Gibraltar Home Improvements, Inc. v. Rockingham Insurance Company

Filing 47

Electronic MEMORANDUM and ORDER denying DE 40 Motion for Partial Summary Judgment; denying DE 40 Motion for Judgment as a Matter of Law; granting in part and denying in part DE 41 Motion for Summary Judgment. For the reasons set forth in the attached memorandum and order, the Court denies Plaintiff's Motion in its entirety, denies Defendant's Motion with respect to Gibraltar's first and second causes of action, and grants Defendant's Motion with respect to Gibraltar's third and fourth causes of action. The parties are directed to appear for a status conference on October 28, 2024, at 11:00 a.m. in Courtroom 820. Ordered by Magistrate Judge Steven I. Locke on 9/25/2024. (AGB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GIBRALTAR HOME IMPROVEMENTS, INC.,
Plaintiff,

MEMORANDUM AND
ORDER

-against-

22-CV-1805 (SIL)

ROCKINGHAM INSURANCE COMPANY,
Defendant.
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STEVEN I. LOCKE, United States Magistrate Judge:
Presently before the Court in this diversity-insurance liability action are: (i)
Plaintiff Gibraltar Improvements, Inc.’s (“Plaintiff” or “Gibraltar”) motion for partial
summary judgment as to liability (“Plaintiff’s Motion” or “Pl. Mot.”), Docket Entry
(“DE”) [40]; and (ii) Defendant Rockingham Insurance Company’s (“Defendant” or
“Rockingham”) cross-motion for summary judgment (“Def. Cross-Mot.”), DE [41]. 1
By way of Complaint, DE [1], dated March 31, 2022, modified by Amended
Complaint (“Am. Compl.”), DE [27], dated June 15, 2023, Gibraltar commenced this
litigation, asserting four causes of action seeking: (i) a declaration that Rockingham
had and continues to have an obligation to defend and indemnify Plaintiff with
respect to costs, expenses, attorneys’ fees and damages awarded against it in relation
to a state court personal injury lawsuit brought against Gibraltar; (ii) an order
obligating Defendant to pay or reimburse Plaintiff any sums paid by Gibraltar with
respect

1

to

that

state

court

lawsuit,

including

attorneys’

fees,

The parties have consented to this Court’s jurisdiction for all purposes. See DE [35].

1

expenses,

disbursements, and judgments; (iii) a money judgment in the amount of premiums
Plaintiff paid Defendant attributable to property damage coverage or, if such amount
cannot be determined, a money judgment in the amount of all premiums it paid to
Rockingham; and (iv) a money judgment, including attorneys’ fees, actual and
statutory damages, and interest, pursuant to N.Y. Gen. Bus. Law (“GBL”) § 349.
Rockingham denies the allegations. See Answer, DE [28]. For the reasons set forth
herein, the Court denies Plaintiff’s Motion in its entirety, denies Defendant’s Motion
with respect to Gibraltar’s first and second causes of action, and grants Defendant’s
Motion with respect to Gibraltar’s third and fourth causes of action.
I.

BACKGROUND

The facts herein are taken from the parties’ Local Rule 56.1 statements,
pleadings, declarations and exhibits. Unless otherwise stated, these facts are not in
dispute.
A. Relevant Facts
i. The Parties
Gibraltar is a general contractor in the home improvement business,
incorporated in New York, with its principal place of business in Floral Park, New
York. See Defendant’s Response to Plaintiff’s Statement of Material Facts (“Def. 56.1
Response”), DE [40-4], ¶¶ 1,7; Plaintiff’s Response to Defendant’s Statement of
Material Facts (“Pl. 56.1 Response”), DE [40-7], ¶ 2. Rockingham is an insurance
company, organized under Virginia law, with its principal place of business in
Harrisonburg, Virginia, that offers, among other things, “casualty insurance covering

2

personal injury and property damages claims brought against insured general
contractors.” Id., ¶¶ 2, 5.
ii. The Rockingham Policy
Rockingham issued Gibraltar a commercial liability insurance policy effective
April 30, 2018 through April 30, 2019 (the “2018 Policy”). See Pl. 56.1 Response, ¶ 4;
Stipulation of Joint Exhibits (“Joint Exs. Stip.”), DE [41-10], ¶ 11, Ex. 11 at 199.
According to Plaintiff, this policy was renewed annually through April 30, 2023. See
Pl. 56.1 Response, ¶ 2. Defendant disputes that the policy was renewed, and counters
that “each year, the [Rockingham] policy consist[ed] of the ‘CGL Form,’ and
endorsements for that policy year.” See Def. 56.1 Response, ¶ 10. Rockingham
defines the “CGL Form” as “the General Liability Coverage [form,] which is a basic
form policy used by Rockingham in [New York] and in other states, accompanied by
endorsements.” Id., ¶ 9; see Policy of Insurance effective April 30, 2020 to April 30,
2021 (the “2020 Policy”), Joint Exs. Stip., ¶ 12, Ex. 12. 2 In any event, the policy or
policies that Rockingham issued Gibraltar were “occurrence-based,” such that the
relevant policy covered incidents occurring within the policy period. See Pl. 56.1
Response, ¶ 5. The 2020 Policy states that Rockingham “will pay those sums that
[Plaintiff] becomes legally obligated to pay as damages because of ‘bodily injury’ or
‘property damage’ to which this insurance applies,” and “will have the right and duty
to defend [Gibraltar] against any ‘suit’ seeking those damages.” See 2020 Policy at
221.

2

Policies from other years are not in the record.

3

iii. The December 4, 2020 Sheetrock Accident
On April 5, 2021, a child, “DM,” and his father sued Gibraltar in state court
(the “DM Suit”). The DM Suit alleged that DM was injured on December 4, 2020,
after sheetrock allegedly fell on DM at the residence his father owned, during work
that Plaintiff performed or oversaw (the “Incident”). See Pl. 56.1 Response, ¶¶ 9-13;
Joint Exs. Stip., ¶ 8, Ex. 8 (the “DM Complaint” or “DM Compl.”), DM, an infant, et
al vs. Gibraltar Home Improvements Inc., No: 604148/2021 (Sup. Ct. Nassau Cty.
2021). The parties do not dispute that the 2020 Policy was in effect on December 4,
2020.

According to the DM Complaint, Gibraltar “controlled, operated, and/or

maintained” the work site, and Plaintiff or its “agents, servants, employees and/or
subcontractors” were “negligent.” See DM. Compl., ¶¶ 9, 13.
According to Gibraltar, the sheetrock was purchased and installed entirely by
a subcontractor, LI Custom Millwork, Inc. See Def. 56.1 Response, ¶¶ 29, 31, 66;
Plaintiff’s Memorandum of Law in Support of Mot. for Partial Summary Judgment
(“Pl. Mem.”) at 15; Joint Exs. Stip., ¶ 10, Ex. 10, Dep. of Alfredo Llivicura on Behalf
of LI Custom Millwork, Inc. (“Llivicura Dep.”), 29:12-18, 53:16-18. Defendant does
not dispute that LI Custom Millwork, Inc. was Plaintiff’s subcontractor on the project
during the time at which the Incident occurred. See Def. 56.1 Response, ¶ 43.
On or before August 10, 2021, Gibraltar notified Rockingham of the Incident.
See Pl. 56.1 Response, ¶ 15. Defendant disclaimed coverage on the basis of three
endorsements attached to the 2020 Policy. Rockingham later waived its reservation
under one of these endorsements, and so it is not relevant to the instant motions. See

4

Def. 56.1 Response, ¶ 39; Joint Exs. Stip., ¶ 13, Ex. 13, Deposition of John Daybell
(“Daybell Dep.”) 53:20-54:17. The two remaining endorsements on which Defendant
based its denial of coverage were: (i) an endorsement drafted in April 2013 entitled
“Exclusion – Construction Management Errors and Omissions” (the “April 2013
Endorsement”); and (ii) an endorsement drafted in May 2018 entitled “Amended
Employer’s/Contractor’s Liability” (the “May 2018 Endorsement”), which contained
multiple exclusions. See Def. 56.1 Response, ¶ 36; Joint Exs. Stip., ¶ 1, Ex. 1 at Ex.
E (“Denial Letter”); April 2013 Endorsement, 2020 Policy at 263; May 2018
Endorsement, 2020 Policy at 244-46. By letter to Rockingham, Gibraltar appealed
that denial unsuccessfully on November 8, 2021. See Def. 56.1 Response, ¶¶ 37-38;
Joint Exs. Stip., ¶ 1, Ex. 1 at Exs. F, G.
The parties agree that after Defendant declined to defend Plaintiff, on
November 8, 2021, “Gibraltar sought coverage . . . as an additional insured under the
casualty policy issued by [insurance company] Maxum Indemnity Co. (“Maxum”) to
LI Custom Millwork[, Inc.,] Gibraltar’s subcontractor[.]” See Def. 56.1 Response, ¶
43; Joint Exs. Stip., ¶¶ 17, 20, Exs. 17, 20. On June 23, 2023, Maxum agreed to
defend Gibraltar under a reservation of rights, as an “additional insured primary,”
“up to the $1,000,000 per occurrence limit.” See Def. 56.1 Response, ¶ 46; Joint Exs.
Stip., ¶¶ 18, 20, Ex. 18 at 820, Ex. 20.
iv. Relevant Original Exclusions in the 2020 Policy
Prior to their modification by later endorsements, the 2020 Policy contained
several relevant exclusions.

