Opinion
113115/08.
Decided February 25, 2011.
Gary A. Cusano, Esq., Law Office of Gary A. Cusano, P.C., Yorktown Heights, NY, Attorney for Plaintiffs.
Joel A. Klarreich, Esq., John E. Greene, Esq., Tannenbaum Helpern Syracuse Hirschtritt LLP, New York, NY, Attorneys for Defendant, United Staffing Systems, Inc.
Erik W. Drewniak, Esq., Phyllis M. Wrann, Esq., Winget, Spadafora Schwartzberg, LLP, New York, NY, Attorneys for Defendant, National Union Fire Insurance Company of Pittsburgh, PA.
Motion sequence nos. 001 and 002 are consolidated for disposition.
Defendant, National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), moves, pursuant to CPLR 3212, for an order granting it summary judgment dismissing this action in its entirety, including defendant's, United Staffing Systems Inc. ("United Staffing"), cross-claim, against it.
Defendant United Staffing separately moves, pursuant to CPLR 3212, for an order granting it summary judgment dismissing the complaint.
Plaintiffs, Mt. Hawley Insurance Co. ("Mt. Hawley") and 260-261 Madison Ave LLC ("Madison LLC"), 260-261 Madison Equities Corp. ("Madison Equities"), Zar Realty Mgt. Corp. ("Zar Realty") and Safir Realty Mgt. Corp. ("Safir Realty") (collectively the "corporate plaintiffs"), cross-move, pursuant to CPLR 2001 and 3025(b), for an ordering granting them leave to amend the complaint to substitute RLI Insurance Company ("RLI") for Mt. Hawley, and to correct the spelling of plaintiff "Safir" Realty to "Sapir" Realty.
Background
Madison LLC, the successor-in-interest to Madison Equities, is the owner of the Manhattan properties located at 260 Madison Avenue and 261 Madison Avenue. Safir Realty f/k/a Zar Realty manages the properties. Defendant United Staffing is in the business of providing temporary staffing of personnel, including manual laborers, that work on construction projects.
Defendant United Staffing executed a contract with a nonparty entity named Sapir Organization, dated April 26, 2006, for "professional recruiting and temporary services provided to Sapir" (Drewniak Affirm., 6/30/10, Ex. C) (the "staffing services agreement"). Defendant National Union issued United Staffing a Staffing Services Liability Policy (the "staffing services policy") under policy number SSL 9518694 for a one year policy period from July 6, 2005 to July 6, 2006 (Polyakova Aff., Ex. A).
In January 2007, nonparty Terrence Noble ("Noble") commenced a personal injury action against Madison LLC, Madison Equities, Zar Realty, and Sapir Realty, in New York County Supreme Court, Index No. 100214/07 (the " Noble" action). Noble sought to recover damages for personal injuries he allegedly sustained on May 24, 2006 while performing construction work at 261 Madison Avenue. Noble alleges in that complaint that Sapir Realty hired United Staffing to perform construction work at 261 Madison Avenue and, at the time of the accident, Noble was an employee of United Staffing. Noble asserted causes of action for negligence and Labor Law §§ 200, 240, and 241. By subsequent amendment, he added as defendants Ziruale Construction Inc. and Ziruale Inc.
Discussion
The corporate plaintiffs commenced the instant action alleging, inter alia, that National Union is obligated to provide coverage to them with respect to the Noble action as additional insureds under the staffing services policy, and that, alternatively, United Staffing is liable to the corporate plaintiffs for breach of contract for its failure to obtain and maintain additional insured coverage for the benefit of the corporate plaintiffs.
The staffing services agreement provides that:
Concurrently with its execution and delivery of this agreement, USS [United Staffing Systems eStaffControl L.L.C.] shall provide Sapir Organization with a certificate of insurance detailing its general and excess liability insurance policies and coverage information and naming Sapir Organization as an additional insured under those policies.
(Drewniak Affirm., 6/30/10, Ex. C). In reliance of this provision, National Union argues that the corporate plaintiffs are not additional insureds under the staffing services policy because the agreement does not contemplate them to be additional insureds. Indeed, Barry Saide, United Staffing's president, who executed the agreement on United Staffing's behalf, points to the fact that the staffing services agreement neither names on its face nor contemplates protection of any other party but Sapir Organization (Saide Aff., ¶ 5). Mr. Saide further asserts that United Staffing understood that its obligation to defend, indemnify, or hold harmless in the event of any litigation extended only to Sapir Organization, and not to any parent, subsidiary, partner, or any entity related to Sapir Organization (Saide Aff., ¶ 6).
