June 13, 2003.
Appeal from a judgment (denominated order) of Supreme Court, Onondaga County (McCarthy, J.), entered December 14, 2001, which, inter alia, granted defendant's cross motion for summary judgment.
SMITH, SOVIK, KENDRICK SUGNET, P.C., SYRACUSE (GABRIELLE MARDANY TUCCI OF COUNSEL), FOR PLAINTIFF-APPELLANT.
BROWN MICHAELS, PC, ITHACA (FRANCIS LOSURDO OF COUNSEL), FOR DEFENDANT-RESPONDENT.
PRESENT: PIGOTT, JR., P.J., PINE, HURLBUTT, LAWTON, AND HAYES, JJ.
MEMORANDUM AND ORDER
It is hereby ORDERED that the judgment so appealed from be and the same hereby is modified on the law by granting judgment in favor of defendant as follows:
It is ADJUDGED and DECLARED that plaintiff is not entitled to a defense or indemnification from defendant with respect to the underlying actions and as modified the judgment is affirmed without costs.
Plaintiff commenced this action seeking judgment declaring, inter alia, that defendant must defend and indemnify plaintiff in two underlying personal injury actions. Plaintiff entered into a construction contract with subcontractor M.S. Olender Sons (Olender) to complete the "rough framing scope" on a project. Pursuant to that subcontract, Olender was required to name plaintiff as an additional insured under a subcontractor's comprehensive general liability and property damage policy. Plaintiff was named as an additional insured in the certificate of liability insurance issued by defendant to Olender. The plaintiffs in the underlying personal injury actions are two employees of Olender who were injured while working on the project. When plaintiff demanded that defendant defend and indemnify it in those two underlying actions, defendant disclaimed coverage based on policy exclusions. Plaintiff moved for summary judgment seeking, inter alia, an order striking the affirmative defenses in the answer and a declaration that defendant must defend and indemnify plaintiff in the underlying actions. Defendant cross-moved for summary judgment dismissing the complaint and a declaration that plaintiff is not entitled to a defense or indemnification from defendant. Supreme Court denied the motion and granted the cross motion.
We do not consider plaintiff's contention, raised for the first time on appeal, that defendant is estopped from denying coverage with respect to one of the underlying actions because its disclaimer was untimely and that there is an issue of fact whether its disclaimer was untimely with respect to the other underlying action ( see Matter of USAA Cas. Ins. Co. [Kaufman], 261 A.D.2d 275, lv denied 94 N.Y.2d 758; see also Fischer v. Zepa Consulting, 263 A.D.2d 946, 947, affd 95 N.Y.2d 66; Deputy Sheriff's Benevolent Assn. of Onondaga County v. County of Onondaga, 288 A.D.2d 953, 954). "It is well settled that `[a]n appellate court should not, and will not, consider different theories or new questions, if proof might have been offered to refute or overcome them had those theories or questions been presented in the court of first instance'" ( Ciesinski v. Town of Aurora, 202 A.D.2d 984, 985).
We reject plaintiff's further contention that the policy exclusion relied upon by the court in granting the cross motion does not apply with respect to the two underlying actions. Pursuant to that exclusion, there is no coverage for " bodily injury to an employee of an insured if it occurs in the course of employment." Plaintiff contends that the exclusion does not apply to it. We disagree. The term "an insured" is unambiguous and, when used in the policy, encompasses both Olender and plaintiff ( see Moleon v. Kreisler Borg Florman Gen. Constr. Co., 304 A.D.2d 337, 340 [Apr. 3, 2003]; Consolidated Edison Co. of N.Y. v. United Coastal Ins. Co., 216 A.D.2d 137, lv denied 87 N.Y.2d 808; Tardy v. Morgan Guar. Trust Co. of N.Y., 213 A.D.2d 296). The exclusion thus applies to plaintiff as an additional insured because the plaintiffs in the underlying actions were employees "of an insured," i.e., Olender ( cf. Greaves v. Public Serv. Mut. Ins. Co., 5 N.Y.2d 120, 125).
Inasmuch as the court failed to declare the rights of the parties in this declaratory judgment action ( see Pless v. Town of Royalton, 185 A.D.2d 659, 660, affd 81 N.Y.2d 1047; Maurizzio v. Lumbermens Mut. Cas. Co., 73 N.Y.2d 951, 954; Boyd v. Allstate Life Ins. Co. of N.Y., 267 A.D.2d 1038, 1039), we modify the judgment by granting judgment in favor of defendant declaring that plaintiff is not entitled to a defense or indemnification from defendant with respect to the underlying actions.
