Recitation, as required by CPLR § 2219 (a), of the papers
considered in the review of this Motion
Papers Numbered
Notice of Motion and Affidavits Annexed 1—4
Order to Show Cause and Affidavits Annexed...
Answering Affidavits 3—4, 5—6
Replying Affidavits 7
Exhibits
Var.
Other
Upon review of the foregoing papers, third-party defendant/second third-party plaintiff Accuweld Technologies (Accuweld)s summary judgment motion to dismiss third-party plaintiff Keyspan Gas Corporation d/b/a National Grid (National Grid)s third-party claims against it and in favor of Accuwelds second third-party claims against Grace Industries (Grace) (Seq. 010), Graces motion to dismiss National Grids third third-party claims due to the antisubrogation rule (Seq. 011), National Grids motion for partial summary judgment on its third-party claims for contractual indemnification and common-law indemnification against Accuweld (Seq. 012), and Graces motion for summary judgment to dismiss Accuwelds third-party claims against it (Seq. 013) are decided as follows:
Introduction
Mr. Ortiz commenced this action against defendant National Grid in February 2019 for injuries he claims to have sustained because of an accident on February 13, 2019. The plaintiff alleges that this accident was caused by the defendants negligence and violations of New York Labor Law §§ 200, 241 (1), and 241 (6) (Complaint at 62—63). National Grid subsequently commenced a third-party action against Accuweld in November 2019. In February 2020, Accuweld commenced a second third-party action against Grace. Discovery has been substantially completed and plaintiff filed a note of issue on December 30, 2020. On January 19, 2021, National Grid commenced a third third-party action against Grace seeking common-law contribution, as well as both common-law and contractual indemnification. The third third-party complaint was then amended on February 16, 2021. The motions currently before the court arise from the various third-party actions for, inter alia, contractual and common-law indemnification, contribution, and breach of contract.
Factual Background
Plaintiff testified at his deposition that he was an employee of Grace Industries (Ortiz EBT at 40), which National Grid
1
hired as part of a project to install gas lines in a roadway (id. at 47). As part of that project, a team from Grace dug out the road and laid down pipe (id. at 57—60). Plaintiff was part of the crew that filled the trench after the pipes were installed (id. at 56—57). When the days work was done, steel plates were placed over the trench to allow cars to travel on the road (id. at 69—70). Plaintiff further testified that he does not remember how the accident occurred (id. at 142—43). Plaintiffs co-workers later told him how the accident occurred, but those statements are hearsay, and therefore not admissible (Viviane Etienne Med. Care, P.C. v Country Wide Ins. Co., 114 AD3d 33, 53 [2d Dept 2013], affd, 25 NY3d 498 [2015]).
Thomas Buckleman, a construction manager for National Grid, testified that National Grid hired plaintiffs employer, Grace Industries, to install a gas main (Buckleman EBT at 33). This work involved digging a trench in a roadway, installing the gas main, placing steel plates over the trench as needed, and filling in the trench (id. at 27—33). Mr. Buckleman explained that, when the plates were not being used, they were stacked to the side of the trench, but not too close to the trench, as that would not be safe (id. at 45—46).
Joan Alfonso Blanco testified that he was a Grace employee on the date of, and at the site of, the accident. He confirmed that, on February 12, 2019, the night before the accident, it was cold with snowy and icy conditions (Blanco Aff. at 7). Mr. Blanco described the work similarly to plaintiff: that the trench was dug in the roadway and that steel plates covered the trench when the work was paused (id. at 8—10). He further explained that the plates were stacked on top of each other, with every third plate separated by wood (id. at 17—21). The stack of plates was four feet from the trench, and [t]here was nothing to secure the stack of plates and no one was given any type of device to secure the stack of plates (id. at 25). Plaintiff was standing at the side of the trench when the stack of plates fell and made contact with plaintiff, causing him to fall into the trench (id. at 27—29). Mr. Buckleman testified that the plates were stacked on ground that sloped in some measure toward the trench (Buckleman EBT at 72).
Third-party defendant Grace submits the affidavit of John L. Spooner, Jr., plaintiffs foreman. In addition to the description offered by plaintiff and Mr. Blanco, Mr. Spooner states that the stack of plates was two-and-a-half feet tall at the time of the accident, stable, and level (Spooner Aff. at 6). Mr. Spooner also opines that the stack of plates was safe and not too close to the trench (id. at 7—8). However, he acknowledges that the plates did fall and admits that he does not know what caused them to fall (id. at 11).