5

1. The Original Expected or Intended Injury Exclusion
Within the “Coverage A – Bodily Injury and Property Damage Liability”
section of the 2020 Policy, the following exclusion is labeled “a. Expected or Intended
Injury”:
This insurance does not apply to . . .
“Bodily injury” or “property damage” expected or intended from the
standpoint of the insured. This exclusion does not apply to “bodily
injury” resulting from the use of reasonable force to protect persons or
property.”
2020 Policy at 222, § I, Coverage A (2)(a) (the “Original Expected or Intended Injury
Exclusion.”).
2. The Original Employee Bodily Injury Exclusion
Next, within the “Coverage A – Bodily Injury and Property Damage Liability”
section of the 2020 Policy, the following exclusion is labeled “e. Employer’s Liability”:
This insurance does not apply to . . .
“Bodily injury” to:
(1) An “employee” of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured’s
business; or
(2) The spouse, child, parent, brother or sister of that “employee” as a
consequence of Paragraph (1) above.
This exclusion applies whether the insured may be liable as an employer
or in any other insured capacity and to any obligation to share damages
with or repay someone else who must pay damages before of the injury.
This exclusion does not apply to liability assumed by the insured under
an “insured contract.”

6

2020 Policy at 222, § I, Coverage A (2)(e) (the “Original Employee Bodily Injury
Exclusion.”)
3. The Original Damage to Property Exclusion
Finally, within the “Coverage A – Bodily Injury and Property Damage
Liability” section of the 2020 Policy, the following exclusion is labeled “j. Damage to
Property”:
This insurance does not apply to . . .
“Property damage” to:
(1) Property you own, rent, or occupy, including any costs or expenses
incurred by you, or any other person, organization or entity, for repair,
replacement, enhancement, restoration or maintenance of such property
for any reason, including prevention of injury to a person or damage to
another's property;
(2) Premises you sell, give away, or abandon, if the “property damage”
arises out of any part of those premises;
(3) Property loaned to you;
(4) Personal property in the care, custody or control of the insured;
(5) That particular part of real property on which you or any contractors
or subcontractors working directly or indirectly on your behalf are
performing operations, if the "property damage" arises out of those
operations; or
(6) the particular part of any property that must be restored, repaired
or replaced because “your work” was performed incorrectly on it . . .
2020 Policy at 222, § I, Coverage A (2)(j) (the “Original Damage to Property
Exclusion”).

7

v. Relevant Endorsements to the 2020 Policy
Each iteration of the policy Defendant issued to Plaintiff contains
endorsements, which include the month and year each endorsement was drafted. See
Def. 56.1 Response, ¶ 12. Each endorsement attached to the 2020 Policy “modifies
[the] insurance provided” therein. See, e.g., 2020 Policy at 262. The parties disagree
as to when endorsements became part of a given year’s insurance policy. See Def.
56.1 Response, ¶ 13. According to Gibraltar, an endorsement was incorporated into
an existing policy “shortly after [it] was written.” Id., see Joint Exs. Stip., ¶ 13, Ex.
13, Daybell Dep., 37:22-38: 13 (testifying that deponent “would say” it is a “safe
assumption” that an endorsement dated September 2018 “became a part of the policy
sometime shortly after September 2018[.]”). Rockingham disputes this, stating that:
“There is no evidence of when the subject endorsements here initially became part of
a ‘CGL Form.’ The earliest they could have become party of the ‘CGL Form’ [was] the
next policy period.” See Def. 56.1 Response, ¶ 13.
1. The April 2013 Endorsement
Initially, the April 2013 Endorsement contains a single exclusion—the
Construction Management Errors and Omissions Exclusion, see 2020 Policy at 263,
which excludes coverage for “‘bodily injury’. . .

arising out of . . . “inspection,

supervision, quality control, architectural or engineering activities done by or for [the
insured] on a project on which [the insured] serve[s] as a construction manager.” Id.
This exclusion contains an exception: it does not exclude coverage for “‘bodily injury’
. . . due to construction or demolition work done by [the insured] . . . or [the insured’s]

8

subcontractors.”

Id.

Defendant cited the April 2013 Endorsement and the

Construction Management Errors and Omissions Exclusion in the Denial Letter,
stating that “if it is determined that [Plaintiff] had indeed acted as a construction
manager in [the DM Suit], this endorsement would also apply to bar coverage for the
suit.” Denial Letter at 58. Gibraltar contends that it did not serve as a construction
manager on the project leading to the Incident, while Rockingham takes the position
that there is a dispute of material fact on this issue. See Def. 56.1 Response, ¶ 66;
Defendant’s Opposition to Pl. Mem. (“Def. Opp.”), DE [40-5] at 9-10.
2. The May 2018 Endorsement
Next, The May 2018 Endorsement provides that the Original Employee Bodily
Injury Exclusion is “deleted in its entirety and replaced” with a provision titled “e.
Employer’s/Contractor’s Liability” (the “May 2018 Bodily Injury Exclusion”). See May
2018 Endorsement, 2020 Policy at 244-45; Pl. 56.1 Response, ¶ 7. In relevant part,
the May 2018 Bodily Injury Exclusion excludes coverage under the 2020 Policy for
“‘bodily injury’ to . . . [a]n invitee of any . . . landowner . . . who is or was present on
any site where an insured is . . . conduct[ing] the insured’s business, where the
‘invitee’ is . . . injured” due to the insured party’s operations, as well as “‘bodily injury’
[due to the insured party’s operations] to . . . the . . . child” of a landowner of the site
where an insured is “conduct[ing] the insured’s business.”

See May 2018

Endorsement, 2020 Policy, at 244.
The May 2018 Endorsement also expands the Original Damage to Property
Exclusion by stating:

9

For the purpose of this exclusion personal property in the care, custody
and control of the insured shall include, but not be limited to: i) any
personal property of any "employee" of any insured, "business invitee,"
"contractor," "subcontractor," "invitee" and/or "landowner," and ii) any
personal property of any insured, "business invitee," "contractor,"
"subcontractor," "invitee," and/or "landowner."
May 2018 Endorsement at 245; Def. 56.1 Response, ¶ 25. Further, the May 2018
endorsement adds an exclusion for bodily injury claims brought under the New York
Labor Law. See May 2018 Endorsement at 245.
In the Denial Letter, Defendant applied the May 2018 Endorsement to
“exclude[ ] coverage for bodily injury to an ‘invitee’ or to the child of the ‘landowner’
on any site where Gibraltar is performing work where [the injured person] is alleged
to have been injured due to the operations of Gibraltar, or by the operations of another
party working on behalf of Gibraltar,” and avoid liability. Denial Letter at 55-56.
3. The September 2018 Endorsement
Finally, an endorsement drafted in September 2018 (the “September 2018
Endorsement”), 3 which is relevant to the Court’s analysis for reasons explained
below, states in part that:
Section I, Coverages, Coverage A – Bodily Injury and Property Damage
Liability, 2. Exclusions, paragraph a. and e. are deleted and
replaced with the following of:
2. Exclusions
This insurance does not apply to:
a. Intentional Injury, Assault, Battery or Assault and
battery
(1) “Bodily injury” or “property damage” expected or
intended from the standpoint of any insured; or
(2) “Bodily injury” or “property damage” arising out of:
a. Assault, Battery, or Assault and Battery;
Defendant inconsistently refers to the May 2018 Endorsement as the “Endorsement” and the
September 2018 Endorsement as “Endorsement A.”
3