We respectfully dissent. In our view, plaintiff is entitled to coverage under the policy of insurance issued by defendant. When plaintiff, the general contractor on the project, contracted with subcontractor M.S. Olender Sons (Olender) to perform framing work on the project, it insisted that it be named as an additional insured on Olender's insurance policy in order to be covered under that policy in the event of an accident such as occurred here. When two of Olender's employees fell from a height, were injured and brought actions against plaintiff pursuant to Labor Law 240(1), plaintiff accordingly turned the claims over to defendant. This is so common a practice that it is governed by its own rule, i.e., the antisubrogation rule ( see generally North Star Reins. Corp. v. Continental Ins. Co., 82 N.Y.2d 281, 294-295). Pursuant to the antisubrogation rule, an insurer "has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered" ( id. at 294). Thus, defendant must undertake, under the policy, to defend each insured under its policy unless coverage is excluded under the terms of the policy. The policy exclusion at issue here states:
"8. We do not pay for:
"a. bodily injury to an employee of an insured if it occurs in the course of employment * * *.
"Exclusion 8. applies where the insured is liable either as an employer or in any other capacity; or there is an obligation to fully or partially reimburse a third person for damages arising out of paragraph 8.a. * * * above * * *" (italics added).
Defendant maintains, and the majority agrees, that the above exclusion, which expressly applies to bodily injury to an employee of an insured, in actuality applies to bodily injury to an employee of any insured. We cannot agree. Defendant has separate and distinct obligations to Olender as the primary insured and to plaintiff as the additional insured under the separability of insureds doctrine ( see Greaves v. Public Serv. Mut. Ins. Co., 5 N.Y.2d 120, 124-125; Morgan v. Greater N.Y. Taxpayers Mut. Ins. Assn., 305 N.Y. 243, 247-248). "[A]n additional although unnamed insured * * * [is] to be treated as if [it has] a separate policy" in determining the applicability of an exclusion ( Greaves, 5 N.Y.2d at 125). Thus, the obligations of defendant to plaintiff, as the additional insured, must be considered separately from its obligations to Olender, as the named insured ( see BMW Fin. Servs. v. Hassan, 273 A.D.2d 428, 429, lv denied 95 N.Y.2d 767). Here, the policy excludes coverage for bodily injuries sustained by "an employee of an insured." Applying the aforementioned principles and reading that exclusion as if the policy had been issued separately to plaintiff, we conclude that the injuries were not sustained by "an employee of an insured" for the simple reason that, here, the injured persons were not in fact employees of plaintiff. That interpretation properly construes the language of the policy and is consistent with the fact that plaintiff insisted that it be named as an additional insured on Olender's insurance policy as well as the fact that Olender agreed to do so. Were that not the case, plaintiff would not be barred by the antisubrogation rule from seeking recovery from Olender and, indeed, could commence a third-party action against Olender for contribution and/or indemnification — the precise scenario that the parties sought to avoid by having plaintiff named as an additional insured.
In our view, the majority's reliance on Consolidated Edison Co. of N.Y. v. United Coastal Ins. Co. ( 216 A.D.2d 137, lv denied 87 N.Y.2d 808) and Tardy v. Morgan Guar. Trust Co. of N.Y. ( 213 A.D.2d 296) is misplaced. Those cases both involved a policy exclusion for "bodily injury to any employee of any named insured" ( Consolidated Edison Co. of N.Y., 216 A.D.2d at 137 [emphasis added]; Tardy, 213 A.D.2d at 296 [emphasis added]). The phrases "any named insured," "any insured" and "an insured," as well as the phrase "the insured" ( see e.g. Ramirez v United States Fid. Guar. Co., 133 A.D.2d 146, 148) have distinct meanings, particularly when viewed in light of the severability of insureds doctrine. The majority also relies on the decision of the First Department in Moleon v. Kreisler Borg Florman Gen. Constr. Co. ( 304 A.D.2d 337 [Apr. 3, 2003]), a case that appears to construe the above phrases as synonyms. We would decline to follow it.
In any event, we further note that the policy exclusion refers to " bodily injury to an employee of an insured if it occurs in the course of employment" yet then recites that "[e]xclusion 8. applies where the insured is liable either as an employer or in any other capacity" (italics added). Given our view that those phrases have precise meanings, the conflicting use of the terms "an insured" and "the insured" within the same exclusion leads us to conclude that the language is ambiguous as a matter of law. Thus, the language must be construed against defendant, as the drafter of the policy, and plaintiff therefore is entitled to coverage on that basis as well ( see Westview Assoc. v. Guaranty Natl. Ins. Co., 95 N.Y.2d 334, 339). Thus, we would reverse the order, grant plaintiff's motion, grant judgment in favor of plaintiff declaring that defendant must defend and indemnify it in the underlying actions and deny defendant's cross motion.