Analysis
On a motion for summary judgment, the moving party bears the initial burden of making a prima facie showing that there are no triable issues of material fact (Giuffrida v Citibank, 100 NY2d 72, 81 [2003]). Once a prima facie showing has been established, the burden shifts to the non-moving party to rebut the movants showing such that a trial of the action is required (Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]).
To prevail on a motion for summary judgment based upon common-law indemnification, the sub-contractor movant must show that it was not negligent, that National Grid or Grace was responsible for negligence that contributed to the accident or, in the absence of any negligence, that [the movant] had [no] authority to direct, supervise, and control the work giving rise to the injury (Poalacin v Mall Properties, Inc., 155 AD3d 900, 909 [2d Dept 2017]). "[A] conclusion that [the defendant] is not liable to [the plaintiff] for the injuries sustained by him necessarily defeats the cross-claims for [common-law] indemnification and contribution asserted against [the defendant] by [other] defendants (Stone v Williams, 64 NY2d 639, 642 [1984]; see also Rodriguez v Yosi Trucking, 151 AD2d 556 [2d Dept 1989]). To prove a claim for contribution, the movant must show that National Grid or Grace owed it or the plaintiff a duty of reasonable care, and that its breach of such duty contributed to the alleged accident and injuries (Guerra v St. Catherine of Sienna, 79 AD3d 808, 809 [2d Dept 2010]).
To prevail on the claim for contractual indemnification, the sub-contractor must show that they are not liable for indemnification in this instance based on the specific language of the contract (Dos Santos v Power Auth. of State of New York, 85 AD3d 718, 722 [2d Dept 2011]; quoting George v Marshalls of MA, Inc., 61 AD3d 925, 930 [2d Dept 2009]). A party seeking contractual indemnification must prove itself free from negligence, because to the extent its negligence contributed to the accident, it cannot be indemnified therefor (Hirsch v. Blake Hous., LLC, 65 AD3d 570, 571 [2nd Dept. 2009]).
The first of the motions currently before the court is Accuwelds summary judgment motion to dismiss National Grids third-party claims for common-law indemnification, contribution, contractual indemnification, and breach of contract for failure to procure insurance. Accuweld contends that it is not liable to the plaintiff for his injuries, and should therefore have the third-party claims against it dismissed. In support of this contention, Accuweld points out that its contract with Grace only required it to perform Non-Destructive Examinations and related inspection services, including but not limited to; Radiography, CWI (Certified Weld Inspections); NACE Coatings Inspections and other related services for the Gas Pipeline system. These services also support Generation Plant and LNG Plant operations (Accuweld contract at Schedule B and C). Mr. Brasen, the backfill inspector employed by Accuweld at the time of the accident, similarly testified that his daily responsibility was to watch the end of the pipe correctly (Mr. Brasen EBT at 25-26). Moreover, National Grids backfill crew supervisor Robert Medford testified that Accuweld did not have any responsibility with respect to the storage of extra steel plates overnight (Mr. Medford EBT at 73).
Accuweld also posits that National Grid undermines its own argument that Accuweld was responsible for the safety at the site. National Grid retained Pontoon Solutions Inc. and Sky Testing Inc. to supervise the safety at the site (Pontoon contract; Sky Testing contract). Based on the foregoing representations about the scope of Accuwelds responsibilities and National Grids retention of outside organizations to ensure safety at the site, Accuweld claims that it was not responsible for Mr. Ortizs accident. Because the language in National Grids contractual indemnification provision requires Accuweld to have been negligent in order to be required to indemnify National Grid, Accuweld seeks dismissal of National Grids contractual indemnification claim.
