Dryden Mutual Insurance v. Goessl

Appeal from a judgment (denominated order and judgment) of the Supreme Court, Oswego County (James W McCarthy, J.), entered October 29, 2012 in a declaratory judgment action. The judgment, among other things, declared that plaintiff has no duty to defend or indemnify defendant Stanley Goessl.

It is Adjudged and declared that plaintiff is obligated to defend and indemnify defendant Stanley Goessl in the underlying action, and that plaintiff is obligated to reimburse defendant Stanley Goessl for the reasonable attorneys’ fees and expenses he incurred in defending the underlying action, and

It is further adjudged and declared that defendant The Main Street America Group is not obligated to defend or indemnify defendant Stanley Goessl in the underlying action.

Memorandum: Plaintiff, Dryden Mutual Insurance Company, commenced this action seeking a declaration that it is not obligated to defend or indemnify defendant Stanley Goessl in the underlying tort action pursuant to a business general liability insurance policy (hereafter, Dryden policy) that it issued to Goessl, who was doing business as S&K Plumbing. The underlying action arose from a fire at a residence that occurred while Goessl was engaged in plumbing work there. Plaintiff disclaimed coverage on the grounds that, inter alia, Goessl was an employee of defendant AP Daino & Plumbing, Inc. (AP Daino) and was acting within the scope of his employment at the time of the fire. AP Daino was insured by defendant The Main Street America Group (MSA) under a “contractors policy” (MSA policy). MSA disclaimed coverage on the ground that Goessl was not an employee of AP Daino at the time of the fire and therefore was not an “insured” within the meaning of the MSA policy. After a bench trial, Supreme Court issued a judgment declaring that plaintiff had no duty to defend or indemnify Goessl in the underlying action and that MSA had a duty to “defend and potentially indemnify” Goessl in that action. In addition, the court ordered MSA to reimburse plaintiff and Goessl for costs they had incurred relative to Goessl’s defense in the underlying action. We conclude that the court erred, and instead conclude, inter alia, that plaintiff must indemnify Goessl in the underlying action while MSA has no such duty.

It is well settled that, “[o]n appeal from a judgment following a bench trial, this Court may independently consider the probative weight of the evidence and the inferences that may be drawn therefrom, and grant the judgment that we deem the facts warrant” (Blakesley v State of New York, 289 AD2d 979 , 979 [2001], lv denied 98 NY2d 605 [2002]; see Crane-Hogan Structural Sys., Inc. v State of New York, 88 AD3d 1258 , 1260 [2011]). “In determining a dispute over insurance coverage, we first look to the language of the policy” (Consolidated Edison

Here, we conclude that the Dryden policy unambiguously provides coverage for Goessl in the underlying action. The Dryden policy states that, “if the named insured is an individual, both the individual and his/her spouse are insureds but only with respect to the conduct of a business of which he/she is the sole proprietor.” “Business” is broadly defined in the Dryden policy as “a trade, profession, or other occupation, including farming, all whether full or part time.” The record in this case establishes that Goessl was the sole proprietor of S&K Plumbing and that, at the time of the fire, he was engaged in the conduct of his “trade, profession, or other occupation” as a plumbing subcontractor for AP Daino. Because the injury in the underlying action allegedly arose out of the conduct of GoessTs plumbing business, plaintiff is obligated to defend and indemnify him in the underlying action (see Cataract Sports & Entertainment Group, LLC v Essex Ins. Co., 59 AD3d 1083 , 1084 [2009]).

We reach the contrary conclusion with respect to the MSA policy. That policy provides that AP Daino’s “employees” are insureds for acts committed “within the scope of their employment by [AP Daino] or while performing duties related to the conduct of [its] business.” The term “employee” is not defined in the MSA policy, and should therefore be given its plain or ordinary meaning (see Curry v Atlantic Mut. Ins. Co., 283 AD2d 937 , 938 [2001], lv denied 96 NY2d 721 [2001]). Where, as here,

Although it is undisputed that Goessl was an insured under AP Daino’s workers’ compensation policy, the record indicates that the workers’ compensation carrier required AP Daino to include uninsured subcontractors on its policy, and Goessl was listed as an uninsured subcontractor, not as an employee, on the policy. AP Daino initially asked Goessl to obtain his own workers’ compensation policy, but Goessl was advised by his insurance carrier that he did not need such coverage because he was an independent contractor. Further, we conclude that the fact that AP Daino’s owner, a master plumber, signed Goessl’s journeyman’s card as his “employer” and paid the required fee is insufficient to render Goessl an “employee” under the MSA policy. Goessl testified without contradiction that a master plumber is permitted to sign for a subcontractor or independent contractor.