In response, the corporate plaintiffs argue that "The Sapir Organization" represents a general reference to the group of corporate entities with common private ownership that fall under its umbrella (De Lillo Affirm., ¶ 6). Plaintiffs contend that reference to The Sapir Organization in the agreement was intended by the parties to include all of the corporate plaintiffs (De Lillo Affirm., ¶ 6). Indeed, they maintain that "considering the context in which The Sapir Organization' is used in the agreement, the indemnification and insurance procurement provisions contained therein was to extend to all of the corporate entities that fall under [the] umbrella of The Sapir Organization'" (De Lillo Affirm., ¶ 7). Further, United Staffing was aware that its personnel was being supplied to "The Sapir Organization" which represents a general reference to the group of corporate entities with common private ownership that fall under its umbrella (De Lillo Affirm., ¶ 6). The corporate plaintiffs' argument is unpersuasive.
The principle is well settled that the party claiming insurance coverage bears the burden of proving entitlement ( Tribeca Broadway Associates, LLC v Mount Vernon Fire Insurance Company, 5 AD3d 198 [1st Dept 2004]). In addition, a party that is not named an insured or an additional insured on the face of the policy is not entitled to coverage ( Id.). Moreover, where a third party seeks the benefit of coverage, the terms of the contract must clearly evince such intent ( Sixty Sutton Corp. v Illinois Union Insurance Co. , 34 AD3d 386 [1st Dept 2006]).
The staffing services agreement was executed by Sapir Organization and USS. Nowhere in the staffing services agreement is there any reference to the corporate plaintiffs or their subsidiaries, or the fact that Sapir Organization is an umbrella company. Nor is Lorenzo V. De Lillo's, senior associate general counsel for plaintiffs, affirmation sufficient in raising a triable issue of fact. Mr. De Lillo provides that he is fully familiar with the facts of this action based, in part, on discussions he had with "various employees of the Sapir Entities who are familiar with the underlying agreements and understandings between the Sapir Entities and [United Staffing]" (De Lillo Affirm., ¶ 1). The corporate plaintiffs, however, fail to provide an affidavit from any such employees with personal knowledge of the staffing services agreement. As such, unlike Mr. Saide's affidavit, the affirmation of Mr. De Lillo lacks probative value given that he did not personally take part in negotiating the staffing services agreement.
Next, the corporate plaintiffs argue that there is an ambiguity in the certificate of insurance, namely, whether corporate plaintiffs were additional insureds. In that regard, the certificate of insurance lists Madison LLC and Zar Realty as certificate holders, and provides that "[Madison LLC], [Zar Realty], and Wachovia Bank, National Association are named as additional insured" (Cross-motion, Ex. 3). This argument is equally unavailing.
The certificate of insurance also provides:
This certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below.
(Cross-motion, Ex. 3). It also sets forth the following disclaimer:
The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.
( Id.). Also, attached to the certificate of insurance is the following:
If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
( Id.). Given the clear disclaimer language, and the fact that the corporate plaintiffs are not endorsed as additional insureds in the staffing services policy itself, there is no ambiguity as to whether the corporate plaintiffs were additional insureds, and, as such, reliance on the certificate of insurance in the face of the above provisions is misplaced ( Moleon v Kreisler Borg Florman General Construction Company, Inc., 304 AD2d 337 [1st Dept 2003]; Trapani v 10 Arial Way Associates, 301 AD2d 644 [2nd Dept 2003]).
Travelers Insurance Company v Utica Mutual Insurance Company, 27 AD3d 456 (2nd Dept 2006), which the corporate plaintiffs rely on, is distinguishable. In Travelers, unlike here, there was a stipulation between the parties providing that the certificate of insurance was binding. Similarly, City of New York v General Star Indemnity Company, 45 AD3d 430 (1st Dept 2007) is inapposite because the issue in that case was "the post-accident dating of the certificate of insurance" ( Id.). No additional facts regarding the certificate of insurance can be gleaned from the decision in that case.
Assuming arguendo that the corporate plaintiffs had to be named as additional insureds, coverage would still not exist. National Union points to Endorsement No. 1 of the staffing service policy, which provides "Who Is An Insured":
Any person or organization as required by your contract or agreement shall be an Insured but only with respect to that person or organization's liability arising out of your operations as a staffing service or premises owned by or rented by you; however, no person or organization added by this endorsement is an insured for liability arising out of his or its sole negligence.
(Polyakova Aff., Ex. A [emphasis in the original]). Staffing service is defined as "service(s) performed for clients for a fee to supply that client with a staffing service employee(s)" (Polyakova Aff., Ex. A). Here, there is no allegation or evidence indicating that Noble's alleged injuries arose out of United Staffing's operations as a staffing service. Thus, any liability the corporate plaintiffs could incur in the Noble personal injury action would not arise out of United Staffing's operations as a staffing service, or a renter or owner of the premises.
The corporate plaintiffs' cross-motion to amend would not alter the above determination.
Accordingly, it is
ORDERED that National Union's and United Staffing's motion for summary judgment is granted, and the action is hereby dismissed; an it is further
ORDERED that the corporate plaintiffs' cross-motion to amend is denied; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
This memorandum opinion constitutes the decision and order of the Court.