Costello v. Times Square Hotel Co.

Order, Supreme Court, New York County (Eugene Nardelli, J.), entered on August 18, 1989, which, inter alia, found appellant Twin City liable for the second $500,000 of a $1,000,000 settlement with plaintiff Costello, unanimously affirmed, with costs and disbursements.

Plaintiff Costello was injured in the course of his employment with Helena Erectors, Inc., during construction of the Marriott Hotel in Times Square. It was stipulated that Helena was liable on behalf of the defendants pursuant to a contract of indemnification with defendant Morse Diesel, Inc. Respondent Commercial Union insured Helena for its liability to Costello for a maximum of $500,000, and appellant Twin City was the excess carrier on the same risk. Pursuant to a procedure to which the parties stipulated, the IAS court correctly determined that Twin City is responsible for the full $500,000 balance of a $1,000,000 settlement payment to plaintiff Costello, despite the existence of additional coverage by Commercial Union in favor of Helena for employee injury. Commercial Union’s payment of $500,000 was not made under its IB coverage for employee injury but under Helena’s contractual liability coverage, based on its indemnity agreement. Thus, the $500,000 limit of its contractual liability coverage was exhausted and Twin City’s obligation to pay under its excess coverage triggered. The result reached by the IAS court effectuates the parties’ intent as to the intended scope and effect of the indemnification agreement. (See, Brown v Two Exch. Plaza Partners, 76 NY2d 172, 178.) Concur — Sullivan, J. P., Carro, Wallach, Kupferman and Kassal, JJ.