In response, National Grid argues that Accuweld was in charge of Graces work, and therefore was responsible for the injury of Graces employee, Mr. Ortiz. Moreover, John Dooney, National Grids construction manager, provided an affidavit that Mr. Brasen had apprised him of concerns before the accident about the way that Grace was stacking plates, but that he did not make his concerns known to anyone prior to the accident (Mr. Dooney Aff. at 9—10). Mr. Spooner testified that National Grid, Grace, and Accuweld employees all had the authority to stop work at the site if they observed a dangerous condition (Mr. Spooner EBT at 48—49),
There is a question of fact as to Accuwelds responsibility to maintain safety at the site. Mr. Dooneys affidavit, commensurate with Mr. Bucklemans testimony that he noticed that the plates were stacked at a slight incline (Buckleman EBT at 72), indicates that Mr. Brasen may have been required to stop work at the site when he noticed potential safety concerns about the steel plates, particularly given the weather conditions on the day of Mr. Ortizs accident. This view is bolstered by National Grids incident report, which states that one of the causes of the accident was Mr. Brasens reluctance . . . to speak up when he had concerns about the way in which the plates were stacked (National Grid Report at 11).
Accuweld also fails to provide sufficient evidence to prove that it met its contractual obligation to National Grid to procure insurance. Accuwelds only evidence is a certification bearing the disclaimer that it is a matter of information only and confers no rights upon the certificate holder (Accuweld Certificate of Insurance, Exhibit CC). This document is insufficient to prove that Accuweld procured the required insurance (Trapani v 10 Arial Way Assoc., 301 AD2d 644, 647 [2003]); 455 Dumont Assoc., LLC v Rule Realty Corp., 180 AD3d 735, 737 [2d Dept 2020]). Accordingly, Accuwelds motion is denied.
National Grid cross-moved for summary judgment on its claims against Accuweld. Both National Grids and Accuwelds arguments are substantially the same as the arguments that were made with respect to Accuwelds initial motion. Irrespective of Accuwelds negligence, National Grid is not entitled to summary judgment because there is a question of fact as to National Grids own negligence in causing Mr. Ortizs injury. Mr. Medford, National Grids safety advisor, testified that he noticed slush and water run-off at the job site, but that he could not recall whether there was a conversation about the weather around the time of the general meeting (Mr. Medford EBT at 95—96). Mr. Medford also testified that he had not reviewed Graces Health and Safety Plan because he believed it to be essentially a boilerplate document, which he admits he was responsible to enforce (id. at 176—177). Because National Grid was the owner of the project, it has a general duty of care to the laborers at the site. There is a least a question of fact as to whether National Grid violated that duty of care and whether that violation led to Mr. Ortizs injuries.Accordingly, National Grids motion for summary judgment on their contractual indemnification, common-law indemnification, and contribution claim is denied.
Finally, Accuweld seeks summary judgment on its common-law indemnification claim against Grace Industries, plaintiffs employer. Accuweld contends that Grace failed to inspect the premises, as required by its Health and Safety Plan. Grace, in response, argues that Accuweld was in charge of the work, and that Accuweld was therefore responsible for the safety of the plates. Grace also cross-moves to dismiss Accuwelds third-party claims for common-law indemnification and contribution against Grace, relying on substantially the same arguments that it raised in its opposition to Accuwelds motion.
2
As determined above, there is a question of fact as to whether Accuweld was the supervisor of the site and was negligent in its supervision. This question of fact is fatal to both the summary judgment motions against Accuweld and Accuwelds own motion for summary judgment. Moreover, there are questions of fact as to Graces negligence. Grace was admittedly responsible for physically stacking the plates, and there is conflicting testimony about the ground on which the plates were stacked and the condition of ice and snow on the plates when they were stacked. Therefore, Graces motion for summary judgment is also denied.
The Anti-subrogation Rule
A motion pursuant to CPLR 3211 (a) (1) to dismiss based on documentary evidence may be appropriately granted only where the documentary evidence utterly refutes the plaintiffs factual allegations, thereby conclusively establishing a defense as a matter of law (Sabre Real Estate Group, LLC v Ghazvini, 140 AD3d 724, 724 [2016] [internal quotation marks, brackets, and citation omitted]). Contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous the terms are to be taken and understood in their plain, ordinary and proper sense (Johnson v Travelers Ins. Co., 269 NY 401, 408 [1936]; see Locascio v Mutual of Omaha Ins. Co., 198 AD2d 403, 404 [1993]).