10

b. Harmful or offensive contact between or
among two or more persons;
c. Apprehension of harmful or offensive contact
between or among 2 or more persons; or
d. Threat by word or deed.
September 2018 Endorsement, 2020 Policy at 247 (emphasis added). The September
2018 Endorsement also adds 22 other exclusions, not relevant here, to the “Coverage
A - Bodily Injury and Property Damage Liability” exclusions section. See id. at 24753.
Plaintiff contends that the above-quoted language in the September 2018
Endorsement “deleted the [May 2018] Replacement of Exclusion [e.], which had
deleted the Original Employee Bodily Injury Exclusion.” See Def. 56.1 Response, ¶
19. Defendant disputes this assertion and takes the position that the September 2018
Endorsement did not delete the May 2018 Bodily Injury Exclusion, but rather
replaced only “‘paragraph a.’ of that “‘exclusion,’” namely, the Original Expected or
Intended Injury Exclusion. See id., ¶ 18.
It was Rockingham’s practice to deny coverage pursuant to the May 2018
Endorsement when the September 2018 Endorsement was attached to the relevant
policy. See Defendant’s Response to Plaintiff’s Supplemental Rule 56.1 Statement
(“Def. Supp. 56.1 Response”), DE [41-8], ¶ 3. Defendant stipulated that “on or after
May 18, 2018 all Rockingham policies issued to building contractors should contain
[the May 2018 Endorsement] and all Rockingham policies with an effective date on
or after September 18, 2019 should contain [the September 2018 Endorsement].” See
Feb. 28, 2023 Stip. at ¶ 2. It is not clear whether “2019” in this sentence was intended

11

to read “2018,” because Defendant’s corporate representative, John Daybell, testified
that “any policy with an effective date after September 2018 . . . moving forward,
should contain [the September 2018 Endorsement].”

See Daybell Dep., 84:7-14.

Daybell testified that, in determining Gibraltar’s claim with respect to the DM Suit,
he “did not interpret” the September 2018 Endorsement to apply to the Original
Employee Bodily Injury Exclusion or the May 2018 Endorsement. See id., 42:17-24.
vi. The Excess Coverage Provision
A final provision of the 2020 Policy is also relevant. The 2020 Policy states
that coverage under “Coverage A - Bodily Injury and Property Damage Liability” is
“excess over . . . [a]ny other primary insurance available to [the insured] covering
liability for damages arising out of the premises or operations, or the products and
completed operations, for which [the insured] ha[s] been added as an additional
insured.” See 2020 Policy at 232 (the “Excess Coverage Provision”). The Excess
Coverage Provision provides that “when . . . insurance is excess, [Rockingham] will
have no duty [under “Coverage A – Bodily Injury and Property Damage Liability”] to
defend the insured against any ‘suit’ if any other insurer has a duty to defend the
insured against that ‘suit.’” Id. It also provides that “[i]f no other insurer defends,
[Rockingham] will undertake to do so, but [Defendant] will be entitled to the insured's
rights against all those other insurers.” Id.
B. Procedural History
By way of Complaint, dated March 31, 2022, modified by Amended Complaint,
dated June 15, 2023, Gibraltar commenced this suit, asserting four causes of action,
seeking: (i) a declaration that Rockingham had and continues to have an obligation
12

to defend and indemnify Plaintiff with respect to costs, expenses, attorneys’ fees and
damages awarded against it in relation to the DM Suit; (ii) an order obligating
Defendant to pay or reimburse Gibraltar any sums paid by Plaintiff with respect to
that suit, including attorneys’ fees, expenses, disbursements, and judgments; (iii) a
money judgment in the amount of premiums Plaintiff paid Defendant attributable to
property damage coverage or, if such amount cannot be determined, a money
judgment in the amount of all premiums it paid to Rockingham; and (iv) a money
judgment, including attorneys’ fees, actual and statutory damages, and interest,
pursuant to GBL § 349.
The parties now cross-move for summary judgment, Plaintiff as to liability,
and Defendant as to the entire Amended Complaint. See Pl. Mot.; Def. Mot. For the
reasons set forth herein, the Court denies Plaintiff’s Motion in its entirety, denies
Defendant’s Motion with respect to Gibraltar’s first and second causes of action, and
grants Defendant’s Motion with respect to Plaintiff’s third and fourth causes of action.
II.

LEGAL STANDARDS
A. Summary Judgment

Pursuant to Fed. R. Civ. P. 56, a “court shall grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Cross-motions for
summary judgment do not alter the basic standard, but simply require the court to
determine whether either of the parties deserves judgment as a matter of law on facts
that are not in dispute.” AFS/IBEX v. AEGIS Managing Agency Ltd., 517 F. Supp.
3d 120, 123 (E.D.N.Y. 2021) (citing Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121
13

(2d Cir. 2001)). Each movant bears the burden of establishing that there are no issues
of material fact such that summary judgment is appropriate. See Huminski v.
Corsones, 396 F.3d 53, 69 (2d Cir. 2004). In deciding a motion for summary judgment,
the Court “is not to weigh the evidence but is instead required to view the evidence
in the light most favorable to the party opposing summary judgment, to draw all
reasonable inferences in favor of that party, and to eschew credibility
assessments.” Amnesty Am. v. Town of West Hartford, 361 F.3d 113, 122 (2d Cir.
2004); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510
(1986) (holding that a motion for summary judgment should be denied if “the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party”).
Once

a

movant

has

met

its

initial

burden,

the

party

opposing summary judgment “must do more than simply show that there is some
metaphysical doubt as to the material facts. . . . [T]he nonmoving party must come
forward with specific facts showing that there is a genuine issue for
trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106
S. Ct. 1348, 1356 (1986) (internal quotation omitted); see Maxton v. Underwriter
Labs., Inc., 4 F. Supp. 3d 534, 542 (E.D.N.Y. 2014) (“An issue of fact is considered
‘genuine’ when a reasonable finder of fact could render a verdict in favor of the nonmoving party”).
In determining whether summary judgment is warranted, “the court’s
responsibility is not to resolve disputed issues of fact but to assess whether there are

14

any factual issues to be tried, while resolving ambiguities and drawing reasonable
inferences against the moving party.” Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d
Cir. 1986); see Artis v. Valls, No. 9:10-CV-427, 2012 WL 4380921, at *6, n.10
(N.D.N.Y. Sept. 25, 2012) (“It is well established that issues of credibility are almost
never to be resolved by a court on a motion for summary judgment.”). Questions of
law are not subject to the same rule. “[T]he Court may decide all questions of law on
summary judgment.” AKF, Inc. v. W. Foot & Ankle Ctr., 632 F. Supp. 3d 66, 74
(E.D.N.Y. 2022) (collecting cases). At the summary judgment stage, a court may
consider deposition testimony in another action. See Linzy v. Uber Techs., Inc., 21CV-05097, 2023 WL 7302643, at *3 (S.D.N.Y. Nov. 6, 2023), reconsideration denied,
No. 21-CV-05097, 2024 WL 2882186 (S.D.N.Y. June 7, 2024); Highland CDO
Opportunity Master Fund, L.P. v. Citibank, N.A., 270 F. Supp. 3d 716, 720, n.3
(S.D.N.Y. 2017); Kanciper v. Lato, No. 13-CV-0871S, 2016 WL 11507274, at *13
(E.D.N.Y. Dec. 1, 2016), aff'd, 718 F. App'x 24 (2d Cir. 2017).
B. Declaratory Judgment
The Declaratory Judgment Act empowers a federal court to “declare the rights
and other legal relations” of an interested party in a “case of actual controversy within
its jurisdiction.” 28 U.S.C. § 2201(a); Kinojuz I.P. v. IRP Int’l Inc., No. CV–11–299,
2016 WL 5936875, at *12 (E.D.N.Y. Oct. 12, 2016). “It must be a real and substantial
controversy admitting of specific relief through a decree of a conclusive character, as
distinguished from an opinion advising what the law would be upon a hypothetical
state of facts.” Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 241,

15

57 S. Ct. 461, 464 (1937). “Whether a real and immediate controversy exists in a
particular case is a matter of degree and must be determined on a case-by-case basis.”
Kidder, Peabody & Co. v. Maxus Energy Corp., 925 F.2d 556, 562 (2d Cir. 1991). A
court will consider: “(1) whether the judgment will serve a useful purpose in clarifying
or settling the legal issues involved; and (2) whether a judgment would finalize the
controversy and offer relief from uncertainty.” W. Heritage Ins. Co. v. Jacobs Dev.
Corp., No. 12-CV-5718, 2014 WL 297792, at *8 (E.D.N.Y. Jan. 27, 2014) (citing Duane
Reade, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 389 (2d Cir. 2005)).
III.

