................................................................61 iv TABLE OF AUTHORITIES 409-411 Sixth Street, LLC v. Mogi, 22 N.Y.3d 875 (2013) .......................60 Ace Wire & Cable Co. v. Aetna Casualty & Surety Co., 60 N.Y.2d 390 (1983) ..................................................................11 Atwater & Co. v. PanamaR.R. Co., 246 N.Y. 519, 524 (1927) ..................34 Baughman v. Merchants Mutual Insurance Co., 87 N.Y.2d 589 (1996) .......................................................2, 31, 39, 42 BP Air Conditioning Corp. v. One Beacon Ins. Group, 8 N.Y.3d 708,715 (2007) ..............................................................30 BradH. v. City of New York, 17 N.Y.3d 180, 185-86 (2011) .....................34 Brown Bros. Elec. Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 399 (1977) .............................................................31 Bynog v. Cipriani Group, Inc., ! N.Y.3d 193 (2003) ...............................36 Cass v. Cass, 91 N.Y.2d 554, 566 (1998) ............................................34 Chautauqua Patrons Insurance Company v. Ross, 38 A.D.3d 1190 (4th Dep’t 2007) ....................................................... 40 City of Albany v. Standard Accident In. Co., 7 N.Y.2d 422, 430 (1960) ............................................................................29, 30 City of New York v. Philadelphia Indemnity Insurance Co., 54 A.D.3d 709, 710 (2n~ Dep’t 2008) ............................................... 3, 4 County of Columbia v. Continental Insurance Company, 83 N.Y.2d 618, 628 (1994) ..............................................................3 V Curry v. Atlantic Mutual Insurance Co., 283 A.D.2d 937, 938, lv. denied 96 N.Y.2d 721 (4th Dep’t 2001) ....................................... 3, 14 Essex Insurance Co. v. Pingley, 41 A.D.3d 774 (2n~ Dep’t 2007) ............38, 42 First State Insurance Company v. J&S United Amusement Corp., 67 N.Y.2d 1044 (1986) .................................................................43 Gliemli v. NetherlandDairy Co., 254 N.Y.2d 60 (1930) .................15, 16, 24 GovernmentEmp. Ins. Co. v. Kligler, 42 N.Y.2d 863, 864 (1977) ..............33 Greenfield v. Philles Records, Inc, 98 N.Y.2d 562, 569 (2002) ...............31,32 Hotchkiss v. National City Bank ofN. Y., 200 F. 287, 293 (S.D.N.Y. 1911) ....................................................................31 In Re Hertz Corp., 2 N.Y.3d 733 (2004) .............................................15 In Re Morton, 284 N.Y. 167 (1940) ..............................................15, 23 J.P. Morgan Securities Inc. v. Vigilant Ins. Co., 21 N.Y. 3d 324, 334 (2013) ............................................................31 Kolbe v. Tibbetts, 22 N.Y.3d 344, 353 (2013) .......................................34 Lally v. Cronen, 247 N.Y. 58, 63 (1928) .............................................31 Lazo v. Mak’s Trading Co., Inc. 84 N.Y.2d 896 (1994) ........................36, 37 Loblaw, Inc. v. Employers’Liability Assurance Corp. Ltd., 57 N.Y.2d 872, 877 (1982) .............................................................33 Lumbermens Mutual Casualty Company v. Allstate Insurance Company, 51 N.Y.2d 651,655 (1980) .........................................................52, 55 vi Madawick Contracting Co., 307 N.Y. 111, 117 (1954) ............................34 Madison Avenue Leasehold, LLC v. Madison Bentley Associates, LLC, 30 A.D.3d 1 (1St Dep’t 2006) ........................................................... 11 Matter of 12 Cornelia St., 56 N.Y.2d 895 (1982) ...................................15 Matter of Beach v. Velzy, 238 N.Y. 100 (1924) ......................................15 Matter of Electrolux Corp., 288 N.Y. 440 (1942) .........................15, 16, 24 Matter of Field Delivery Service, 66 N.Y. 2d 516 (1985) .........................15 Matter ofLiberman v. Gallman, 41 N.Y.2d 774 (1977) ..................23, 36, 42 Matter of Ted is Back Corp., 64 N.Y.2d 725 (1984) ................................6 Murray v. Union Railroad Co. of New York City, 229 N.Y. 110 (1920) .........................................................8, 9, 37, 43 New York Central Mutual v. Sweet, 16 A.D.3d 1013 (3rd Dep’t 2005) ..........40 Nicholas v. Nicholas, 306 N.Y. 490, 494 (1954) ...................................32 0 ’Brien v. Spitzer, 7 N.Y.3d 239 (2006) ............................................36 Pattengell v. Welsh, 81 A.D.2d 831 (2nd Dep’t 1981) aff’d 53 N.Y.2d 917 (1981) ............................................................40 Rentways, Inc. v. O’Neill Milk & Cream Co., 308 N.Y. 342,347 (1955). ......35 Riverside Planning Corp. v. CRP/Extell Riverside, L.P., 13 N.Y.3d 398, 404 (2009) ....................................................~ . ....34 Schron v. Troutman Sanders LLP, 20 N.Y.3d 430, 433 (2013) ...................31 vii Scott v. Massachusetts Mutual Life Ins. Co., 86 N.Y.2d 429 (1995) ............37 Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 (1991) (2004) ...................................................................................6, 7 Uribe v. Merchants BankofN.Y., 91 N.Y.2d 336, 341 (1998) ..................33 Utica Fire Insurance Company of Oneida County v. Gozdziak, 198 A.D.2d 775 (4th Dep’t 1993) ................................................ 40, 42 Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004) .............................................................33 Villa Maria Institute of Music v. Ross, 54 N.Y.2d 691 (1981) ...................23 W. W. W. Assoc., Inc. v. Giancontieri, 77 N.Y.2d 157 (1990) .....................32 Wallace v. 600 Partners Co., 86 N.Y.2d 543,547 (1995) ........................11 White v. Continental Cas. Co., 9 N.Y.3d 264, 267 (2007) ...................31, 32 OTHER SOURCES Restatement [Second] of Contracts §203[a] .........................................34 viii PRELIMINARY STATEMENT The Appellant, Dryden Mutual Insurance Company ("Dryden"), respectfully submits this Reply Brief in response to several arguments made by Main Street in its Brief to this Court. Dryden otherwise relies on its Main Brief to refute arguments made in Main Street’s Brief. POINT I MAIN STREET FAILS TO PERSUASIVELY DISPUTE THAT GOESSL AND MAIN STREET HAD A REASONABLE EXPECTATION THAT GOESSL WAS COVERED UNDER THE MAIN STREET POLICY The Court of Appeals has held that in determining whether a party is entitled to liability insurance coverage: An important guidepost when interpreting a business policy is to examine "the reasonable expectation and purpose of the ordinary business [person] when making an ordinary business contract." Baughrnan v. Merchants Mutual Insurance Co., 87 N.Y.2d 589, 592-93 (1996). In this appeal, Main Street argues that it has no insurance coverage obligation under its policy based on an alleged oral agreement between Goessl and Daino. That alleged agreement, entered into nine years before the accident in issue, was between two plumbers unsophisticated in contract, employment or insurance law. That alleged agreement mislabeled Goessl an independent contractor on the apparent mistaken belief that Goessl could not work as both an employee of Daino doing Daino work and as an independent contractor doing non-Daino work. Main Street’s argument on this appeal based on the alleged agreement is undermined by the trial record: 1) in which Goessl, in his arrangement with Daino, did not know whether he was an employee or independent contractor (R57, 59) and 2) in which it is undisputed that Goessl never agreed that he would not be covered for liability purposes under the Main Street policy or that he even knew that the Main Street policy existed prior to the accident for which he is potentially liable. A. The reasonable expectations to be drawn from the language of the Main Street policy What triggers liability coverage for Goessl under the Main Street policy is whether Goessl was an "employee" of Daino, as that term is used in the Main Street policy. Main Street, in its brief to this Court, ignores how the word "employee" is used and defined in its policy and instead states: The term "employee" is not substantively defined by the [Main Street] policy and should be given its plain and ordinary meaning. See Curry v. Atlantic Mutual Insurance Co., 283 A.D.2d 937, 938, Iv. denied 96 N.Y.2d 721 (4th Dep’t 2001). Resp. Br. p. 20. In considering the "plain and ordinary meaning" of a policy term, the Court of Appeals has held that the term must be read in the context of the entire policy. See County of Columbia v. Continental Insurance Company, 83 N.Y.2d 618, 628 (1994); see also City of New York v. Philadelphia 3 Indemnity Insurance Co., 54 A.D.3d 709, 710 (2nd Dep’t 2008) ("in interpreting an insurance policy, the policy should be read as a whole" (citation omitted)). Considering the language of the Main Street policy, the Main Street policy does not state that a worker shall be deemed an "employee" for insurance purposes only if the named insured/alleged employer/Daino pays payroll taxes on the worker; or if the named insured/Daino files a W-2 form; or if the worker is deemed to be an employee for purposes of worker’s compensation coverage; or if the worker meets an IRS definition of "employee"; or if the worker gets paid vacations from the named insured/Daino. Rather, the Main Street policy, when read in its entirety, clearly contemplates that a worker may be an employee (and thus insured under the Main Street policy) even if the insured/alleged employer does not withhold payroll taxes; does not provide the worker with paid vacation; and/or does not pay the worker with a check made payable to his name individually. The Main Street policy does this by, among other things, including in the meaning of"employee" what the policy says is a "leased worker" who is leased to the named insured by a labor leasing firm. (R239) Such an individual, though not an IRS employee; though not necessarily given paid vacations by Daino; 4 though not having had payroll taxes withheld by Daino; would, nonetheless, under the Main Street policy, be deemed to be an "employee" for insurance purposes. Reading the Main Street policy in its entirety, what controls whether a worker is deemed to be an employee for insurance purposes is, as stated in the Main Street policy, "while performing duties [Daino’s] business" (R236) or, in the case "temporary worker." (R239) Moreover, what relating to the conduct of of a leased worker, not a controls, according to the language of the Main Street policy, is whether the worker’s potential liability arises out of: acts within the scope of their employment by you or while