Court Denies Summary Judgment in Insurance Dispute Concerning Indemnification for Wrongful Death Claim

Grand Crossing, L.P. v. U.S. Underwriters Ins. Co., 2007 WL 4591989 (S.D.N.Y. Dec. 18, 2007)

This case concerned an insurance policy claim made for partial coverage of settlement in a wrongful death action based on a construction site fatality.  The Southern District of New York denied the parties’ cross-motions for summary judgment. 

The specific issue involved whether the defendant-insurer’s policy covered a wrongful death claim arising out of a construction accident that plaintiffs had settled.  Plaintiffs owned the construction site where the death occurred and initiated this action, as assignees of their former subcontractor, for contribution/indemnification from the insurer.  Defendant claimed that the limited scope of the coverage and the timeliness of the contractually-required notice prevented it from being liable.

The court denied defendant’s summary judgment motion for several reasons.  First, plaintiffs had standing because they stood “in the shoes of the insured.”  Second, defendant failed to show that no set of facts existed upon which plaintiffs could show that their delay in providing notice was reasonable.  Third, and most importantly, defendant failed to establish that the limitation endorsements set forth in the policy unambiguously excluded coverage of the accident at issue.  With respect to the latter argument, the court reasoned that a “court should only grant summary judgment in favor of the insurer where the classification could not potentially be interpreted to cover the activity at issue.”

Similarly, the court denied plaintiffs’ cross-motion for summary judgment because the facts relevant to determining whether plaintiffs’ notice was reasonable were in dispute.