The policy of preventing subrogation in circumstances where both parties are insured by the same carrier is to prevent sanction[ing] an indirect breach of the insureds obligation to defend its insured (Pennsylvania General Ins. Co. v Austin Powder Co., 68 NY 465, 472 [1986]). The rule applies to bar indemnification up to the policy limits of the comprehensive general liability policy at issue (Blanco v CVS Corp., 18 AD3d 685, 686 [2d Dept 2005]).
In the leading case on the anti-subrogation doctrine, the Court of Appeals stated that plainly, a potential conflict of interest arises where the insurer that issued both policies seeks indemnification against the contractor. As is apparent in the present cases, the mutual insurer, as subrogee of the owner, can fashion the litigation so as to minimize its liability under the GCL. By failing to assert a contractual indemnification claim on the owners behalf, the insurer can trigger coverage under other insurance policies held by the contractor such as a workers compensation or excess policy (North Star Reinsurance Corp. v. Continental Ins. Co., 82 NY2d 281, 295-296 [1993]). To wit, the policy of the anti-subrogation doctrine is to prohibit the upper tiers of insurance towers from manipulating litigation in order to insulate themselves from liability to which they should rightly be exposed due to the liability of their insured.
In the instant case, Grace moves pre-answer pursuant to CPLR 3211(a)(1) and (a)(7) to dismiss National Grids third third-party claims on the grounds that these claims are barred by the anti-subrogation rule. Grace procured the following insurance policies, including National Grid as an additional insured on these policies: Travelers, primary, for $2,000,000; Travelers, umbrella policy, for $5,000,000; RSUI, excess, for $5,000,000; Navigator/Hartford, excess, $7,500,000; and Endurance, excess, $7,500,000. In addition to moving for dismissal of National Grids claims, Grace also seeks a declaratory judgment pursuant to CPLR 3001 about the priority of these policies for the purposes of the instant lawsuit. In support of this motion, Grace argues that the total of $27,000,000 in policy limits available under all of the primary, umbrella, and excess policies that afford additional insured coverage to National Grid must be exhausted before National Grid can pursue indemnification claims against Grace. This contention is predicated on Graces contention that both it and National Grid are covered by the same insurance tower, and National Grids claims are therefore an effort by one insured to enforce indemnification by another entity insured under the same policy—a violation of the anti-subrogation rule. National Grid argues that, because (1) National Grids exposure is in excess of the coverage tower that Grace purchased and (2) Grace falls into the employer exclusion of the Travelers Excess policy because it is an employer, the anti-subrogation rule does not apply. Furthermore, National Grid argues that Grace is not entitled to a declaratory judgment for the benefit (or to the detriment) of insurance carriers that are not party to this action.
Upon the review of the insurance policies purchased by Grace, under which National Grid is listed as an additional insured, National Grids claims against Grace are barred by the anti-subrogation doctrine only up to the extent of the $27,000,000 policy limit (Lodovichetta v Baez, 31 AD3d 718, 719 [2d Dept 2006]). Claims beyond the policy limits of the common insurance policy are not barred (ELRAC, Inc.v Ward, 96 AD2d 58, 78 [2001]). The employer exclusions do not negate the anti-subrogation rule because the indemnification claims against Grace would be paid out of the insurance tower, triggering the contract insured exception to the exclusion in the policy. Graces motion for a declaratory judgment as to the priority in which the excess insurance policies should pay claims is granted only to the extent that this court finds that the insurance tower must be exhausted before National Grid can seek indemnification against Grace.
Conclusion
Accuwelds motion (Seq. 010) is denied.
Graces motion to dismiss National Grids claim (Seq. 011) is granted to the extent of limiting National Grids indemnification claims to amounts in excess of the the $27,000,000 insurance tower.
National Grids motion for summary judgment against Accuweld (Seq. 012) is denied.
Graces motion for summary judgment against Accuweld (Seq. 013) is denied.
This constitutes the decision and order of the court..
DATE January 18, 2022
DEVIN P. COHEN
Justice of the Supreme Court
FOOTNOTES
1
. Defendants refer to themselves as Keyspan, but Mr. Buckleman testified that, at the time of the accident, he worked for National Grid and National Grid performed the construction project (Buckleman EBT at 17—20, and 27).
2
. The parties have stipulated that Accwuelds cause of action for contractual indemnification against Grace has been discontinued. See NYSCEF Dkt. #274.
Devin P. Cohen, J.