performing duties related to the conduct of your business. (R236) (emphasis added) Main Street ignores the undisputed fact that Goessl was working full time for Daino for nine years before this incident. Main Street ignores the undisputed fact that Goessl’s potential liability arises out of what Main Street’s policy expressly states triggers liability coverage, which is a worker’s potential liability that arises "while performing duties related to the conduct of your [Daino’s] business." (R236) Main Street ignores the fact that its policy does not expressly define all the factual scenarios upon which a worker may be deemed to be an employee for insurance purposes, thereby allowing for the reasonable interpretation that if a worker, like Goessl, is not hired by Daino from a leasing company, that the worker, like Goessl, could still be considered an employee for insurance purposes under the Main Street policy, notwithstanding that, like a leased worker from a leasing company, Daino does not pay health insurance; Daino does not withhold payroll taxes; Daino issues a 1099; Daino gives some official employees some benefits that it does not give to workers. Main Street chose to define an insured as an "employee" but did not, in its policy, provide a comprehensive definition of "employee." By giving insured status to an "employee," Main Street chose an inherently ambiguous word that New York courts have repeatedly struggled to define. See Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 (1991); Matter of Ted is Back Corp., 64 N.Y.2d 725 (1984) (whether a worker is an employee must be considered on a case by case basis with no one factor determining employee status, although recognizing that the most important factor is direction and control over the method and manner of the work performed.) Given Main Street’s use of the word "employee," it was clearly the intention and reasonable expectation of Main Street to provide liability coverage to a Daino worker who worked full time for Daino, under Daino’s 6 direction and control, whose liability arose, as required by the policy, "while performing duties related to the conduct of [Daino’s] business." B. The reasonable expectations, or lack thereof, to be drawn from Goessl’s alleged oral agreement with Daino Main Street, on this appeal, distorts and mischaracterizes the trial record in an attempt to argue that Goessl, who gave testimony contradicting whether he considered himself to be Daino’s employee or independent contractor, had no reasonable expectation of coverage under the Main Street policy. First, Main Street ignores the fact that Goessl never agreed that he would not have liability coverage under Daino’s liability policy with Main Street while he, Goessl, did Daino work and used Daino tools under Daino’s direction and control. In this case, where the alleged agreement between Goesl and Daino is silent on the issue of whether Goessl would be covered under the Main Street policy, what is warranted is a judicial assessment of the actual relationship for purposes of Goessl’s entitlement to liability coverage. See generally (1991). Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 Second, Main Street erroneously asserts that "[Goessl and Daino] deliberately constructed a relationship to remain independent from each other" (Resp. Br. p. 9) and that Goessl’s work for Daino "was done with the 7 expressed understanding that he was acting as S&K Plumbing, an independent contractor." Resp. Br. p. 16. Main Street then cites the Court of Appeals decision in Murray v. Union RE Co. of NY City, 229 N.Y. 110, for the proposition that "employment, like any other contract, presupposes understanding." Main Street then asserts that because Goessl and Daino created the fiction that Goessl would be called an independent contractor, Goessl could have no reasonable expectation that he would have liability coverage under the Main Street policy which provides coverage to him only if he were an "employee." Main Street’s argument fails because even if Goessl called himself an independent contractor when doing Daino work, the weight given that statement for purposes of determining whether he had a reasonable expectation of coverage under the Main Street policy should be’ minimal, if non-existent, given that Goessl did not appear to know that he could work both as an. employee of Daino and still work as an independent contractor doing non-Daino work (R67-68); was never given the opportunity by Daino and told that he could work as an employee of Daino and still do non-Daino work as an independent contractor (R92); did not know that the Main Street policy even existed; and never said or agreed that he did not have liability coverage under Daino’s liability policy while doing Daino work. 8 Main Street ignores the fact that in the trial record, there is an affidavit from Goessl in which he takes "no position ... whether I was working at the Smolnik residence as a sole proprietor or an employee ofA.P. Daino." (R532) Main Street ignores the evidence in the record that Goessl and Daino, neither of whom were sophisticated in employment law, appear to be under the mistaken impression that Goessl could not work as an employee of Daino and still work as an independent contractor doing non-Daino work. (R67-68) Main Street ignores the fact that Goessl gave inconsistent testimony in the trial record essentially stating that he was not sure whether he was Daino’s employee or independent contractor, (R57, 363) and that if he was not Daino’s employee, he wanted to be an employee but was. afraid to ask Craig Daino to make him an official employee. (R59) Goessl’s understanding, or lack thereof, is, under New York law, important in determining how much weight to be given this "business arrangement" in deciding whether this business arrangement can be used by Main Street to deny Goessl coverage. As the Court of Appeals said in Murray v. Union Railroad Co. of New York City, 229 N.Y. 110 (1920): [employment], like any other contract, presupposes understanding. The new relation cannot be thrust upon the servant without knowledge or consent ... He must understand that he is submitting himself to the control of a new master. 9 Id. at 113. Just as employment "presupposes understanding," so does independent contractor status. The trial record (Goessl’s testimony and his pleadings) make patently clear that Goessl did not know or understand whether he was an independent contractor or an employee. (R57, 363) What the trial court judge found after a bench trial was that Goessl had subjected himself to the "control of a new master" [Daino] and was working for Daino five days a week, being directed and told what to do, using Daino tools and equipment. Moreover, even if Goessl, in this lawsuit, had vigorously asserted that he was, at all times, an independent contractor of Daino (which he did not), such a conclusory assertion would be a fiction not supported by the actual relationship between Goessl and Daino. No insurer, whether it be Main Street or Dryden, should be forced to provide liability coverage or be allowed to deny liability coverage to an insured based on a fiction that ignores the actual work relationship. This is especially so when it comes to a worker who is in an unequal bargaining power with his purported employer who, like Goessl, may not ask to become an official employee because he knew his employer would not go for it. (R59) This is also especially so given what the Appellate Division dissent stated was "the strong public policy that militates against the 10 improper and unscrupulous classification of employees as independent contractors." (R693) In determining the evidentiary weight to be given to a business arrangement, the courts looks to the sophistication of the parties. See Madison Avenue Leasehold, LLC v. Madison Bentley Associates, LLC, 30 A.D.3d 1 (1 st Dep’t 2006) citing Ace Wire & Cable Co. v. Aetna Casualty & Surety Co., 60 N.Y.2d 390 (1983); see also Wallace v. 600Partners Co., 86 N.Y.2d 543,547 (1995) ("the court noted that the lease was executed and later revised by "sophisticated business people ably assisted by presumed reasonably competent counsel and competent financial advisors"). Such scrutiny over the alleged business arrangement is especially warranted where a third party, not a party to the contract, such as Main Street, seeks to have its coverage obligations, or lack thereof, established solely by the existence of this alleged oral agreement. C. Main Street fails to make a persuasive argument that the trial court erred in finding that Goessi was an employee of Daino at the time of the accident, and thus covered under Main Street’s policy Main Street appears to recognize the weakness of its argument that the business arrangement, whereby Goessl allegedly agreed he was an independent contractor, should be given great weight in determining that he was not an employee for purposes of insurance under the Main Street policy. Main Street, in an attempt to address this weakness, proceeds in its brief to reargue and mischaracterize the facts found by the trial judge after a bench trial which established the numerous factors evidencing Goessl’s status as an employee. The trial judge’s findings were based on a fair interpretation of the evidence, and Main Street’s attempt to reargue them by, among other things, misstating what the evidence shows, should be rejected as not appropriate for appellate review. D. Main Street ignores strong public policy reasons why Main Street is not entitled to the windfall of a finding of no coverage Main Street ignores and does not otherwise address the finding of the Appellate Division dissenting judge that the majority’s decision relieving Main Street of any liability coverage obligation "militates against the improper and unscrupulous classification of employees as independent contractors." (R 693) Employers have a history ofmisclassifying workers as independent contractors so as to avoid paying worker’s compensation premiums. The majority decision in this case now creates an incentive for employers to misclassify workers as independent contractors so that they can assign those workers the riskiest jobs, make those workers get their own liability insurance, and thus keep the employers’ insurance loss history down so as to minimize insurance premiums on general liability policies. 