Arthur Kill Power, LLC v. American Casualty Safety Insurance , 915 N.Y.S.2d 535 ( 2011 )

Order, Supreme Court, New York County (Michael D. Stall-man, J.), entered March 9, 2010, which, inter alia, denied that portion of plaintiffs’ motion for summary judgment declaring that defendant had a duty to defend and indemnify plaintiff Arthur Kill Power, LLC (Arthur Kill) and that defendant’s coverage was primary, and denied that portion of defendant’s motion for summary judgment declaring that the “Employer’s Liability Exclusion” in its general liability insurance policy excluded coverage to Arthur Kill, modified, on the law, to declare that the employer’s liability exclusion did exclude coverage to Arthur Kill, and, as so modified, affirmed, without costs. Appeal from order, same court and Justice, entered June 11, 2010, which, to the extent appealed from, granted plaintiffs’ motion to reargue the aforesaid order, and upon reargument, adhered to its prior decision, unanimously dismissed, without costs, as academic.

Arthur Kill is an additional insured under a commercial general liability policy issued by defendant to nonparty Wing Environmental, Inc. (Wing), an asbestos abatement contractor. This is an action for a judgment declaring that defendant has a duty to provide Arthur Kill with a defense and indemnification in a personal injury action brought by Jose Barros, Wing’s employee. Barros, who allegedly slipped on grease on the floor of Arthur Kill’s premises, asserts in the underlying action that Arthur Kill negligently maintained the premises. Defendant’s policy provided that the coverage available thereunder was to have been primary with respect to additional insureds “with whom the Named Insured. executes a written contract prior to the start of the project.” As correctly found by the motion court, Arthur Kill’s coverage under defendant’s policy would not have been primary because the purported , written contract between Arthur Kill and Wing was not executed until after Barros’s accident.

The employer’s liability exclusion of defendant’s policy excludes coverage for bodily injury to any employee of any insured arising from and in the course of employment by any insured. The exclusion, however, does not apply to liability assumed by an insured under an “insured contract.” The policy defines an insured contract as a written contract by which an insured assumes the tort liability of another because of bodily injury or property damage to a third person caused by the insured’s negligence.

Under applicable Georgia law, “[a]n insurer’s duty to defend is determined by comparing the allegations of the complaint with the provisions of the policy” (Nationwide Mut. Fire Ins. Co. v City of Rome, 268 Ga App 320, 320, 601 SE2d 810, 812 [2004]).^* Here, the motion court concluded that the employer’s liability exclusion did not apply to Arthur Kill’s liability to Barros because such liability was assumed by Wing under an insured contract. This was error. The Barros complaint provides no basis for an inference that the presence of grease on Arthur Kill’s floor would have been the result of negligence on Wing’s part. Therefore, Barros’s claim does not involve tort liability assumed by Wing because of injury caused by its own negligence. The dissent misplaces reliance on the fact that Barros was on Arthur Kill’s premises “in furtherance of the work described by the parties’ agreement.” Absent an inference of negligence on Wing’s part, the purpose of Barros’s presence on the premises would be irrelevant. On the other hand, although Arthur Kill is an insured and was allegedly negligent, its liability to Barros, if any, would not have stemmed from any contract by which it assumed the tort liability of another. As such, the employer’s liability exclusion applies because Arthur Kill’s liability to Barros, if any, did not arise out of an insured contract. We have considered the parties’ remaining contentions and find them unavailing. Concur — Andrias, Sweeny and DeGrasse, JJ.

* We therefore disagree with the dissent’s view that the applicability of a policy exclusion is not determined by reference to the allegations made against the insured in the underlying action.