DISCUSSION

Plaintiff moves for partial summary judgment as to liability, see Pl. Mem. at 1,
while Defendant opposes and cross-moves for summary judgment on all causes of
action. See Def. Opp.; Defendant’s Memorandum in Support of Def. Mot. (“Def.
Mem.”), DE [41-3]. Because the parties cite New York law in their briefing on
Plaintiff’s state law claims, they have implicitly consented to its application. See
Meisel v. Grunberg, 651 F. Supp. 2d 98, 109 (S.D.N.Y. 2009). For the reasons set forth
below, the Court denies Plaintiff’s Motion in its entirety, denies Defendant’s Motion
with respect to Gibraltar’s first and second causes of action, and grants Defendant’s
Motion with respect to Plaintiff’s third and fourth causes of action.
A. The Duty to Defend
Gibraltar’s first cause of action, seeking a declaratory judgment, and second
cause of action, seeking a monetary judgment related to the DM Suit, are based, in
part, on its contention that Rockingham had and has a duty to defend Plaintiff with

16

respect to the that action. See Pl. Mot. at 1-2. For the reasons set forth below,
summary judgment on this issue is premature.
Under New York law, an insurer’s “duty to defend is triggered by the
allegations in the underlying complaint[.]”

See BP Air Conditioning Corp. v.

OneBeacon Ins. Grp., 8 N.Y.3d 708, 714, 840 N.Y.S.2d 302, 305 (2007). The duty is
“exceedingly broad and far more expansive than the duty to indemnify . . . .” Value
Wholesale, Inc. v. KB Ins. Co., No. 18-cv-5887, 2020 WL 1536387, at *8 (E.D.N.Y.
Mar. 31, 2020) (internal citations omitted).

Indeed, an insurer must defend its

insured “whenever the allegations in a complaint against the insured fall within the
scope of the risks undertaken by the insurer, regardless of how false or groundless
those allegations might be.” Id. (quoting Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d
304, 310, 486 N.Y.S.2d 873, 876 (1984)); see GMM Realty, LLC v. St. Paul Fire &
Marine Ins. Co., 129 A.D.3d 909, 909, 11 N.Y.S.3d 661, 662 (2d Dep’t 2015) (holding
that allegations against an insured must be “construed liberally” and an insurer will
owe a defense to the insured if the allegations “suggest a reasonable possibility of
coverage”). An insurer’s duty to defend applies “[i]f the allegations of the complaint
are even potentially within the language of the insurance policy[,]” see Frank v.
Continental Cas. Co., 123 A.D.3d 878, 880, 999 N.Y.S.2d 836, 838 (2d Dep’t 2014),
“even though facts outside the four corners of the pleadings indicate that the claim
may be meritless or not covered.” Euchner-USA, Inc. v. Hartford Cas. Ins. Co., 754
F.3d 136, 140 (2d Cir. 2014). Rockingham contends that: (i) it is entitled to summary
judgment on this issue, as it has no duty to defend under a bodily injury exclusion;

17

and (ii) in the alternative, an issue of material fact exists as to whether the Incident
is also excluded under a construction manager exclusion, which would preclude
summary judgment in Gibraltar’s favor. The Court considers each argument in turn.
i. Bodily Injury Coverage under the 2020 Policy
Initially, Plaintiff argues that it is entitled to: (i) a declaratory judgment that
“Rockingham had and continues to have an obligation to defend and indemnify
Gibraltar with respect to any costs, expenses . . . [and] damages awarded against
Gibraltar[,] . . . and reasonable attorney fees involved in Gibraltar's defense of [the
DM Suit]”; and (ii) an order obligating Defendant to pay any current or future “sums,”
including a “judgment,” “attorneys fee[s], expenses, and disbursements” related to
the DM Suit. See Pl. Mot at 2; Pl. Mem. at 17. Defendant counters that the events
leading to the DM Suit are excluded from coverage by the May 2018 Bodily Injury
Exclusion, because DM was an invitee and/or a child of the landowner. See Def. Mem.
at 8. As explained above, Plaintiff takes the position that while the May 2018 Bodily
Injury Exclusion replaced the Original Employee Bodily Injury Exclusion, the
September 2018 Endorsement in turn deleted the May 2018 Bodily Injury Exclusion,
and that the Original Employee Bodily Injury Exclusion was not subsequently
replaced. See Pl. Mem. at 4-5.
When interpreting coverage, “[t]he unambiguous terms of an insurance
contract must be given their plain and ordinary meaning, and the interpretation of
such terms is a question of law for the court.” Viznitz v. Church Mut. Ins. Co., 132
A.D.3d 853, 854, 18 N.Y.S.3d 168, 170 (2d Dep’t 2015) (internal citations omitted); see

18

Rosano v. Freedom Boat Corp., No. 13-CV-842, 2015 WL 4162754, at *3 (E.D.N.Y.
July 8, 2015) (“Construction of an insurance policy is governed by the rules of
construction applicable to contracts generally . . . and an insurance contract is
interpreted to give effect to the intent of the parties as expressed in the clear language
of the contract.”) (internal quotation and citations omitted).
An insurer that relies on an exclusion clause to deny coverage “has the burden
of demonstrating that the ‘allegations of the complaint cast that pleading solely and
entirely within the policy exclusions and, further, that the allegations, in toto, are
subject to no other interpretation.’” Technicon Elecs. Corp. v. Am. Home Assur. Co.,
74 N.Y.2d 66, 73–74, 544 N.Y.S.2d 531, 533 (1989) (quoting International Paper Co.
v Continental Cas. Co., 35 N.Y.2d 322, 325, 361 N.Y.S.2d 873, 875 (1974)). If it fails
to meet this burden, the insurer is “required to provide a defense.” Euchner-USA,
Inc., 754 F.3d at 142. Moreover, “policy exclusions are given a strict and narrow
construction, with any ambiguity resolved against the insurer.” Belt Painting Corp.
v. TIG Ins. Co., 100 N.Y.2d 377, 383, 763 N.Y.S.2d 790, 792 (2003).
An endorsement to a policy may “alter . . . the words” of that policy. Penna v.
Fed. Ins. Co., 28 A.D.3d 731, 732, 814 N.Y.S.2d 226, 228 (2d Dep’t 2006) (quoting
Cnty. of Columbia v. Cont'l Ins. Co., 83 N.Y.2d 618, 628, 634 N.E.2d 946, 950 (1994)).
Where two endorsements conflict, and “it is equally plausible that one controls over
the other,” the endorsements are ambiguous, and a court may consider extrinsic
evidence of the parties’ intent. Travelers Prop. Cas. Co. of Am. v. Wesco Ins. Co., 585
F. Supp. 3d 463, 472 (S.D.N.Y. 2022) (citing Port Auth. of N.Y. & N.J. v. Brickman

19

Ltd., LLC, 181 A.D.3d 1, 12 n.12, 115 N.Y.S.3d 246, 254 n.12 (1st Dep't 2019). “If
extrinsic evidence does not reveal the parties’ intent, it is appropriate for a court to
resort to other rules of construction, including the contra-insurer rule, which states
that any ambiguity in an insurance policy should be resolved against the insurer.”
Travelers Prop. Cas. Co. of Am., 585 F. Supp. 3d at 471 (citation omitted); see
Brickman Ltd., LLC, 181 A.D.3d at 12 n.12, 115 N.Y.S.3d at 254 n.12; see also Olin
Corp. v. OneBeacon Am. Ins. Co., 864 F.3d 130, 148 (2d Cir. 2017) (“If the extrinsic
evidence fails to establish the parties' intent, courts [on summary judgment] may
apply other rules of contract interpretation, including New York's insurance-specific
version of the rule of contra proferentem, according to which ambiguity should be
resolved in favor of the insured.”); Syracuse Univ. v. Nat'l Union Fire Ins. Co. of
Pittsburgh, PA, 40 Misc. 3d 1205(A) at *3 n.1, 975 N.Y.S.2d 370 n.1 (Onondaga Cty.
Sup. Ct.), aff'd, 112 A.D.3d 1379, 976 N.Y.S.2d 921 (2013) (“Where, as here, there is
no basis for favoring one endorsement over another endorsement, any ambiguity
raised by the conflicting endorsement is construed in favor the plaintiff, the
insured.”); Reisman v. Coleman, 193 A.D.2d 659, 660, 598 N.Y.S.2d 12, 12 (2d Dep’t
1993) (“[T]here are conflicting endorsements in the subject insurance policy. It is well
established that an insurance policy must be construed in favor of the policy holder
if reasonably susceptible to two different constructions, and any ambiguities are to
be resolved in favor of the policy holder and against the carrier.”). “However, ‘if
extrinsic evidence is available but inconclusive,’ . . . or it ‘raises a question of
credibility or presents a choice among reasonable inferences,’ . . . the ambiguity in