12 Main Street seeks an undeserved windfall in attempting to avoid having to provide liability coverage to Goessl by attempting to portray to this Court that Goessl could not have a reasonable expectation of coverage under the Main Street policy because of what Main Street, on this appeal, erroneously describes as an "expressed understanding" that Goessl was an independent contractor. Goessl had no such understanding, and he certainly had no understanding that he would not be covered under the Main Street policy which insured Daino’s workers who worked full time for Daino under Daino’s direction and control. 13 POINT II MAIN STREET AGREES THAT THE COMMON LAW MEANING OF AN EMPLOYEE GOVERNS, BUT IGNORES THE OVERWHLEMING EVIDENCE THAT GOESSL WAS AN EMPLOYEE UNDER THE MAIN STREET POLICY While Main Street’s legal and factual analysis is deeply flawed in several ways, Main Street agrees with Dryden in one material respect: the common law meaning of an employee governs the determination of whether Goessl was an insured under the Main Street policy. As discussed below, Dryden strongly disagrees with unsupported factual statements made by Main Street and the relative importance of the undisputed facts when determining whether Goessl was an employee. A. Main Street agrees the common law meaning of employee determines its policy coverage obligation to a Daino worker Despite Main Street’s flawed analysis of its own policy, Main Street nonetheless agrees that the common law meaning of employee determines whether Goessl was an insured under the Main Street policy. See Resp. Br. 20-21. Main Street states that the "plain and ordinary meaning" of the word "employee" as used in the Main Street policy governs. See Resp. Br. pp. 20- 21 (citing Curry v. Atlantic Mut. Ins. Co., 238 A.D.2d 937, 938 (4th Dept. 2001)). Main Street then cites cases that apply the common law meaning of an employee. See Resp. Br. p. 21. Main Street agrees that a court should 14 consider "the degree of control exercised over the hired party’s work." Resp. Br. pp. 21-24. Main Street also lists examples of factors that courts have considered to determine whether a worker is an employee under the common law. Id. B. The key factor is direction and control Main Street’s legal analysis is again flawed when it fails to acknowledge that "direction and control" is the key factor for determining whether a worker is an employee or an independent contractor. Resp. Br. pp. 20-21. See In re." Morton, 284 N.Y. 167, 172 (1940); Ap. Br. pp. 46-48. By definition, an employee "works under the supervision and control of his employer." In re Morton, 284 N.Y. at 172. In contrast, an independent contractor is "bound by his contract but not by his employer’s orders." I__d. A court examines the facts or "factors" in each case to ascertain whether the employer "directs and controls" the worker. See Morton, 284 N.Y. at 173- 74; Matter of Beach v. Velzy, 238 N. Y 100-104 (1924); Matter of Electrolux Corp., 288 N.Y. 440, 445 (1942); Gliemli v. Netherland Dairy Co., 254 N.Y.2d at 62; Matter of Field Delivery Service, 66 N.Y. 2d 516, 521 (1985). Control over the "means used to achieve the results" is a highly significant factor. In re," Hertz Corp., 2N.Y.3d 733, 735 (2004)(citing Matter of 12 Cornelia St.), 56 N.Y.2d 895,897 (1982). Likewise, the employer’s right to terminate the worker is a very important factor. In Re Electrolux Corp., 288 N.Y. 440, 446 (1942); Gliemli v. NetherlandDairy Co., 254 N.Y.2d 60, 61- 64 (1930). To Main Street, one factor is as important as another. The factor of "direction and control" is one of many co-equal factors. Main Street fails to see the forest for the trees. Under this Court’s precedent, the most important facts are those that bear on whether the employer "directs and controls" a worker, and in particular the means used to achieve the results of their work. See Ap. Br. pp. 46-48. In the case at bar, there are a numerous facts demonstrating that A.P. Daino directed and controlled Goessl, particularly as to the means Goessl used to achieve the results of his work: ¯ A.P. Daino exercised the same level of direction and control over Goessl as it did over its other employees, including the supervisor of the other crew; (R73-74; 84-86; 472-475; 490-491; 528) ¯ A.P. Daino exercised essentially the same level of direction and control over Goessl as it did when Goessl had previously worked for the company as an employee; (R73-79; 451; 468) ¯ A.P. Daino exercised the same level of direction and control over Goessl as did Carl Plumbing when Goessl was employed by the company for 13 years; (R56-57) ¯ Mr. Daino expected Goessl to identify himself to customers as an employee of A.P. Daino, and Goessl complied; (R84; 479) ¯ Mr. Daino said he was a "fair boss" to Goessl; 16 ¯ Goessl thought of himself as an "employee" of A.P. Daino when he did his assigned jobs for the company; (R57; 363) Goessl worked for A.P. Daino full time and only did side jobs when they did not conflict with his commitment to A.P. Daino; (R73; 79; 451; 468) As with the other supervisor, Mr. Daino expected Goessl to instruct apprentice employees on "what to do, when to do it, and how to do Daino jobs" and to monitor their performance and quality of work; (R51-53; 77-78; 445-446) ¯ Mr. Daino expected the crews and Goessl to report to the shop each morning to receive their assigned jobs for the day; (R47-49; 377-378) Mr. Daino put notes in the company trucks specifying the jobs that Goessl and the other employees were instructed to perform that day, and the order in which they must perform the jobs; (R48; 89; 439; 442; 489) ¯ Goessl played no role in selecting the assigned jobs he was to perform and the order in which they were to be performed; (R48o49) A.P. Daino expected Goessl and its employees to wear work boots, and gave Goessl and the employees clothing to wear bearing the name of the company; (R88; 477-478) A.P. Daino supplied the trucks, materials, and tools to be used to perform the assigned jobs, and although Goessl sometimes used his own hand tools, there was no agreement for him to do so; (R50; 57; 76; 80-81; 92; 377-378; 396; 489) A.P. Daino paid the annual fee for renewal of Goessl’s journeyman plumber’ s card, and allowed Goessl to list Mr. Daino, a master plumber, as his employer; (R97, 356-358) ¯ Mr. Daino monitored purchases of materials made by Goessl and the other employees; (R381) 17 Mr. Daino routinely pulled Goessl off of jobs and immediately reassigned him to other jobs and Goessl always complied with his orders; (R49; 89; 439-440) ¯ Mr. Daino gave the same level of inspection and supervision to both crews; (R86; 490) ¯ A.P. Daino reserved the fight to make Goessl redo or fix work he had been assigned by the company; (R503) As needed, Mr. Daino instructed Goessl on how to do jobs over which Goessl had no experience, and Goessl always obeyed his instructions; (R401; 498) A.P. Daino could terminate Goessl immediately, even in the middle of a job, and was only be obligated to pay Goessl for the hours he worked up to the moment of discharge; (R55; 89; 445; 497) The customers belonged to A.P. Daino and Goessl was prohibited from soliciting them for side work as S & K Plumbing; (R54-55; 82-83; 381; 384; 448) ¯ Mr. Daino negotiated all contracts with customers and the prices charged for work; (R389) ¯ A.P. Daino handled all complaints from customers, not Goessl; (R523) ¯ Goessl was paid the hours he worked, regardless of whether he negligently performed a job or a customer did not pay; (R51; 401) ¯ In general, Goessl asked Mr. Daino for permission to take time off from work; (R400-401; 440-441) ¯ A.P. Daino required Goessl to report his hours worked on a weekly basis and he was paid weekly; (R47; 50; 81; 95-96; 360) ¯ After the fire, Mr. Daino told the police "he had two employees there doing work," one of whom he identified as Goessl; (R311) 18 ¯ Goessl also identified himself to the police officer as an employee of A.P. Daino; (R311) ¯ A.P. Daino purchased workers’ compensation insurance for Goessl before the fire, knowing that the purpose of the insurance was to pay an "employee" money in the event he or she was injured. (R62; 78-80; 505) As found by the trial court and reiterated by the dissenting judge in the Fourth Department, the evidence that Goessl was an employee of A.P. Daino is "overwhelming." Nonetheless, Main Street ignores the overwhelming undisputed evidence and relies on facts having little or no relevance to the issue of whether A.P. Daino directed and controlled Goessl’s work. For the most part, the facts upon which Main Street rely merely support the "fiction" that Goessl was an "independent contractor." Unfortunately, Main Street also distorts or misstates some facts in its desperate attempt to claim that Goessl was an independent contractor, and therefore not an insured under its policy. C. Main Street’s flawed analysis bearing on direction and control While ignoring the vast majority of undisputed facts demonstrating that A.P. Daino directed and controlled Goessl’s work, Main Street attacks Dryden on a few isolated facts by claiming that Dryden has made statements that are contrary to the record. Dryden strongly disagrees. First, Main Street alleges that "Goessl did not show up for work every day at the same place" but rather that he "reported, albeit fairly consistently, 19 - at a time of his choosing - to whatever site he was working at, at that particular time." Resp. Br. p. 22 (emphasis in original). The record does not support Main Street’s claim. Goessl and the other Daino official employees had very limited discretion in selecting the time they started work each morning. (R90; 488) Mr. Daino allowed each crew "some flexibility" in setting the time that each crew would report to work. (R90) That limited discretion was exercised only once. After the crew selected the time, the crew was expected to report to the company office at that same time each day, month after month and year after year. (R488) As Mr. Daino testified, he "didn’t know if he actually gave them discretion" in selecting the time to report, but "it was pretty much they had agreed upon a start time and that was pretty much what was expected of them." (R488) Goessl’s crew selected 6:30 am as their start time to report to the company office for its work assignments. (R439) The crew run by Kruger selected 8:00 am as its start time. (R439) Once selected, the scheduled start time for reporting to work did not vary. Main Street is also incorrect when it said that Goessl first "showed up for work" at "whatever site he was working at" according to "a time of his choosing." Resp. Br. p. 22. Goessl and the other employees on his crew were first required to report to the company office at 6:30 am to receive their daily 2O work assignments. (R47-49; 377-78) Mr. Daino then gave them "a list, and all three of [the men on