Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co.

Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co.

Opinion

 [*141]  [**461]  Friedman, J.

This appeal concerns a dispute among several insurance companies over the priority of coverage for the construction  [*142]  manager and owner of a construction project in a wrongful death action. Based on an examination of the terms and role of each insurance policy at issue, we hold that the additional insured coverage afforded the construction manager and owner by the umbrella liability policy of the subcontractor that employed the decedent is excess to the construction manager's and owner's [**462]  coverage under the construction manager's own primary insurance. We also hold, based on the same examination, that the construction manager's and owner's additional insured coverage under the subcontractor's umbrella policy is excess to their coverage under the primary insurance maintained by the general contractor that retained the subcontractor. We reach  [***3] these conclusions notwithstanding that the insurance provisions of the [****3]  underlying subcontract apparently required the subcontractor to make all of the insurance it provided to the construction manager and owner applicable on a primary basis, without contribution by the construction manager's and owner's own insurance. Our reasoning is that, under applicable precedent, ] an umbrella or excess liability insurance policy should be treated as just that, and not as a second layer of primary coverage, unless the policy's own terms plainly provide for a different result. To hold otherwise would, we believe, merely sow uncertainty in the insurance market.

This matter arises from a fatal accident that occurred on June 10, 2003, in the course of the construction of the Bronx Criminal Court Complex, a project for which Bovis Lend Lease LMB, Inc. (Bovis) was retained as construction manager by the governmental owner, the Dormitory Authority of the State of New York (DASNY). The decedent, Joao Goncalves, was an employee of J &A Concrete Corp. (J &A), a subcontractor of the project's general construction contractor, Stonewall Contracting Corp. (Stonewall). The decedent allegedly fell down an elevator  [***4] shaft on which work had been performed by A.J. McNulty &Co., Inc. (A.J. McNulty), a subcontractor of SMI-Owen Steel Company, Inc. (SMI-Owen), the structural steel and stair contractor for the project. Stonewall and SMI-Owen each contracted separately with DASNY, and were not in contractual privity with each other. ¹   

The decedent's estate has commenced a wrongful death action in Bronx County Supreme Court against, among others,  [*143]  DASNY, the City of New York (NYC), Bovis, and Stonewall (Maria Goncalves, etc., et al. v The Dormitory Authority of the State of New York, et al., Index No. 21460/04 [the Goncalves action]). The instant action has been brought by plaintiffs herein--Bovis, DASNY, NYC, and Bovis's commercial general liability (CGL) insurance carrier, Illinois National Insurance Company (Illinois)--to obtain a determination concerning the entitlement of Bovis, DASNY and NYC (collectively, the Bovis plaintiffs) to a defense and indemnification in the Goncalves action from the insurers of Stonewall, J &A and A.J.  [***5] McNulty. The following insurers (with relevant policy limits noted) have been named as direct defendants in this action: (1) QBE Insurance Corporation (QBE), J &A's primary CGL carrier (policy limit of $ 1 million per occurrence); (2) United National Insurance Corp. (United), J &A's commercial umbrella liability carrier (policy limit of $ 5 million per occurrence, in excess of primary coverage); (3) Liberty Insurance Underwriters, Inc. (Liberty), Stonewall's primary CGL carrier (policy limit of $ 1 million per occurrence); (4) Westchester Fire Insurance Company (Westchester), Stonewall's commercial umbrella liability carrier (policy limit of $ 10 million per occurrence, in excess of primary coverage); and (5) Great American E &S Insurance Company, sued herein as Great American Insurance Company (Great American), A.J. McNulty's primary CGL carrier (policy limit of $ 1 million per occurrence). The relevant limit [**463]  of the Bovis plaintiffs' primary CGL coverage under the policy issued to Bovis by plaintiff Illinois (which covers DASNY and NYC [****4]  as additional insureds) is $ 1 million per occurrence. ²   

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