Summary
This Second Circuit opinion addresses whether an excess insurer has a duty to indemnify and defend a construction project owner under a subcontractor’s commercial general liability policy after a scaffold collapse injured a worker. The court affirmed the district court’s finding that the subcontractor’s negligence was a proximate cause of the injury, triggering the duty to indemnify despite subsequent state court proceedings dismissing contractual indemnity claims. However, the court reversed the award of attorney’s fees, holding that a statutory safe-harbor provision in New York Insurance Law exempts the unauthorized insurer from fee liability due to a drafting error involving a comma.
Topics
Practice areas
Questions Presented
- Whether Hudson owes a duty to indemnify the owner under the Hudson policy.
- Whether Hudson must pay attorney’s fees to Liberty under NY Insurance Law §1213(d) or is exempt by the §1213(e) safe‑harbor provision.
Holdings
- Hudson owes a duty to indemnify the owner (45 John) under the Hudson policy.
- Hudson is exempt from the attorney‑fees award; the district court’s award is reversed.
Key quotations
“We determine that the personal injury liability insurance provided for in Section 1113(a)(13) is not limited to that caused by negligence in rendering expert, fiduciary, or professional service.” (at 193)
“Accordingly, we AFFIRM the district court’s judgment declaring that Hudson owes a duty of indemnity and REVERSE the district court’s award of attorney’s fees to Liberty.” (at 193)
Factual background
A subcontractor employee, Juarez, was injured when a scaffold collapsed at 45 John Street. The employee sued the owner and general contractor. The owner was insured by Liberty; the subcontractor was insured by Hudson under a CGL policy that named the owner as an additional insured.
Procedural history
The district court held a bench trial, declared Hudson owed a duty to indemnify the owner and awarded attorney's fees to Liberty under NY Insurance Law §1213(d). The Second Circuit reviewed the legal conclusions de novo and factual findings for clear error.