the crew would] go to that job." (R384) Therefore, Goessl did not first go to the work site, but rather reported to the company office. After Mr. Daino instructed them to perform certain jobs, they immediately left in a company truck to do those jobs. Goessl did not first report to a work site "at a time of his choosing." Second, Main Street incorrectly states that "Goessl did not have to ask for permission to take time off, but instead routinely took time off without asking Craig Daino." Resp. Br. p. 22 (emphasis added). It should be noted that Main Street contradicts its own statement later in its brief. At page 26 of its brief, Main Street states that "sometimes, Goessl would not even inform Daino that he took time off until after he got back." Resp. Br. p. 26 (emphasis added). Main Street’s later statement concedes that it was not routine. Main Street’s statement that Goessl "routinely took time off without asking Craig Daino" is not supported by the record. Instead, the record states that Goessl asked Craig Daino to take time off from work. (R400-01) Goessl further testified that if there was a day on which he did not want to report to work, he would "call in and report that." (R400) Goessl also confirmed that from time to time he would "ask permission not to work" and that sometimes Craig Daino "denied [him] permission." Id. 21 Third, Main Street incorrectly argues that "the fact that Goessl informed Daino when he finished a job so as to learn of the next job is significant of nothing." Resp. Br. p. 22 (emphasis added). Main Street could not be more wrong. In the record, Goessl testified that if he and the other employees on his crew completed their assigned jobs before the end of the workday, they were expected to call Mr. Daino to "[s]ee if there’s other work." (R443-44; 87) Such requirement is quintessential evidence that A.P. Daino directed and controlled their work. An independent contractor would never be required to report to an employer for more work upon the completion of a job. An independent contractor is free to leave upon the completion of the agreed task. The record confirms that Goessl was not free to leave when he completed the assigned tasks before the end of the workday. Fourth, Main Street attempts to make something of the fact that Mr. Daino did not generally have to supervise or inspect the work of his employees when they were on a jobsite. The need to inspect and supervise is a function of the skill level, experience, and dependability of an employee, not an indicator of whether a worker is an independent contractor. For example, management level employees in companies generally do not have others inspect or supervise their work. Rather, management employees inspect and supervise the work of others. The fact that managers do not need daily 22 supervision does not mean that they transform into independent contractors. Of course they remain employees. It is important to remember that while Mr. Daino was not generally required to inspect and supervise the work of his employees because they were skilled, he reserved the right to do so. An employer-employee relationship can also be shown by "the degree of control and direction reserved to the employer." Villa Maria Institute of Music v. Ross, 54 N.Y.2d 691, 692 (1981)(citing Matter of Morton, 284 N.Y. 167, 173 (1940); Matter of Liberman v. Gallman, 41 N.Y.2d 774, 778 (1977))(emphasis added). On occasion, Mr. Daino did inspect their work. (R86) In general he did not need to inspect and supervise Goessl and the other employee plumbers when they were on jobsites because they already knew how to do their jobs. (R525) Goessl and the other employee plumbers mostly did plumbing jobs on new construction residential houses. (R87; 354-355) Such plumbing jobs are not complicated for a skilled plumber. The plumbers followed approved building plans that specified the plumbing work that must be done. An experienced employee plumber would not need supervision of such jobs. Moreover, Mr. Daino could make Goessl return to a job to redo any work he improperly performed. (R503) 23 Mr. Daino supervised Kruger to the same degree as Goessl. (R490) Kruger was an employee of the company with comparable skills, experience, and responsibility. (R74) If Kruger was an employee, so was Goessl. In addition, Mr. Daino more closely supervised Goessl when he assigned him commercial plumbing jobs. (R401; 448; 498-499) Goessl was not as skilled as Mr. Daino, a master plumber. (R401; 448-449; 503)Therefore, Mr. Daino supervised Goessl and the other employees as needed. He reserved the right to do so. By the same token, the fact that Goessl did not have management responsibilities within A.P. Daino has no bearing on whether Goessl was an employee or independent contractor. See Resp. Br. pp. 26-27. Again, the issue is whether A.P. Daino exercised direction and control over Goessl’s work or reserved the right to do so. While Goessl supervised an apprentice assigned to his crew, he did so at the command ofA.P. Daino. (R51-53; 77-78; 445-446) The apprentice was an employee of A.P. Daino. Id. Fifth, Main Street ignores this Court’s terminate employment strongly indicates the precedent that the right to existence of an employer- employee relationship. In Re Electrolux Corp., 288 N.Y. 440, 446 (1942); Gliemli v. Netherland Dairy Co., 254 N.Y.2d 60, 61-64 (1930). Main Street grudgingly acknowledges that this factor "ostensibly...weighs in favor of 24 Dryden’s argument." Resp. Br. p. 25. But Main Street then nonsensically says that if A.P. Daino had terminated Goessl, such termination would not "leav[e] AP Daino in the lurch." Id. The right to terminate at will is a critically important factor. A hiring party to an agreement with an independent contractor cannot generally terminate the contractor for no cause without repercussions, particularly when the work has begun. The agreement fixes rights and obligations between the parties. A hiring party does not have the right to terminate the agreement unless a provision in the agreement allows it. If the hiring party wrongfully terminates the agreement, the hiring party is in breach of the agreement and potentially subject to an action for damages. Here, A.P. Daino had the absolute right to terminate Goessl at any time and for any reason. (R55; 89; 445; 497) As Goessl testified, A.P. Daino could terminate him even when he was in the middle of a job. (R497) A.P. Daino’s only obligation to Goessl would have been to pay him for the hours he had worked until the point of termination. (R445) Sixth, Main Street incoherently argues that Goessl participated in the "profit and loss" of his work. Resp. Br. 26. Main Street ignores that A.P. Daino paid Goessl a low hourly rate consistent with that for a skilled employee plumber. Goessl first earned only $20 per hour and his wage increased to only 25 $24 per hour after having worked for the company for nine years. In 2009, Goessl earned only $33,000 from A.P. Daino, his only source of income. (R369) The fact that Goessl asked for a raise now and then is no different from any other employee who asks his/her employer for a raise after years of service to a company. He could not get the raise unless Mr. Daino agreed. Significantly, Kruger was a comparable employee who received a comparable wage, after factoring in the cost of employee benefits. A.P. Daino also engaged independent contractors to do non-plumbing tasks for the company and they were paid on a profit basis. Goessl was not. Main Street’s claim that Goessl bore the risk of loss for his work is contrary to the record. Goessl testified that he was paid regardless of whether he performed the work properly. (R51; 401) Goessl was paid by A.P. Daino for the hours he worked regardless of whether the customer paid A.P. Daino. (R51; 401) Goessl filled out weekly time cards listing the number of hours he had worked and A.P. Daino paid him for those hours. (R81; 95-96) There is nothing in the record to support the claim that his hours were deducted if he performed work improperly or that he was not paid if he returned to a job to redo his work. Seventh, Main Street argues that it is irrelevant that Goessl’s sole income was from A.P. Daino by 2006. Resp. Br. pp. 27-28. Main Street is 26 obviously concerned because full-time employees typically work for one employer whereas independent contractors do not. An independent contractor typically works for many customers, finds his own customers, sets the prices he charges those customers, bears the risk of loss if the customers do not pay, and is paid directly by the customers. A.P. Daino found the customers and did not permit Goessl to solicit its customers for future work. (R48-49; 389) Goessl never set prices with A.P. Daino’s customers. (R384) He did not bear the risk of loss. (R54-55; 82-83; 381; 384) The customers paid A.P. Daino, not Goessl. (R495-496) D. Main Street relies heavily on facts that have little bearing on whether A.P. Daino directed and controlled Goessi’s work There is a reason that Main Street did not acknowledge that "direction and control" is the key factor for determining whether a worker is an employee or an independent contractor. Resp. Br. pp. 20-21. The main facts on which Main Street and the Fourth Department relied have little bearing on whether A.P. Daino directed and controlled Goessl’s work. Rather, these facts are consistent with the fictional label that Goessl was an independent contractor. Such facts having little or no bearing on direction and control of Goessl’s work include: not withholding taxes from Goessl’s paycheck; issuing Goessl an IRS tax form 1099; not providing Goessl with employee benefits but rather paying him a higher hourly rate to compensate for the cost of such 27 benefits; and requiting Goessl to provide A.P. Daino with a certificate of liability insurance. The Main Street policy insured Goessl as an employee of A.P. Daino for the fire caused by his allegedly negligent work on behalf ofA.P. Daino at the Smolniks’ residence. Main Street agrees that the common law meaning of an employee governs the issue before this Court. As set forth in Dryden’s Main Brief and this Reply Brief, the undisputed evidence is overwhelming that Goessl was an employee under the common law meaning. 