20

question should be considered at trial, rather than applying the contra proferentem
rule at the summary judgment stage.” Park Electrochemical Corp. v. Cont'l Cas. Co.,
No. 04-CV-4916, 2011 WL 703945, at *3 (E.D.N.Y. Feb. 18, 2011) (citing Morgan
Stanley Grp. Inc. v. New England Ins. Co., 225 F.3d 270, 276 (2d Cir. 2000)).
Here, the May and September 2018 Endorsements conflict: each purports to
delete the Original Employee Bodily Injury Exclusion, but each states that it replaces
that exclusion with different text. The May 2018 Endorsement purports to delete and
replace it with the May 2018 Bodily Injury Exclusion. See May 2018 Endorsement,
2020 Policy at 244-45. The September 2018 Endorsement, on the other hand, deletes
and replaces both the Original Expected or Intended Injury Exclusion and the
Original Employee Bodily Injury Exclusion with an exclusion titled “a. Intentional
Injury, Assault, Battery or Assault and battery.” See September 2018 Endorsement,
2020 Policy at 247.

The September 2018 Endorsement also adds 22 additional

exclusions that exclude coverage for bodily injury to any person. See id. at 247-53.
There is no indication that the September 2018 Endorsement supersedes the
May 2018 Endorsement, as Gibraltar argues. See Pl. Mem. at 4-5. The 2020 Policy
contains a schedule of forms that apply to the Commercial General Liability portion
of the 2020 Policy, which includes the relevant exclusions. See 2020 Policy at 218-19.
Both the May 2018 Endorsement and the September 2018 Endorsement are included
in that schedule.

See id.

Thus, as of April 30, 2020, both endorsements were

incorporated into the 2020 Policy, with no clear hierarchy between the two.
Accordingly, the 2020 Policy is ambiguous with respect to the May 2018 and

21

September 2018 Endorsements, because under the two endorsements, the Original
Employee Bodily Injury Exclusion is deleted and replaced with two different
provisions.
As a result, the Court looks first to extrinsic evidence to determine the parties’
intent. See Travelers Prop. Cas. Co. of Am., 585 F. Supp. 3d at 472; Olin Corp. v. Am.
Home Assur. Co., 704 F.3d 89, 99 (2d Cir. 2012). The parties point to little evidence
in this regard. Plaintiff contends that “the description of Gibraltar’s business” as a
“general contractor” in its applications for insurance to Rockingham demonstrates
that “Gibraltar’s purpose in applying for this commercial insurance was to insure
against the major risks posed by Gibraltar's renovations and repair activities at the
project when subcontractors perform the work that was the subject of Gibraltar's
contract with its customer.” Pl. Mem. at 11-12. The insurance applications submitted
by the parties indeed state that Plaintiff is applying as a “GENERAL CONTRACTOR
(100% SUBBED OUT),” and categorize Gibraltar as “100% PAPER G.C. –
EVERYTHING SUBBED OUT,” but offer no other evidence to interpret these terms.
See Joint Exs. Stip., ¶ 11, Ex. 11. Defendant offers “the conduct of the parties” as
extrinsic evidence, but does not describe any such “conduct,” other than Plaintiff’s
purchase of a policy effective April 30, 2018, prior to the incorporation of the May and
September 2018 Endorsements, and Gibraltar’s subsequent applications for future
policies. See Def. Opp. at 3-4. Neither party explains what this extrinsic evidence is
intended to demonstrate with respect to what the parties intended to replace the
Original Employee Bodily Injury Exclusion.

22

Because “the extrinsic evidence fails to establish the parties' intent,” the Court
“may apply other rules of contract interpretation, including New York's insurancespecific version of the rule of contra proferentem, according to which ambiguity should
be resolved in favor of the insured.” Olin Corp., 864 F.3d at 148. Accordingly, the
Court resolves the ambiguity set forth above in Plaintiff’s favor, and concludes that
the September 2018 Endorsement (and not the May 2018 Bodily Injury Exclusion)
replaced the Original Employee Bodily Injury Exclusion.

The September 2018

Endorsement does not categorically exclude coverage for bodily injury to invitees or
children of the landowner. Thus, it does not bar Gibraltar’s bodily injury claim.
Defendant makes several arguments to the contrary, none persuasive.
Initially, Rockingham’s argument that such a reading is “absurd” or “render[s] the
[May 2018] Endorsement meaningless” is unavailing.

See Def. Mem. at 8-10.

Contrary to Defendant’s argument, the text of the May 2018 Endorsement is not
limited to the May 2018 Bodily Injury Exclusion.
Endorsement.

See 2020 Policy, May 2018

As explained above, the May 2018 Endorsement also adds an

exclusion based on New York Labor Law liability and amends the Original Damage
to Property Exclusion. See id. at 245-26. Thus, the May 2018 Endorsement as a
whole is not rendered meaningless by the Court’s construction. Further, the
September 2018 Endorsement alone adds 23 exclusions to bodily injury coverage
under the 2020 Policy, which itself contains multiple additional bodily injury
exclusions. See 2020 Policy at 222-26, September 2018 Endorsement at 247-53.
Accordingly, the Court’s resolution of the endorsement ambiguity in favor of coverage

23

here does not equate to a reading of the 2020 Policy that “grant[s] coverage for any
‘bodily injury’ to any person at a covered property (if caused by Gibraltar).” See Def.
Mem. at 9-10. Moreover, bodily injury, including bodily injury to children of the
landowner or to invitees, may be excluded from coverage if it falls into one of the
dozens of other exclusions throughout the policy.
Next, Defendant’s citations to New York caselaw holding that exclusions
cannot be regarded as inconsistent with one another are inapposite. See Def. Mem.
at 8-9; Defendant’s Reply (“Def. Reply”), DE [41-7], at 2-3.

It is the May and

September 2018 Endorsements that are inconsistent in how they modify one
exclusion, the Original Employee Bodily Injury Exclusion, and, as explained above,
New York caselaw is clear on how to address conflicting endorsements. See Syracuse
Univ., 40 Misc. 3d 1205(A) at *2 n.1, 975 N.Y.S.2d 370 n.1 (Onondaga Cty. Sup. Ct.),
aff'd, 112 A.D.3d 1379, 976 N.Y.S.2d 921 (4th Dep’t 2013); Reisman v. Coleman, 193
A.D.2d 659, 660, 598 N.Y.S.2d 12, 12 (2d Dep’t 1993).
Further, Rockingham points to the rule against surplusage, which dictates
that “contract interpretations that render provisions of a contract superfluous” are
“disfavored.” Int'l Multifoods Corp. v. Com. Union Ins. Co., 309 F.3d 76, 86 (2d Cir.
2002). This rule does not resolve the ambiguity at hand, because here, applying
Defendant’s logic, either the May 2018 Bodily Injury Exclusion, or the text of the
September 2018 Endorsement stating that, within “Coverage A - Bodily Injury and
Property Damage Liability,” “paragraph a. and e. are deleted and replaced with” the
replacement exclusion, is superfluous.

See September 2018 Endorsement, 2020

24

Policy at 247 (emphasis added).

So this rule does not aid the Court’s analysis.

