Atlantic Casualty Insurance Company v. Torres Custom Framing Corp. et al

Filing 25

ORDER: ORDER Granting 22 Motion for Summary Judgment. For the foregoing reasons (PLEASE SEE ORDER FOR FURTHER DETAILS), Atlantic Casualtys motion for summary judgment is granted. A judgment shall be entered declaring that Atlantic Casualty does not owe any coverage to, or have any duty to defend or indemnify, any party or any other person under Policy No. L068015845 or any other policy, for any claim arising out of Mr. Cardenass January 9, 2014 injury, including but not limited to the claims a sserted in the Underlying Action, see Cardenas, et al. v. Fullam Enterprises, Inc., et al., Index No. 2253/14 (N.Y. Sup. Ct.), and Fullam Enterprises, Inc., et al. v. Torres Custom Framing Corp., Index No. 770127/14 (N.Y. Sup. Ct.). So Ordered by Judge Sandra J. Feuerstein on 11/4/2015. (Ortiz, Grisel)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ATLANTIC CASUALTY INSURANCE CO.,
Plaintiff,
-against-

ORDER
14-CV-5306 (SJF)(ARL)

TORRES CUSTOM FRAMING CORP.,
MIGUEL CARDENAS, BLANCA CALDAS,
FULLAM ENTERPRISES, INC., and
PAVILION INVESTORS I, LLC,
Defendants.
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FEUERSTEIN, J.
Plaintiff, Atlantic Casualty Insurance Company, commenced this action for a declaratory
judgment that it is not obligated to provide coverage to any party in an underlying state personal
injury action. Plaintiff’s unopposed summary judgment motion is granted.
I.

Background
A.

Factual Background

From December 9, 2013 to December 9, 2014, Atlantic Casualty Insurance Company
(“Atlantic Casualty” or “Plaintiff”) provided insurance to Torres Custom Framing Corporation
(“Torres”) pursuant to insurance policy number L068015845 that listed Torres as the named
insured (the “Policy”). [DE 23, Rule 56.1 Statement, at ¶ 2]. The Policy provided that Atlantic
Casualty “will pay those sums that the insured [Torres] becomes legally obligated to pay as
damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” [DE
22, Motion for Summary J. (“Motion”), Ex. 5, at ACIC 00021]. It excluded coverage for any

“bodily injury” that any Torres employee may sustain in the course of his employment (the
“Employee Exclusion”). Id. at ACIC 00021. The Employee Exclusion stated that:
This insurance does not apply to:
(i) “Bodily injury” to any "employee” of any insured arising out of or in
the course of;
(a) Employment by any insured; or
(b) Performing duties related to the conduct of any insured's business
...
(ii) “Bodily injury” sustained by any spouse, child, parent, brother or
sister of any “employee” of any insured, . . . as a consequence of any
injury to any person as set forth in paragraphs (i) and (ii) of this
endorsement.
This exclusion applies to all claims and “suits” by any person or organization for
damages because of “bodily injury” to which this exclusion applies including
damages for care and loss of services.
This exclusion applies to any obligation of any insured to indemnify or contribute
with another because of damages arising out of “bodily injury” to which this
exclusion applies, including any obligation assumed by an insured under any
contract.
With respect to this endorsement only, the definition of “Employee” in the
SECTION V – DEFINITIONS is replaced by the following:
“Employee” shall include, but is not limited to, any person or persons
hired, loaned leased, contracted, or volunteering for the purpose of
providing services to or on behalf of any insured, whether or not paid for
such services and whether or not an independent contractor.
Id. at ACIC 00036 (emphasis added). On January 9, 2014, Miguel Cardenas (“Mr. Cardenas”), a
Torres employee, was injured while working on a construction project (the “Project”) for Fullam
Enterprises, Inc. (“Fullam”) and Pavilion Investors I, LLC (“Pavilion”), which had contracted
with Torres for the Project. [DE 23, Rule 56.1 Statement, at ¶¶ 5-6].
B.

Procedural Background

On January 28, 2014, Cardenas and his wife, Blanca Caldas (“Ms. Caldas”), filed an
action in New York state court seeking damages arising out of Mr. Cardenas’s injury (the
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“Underlying Action”). See Cardenas, et al. v. Fullam Enterprises, Inc., et al., Index No.
2253/14 (N.Y. Sup. Ct. Jan. 28, 2014) (Compl.); DE 22, Ex. J. Mr. Cardenas seeks damages for
his injury; Ms. Caldas seeks damages for the loss of consortium and expenses incurred in her
husband’s treatment. [DE 22, Ex. J, at ACIC 00125]. On May 2, 2014, Fullam and Pavilion
commenced a third-party action against Torres for indemnification and contribution of any
damages for which they may be liable to Mr. Cardenas and Ms. Caldas in the Underlying Action.
See Fullam Enterprises, Inc., et al. v. Torres Custom Framing Corp., Index No. 770127/14 (N.Y.
Sup. Ct. May 1, 2014) (Third-Party Compl.); DE 22, Ex. L.
On September 10, 2014, Atlantic Casualty commenced this action seeking a declaratory
judgment that:
[I]t does not owe coverage to Torres, Fullam, Pavilion, or any other person under
Atlantic Casualty Policy No. L068015845 (the “Policy”) or any other policy for
any claim arising out of Mr. Cardenas’s alleged accident on or about January 9,
2014, including, but not limited to those claims asserted in Cardenas, et al. v.
Fullam Enterprises, Inc., et al., in the New York Supreme Court, [C]ounty of
Suffolk, under index number 2253-2014 (the “Underlying Action”).
[DE 4, Am. Compl., at ¶ 6]. On March 24, 2015, a certificate of default was issued against
Torres. [DE 20, Certif. of Default].1 Atlantic Casualty has now filed an unopposed motion for
summary judgment. [DE 22, Mot. for Summary J.].
II.