28 POINT III THE DRYDEN POLICY, WHICH UNAMBIGUOUSLY STATES THAT IT ONLY INSURED GOESSL WHEN HE DID BUSINESS AS A SOLE PROPRIETOR, NOT WHEN HE WORKED AS AN EMPLOYEE FOR A.P. DAINO, DID NOT COVER GOESSL FOR THE ACCIDENT IN ISSUE In arguing that the Dryden policy insured Goessl when he worked as an employee for A.P. Daino, Main Street incorrectly states that "it is Goessl’s intention that governs Dryden’s obligations." Resp. Br. p. 17 (emphasis in original). Main Street cannot be more wrong. It is the intention of the insured and insurer as stated in the language in the Dryden policy that governs. The Court of Appeals could not be any more clear in enunciating how insurance policies are to be interpreted when it stated: The language employed in the contract of insurance must be given its ordinary meaning, such that the average policyholder of ordinary intelligence, as well as the insurer, would attach to it. (citations omitted) City of Albany v. (emphasis added). Standard Accident In. Co., 7 N.Y.2d 422, 430 (1960) Main Street ignores the clear and unambiguous language of the Dryden policy that Dryden insured Goessl "only with respect to the conduct of a business of which he/she is the sole proprietor ...." (R174) (emphasis added) 29 As established in Dryden’s Main Brief and Point II of this Reply Brief, Goessl worked as an employee for A.P. Daino when the fire happened. Main Street asserts that the language in the Dryden policy is "susceptible of two reasonable interpretations" but Main Street fails to state those interpretations. Resp. Br. p. 17. Main Street’s analysis is flawed for many reasons. A. The Appellate Division majority did not find Dryden’s policy language to be ambiguous Unlike the argument asserted in Main Street’s brief, the Appellate Division majority did not find Dryden’s policy to be in any way ambiguous. Rather, the Appellate Division found that Goessl was a self-declared independent or subcontractor of Daino and based on that finding, concluded that while doing Daino work at the Smolniks, Mr. Goessl was engaged in "the conduct of a business of which he/she is the sole proprietor" and thus a named insured under Dryden’s policy for purposes of his liability arising out of that job. (R689-692) B. The language of the policy governs Dryden’s obligations The language of the insurance policy controls when determining the parties’ intent. City of Albany v. Standard Accident ln. Co., 7 N.Y.2d 422,430 (1960); see BP Air Conditioning Corp. v. One Beacon Ins. Group, 8 N.Y.3d 708, 715 (2007)(reasonable expectation of the parties ascertained from the 3O language of the policy); Baughman v. Merchants Mutual Ins. Co., 87 N.Y.2d 589 (1996). "[I]nsurance contracts, like other agreements, will ordinarily be enforced as written." J.P. Morgan Securities Inc. v. Vigilant Ins. Co., 21 N.Y. 3d 324, 334 (2013). See White v. Continental Cas. Co., 9 N.Y.3d 264, 267 (2007). "The best evidence of what parties to an agreement intend is what they say in their writing." Schron v. Troutman Sanders LLP, 20 N.Y.3d 430, 433 (2013) (quoting Greenfield v. Philles Records, Inc, 98 N.Y.2d 562, 569 (2002)). This Court assesses the manifested intent of the parties "from the language [they] used." Lally v. Cronen, 247 N.Y. 58, 63 (1928). A court looks "to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds." Brown Bros. Elec. Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 399 (1977). As Judge Learned Hand once said, even "[i]f...it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held, unless there were some mutual mistake, or something else of the sort." Hotchkiss v. National City Bank ofN. Y.; 200 F. 287,293 (S.D.N.Y. 1911). C. The language of the Dryden policy was clear and unambiguous and therefore must be enforced according to its terms 31 The Dryden policy clearly and unambiguously states that Dryden insured Goessl "only with respect to the conduct of a business of which he/she is the sole proprietor ...."(R174) (emphasis added) The term "sole proprietor" has a definite and precise meaning. It refers to the owner of a business, not an employee for another business. The named insured was "Stanley Goessl doing business as S&K Plumbing." As established in Dryden’s Main Brief and Point I of this Reply Brief, the fire occurred at the Smolniks’ residence when Goessl was working as an employee for A.P. Daino. The Dryden policy therefore did not insure Goessl for the fire that apparently resulted from his work. When the terms of an insurance policy are clear and unambiguous, "the intent of the parties must be found therein." See Nicholas v. Nicholas, 306 N.Y. 490, 494 (1954). See W.W.W. Assoc., Inc. v. Giancontieri, 77 N.Y.2d 157 (1990); Greenfield, 98 N.Y.2d at 565. An insurance contract "is unambiguous if the language it uses has ’a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion.’" White v. Continental Cas. Co., 9 N.Y.3d at 267 (quoting Greenfield, 98 N.Y.2d at 569) Therefore, "if the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity." Id__~. See 32 Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004). A clear and unambiguous contract will not be "subverted by straining to find an ambiguity which otherwise might not be thought to exist." Uribe v. Merchants Bank ofN. Y., 91 N.Y.2d 336, 341 (1998) (quoting Loblaw, Inc. v. Employers’ Liability Assurance Corp. Ltd., 57 N.Y.2d 872, 877 (1982)). "While it is true that policies of insurance are to be construed liberally in favor of the insured and strictly against the insurer, where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement." Government Emp. Ins. Co. v. Kligler, 42 N.Y.2d 863,864 (1977). Main Street fails to support its claim that the language of the Dryden policy is "susceptible of two reasonable interpretations" and therefore ambiguous. Resp. Br. p. 17. It offers no reasonable alternative interpretation of the Dryden policy because there is none. As such, this Court must enforce the Dryden policy as written. D. The term "employee" as used in the Dryden pokey has a direct bearing on the meaning of tl~e term "sole proprietor" as used in the Dryden pokey With little or no supporting argument, Main Street claims that "the Dryden policy’s definition of ’employee’ are [sic] immaterial to the question 33 of whether Goessl qualifies as an insured under its (or Main Street’s) policy." Resp. Br. p. 15. Main Street’s claim is contrary to law and fact. When analyzing an insurance contract, "[p]articular words should be considered, not as if isolated from the context, but in light of the obligation as a whole and the intention of the parties manifested thereby." See Kolbe v. Tibbetts, 22 N.Y.3d 344, 353 (2013) (quoting Riverside Planning Corp. v. CRP/Extell Riverside, L.P., 13 N.Y.3d 398, 404 (2009). Brad H. v. City of New York, 17 N.Y.3d 180, 185-86 (2011). An interpretation that "gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part...of no effect." Restatement [Second] of Contracts §203[a]. Provisions in an insurance contract on the same subject do not have a separate existence from each other. Madawick Contracting Co., 307 N.Y. 111, 117 (1954). "Form should not prevail over substance and a sensible meaning of words should be sought." Cass v. Cass, 91 N.Y.2d 554, 566 (1998) (quoting Atwater & Co. v. Panama R.R. Co., 246 N.Y. 519, 524 (1927)). "A cardinal principle governing the construction of contracts is that the entire contract must be considered and, as between possible interpretations of an ambiguous term, that will be chosen which best accords with the sense of the remainder 34 of the contract." Rentways, Inc. v. O’Neill Milk & Cream Co., 308 N.Y. 342, 347 (1955). When examining the Dryden policy as a whole, the policy made clear that Goessl was not insured as an "employee" under the policy. (R148) An "employee" under the Dryden policy was someone who worked for Goessl under his direction and control when doing business as S & K Plumbing. Id. With property damage, an employee of Goessl was insured "while acting within the scope of his duties." (R175) The policy did not define an employee according to how the person was labeled. See Id. It defined an employee according to whether the person was subject to Goessl’s direction and control. For example, when discussing coverage for "employee dishonesty" and "money and securities," the Dryden policy defined an employee as a "person who is engaged in a service usual to your business operations and to whom you pay salary, wages, or commission." (R148; 164-67) The policy further said that an "employee" was a person over whom Goessl had "the exclusive right to direct this person in the performance of his/her service." Id. The definition of"employee" further "exclude[ed] any...contractor ...."Id E. Main Street asks this Court to ignore well-settled precedent of this Court that the "actual relationship" between an employer and employee governs, and not a label that the employee is an "independent contractor" 35 When arguing that the oral agreement between Daino and Goessl falsely labeling Goessl an "independent contractor" should govern, Main Street asks this Court to ignore this Court’s well-established precedent that it is the "actual relationship" between the parties that governs. Main Street argues inconsistently that this Court’s precedent on the common law meaning of an employee (which includes the principle that the actual relationship governs) is limited to "workers compensation and unemployment insurance disputes." Resp. Br. pp. 18-19; Compare Resp. Br. pp. 20-30 (wherein Main Street agrees that such precedent governs whether Goessl is insured under the Main Street policy). Main Street is wrong that this Court’ s precedent is limited to workers compensation and unemployment insurance disputes. This Court has applied the common law definition for employee and independent contractor based on the actual relationships in many other contexts. See e.g. O ’Brien v. Spitzer, 7 N.Y.3d 239 (2006)(whether referee of foreclosure sale was state employee entitled to defense and indemnification from state for lawsuit relating to sale); Liberman v. Gallman, 41 N.Y.2d 774 (1977) (whether taxpayer was not an employee of manufacturer and therefore subject to unincorporated business tax); Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193 (2003) (whether temporary waiters were employees and therefore entitled to benefits under the Labor Law); Lazo v. Mak’s Trading Co., Inc. 84 36 N.Y.2d 896 (1994) (whether laborer was employee of grocer thereby rendering grocer liable in tort for negligent acts of laborer); Scott v. Massachusetts Mutual Life Ins. Co., 86 N.Y.2d 429 (1995) (whether person was employee for purpose of provision in human rights law prohibiting employment discrimination). In each of these cases, this Court examined the actual relationship between the parties to determine whether the worker was an employee. Main Street also appears to contend that this Court’s precedent on the common law meaning of employee does not apply to the resolution of disputes involving third parties. Resp. Br. p. 19. Main Street relies on Murray v. Union Ry. Co. ofN. Y. City, 229 N.Y. 110 (1920), a case cited by Dryden in its Main Brief. Main Street relies on Murray to argue that the worker must understand that he is an employee. Id. Main Street then quotes Murray as saying: "We are not concerned at the moment with cases in which the rights of third persons are involved." Id. at 113. Murray did not decide the rights of third parties because it was not an issue in that case. In Lazo v. Mak’s Trading Co., Inc. 84 N.Y.2d 896 (1994), the rights of a third party were at issue. This Court applied common law precedent on the meaning of an employee to determine whether a laborer was an employee of a grocer thereby rendering the grocer liable in tort for the negligent acts of a laborer toward a third party. 