Accordingly, again it is appropriate to turn to other rules of construction, including
contra proferentem, which the Court applies above.
Finally, for the first time in its Reply, Defendant argues that the relevant
language of the September 2018 Endorsement is a “typographical error.” See Def.
Reply at 6. A typographical error will not create ambiguity in an endorsement where
“the error notwithstanding, the exclusionary import of the endorsement is clear,”
Behrens v. City of New York, 279 A.D.2d 407, 408, 720 N.Y.S.2d 64, 65 (1st Dep’t
2001), and where the error “does not alter the overall meaning of the clause in any
way.” Huff v. Watson Servs., Inc., No. 07-CV-6033, 2009 WL 382729, at *8 (S.D.N.Y.
Feb. 13, 2009) (citation omitted). But that is not the case here. The September 2018
Endorsement includes the word “and” between “paragraph a.” and “e.,” as well as the
plural verb “are,” each of which signifies the intent to cite multiple paragraphs. See
September 2018 Endorsement, 2020 Policy at 247. It is not clear that the words
“and,” “[paragraph] e.,” and “are” were all typographical errors, as Rockingham
suggests. And their presence “alter[s] the overall meaning of the clause,” Huff, 2009
WL 382729, at *8, and muddies the “exclusionary import of the endorsement.”
Behrens, 279 A.D.2d at 408, 720 N.Y.S.2d at 65. Accordingly, the Court rejects this
argument.
ii. The Construction Management Errors and Omissions
Exclusion
Defendant also contends that a genuine issue of material fact exists as to
whether Plaintiff was a “construction manager” within the meaning of the
25

Construction Management Errors and Omissions Exclusion of the April 2013
Endorsement, rendering summary judgment in Gibraltar’s favor inappropriate.
Plaintiff argues that this exclusion is inapplicable, because “the placement of
sheetrock, which was the circumstance DM alleges resulted in [his] alleged injuries,
was not of Gibraltar's doing, or its responsibility,” and because Plaintiff did not act
as a construction manager. See Pl. Mem. at 16; Pl. 56.1, ¶ 66. Gibraltar also contends
that the Construction Management Errors and Omissions Exclusion only excludes
coverage for injuries “arising out of” Plaintiff’s role as a construction manager, and
that DM’s injury did not arise out of any action on Gibraltar’s part. See Pl. Reply at
6.
According to the DM Complaint, Gibraltar “controlled, operated, and/or
maintained” the work site, and it or its “agents, servants, employees and/or
subcontractors” were “negligent.” See DM. Compl., ¶¶ 9, 13.

The Construction

Management Errors and Omissions Exclusion excludes coverage for “‘bodily injury’. .
. arising out of . . . “inspection, supervision, quality control, architectural or
engineering activities done by or for [the insured] on a project on which [the insured]
serve[s] as a construction manager,” but does not exclude “‘bodily injury’ . . . due to
construction or demolition work done by [the insured] . . . or [the insured’s]
subcontractors.” See April 2013 Endorsement, Construction Management Errors and
Omissions Exclusion, 2020 Policy at 263. 4

The Court initially notes that neither party cites the exception to the Exclusion for “construction . . .
work done by . . . [the insured’s] subcontractors” in their briefing, and so the Court does not consider
the applicability of that exception.
4

26

The 2020 Policy does not define “construction manager,” nor is one settled in
New York law. See W. Waterproofing Co., Inc. v. Zurich Am. Ins. Co., No. 20-CV3199, 2022 WL 329225, at *15 (S.D.N.Y. Feb. 3, 2022), reconsideration denied, No.
20-CV-3199 (AJN), 2022 WL 1501087 (S.D.N.Y. May 11, 2022) (citing Sarah B. Biser
et al., 33 N.Y. Practice, New York Construction Law Manual § 1:13 (2d ed. 2021))
(“There is no established definition of who a construction manager is or what a
construction manager's responsibilities are or should be; great variations are
possible, allowing the role of a construction manager to be tailored to each job.”).
As to the parties’ arguments, Gibraltar points to two pieces of evidence in
support of its contention that it did not act as a construction manager:

(i) the

deposition testimony of Alfredo Llivicura on behalf of LI Custom Millwork, Inc., see
Llivicura Dep.; and (ii) the declaration of Margaret Gamba, office manager of
Gibraltar.

See Decl. of Margaret Gamba (“Gamba Decl.”), DE [40-1].

In his

deposition, Llivicura testified that LI Custom Millwork, Inc. purchased and installed
the sheetrock that allegedly injured DM. See Llivicura Dep., 29:12-17, 50:13-18,
53:16-17. Margaret Gamba states that “Gibraltar [does] not act as a construction
manager for any projects it agrees to complete.” Gamba Decl., ¶ 8. Defendant, on the
other hand, refers to excerpts of Llivicura’s deposition in which he testified that a
Gibraltar representative met with LI Custom Millwork, Inc. at the DM residence and
“explain[ed] to [him] things with the cabinets” and “came just to see the job.” See Def.
Opp. at 6-7; Llivicura Dep. at 60:3-10, 27:1-7. Due to these conflicting facts and a
lack of a clear definition for “construction manager” in the 2020 Policy or established

27

New York precedent, the Court concludes that summary judgment is inappropriate
on this issue. See Euchner-USA, Inc., 754 F.3d at 142 (an insurer “disclaim[ing]
coverage on the basis of an exclusion” is “required to provide a defense unless it can
demonstrate that the allegations of the complaint cast that pleading solely and
entirely within the policy exclusions.”) (citing Auto. Ins. Co. of Hartford v. Cook, 7
N.Y.3d 131, 137, 850 N.E.2d 1152, 1155 (2006)).
As to the remaining exclusions cited in Defendant’s denial of coverage, as
explained above, the Court concludes that Plaintiff’s claim for defense is not barred
the May 2018 Endorsement, and Rockingham waived its reservation under the
remaining cited exclusion. See Def. 56.1 Response, ¶ 39. Thus, no exclusion bars
Gibraltar’s claim for coverage, and the only remaining issue is whether the Excess
Coverage Provision absolves Defendant of its duty to defend.
iii. The Excess Coverage Provision
Rockingham argues in the alternative that even if a defense were otherwise
warranted, Gibraltar’s claims under the duty to defend are defeated by the Excess
Coverage Provision, although Defendant does not affirmatively move for summary
judgment on that ground. See Def. Opp. at 7-8; Def. Reply at 1-2. “Where its policy
has been triggered, a primary insurer has a primary duty to defend its insureds,
whereas an excess insurer has no obligation to do so.” AVR-Powell C Dev. Corp. v.
Am. States Ins. Co., 210 A.D.3d 403, 404, 176 N.Y.S.3d 638, 639 (1st Dep’t 2022)
(citing General Motors Acceptance Corp. v. Nationwide Ins. Co., 4 N.Y.3d 451, 455456, 796 N.Y.S.2d 2, 828 N.E.2d 959 (2005)). “Coverage under an excess policy thus

28

is triggered when the liability limits of the underlying primary insurance policy have
been exhausted.” Ali v. Fed. Ins. Co., 719 F.3d 83, 90 (2d Cir. 2013); see Danaher
Corp. v. Travelers Indem. Co., 414 F. Supp. 3d 436, 455 (S.D.N.Y. 2019) (“to the extent
that any given Excess Insurer's policy goes untriggered, [the primary insurer] will
not be entitled to contribution from that Excess Insurer with respect to the
indemnification or defense costs associated with the Underlying Claims.”).
Here, the Excess Coverage Provision states that coverage under “Coverage A Bodily Injury and Property Damage Liability” is “excess over . . . [a]ny other primary
insurance available to [the insured] covering liability for damages arising out of the
premises or operations, or the products and completed operations, for which [the
insured] ha[s] been added as an additional insured.” See 2020 Policy at 232. The
Excess Coverage Provision provides that “when . . . insurance is excess, [Rockingham]
will have no duty [under “Coverage A – Bodily Injury and Property Damage
Liability”] to defend the insured against any ‘suit’ if any other insurer has a duty to
defend the insured against that ‘suit.’” Id. It also provides that “[i]f no other insurer
defends, [Rockingham] will undertake to do so, but [Defendant] will be entitled to the
insured's rights against all those other insurers.” Id.
On November 8, 2021, after Defendant declined to defend Plaintiff, Gibraltar
sought coverage from Maxum as an additional insured under the casualty policy
Maxum issued to LI Custom Millwork, Inc. See Def. 56.1 Response, ¶ 43; Joint Exs.
Stip., ¶ 17, Ex. 17. On June 23, 2023, Maxum agreed to defend Gibraltar under a
reservation of rights, as an “additional insured primary,” “up to the $1,000,000 per