Inasmuch as the record establishes that AP Daino and Goessl intentionally entered into a business arrangement whereby Goessl was an independent contractor rather than an employee, we conclude, upon our independent review of the record (see generally Blakesley, 289 AD2d at 979 ), that neither AP Daino nor Goessl expected that Goessl would be considered an “employee” under the MSA policy (see generally Baughman, 87 NY2d at 594 ). We thus conclude that Goessl is not insured under the MSA policy and, therefore, that MSA has no duty to defend or indemnify him in the underlying action (see generally Farm Family Cas. Ins. Co. v Nason, 89 AD3d 1401 , 1402 [2011]).

It is well settled that, “[o]n an appeal from a judgment rendered after a nonjury trial, our scope of review is as broad as that of the trial court (see Matter of Capizola v Vantage Intl., 2 AD3d 843 , 844 [2003]). Upon such a review, the record should be ‘viewed in the light most favorable to sustain the judgment’ (Farace v State of New York, 266 AD2d 870 , 871 [1999]; see Parone v Rivers, 84 AD2d 686 [1981]), and this Court should evaluate ‘the weight of the evidence presented and grant judgment warranted by the record, giving due deference to the trial court’s determinations regarding witness credibility, so long as those findings could have been reached upon a fair interpretation of the evidence’ (New York Tel. Co. v Harrison & Burrowes Bridge Contrs., 3 AD3d 606 , 608 [2004] [internal quotation marks and citations omitted]). ‘[T]he decision of the fact-finding court should not be disturbed upon appeal unless it is obvious that the court’s conclusions could not be reached under any fair interpretation of the evidence, especially when the findings of fact rest in large measure on considerations relating to the credibility of witnesses’ (Thoreson v Penthouse Intl., 80 NY2d 490 , 495 [1992] [internal quotation marks omitted], rearg denied 81 NY2d 835 [1993])” (Matter of City of Syracuse Indus. Dev. Agency [Alterm, Inc.], 20 AD3d 168 , 170 [2005]).

In my view, the court properly considered and gave appropriate weight to the evidence in determining that Goessl was an employee of AP Daino. Specifically, on the day of the fire, Goessl went to AP Daino’s Central Square office, picked up a van, and drove his crew of AP Daino employees to the designated work site; Goessl previously was employed by AP Daino before being approached about working for AP Daino as an “independent contractor”; Goessl was paid on an hourly basis; Goessl performed the same type of work as other AP Daino employees; Goessl introduced himself to customers as “Stan from AP

With respect to the insurance policy that plaintiff issued to Goessl, I conclude that the language of that policy is not ambiguous and that Goessl was not “conducting] ... a business of which he[ ] is the sole proprietor” when he was working as an employee of AP Daino (emphasis added). Notably, plaintiff insured Goessl as the sole proprietor of a plumbing business with no employees, and Goessl undoubtedly reported his business revenue, which would be used for underwriting purposes, only insofar as such revenue included payments for work performed for AP Daino, as well as the payments for the small amount of work he performed for his own customers. At trial, Goessl described working on crews with one, two or possibly more AP Daino employees under circumstances where he sometimes supervised an apprentice plumber and where he, based on his experience, was the de facto foreman when working with other AP Daino employees. If the majority’s analysis is correct, Goessl would be potentially liable not only for his own negligence, but also for the negligence of AP Daino employees working on the same crew, thereby creating greater liability

Present—Scudder, PJ., Fahey, Peradotto, Lindley and Sconiers, JJ.