Jimenez v. Monadnock Construction, Inc.

In an action to recover damages for personal injuries, the third-party defendant/second third-party defendant, Bedroc Contracting, LLC, appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Bayne, J.), dated December 9, 2011, as denied its motion for summary judgment on its cross claim against the second third-party defend

Ordered that the order is reversed insofar as appealed from, on the law, with costs, the motion of the third-party defendant/ second third-party defendant, Bedroc Contracting, LLC, for summary judgment on its cross claim against the second third-party defendants American Safety Casualty Insurance Company and American Safety Claims Services, Inc., is granted, the cross motion of the second third-party defendants American Safety Casualty Insurance Company and American Safety Claims Services, Inc., is denied, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the second third-party defendant American Safety Casualty Insurance Company is obligated to defend and indemnify Bedroc Contracting, LLC, in the main action.

The plaintiff commenced this action (hereinafter the main action) against Monadnock Construction, Inc. (hereinafter Monadnock), the Related Companies, L.E (hereinafter Related), Amsterdam & 77th Associates, LLC (hereinafter Amsterdam), and Sylgar Properties Company, LLC (hereinafter Sylgar), after allegedly sustaining an injury while working for Bedroc Contracting, LLC (hereinafter Bedroc), at premises located at 350 Amsterdam Avenue in Manhattan. The plaintiff asserted causes of action to recover damages for common-law negligence and violations of several provisions of the Labor Law. Thereafter, Monadnock, Amsterdam, and Sylgar (hereinafter collectively the third-party plaintiffs) commenced a third-party action against Bedroc for indemnification, to recover damages for breach of a contract to procure insurance, and contribution. The third-party plaintiffs served a second third-party complaint upon American Safety Casualty Insurance Company (hereinafter ASCIC), which issued a liability insurance policy to Bedroc in connection with the work at the premises, American Safety Claims Services, Inc. (hereinafter ASCSI), which disclaimed coverage to Bedroc on behalf of ASCIC based on, among other things, late notice, and Global Associates, the broker which

The Supreme Court erred in determining that New York law, rather than New Jersey law, governed the issue of whether ASCIC properly disclaimed coverage to Bedroc based on late notice. “The first step in any case presenting a potential choice of law issue is to determine whether there is an actual conflict between the laws of the jurisdictions involved” (Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], 81 NY2d 219 , 223 [1993]; see Bonded Waterproofing Servs., Inc. v Anderson-Bernard Agency, Inc., 86 AD3d 527 , 528 [2011]). Here, there is a clear conflict inasmuch as New Jersey law requires insurers asserting a disclaimer based on late notice to show that they were prejudiced by the untimely notice (see Gazis v Miller, 186 NJ 224 , 228-232, 892 A2d 1277 , 1279-1282 [2006]; Cooper v Government Empls. Ins. Co., 51 NJ 86 , 94, 237 A2d 870 , 873-874 [1968]), while, with respect to an identical disclaimer made under an insurance policy that, like the one in dispute here, was issued prior to January 17, 2009, New York law does not (see Chiarello v Rio, 101 AD3d 793 , 793 [2012]; Waldron v New York Cent. Mut. Fire Ins. Co., 88 AD3d 1053 , 1054 [2011]; Atlantic Gen. Contr., Inc. v United States Liab. Ins. Group, 24 AD3d 480 , 481 [2005]).

In contract cases, the court then applies a “center of gravity” or “grouping of contacts” analysis in order to determine which State has the most significant relationship to the transaction and the parties (see Matter of Midland Ins. Co., 16 NY3d 536 , 543 [2011]; Zurich Ins. Co. v Shearson Lehman Hutton, 84 NY2d 309 , 317 [1994]). The court considers significant contacts such as the place of contracting, the place of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties (see Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], 81 NY2d at 227 ; Matter of Integon Ins. Co. v Garcia, 281 AD2d 480 , 481 [2001]; Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56 , 58-59 [2000]).

“In the context of liability insurance contracts, the jurisdic

Here, based on the plain language of the subject policy, Bedroc and ASCIC understood that the insured risks were spread over multiple states and, under certain circumstances, beyond the United States. Moreover, the policy was issued to Bedroc, a New Jersey corporation, through a New Jersey broker, and contains a New Jersey endorsement (see FC Bruckner Assoc., L.P v Fireman’s Fund Ins. Co., 95 AD3d at 557 ). Thus, New Jersey, as the state of Bedroc’s domicile, was properly regarded as a proxy for the principal location of the risks insured under the policy (see id., Steadfast Ins. Co. v Sentinel Real Estate Corp., 283 AD2d 44 , 50 [2001]; Regional Import & Export Trucking Co. v North Riv. Ins. Co., 149 AD2d 361 , 361-362 [1989]). Accordingly, the Supreme Court should have determined that New Jersey law applied under the facts presented.

Applying New Jersey law, ASCIC’s disclaimer of coverage under the policy was invalid, since ASCIC failed to make the requisite showing that it was prejudiced as a result of the late notice of the plaintiffs accident provided by Bedroc (see Gazis v Miller, 186 NJ at 228-232 , 892 A2d at 1279-1282 ; Cooper v Government Empls. Ins. Co., 51 NJ at 94 , 237 A2d at 873-874 ). Furthermore, ASCIC failed to meet its burden of demonstrating the applicability of the policy’s “Owner Controlled Insurance Program” and “employee bodily injury” exclusions (see generally Seaboard Sur. Co. v Gillette Co., 64 NY2d 304 , 311 [1984]; Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 84 AD3d

Since Bedroc’s cross claim in the second third-party action sought a declaratory judgment, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that ASCIC is obligated to defend and indemnify Bedroc in the main action (see Lanza v Wagner, 11 NY2d 317 , 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Balkin, J.E, Leventhal, Lott and Sgroi, JJ., concur.