29

occurrence limit.” See Def. 56.1 Response, ¶ 46; Joint Exs. Stip., ¶¶ 18, 20, Ex. 18 at
820, Ex. 20. Maxum’s letter agreeing to defend Plaintiff cited a provision of the
applicable Maxum policy, which is not provided in its entirety, stating that Maxum
has a “duty to defend the insured” against suits seeking covered bodily injury
damages. See Joint Exs. Stip., ¶ 18, Ex. 18 at 818-19. That letter also reserved
Maxum’s right to withdraw from Gibraltar’s defense if Maxum determined that the
damages in the DM Suit were not covered by the applicable Maxum policy. See id. at
820.
Applying these facts, because Maxum conceded that it had a duty to defend
and agreed to defend Plaintiff as a primary insurer, see Joint Exs. Stip., ¶ 18, Ex. 18.,
Rockingham’s duty to defend has not been triggered based on the record evidence.
See 2020 Policy, Excess Coverage Provision. Nevertheless, the record is devoid of
evidence indicating whether Maxum is still defending Plaintiff, or whether its policy
limit has been reached, and so summary judgment is premature. If Maxum exercises
its reservation to withdraw from Gibraltar’s defense or reaches its policy limits,
Defendant may have a duty to defend. See Danaher Corp., 414 F. Supp. 3d at 455.
Accordingly, while the Court concludes that Plaintiff’s defense is not precluded by the
2020 Policy’s exclusions or endorsements, the Court denies without prejudice the
portions of Plaintiff’s Motion seeking: (i) a declaration that Rockingham had and
continues to have a duty to defend Gibraltar; and (ii) an order obligating Defendant
to pay Plaintiff’s attorneys’ fees and expenses accrued against it in the DM Suit.

30

B. The Duty to Indemnify
“The duty to indemnify is unquestionably narrower than the duty to defend.”
Specialty Nat. Ins. Co. v. English Bros. Funeral Home, 606 F. Supp. 2d 466, 472
(S.D.N.Y. 2009) (citing Ruder & Finn Inc. v. Seaboard Sur. Co., 52 N.Y.2d 663, 669,
439 N.Y.S.2d 858, 861 (1981)). As a result, courts in the Second Circuit generally
deny the indemnification portions of declaratory judgment and summary judgment
actions, where, as here, there is no determination as to liability in an underlying state
court action reflected in the record. See, e.g., Lighton Indus., Inc. v. Allied World Nat’l
Assurance Co., 348 F. Supp. 3d 167, 196 (E.D.N.Y. 2018) (“where another suit is
pending in a state court presenting the same issues, not governed by federal law,
between the same parties, it is entirely appropriate for a district court to dismiss a
declaratory judgment action.”) (citing Westport Ins. Corp. v. Hamilton Wharton Grp.
Inc., 483 F. App’x 599, 604 (2d Cir. 2012) (internal quotations, brackets, and ellipses
omitted)); see Am. Auto. Ins. Co. v. Sec. Income Planners & Co., 847 F. Supp. 2d 454,
465 (E.D.N.Y. 2012) (“An action to declare the insurer’s duty to indemnify is
premature and does not lie where the complaint in the underlying action alleges
several grounds of liability, some of which invoke the coverage of the policy, and
where the issues of indemnification and coverage hinge on facts which will
necessarily be decided in that underlying action.”) (internal quotations and citations
omitted).
Here, the record is devoid of evidence indicating whether Gibraltar has been
found liable in the DM Suit. Thus, there is currently no basis for Rockingham to

31

indemnify Plaintiff. Cf. Lighton Indus., Inc., 348 F. Supp. 3d at 196 (“At this time,
there is no liability for which defendants could indemnify plaintiffs”). Moreover, the
outcome of the DM Suit will determine the extent of any liability. If Gibraltar is
absolved of liability in state court, then it necessarily follows that it will have no basis
to seek indemnity from Defendant. Finally, as explained above, the Rockingham
policy is excess to the Maxum policy, and there is no evidence before the Court
reflecting whether the Maxum policy’s limits have been reached. Accordingly, the
Court denies without prejudice the parties’ motions with respect to Plaintiff’s first
and second causes of action.
C. Illusory Policy Coverage
In its third cause of action, Gibraltar seeks “disgorgement of the consideration
[it paid]” Rockingham for “property damage” coverage on the grounds that the
relevant annual policy between the parties is illusory as to that category of coverage.
See Pl. Mem. at 17-18. Defendant moves for summary judgment on this claim. See
Def. Mot. For the reasons set forth below, the Court grants Defendant’s Motion as to
this cause of action.
According to Plaintiff, the Original Damage to Property Exclusion and its
expansion in the May 2018 Endorsement render the 2020 Policy—and perhaps the
preceding and following policies, although Gibraltar is not clear on this point—
illusory from “the view point of a paper general contractor such as Gibraltar.” See id.
at 20.

Moreover, Plaintiff argues, “Rockingham’s requirement that ‘paper

contractors’ . . . obtain[ ] a certificate of insurance listing the insured as an additional

32

insured with respect to bodily injury[ ] and property damage . . . renders
Rockingham’s insurance of ‘paper contractors’ . . . excess[.]”

Id.

According to

Gibraltar, the language in the 2020 Policy stating that coverage is “primary” unless
the Excess Coverage Provision applies, see 2020 Policy at 232, is “misleading[ ]”
because in the case of an insured like Gibraltar, which “subcontracts out all of its
work, virtually all coverage would be excess.” Pl. Mem. at 21. Plaintiff also contends
that “Gibraltar would not ordinarily be liable for the acts of its subcontractors, or
other independent contractors.”

Id.

Finally, Gibraltar argues that an insured

purchasing the 2020 Policy “would have reasonably expected: (1) coverage of property
damage that occurred during construction at the work site; (2) coverage of property
of the owner of such site[;] (3) coverage of the property of ‘invitees’, (a term so broadly
defined by Rockingham as to essentially include anyone with permission to be at the
site)[;]” and (4) “primary insurance.” See Pl. Reply at 7.
i. Article III Standing
Before reaching the merits of Plaintiff’s argument, the Court must address
Defendant’s contention that Gibraltar lacks standing to bring this cause of action
because Plaintiff has not been denied coverage for a property damage claim, and
therefore lacks injury in fact. See Def. Reply at 6-7. Under Article III of the United
States Constitution, a federal court’s jurisdiction is limited to “cases” and
“controversies.” U.S. Const. Art. III, § 2. “For there to be a case or controversy under
Article III, the plaintiff must have a ‘personal stake’ in the case—in other words,
standing.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423, 141 S. Ct. 2190, 2203

33

(2021) (citation omitted). If a plaintiff in federal court lacks Article III standing, that
court lacks federal subject matter jurisdiction. See Cent. States Se. & Sw. Areas
Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 198 (2d
Cir. 2005). To maintain Article III standing, a plaintiff must allege facts sufficient to
establish: “(i) that he suffered an injury in fact that is concrete, particularized, and
actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii)
that the injury would likely be redressed by judicial relief.” TransUnion LLC, 594
U.S. at 423, 141 S. Ct. at 2203; see also Lujan v. Defs. of Wildlife, 504 U.S. 555, 56061, 112 S. Ct. 2130, 2136-37 (1992).
Under New York law, an illusory contract is unenforceable and void for lack of
consideration. See Lend Lease (US) Const. LMB Inc. v. Zurich Am. Ins. Co., 28 N.Y.3d
675, 684, 71 N.E.3d 556, 562 (2017) (citation omitted); In re The Containership Co.,
No. 11-12622, 2016 WL 2341363, at *8 (Bankr. S.D.N.Y. Apr. 29, 2016), report and
recommendation adopted sub nom. In re The Containership Co. (TCC) A/S, 611 B.R.
729 (Bankr. S.D.N.Y. 2019), aff'd 828 F. App'x 61 (2d Cir. 2020). A plaintiff who
“argue[s] [it] paid premiums for . . . insurance policies that are . . . void ab initio or,
in the alternative, voidable” has alleged “injury in fact for the purposes of Article III
standing.” Dubuisson v. Stonebridge Life Ins. Co., 887 F.3d 567, 574 (2d Cir. 2018)
(citing Spokeo, Inc. v. Robins, 578 U.S. 330, 338-39, 136 S. Ct. 1540, 1547-48 (2016),
as revised (May 24, 2016)). Plaintiff here alleges that it paid premiums on a void or
voidable policy. Accordingly, Gibraltar has established Article III standing as to this
claim.