Discussion
A.

Standard of Review

“Summary judgment must be granted where the pleadings, the discovery and disclosure
materials on file, and any affidavits show ‘that there is no genuine dispute as to any material fact
and that the movant is entitled to judgment as a matter of law.’” Brown v. Eli Lilly & Co., 654

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At the time of this Order, a proposed default judgment has not been submitted to this Court, so no default judgment
has been entered against Torres.

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F.3d 347, 358 (2d Cir. 2011) (quoting Fed. R. Civ. P. 56(a)). “In ruling on a summary judgment
motion, the district court must resolve all ambiguities, and credit all factual inferences that could
rationally be drawn, in favor of the party opposing summary judgment and determine whether
there is a genuine dispute as to a material fact, raising an issue for trial.” McCarthy v. Dun &
Bradstreet Corp., 482 F.3d 184, 202 (2d Cir. 2007) (internal quotation marks omitted). “A fact
is material if it might affect the outcome of the suit under the governing law, and an issue of fact
is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012) (internal
quotation marks omitted).
“The moving party bears the burden of establishing the absence of any genuine issue of
material fact.” Zalaski v. City of Bridgeport Police Dep’t, 613 F.3d 336, 340 (2d Cir. 2010). If
the moving party satisfies its initial burden, “the burden shifts to the non-movant to point to
record evidence creating a genuine issue of material fact.” Salahuddin v. Goord, 467 F.3d 263,
273 (2d Cir. 2006). Even if a motion for summary judgment is unopposed, a court “may not
grant the motion without first examining the moving party’s submission to determine if it has
met its burden of demonstrating that no material issue of fact remains for trial.” Amaker v.
Foley, 274 F.3d 677, 681 (2d Cir. 2011). Only “[w]here the record taken as a whole could not
lead a rational trier of fact to find for the nonmoving party, [is] there . . . no genuine issue for
trial,” thus meriting summary judgment. Ricci v. DeStefano, 557 U.S. 557, 586, 129 S. Ct. 2658,
174 L. Ed. 2d 490 (2009) (quotation marks and citation omitted).
B.

Interpretation of Insurance Contracts

Under New York law, the interpretation of a contract “is a matter of law for the court to
decide.” Int’l Multifoods Corp. v. Comm. Union Ins. Co., 309 F.3d 76, 83 (2d Cir. 2002).

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Construction of an insurance policy “is governed by the rules of construction applicable to
contracts generally,” see Christiania Gen. Ins. Corp. of New York v. Great Am. Ins. Co., 979
F.2d 268, 274 (2d Cir. 1992), and “an insurance contract is interpreted to give effect to the intent
of the parties as expressed in the clear language of the contract,” see Parks Real Estate
Purchasing Grp. v. St. Paul Fire & Marine Ins. Co., 472 F.3d 33, 42 (2d Cir. 2006) (citation and
internal quotation marks omitted). Summary judgment may be granted where the words of a
contract “convey a definite and precise meaning absent any ambiguity.” Seiden Assocs., Inc. v.
ANC Holdings, 959 F.2d 425, 428 (2d Cir. 1992). When an insurer seeks to invoke an
exclusionary clause in a contract to disclaim coverage, it has the burden of demonstrating that the
exclusion applies “in clear and unmistakable language,” which is “subject to no other reasonable
interpretation.” See U.S. Underwriters Ins. Co. v. Zabar, No. 97-cv-1738, 1999 WL 441472, at
*2 (E.D.N.Y. May 28, 1999).
C.

Plaintiff is Entitled to Summary Judgment

The language of the Employee Exclusion is unambiguous, valid, and enforceable. See,
e.g., U.S. Underwriters, 1999 WL 441472, at *3 (E.D.N.Y. May 28, 1999) (holding exclusionary
clause in insurance contract disclaimed coverage for employee’s work-related bodily injury);
U.S. Underwriters Ins. Co. v. Beckford, No. 93-cv-4272, 1998 WL 23754, at *4-5 (E.D.N.Y. Jan.
20, 1998) (same). The Employee Exclusion applies “in clear and unmistakable language” to Mr.
Cardenas, a Torres employee who was injured in the course of his employment, as well as Ms.
Caldas, who was injured as a consequence of Mr. Cardenas’s work-related injury. Pursuant to
the Employee Exclusion, Atlantic Casualty therefore does not owe any coverage for the claims
pleaded in the Underlying Action, and it has no duty to defend or indemnify any of the parties

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for the claims asserted in the Underlying Action or in Fullam and Pavilion’s third-party action
against Torres.
III.

Conclusion
For the foregoing reasons, Atlantic Casualty’s motion for summary judgment is granted.

A judgment shall be entered declaring that Atlantic Casualty does not owe any coverage to, or
have any duty to defend or indemnify, any party or any other person under Policy No.
L068015845 or any other policy, for any claim arising out of Mr. Cardenas’s January 9, 2014
injury, including but not limited to the claims asserted in the Underlying Action, see Cardenas,
et al. v. Fullam Enterprises, Inc., et al., Index No. 2253/14 (N.Y. Sup. Ct.), and Fullam
Enterprises, Inc., et al. v. Torres Custom Framing Corp., Index No. 770127/14 (N.Y. Sup. Ct.).

SO ORDERED.
s/ Sandra J. Feuerstein
Sandra J. Feuerstein
United States District Judge
Dated: November 4, 2015
Central Islip, New York

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