37 Main Street, in support of its erroneous position that "Goessl’s intention ... governs Dryden’s obligations" cites to the case of Essex Insurance Co. v. Pingley, 41 A.D.3d 774 (2no Dep’t 2007). Main Street’s reliance on Essex is misplaced, and in fact Essex supports Dryden’s contention that the actual relationship, and not any agreement which mislabels that relationship, is what controls the insurer’s obligation under the terms of the policy. In Essex, the named insured and the claimant/Mr. Pingley entered into a "business relationship" which, based on the actual relationship, the Appellate Division found that Mr. Pingley was an independent contractor, and not an employee of the named insured. The Appellate Division’s decision cited facts evidencing the actual work relationship in determining that Mr. Pingley was an independent contractor and made no reference to any label, intention or conclusory statement that he was an independent contractor. Nowhere in Essex is there a finding of overwhelming evidence of an employee relationship that was trumped or usurped by an agreement or understanding between Mr. Pingley or the named insured that Mr. Pingley would be an independent contractor. Rather, the Appellate Division, in finding that the insurer was bound to provide coverage, followed Court of Appeals precedent and based its findings on the actual relationship. 38 Main Street does not want this Court to apply the rule that it is the actual relationship between the parties and not a fictitious label that governs because there is "overwhelming evidence" in this case that Goessl was actually an employee. See App. Br. Pt. II, Reply Br. Pt. I. When the "actual relationship" between the parties demonstrates the existence of an employer-employee relationship, any agreement to the contrary has little or no weight. See Id. F. There is longstanding case precedent that insurance policy obligations are interpreted based on an insured’s "reasonable" expectations and not subjective expectations In deciding when an individual or company is an insured, New York courts consistently look to the "reasonable expectations" as evidenced by the actual relationship and give little to no weight to what an alleged insured thinks, believes or agreed to with a third person not the insurer. Baughman v. Merchants Mutual Insurance Company, 87 N.Y.2d 589 (1996). What is explicit in every New York court decision analyzing an insurer’s potential coverage obligations is a consideration or evaluation of the actions of the insured with little to no regard or evidentiary value placed on what the insured thinks or believes or agrees to with a third person not a party to the insurance contract. See Baughman, su__u_u_u_u_u_u_u_u~_ (the issue was whether the vehicle was being used "exclusively in the business of the named insured" as required by the policy language and not whether the insured or the person 39 seeking coverage thought, believed or had agreed whether the vehicle was being used exclusively in the business of the named insured). In another example, the insuring agreement of a standard homeowner’s insurance policy in New York State defines an "insured" as including "persons under the age of 21 in your [named insured’s] care." Utica Fire Insurance Company of Oneida County v. Gozdziak, 198 A.D.2d 775 (4th Dep’t 1993). New York courts have held that what determines whether an infant is "in the care of’’ a named insured is whether the named insured provides financial support to, or disciplinary control of, the child--the actual relationship. See Pattengell v. Welsh, 81 A.D.2d 831 (2nd Dep’t 1981) aff’d 53 N.Y.2d 917 (1981); New York Central Mutual v. Sweet, 16 A.D.3d 1013 (3rd Dep’t 2005); Chautauqua Patrons Insurance Company v. Ross, 38 A.D.3d 1190 (4th Dep’t 2007); and Utica Fire Insurance Company of Oneida County v. Gozdziak, 198 A.D.2d 775 (4th Dep’t 1993); If a named insured enters into an oral agreement with a child such that they mutually agree that the child will be in the named insured’s care, but if the actual relationship is a fiction such that the child does not live with the named insured and the named insured provides no financial support to, or disciplinary control of, the child, then, presumably, no New York:court would rule that an insurance company would be bound by an agreement which 40 creates a fiction that is not manifested or evidenced by the actual relationship (i.e., the named insured providing either financial support to, or disciplinary control of, the child). To impose liability coverage on the insurance company based on a fiction is a bad precedent that could unfairly destabilize the insurance industry. New York courts simply do not allow agreements between an alleged insured and some third party to control or determine an insurance company’s obligation in the absence of proof that the agreement is reflective of the actual relationship. Notwithstanding that the child had an oral agreement with the named insured that the child would be in the named insured’s care, the child would not have a "reasonable expectation" of coverage under the named insured’s policy because, in fact, the actual relationship evidences that the child was not in the care of the named insured. By analogy, any employee of General Motors who negligently installs a motor on the General Motors assembly line cannot reasonably expect that the liability insurance policy he purchased for doing side jobs repairing cars out of his garage as a sole proprietor/independent contractor, would cover him for his negligence while working as an employee on the General Motors assembly line, notwithstanding that the worker and General Motors may have labeled him an independent contractor. 41 There is longstanding case precedent in New York supporting the proposition that when an individual seeks liability insurance coverage under an insurance policy the court, in deciding coverage, will look to the actual relationship out of which insured status allegedly arises and will give little to no weight to an insured’s "intention" or to an agreement in which the insurer is not a party which attempts to label the relationship. See generally Baughman v. Merchants Mutual Insurance Company, 87 N.Y.2d 589 (1996); Utica Fire Insurance Company of Oneida County v. Gozdziak, 198 A.D.2d 775 (4th Dep’t 1993); Liberman v. Gallman, 41 N.Y.2d 774 (1977); Essex Insurance Co. v. Pingley, 41 A.D.3d 774 (2nd Dep’t 2007). What controls for purposes of deciding whether to impose a contract obligation on an insurance company is the insured’s acts (providing financial support or disciplinary control) and not an insured’s "intentions." In the case at bar, Daino’s or Goessl’s "intentions" may have been that Goessl be labeled an independent contractor, but that label is inconsistent with the acts of Goessl and Daino where, for several years, there was "overwhelming evidence" that Goessl was acting as Daino’s employee. Main Street, in its brief before this Court, does not put forth one court ~decision supporting its contention that Dryden’s coverage obligation can be ¯ determined by an alleged insured who mislabels or incorrectly describes the 42 activity or employment status in contravention of the actual relationship. Main Street does not set forth one court decision supporting its contention that Dryden, though not a party to the alleged oral agreement between Goessl and Daino which allegedly labeled Goessl an independent contractor, should be bound by it. In fact, the Court of Appeals has always been careful not to bind insurance companies based on agreements of which the insurer is not a party in contravention of what is reflected by the actual relationship. See generally Murray v. Union Railroad Co. of New York City, 229 N.Y. 110 (1920) ("we are not concerned at the moment with cases in which the rights of third persons are involved"); see generally First State Insurance Company v. J&S United Amusement Corp., 67 N.Y.2d 1044 (1986) ("because [the insurer] is neither party to nor a participant in the tort action, the employment determination made in that action is not conclusive with respect to its obligation with respect to its obligation to indemnify.") Main Street’s position and the Appellate Division majority’s decision, which relies heavily on the alleged "business arrangement" between Dryden and Goessl to determine Dryden’s duty under its policy, flies in the face of longstanding case precedent, which looks to the actual relationship in determining the insurer’s duty to provide liability coverage. 