Insurer Has Duty to Defend General Contractor for Injuries Arising Out of Subcontractor’s Work Where General Contractor is Named as Additional Insured on Subcontractor’s Policy

Parker v. John Moriarty & Assocs., Inc., 2007 WL 2429719 (Mass. Super. Ct. July 29, 2007)

This case arose from personal injuries suffered by the plaintiff while working at a construction site in Brighton, Massachusetts.  The general contractor of the construction project subcontracted some aspects of the project; plaintiff was an employee of the subcontractor.  The plaintiff filed a complaint, asserting a negligence claim against the general contractor for negligently failing to provide a safe workplace and the general contractor settled.  By third-party complaint, the general contractor brought claims against the subcontractor and the subcontractor’s insurer for indemnification, contribution, and breach of contract for failure to provide insurance.  The insurer moved for summary judgment on all claims against it, arguing that the insurance policy did not provide coverage on the claims.  The insurer argued that it did not owe a duty to defend the claims and did not have a duty to indemnify because the general contractor was not covered for the claims under the additional insured endorsement and such claims were excluded from coverage under the cross-suits provision.  The general contractor opposed and filed a cross-motion for summary judgment, asserting that, as a matter of law, the policy provided coverage in that the insurer had a duty to defend and to indemnify for the settlement of the claims.  The subcontractor also moved for summary judgment in its favor on the breach of contract claim for failure to provide insurance, arguing that it had named the general contractor as an additional insured on the policy.

The court found that the endorsement included the general contractor as an additional insured, but limited the claims covered under the policy to those claims arising out of the work of the subcontractor.  Because the issue of coverage would depend upon the outcome of the trial, the court denied summary judgment on the indemnification claim.  The court found that the insurer owed a duty to defend the general contractor because while an insurer’s obligation to indemnify may arise only after an adjudication or judgment, the duty to defend commences when the allegations of a complaint are reasonably susceptible of an interpretation that the claim is covered by the terms of the insurance policy.  The damages resulting from the breach of the duty to defend, however, could not be determined as a matter of law, so summary judgment was again denied. 

The insurer also claimed that there was no coverage under the cross-suits exclusion because the plaintiff was an employee of the subcontractor and his suit against the general contractor amounted to a cross-claim.  The court rejected this interpretation of the exclusion and found that, as a matter of law, the insurer had a duty to defend and breached its duty.  The question of damages resulting from the breach involved material issues of fact, so summary judgment was denied. In conclusion, the court allowed the general contractor’s motion for summary judgment in part, finding the insurer owed a duty to defend, and denied in part, finding damages presented an issue of fact.  The court denied the summary judgment motions of the subcontractor and insurer, finding that issues of coverage and damages should be determined at trial.