New York

Next week, the New York Court of Appeals will hear oral arguments in Worth Contr. Co. v. Admiral Ins. Co.  The issue on appeal addresses the interpretation of an additional insured endorsement, stating:

The additional insured endorsement of the Farm Family/Pacific policy provides in relevant part as follows: "WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you." Under paragraph 21 of the policy, the term "Your work" is defined to mean "(a) Work or operations performed by you or on your behalf; and (b) Materials, parts or equipment furnished in connection with such work or operations."

The plaintiff Worth Construction was general contractor on a construction site in White Plains.  Defendant Farm Family insured subcontractor Pacific Steel, hired by Worth to build a staircase.  Farm Family's insurance policy contains the already referenced additional insured endorsement covering Worth for liability arising out of its insured's operations at the White Plains project.

An injured worker, who was employed by a sub-subcontractor brought an underlying action against Worth in Westchester County for injuries allegedly sustained when he slipped on the stairs built by Pacific.   At the time of the accident, Pacific had finished installing the metal pans on the stairs and was not scheduled to come back to the site to put up handrails until other trades had filled in the metal pans with concrete.  In the underlying Westchester action, Worth formally admitted that no negligence on Pacific's part contributed to the accident, resulting in Pacific's dismissal from the underlying action.

The Appellate Division, First Department's Majority held that it is immaterial, for purposes of deciding additional insured coverage, whether Pacific had completed its installation of the stairs, whether Pacific's installation of the stairs was negligent, or whether Pacific or a contractor in privity with it was the injured worker's employer.  That the injury was sustained on the stairs was sufficient to determine additional insured coverage. 

Justice Nardelli, with Justice McGuire joining the dissenting opinion, opined thathe Majority's analysis is erroneous, for the reasons stated by Justice Sullivan in his dissenting opinion in Chelsea Assoc., LLC v Laquila-Pinnacle (21 AD3d 739, 741 [2005], lv denied 6 NY3d 742 [2005]).

NYCL law will keep you apprised of the decision when the Court hands it down.