43 G. In addition, the oral agreement between Daino and Goessl could not modify the coverage in the Dryden policy because Dryden was not a party to the agreement, did not know about the agreement, and did not agree to it Contrary to Main Street’s completely unsupported claim, Dryden did not know of the existence of the oral agreement. Moreover, had Dryden known of the oral agreement Dryden would not have insured Goessl because he was working as an employee of another company that Dryden did not insure. (R338) Such relationship involved greater risks. Contrary to Main Street’s completely unsupported claim, Dryden did not know of the existence of the oral agreement. Main Street states that "Dryden was or should have been, at all times, fully aware" that Goessl was receiving income from A.P. Daino. Resp. Br. p. 11. The fact that Main Street included the words "should have known" in its statement to this Court is a tacit admission that there is no record support for the assertion that Dryden knew about the oral agreement. Dryden adamantly states that it did not know of the oral agreement labeling Goessl an independent contractor. The record demonstrates such fact. Moreover, the record shows that Dryden would not have insured Goessl for his work as an employee for A.P. Daino had it known. There was nothing in Goessl’s application for insurance to indicate that Goessl was doing any work for A.P. Daino. (R340-46) Under "Applicant Information" the application simply said "Stanley Goessl dba S&K 44 Plumbing." (R341) Under "Nature of Business/Description of Operation by Premise(s)", the application said "[p]lumbing on new houses [and] [h]ome inspections for residential home buyers." Id. The application listed his estimated income and "First Preston" as an "Additional Insured." (R343-44) As acknowledged by Main Street, Goessl later obtained the Certificate of Insurance from Goessl’s insurance agent, Haylor, Freyer & Coon, Inc., not Dryden. Resp. Br. p. 29. The foregoing demonstrates that Dryden only knew Goessl sought liability coverage "solely for plumbing and home inspection work he was performing as a sole proprietor doing business as S&K Plumbing." (R337) Had Dryden known of the oral agreement and Goessl’s work as an employee for A.P. Daino, Dryden would not have insured Goessl for that work. Dana J. Abbey, Chief Operating Officer and head of the underwriting department at Dryden, unequivocally stated that Dryden had "never knowingly insured the employee of a business for that employee’s liability arising out of business activities without Dryden also insuring the business." (R337-38) (emphasis in original) Abbey affirmed there "are no underwriting guidelines that apply to this situation because it is so fundamental to the risk being insured that none are necessary." (R338) 45 Abby explained that Dryden and "any other insurer" would not insure an employee of a company without also insuring the company because "then a company could have its employee who does the riskiest work (i.e. the work that most likely would result in a liability claim) obtain separate insurance from the company." Id. The employer "could then obtain its own policy and stand a better chance at avoiding losses or claims and thus minimize its insurance premium. Id. Such action by the employer "would minimize the cost of insurance to the company by unfairly transferring unto the insurer of the employee a risk that should be insured by the insurer of the company." Id. In fact, Goessl testified that Craig Daino assigned him the riskier work. (R375) In sum, had Dryden known that Goessl, an employee of A.P. Daino, "wanted Dryden to insure him for his liability as an employee of A.P. Daino, Dryden would not have insured Mr. Goessl for his potential liability." (R338) Although the policy did not insure Goessl for his work while an employee of A.P. Daino, it did insure him for the side jobs he did when conducting his business as a sole proprietor. Goessl recognized the need for liability insurance for this work before Craig Daino approached him and offered him "a job" with A.P. Daino. After Goessl commenced employment with A.P. Daino, he continued his business as a sole proprietor doing side jobs. The Dryden policy insured 46 Goessl on the side jobs. As the years passed, the Dryden policy continued to insure Goessl for any damage or injury that resulted from his work on the hundreds of side jobs he had done over the years, provided that the damage or injury occurred during the policy period. The Dryden policy also put Goessl in a position to accept new side jobs, even if no work materialized. H. The alleged oral agreement between Goessl and Daino has little to no evidentiary weight in deciding insurance coverage because Goessl did not know whether he was an employee or an independent contractor Main Street erroneously asserts that Goessl and Daino "deliberately constructed a relationship to remain independent from each other." Resp. Br., p. 19. Such an assertion by Main Street flies in the face of the trial court’s findings after a jury trial and by the Appellate Division dissent of "overwhelming evidence" of Goessl’s employee status and not independent contractor status. Moreover, such an assertion by Main Street is inconsistent with the trial record, including Goessl’s testimony, his affidavit and his pleadings, in which he states and asserts that he does not know if he was an employee or independent contractor while doing the Daino work out of which his potential liability arose. (R57-59; 125-134; 363; 531-532) Craig Daino referred to his other plumbers and apprentices as his "official employees." (R490) By implication Craig Daino meant that Goessl was his "unofficial" employee. The label "independent contractor" was a 47 fiction. After the fire, Craig Daino told Officer Matthews that Goessl was his "employee." (R61; 312) Goessl also testified that when he went out on A.P. Daino jobs, he "considered [him]self to be [A.P. Daino’s] employee." (R57; 363) Goessl also told A.P. Daino’s customers that he was "Stan from A.P. Daino." (R53; 364; 380) By the time of the fire, even the fiction that Goessl was an independent contractor no longer served its purpose. Goessl derived all his income from A.P. Daino but none of the benefits of an employee. Goessl wanted Criag Daino to make him an "official" employee but knew Daino would not. Such fact demonstrates the unequal bargaining power of Goessl and similarly situated employees who are subjected to such unfair agreements. Goessl takes no position in this case whether he was an employee or independent contractor. (R138; 532) He just wants coverage. Here, Main Street has the duty to provide that coverage under the terms of its policy. See Point II. I. Policy concerns weigh heavily against enforcement of the oral agreement fictitiously labeling Goessl as an "independent contractor" As correctly observed by the dissenting judge in the Fourth Department, the majority’s decision relieving Main Street of its liability coverage obligation "militates against the improper and unscrupulous classification of employees as independent contractors." (R693) Strong policy considerations 48 require a finding that the oral agreement between A.P. Daino and Goessl falsely labeling Goessl an "independent contractor" is unenforceable. First, enforcement of the oral agreement will encourage unscrupulous employers to make employees sign agreements falsely labeling them as "independent contractors." Employers will then assign those employees riskier work, thereby keeping the premiums for the company insurance unfairly low while putting the burden of the risk on the employees. Enforcement will also encourage unscrupulous employers to have employees enter into such agreements to eliminate the employers’ duties to pay employee benefits and withhold taxes. Second, innocent parties who believe that the company they hired to perform work will be responsible for the payment of loss due to negligent work, will learn after a loss that their recourse is against the employee’s policy. The employee’s policy will likely have lesser coverage than an employer’s policy because an employee generally has less ability to afford premiums. Third, enforcement of the oral agreement will wreak havoc on the insurance industry because insurers will be reluctant to issue liability insurance under these circumstances when parties can enter into agreements 49 that falsely label an employee as an insured, it will be difficult if not impossible for the insurers to assess risk and calculate premiums. Finally, enforcement of the oral agreement will increase the possibility of fraud. After sustaining a loss, parties falsely claim that they had a preexisting oral agreement that created coverage under a policy. 5O POINT IV ALTERNATIVELY, IF BOTH DRYDEN AND MAIN STREET HAVE A COVERAGE OBLIGATION TO GOESSL, THEN THE INSURERS ARE CO-PRIMARY INSURERS FOR THE ACCIDENT Both Dryden and Main Street have argued that the other’s policy provides liability coverage to Goessl for the accident. If this Court concludes that both insurers provide liability coverage to Goessl, then the issue is whether the two insurers both provide primary coverage or only one insurer’s policy would be excess over the other insurer’ s policy. Both Dryden and Main Street have "other insurance" clauses in their policies. Based on this Court’s precedent, the "’other insurance" clauses cancel each other out. Therefore, Dryden and Main Street would both be obligated to provide co-primary coverage on a 50% - 50% basis. A. Applicable New York Law The New York Court of Appeals has held that where two insurers have "other insurance" clauses that both purport to make their insurance policy excess over any other available liability coverage, the "other insurance" clauses cancel one another out and the two insurers must provide liability coverage on a co-primary basis. As this Court has held: The general rule is, of course, that where there are multiple policies covering the same risk, and each generally purports to be excess to the other, the 51 excess coverage clauses are held to cancel out each other and each insurer contributes in proportion to its limit amount of insurance. (citations omitted) Lumbermens Mutual Casualty Company v. Allstate Insurance Company, 51 N.Y.2d 651,655 (1980). The "Other Insurance" Clauses Of The Dryden And Main Street Policies. 1. The Main Street Policy. The Main Street policy contains an "other insurance" clause which states, in pertinent part: H. Other Insurance 1. If there is other insurance covering the same loss or damage, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect on it or not. But we will not pay more than the applicable Limit of Insurance. 2. Business Liability Coverage is excess over any other insurance that insures for direct physical loss or damage. 3. When this insurance is excess, we will have no duty under Business Liability Coverage to defend any claim or "suit" that any other insurer has a duty to defend. If no other insurer defends, we will undertake to do so; but we will be entitled to the insured’s rights against all those other insurers. (R243) 2. The Dryden Policy. 52 The Dryden policy’s "other insurance" clause states, in pertinent part: 10. Insuranee Under More Titan One Policy. a) Insurance under this General Liability Coverage is primary except as provided under paragraph 10c. below, or unless otherwise stated. The amount of our liability is not reduced because of other insurance which applies to the loss on other than a primary basis. b) If the other insurance is also primary, we will share in the loss as follows: (1) If the other insurance provides for contribution by equal shares, we will pay equal amounts with other insurers until: (a) the lowest applicable limit under any one policy is reached; or (b) the full amount of the loss is paid. If part of the loss remains unpaid, we will pay an equal share with the other insurers until the full amount of the loss is paid, or until we have paid out" limit in full. (2) If the other insurance does not provide for contribution by equal shares, we will pay no more than that proportion of the loss to which the applicable limit under this policy for such loss bears to the total applicable limit for all insurance against the loss. c) Insurance under this General Liability Coverage is excess over any other insurance: (1) if the other insurance, whether primary, excess, contingent or on any other basis, provides: (a) fire, extended coverage, builders’ risk, installation risk or similar coverage for your work; or (b) fire insurance for premises rented to you; or (2) if the other insurance applies to any loss arising out of the maintenance or use of aircraft, autos or watercraft which may be covered by this policy. d) When this insurance is excess over any other insurance: (1) we will have no duty under Coverage L to defend any claim or suit that any other insurer has a duty to defend. If no other insurer defends, we will do so. However, we will be entitled to the insured’s rights against all those other insurers. (2) we will pay our share of the amount of loss, if any, that exceeds the sum of: (a) the total amount that all such other insurance would pay for the loss in the absence of this insurance; and (b) the total of all deductibles and self- insured amounts required by such other insurance. We will share the remaining loss with any other insurance that is not described in this excess insurance provision and was not bought specifically to apply in excess of the limits of insurance shown on the Declarations page, the Supplemental Declarations page or attached endorsements of this General Liability Coverage. 54 (R184-85) C. The Dryden policy and Main Street policy each purport to be excess over the other The Dryden policy states in its "other insurance" clause that the Dryden liability coverage "is excess over any other insurance: (1) if the other insurance, whether primary, excess, contingent or on any other basis provides: ... installation, risk or similar coverage for your work." (R184) The Main Street policy states in its "other insurance" clause that: If there is other insurance covering the same loss or damage, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, ... Business Liability Coverage is excess over any other insurance that insures for direct physical loss or damage. (R243) The Dryden and MainStreet clauses both attempt to make their respective policies excess over the other’s policy. Under New York law, the excess clauses effectively cancel one another out. Under well-established precedent of this Court, if both Dryden and Main Street have a coverage obligation, they are co-primary in their obligation to provide that coverage. See Lumbermens, supra. Given that both Dryden and Main Street policies provide liability limits of $1,000,000 per occurrence, if both policies are found 55 by this Court to provide coverage, the two insurers are obligated to pay, on a 50% - 50% co-primary basis, both defense and indemnification costs up to their respective policy limits. Id. If this Court finds that both Dryden and Main Street have a liability coverage obligation to Mr. Goessl, then this Court should find that both Dryden and Main Street are co-primary as to that coverage obligation. 56 POINT V MAIN STREET ERRONEOUSLY ASSERTS THAT THE APPELLATE DIVISION DID NOT MAKE NEW FACTUAL FINDINGS A. Main Street asserts that the Appellate Division’s majority decision is based solely on a new "legal finding" and not on new factual findings. Main Street erroneously asserts that the majority decision of the Appellate Division did not make new factual findings but rather made a new "legal finding" based on facts in the record. Resp. Br. p. 13. Main Street claims that the new legal finding is based on, among other things, the following facts: (1) A.P. Daino did not provide Goessl with health insurance; (2) A.P. Daino did not withhold employment taxes from Goessl’s pay; (3) Goessl submitted invoices to A.P. Daino; and (4) Goessl received a 1099 form from A.P. Daino. Resp. Br. pp. 13-14. Of note, the foregoing "facts" are typically present in every case in which an employer with unequal bargaining power mislabels or incorrectly describes a worker as an independent contractor to avoid paying such things as health insurance, employee taxes, Division dissenting judge observed Section II intentionally reporting employees as and vacation pay. The Appellate that "Worker’s Compensation Law was amended because ’unscrupulous employers [were] independent contractors to state and 57 federal authorities or worker’s compensation carriers in record numbers.’" (citations omitted) (R 692) Other facts upon which Main Street relies to support its claim that the Appellate Division’s majority decision solely made a new legal finding include: (1) Goessl obtained his own liability insurance policy, and (2) Goessl paid his own premiums. Resp. Br., p. 14. Main Street ignores the fact that Goessl obtained liability insurance even before he began working for A.P. Daino when he started his business doing non-Daino work as an independent contractor. (R69) Main Street ignores the fact that Dryden’s insurance policy covered Goessl for hundreds ofnon-Daino side jobs. (R339) Employees who perform side jobs often obtain liability insurance coverage for those jobs and the purchase of such insurance does not determine a worker’s employment B. The Appellate Division’s majority decision is based on new findings of fact Main Street fails to acknowledge that the Appellate Division’s reversal is based primarily on its factual finding that "A.P. Daino and Goessl intentionally structured their business relationship as a long-term subcontracting arrangement rather than an employment relationship" and that "Daino and Goessl intentionally entered into a business arrangement whereby Goessl was an independent contractor rather than an employee." (R691) 58 status. The Appellate Division’s majority ignored Goessl’s testimony that he did not know whether he was an independent contractor or an employee while he worked for A.P. Daino. (R57) The Appellate Division’s majority also ignored Goessl’s testimony that he did not ask to be treated like other A.P. Daino employees because he did not think that Mr. Daino would agree to it. (R59) Finally, the Appellate Division’s majority ignored the fact that there was no evidence in the trial record that Goessl agreed that he would not be covered under A.P. Daino’s policy with Main Street. The majority’s factual finding that Goessl intentionally entered into an independent contractor relationship and that such relationship was still in effect on the date of the fire is contrary to the overwhelming evidence in the record. The Appellate Division dissent criticized the majority for its failure to follow the correct standard of review of the facts: Upon such a review, the record should be "viewed in the light most favorable to sustain the judgment (citation omitted) and this court should evaluate "the weight of the evidence presented and grant judgment warranted by the record, giving due deference to the trial court’s determinations regarding witness credibility so long as those findings could have been reached upon a fair interpretation of the evidence" (citation omitted). (R 692) ~9 The trial court gave little or no weight to the alleged oral agreement between A.P. Daino and Goessl. (R12-20) Among other things, the trial court obviously credited Goessl’s testimony that he was uncertain nine years after he started working full time for A.P. Daino whether he was an independent contractor or an employee ofA.P. Daino. Among other reasons, the trial court also gave little or no weight to the oral agreement between Craig Daino and Goessl because of the unequal bargaining power between them and the overwhelming evidence showing that their actual relationship was employer and employee. In its brief, Main Street does not dispute that the trial court’s findings of fact were "reached under [a] fair interpretation of the evidence." See 409- 411 Sixth Street, LLC v. Mogi, 22 N.Y.3d 875, 876 (2013). The Appellate Division substituted "its own view of the trial evidence" and made a new factual finding that Goessl allegedly had a clear understanding that he was an independent contractor and that Goessl had no expectation that he would be covered under A.P. Daino’s liability insurance policy. The majority made this new factual finding notwithstanding that Goessl was doing A.P. Daino jobs; that Goessl was under A.P. Daino’s direction and control; that Goessl was using A.P. Daino’s tools and equipment; and that Goessl was introducing himself to customers as "Stan from A.P. Daino." 60 This Court should find that the majority did not apply the correct standard of review and improperly substituted its own view of the trial evidence. If this Court does not grant the relief sought in Points I through III of this Reply Brief, then this Court should remit this case to the Appellate Division with instructions to apply the correct standard of review. CONCLUSION This Court should reverse the decision and order of the Fourth Department and reinstate the order of the trial court ruling against Main Street and for Dryden. In the alternative, this Court should find that both the Dryden policy and Main Street policy provide coverage to Goessl on a co-primary basis. In the altemative, this Court should find the Appellate Division applied an incorrect standard of review and remit the case to the Appellate Division to apply the correct standard of review. Dated: February 4, 2015 Respectfully submitted, KNYCH & WHRITENOUR, LLC ~ Peter W. Knych,l~sq. 61 Attorneys for Plaintiff-Appellant Dryden Mutual Insurance Company Office and P.O. Address One Park Place, Suite 404 300 South State Street Syracuse, New York 13202 Telephone: (315) 472-1175 Bru ¯ ry , Esq. Appellate Counsel for Plaintiff-Appellant Dryden Mutual Insurance Company Office and P.O. Address 333 E. Onondaga St. Syracuse, New York 13202 Telephone: (315) 476-1800 TO: Robert A. Crawford, Esq. Jessica L. Foscolo, Esq. KENNY SHELTON LIPTAK NOWAK, LLP Attorneys for Defendants/Respondents A.P. Daino Plumbing & Heating, Inc. and The Main Street America Group 14 Lafayette Square, Suite 510 Rand Building Buffalo, New York 14203 Telephone (716) 853-3801 Thomas J. Lynch, Esq. LYNCH LAW OFFICE Attorneys for Defendant Stanley Goessl 2700 Bellevue Avenue Syracuse, New York 13219 Telephone: (315) 471-1318 62