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ii. Coverage Under the Gibraltar-Rockingham Policy is
not Illusory.
Turning to the merits, under New York law, a contract is “illusory,” and
therefore unenforceable, when “one party gives as consideration a promise that is so
insubstantial as to impose no obligation.” Lend Lease (US) Const. LMB Inc., 28
N.Y.3d at 684, 71 N.E.3d at 562 (citation omitted). “Insurance coverage is illusory
where the insured purchases no effective protection.” Children's Apparel Network
Ltd. v. Twin City Fire Ins. Co., No. 18-10322, 2019 WL 3162199, at *5 (S.D.N.Y. June
26, 2019) (citation omitted). By contrast, “[a]n insurance policy is not illusory if it
provides coverage for some acts subject to a potentially wide exclusion.” Lend Lease
(US) Const. LMB Inc., 28 N.Y.3d at 684, 71 N.E.3d at 562 (citation omitted).
Gibraltar fails to demonstrate that the 2020 Policy is illusory. As Rockingham
explains, the 2020 Policy covers damages where a neighbor or passerby suffered
property damage. See Def. Mem. at 10; Joint Exs. Stip., ¶ 16, Ex. 16. at 694-716
(Rockingham letter agreeing to defend an insured who purchased a Commercial
General Liability policy similar or identical to the 2020 Policy, where the resident of
a neighboring apartment allegedly suffered property damage as a result of the
insured’s remodeling work next door).

True, the 2020 Policy contains a broad

property damage exclusion. It appears that this Policy was a poor fit for the coverage
Gibraltar would have preferred. But even an exclusion that is “exceptionally broad,”
which bars coverage for the “most likely allegations” brought against an insured, does
not render a policy illusory if that policy “provides coverage for some losses.” Spandex
House, Inc. v. Hartford Fire Ins. Co., 407 F. Supp. 3d 242, 263 (S.D.N.Y. 2019), aff'd,
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816 F. App'x 611 (2d Cir. 2020) (emphasis in original). Accordingly, Defendant’s
Motion is granted and Plaintiff’s motion is denied as to Gibraltar’s third cause of
action.
Plaintiff’s four arguments to the contrary miss the mark. Initially, Gibraltar
argues that the New York Court of Appeals’ Lend Lease decision permits a court to
divide an insurance policy into portions and conclude that one portion is illusory and
another non-illusory. See 28 N.Y.3d at 684, 71 N.E.3d at 562; Pl. Mem. at 19. In
Lend Lease, the court analyzed only whether one provision was illusory, because the
challenged exclusion was located within that provision. Id., 28 N.Y.3d at 685, 71
N.E.3d at 562. Concluding that the challenged exclusion did not “defeat all of the
coverage afforded under” that provision, and that provision was therefore not illusory,
the court did not address the rest of the policy. See id. (emphasis in original). Thus,
the court did not reach the issue for which Gibraltar relies on Lend Lease, namely
whether a policy with one illusory category is void, in part or in whole, if the rest of
the policy provides coverage. Moreover, the Court is not aware of any case in which
a court ordered disgorgement of insurance premiums because one provision or
category of an insurance policy was illusory.
Next, Gibraltar argues that it reasonably expected the 2020 Policy to cover
property damage at the worksite, as well as personal property of those with
permission to be there. But a policy is not illusory merely because the insured expects
it to cover more than it does. See Spandex House, Inc., 407 F. Supp. 3d at 263.
Moreover, Thomas J. Lipton, Inc. v. Liberty Mut. Ins. Co. and Madawick Contracting

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Co. v. Travelers Ins. Co., cited by Plaintiff, are inapposite—these cases explain that
courts construing ambiguous contract provisions should avoid an interpretation that
would render a provision illusory, but do not reach the issue of whether a Court
should order disgorgement of insurance premiums. See 34 N.Y.2d 356, 361, 314
N.E.2d 37 (1974); 307 N.Y. 111, 119, 120 N.E.2d 520 (1954); Pl. Mem. at 17-18.
Further, Gibraltar argues that the 2020 Policy is illusory because it requires
Plaintiff and any subcontractors to obtain a certificate of insurance listing Gibraltar
as a primary additional insured, even though Plaintiff “would not ordinarily be liable
for the acts of its subcontractors, or other independent contractors.” Pl. Mem. at 21.
This statement of the law is an oversimplification, because New York law recognizes
several exceptions. Bros. v. New York State Elec. & Gas Corp., 11 N.Y.3d 251, 258,
898 N.E.2d 539, 542 (2008). For example, if a contractor is negligent in “selecting,
instructing, or supervising” a subcontractor, or contracts out “inherently dangerous”
work, that contractor may be held liable for the acts of its subcontractor. See id. at
542-43 (citations omitted). Accordingly, this argument does not hold water.
Finally, Plaintiff does not attempt to explain why an excess policy that provides
excess coverage is illusory. Excess coverage still provides “coverage for some acts.”
Lend Lease (US) Const. LMB Inc., 28 N.Y.3d at 685, 71 N.E.3d at 562. Accordingly,
summary judgment in favor of Defendant is appropriate on this claim.
D. Deceptive Practices under GBL § 349
In its fourth cause of action, Plaintiff seeks a money judgment, including
attorneys’ fees, actual and statutory damages, and interest, pursuant to GBL § 349.

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See Pl. Mem. at 21-25. GBL § 349 renders unlawful “deceptive acts or practices in
the conduct of any business, trade or commerce or in the furnishing of any service.”
N.Y. Gen. Bus. Law § 349 (a). A plaintiff bringing a deceptive practices action under
GBL § 349 must demonstrate that “(1) the defendant's conduct was consumeroriented; (2) the defendant's act or practice was deceptive or misleading in a material
way; and (3) the plaintiff suffered an injury as a result of the deception.”
Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender &
Co., Inc., 37 N.Y.3d 169, 176, 171 N.E.3d 1192, 1197 (2021).
“Consumer-oriented” conduct must have “a broad impact on consumers at
large” to fall within the ambit of GBL § 349. New York Univ. v. Cont'l Ins. Co., 87
N.Y.2d 308, 320, 639 N.Y.S.2d 283, 290 (1995). Courts in this Circuit generally hold
that insurance disputes “are nothing more than private contractual disputes that lack
the consumer impact necessary to state a claim pursuant to Section 349.” Fishberg
v. State Farm Fire & Cas. Co., No. 20-CV-6664, 2021 WL 3077478, at *4 (S.D.N.Y.
July 20, 2021) (citation omitted). “The one instance where such GBL § 349 claims
have been allowed to proceed are those where the plaintiffs alleged that they
purchased insurance policies based on defendants' false representations regarding
the terms of the insurance policies.” Dollar Phone Corp. v. St. Paul Fire & Marine
Ins. Co., No. CV-09-1640, 2012 WL 1077448, at *15 (E.D.N.Y. Mar. 9, 2012), report
and recommendation adopted, 2012 WL 1078994 (E.D.N.Y. Mar. 30, 2012), aff'd, 514
F. App'x 21 (2d Cir. 2013); see, e.g., Nick's Garage, Inc. v. Progressive Cas. Ins. Co.,
875 F.3d 107, 125 (2d Cir. 2017) (denying summary judgment on an insurance-

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dispute GBL § 349 where plaintiff produced evidence that “insurer, as a matter of
practice, misled consumers” who entered into a “standard form contract” by falsely
claiming that it paid repair shops at the prevailing labor rate.). Here, the parties do
not dispute that the 2020 Policy included a “basic form policy used by Rockingham”
across the country. See Def. 56.1 Response, ¶ 9. Such a policy is akin to the “standard
form contract” issued by the insurer in Nick’s Garage, Inc., which the Second Circuit
held “affect[ed] the public generally.” 875 F.3d at 125. Thus, Plaintiff has met its
burden to produce evidence that Defendant’s conduct was “consumer-oriented.”
Nevertheless, as explained above, Gibraltar must also demonstrate that
Rockingham deceived or misled it. Plaintiff argues that Defendant did so in two ways:
(i) by failing to state in coverage denial letters that the September 2018 Endorsement
purportedly deleted the May 2018 Endorsement, which allegedly in turn deleted the
Original Employee Bodily Injury Exclusion; and (ii) by “deceptively eviscerat[ing]
promised basic property coverage with exclusions that so comprehensively alter
coverage of property damage that the coverage was rendered meaningless, or close to
it, from the prospective of paper general contractors.” See Pl. Mem. at 22-25. As to
Plaintiff’s first point, the Court has already determined that the September 2018
Endorsement did not delete the May 2018 Endorsement. Accordingly, Rockingham
did not engage in a deceptive practice when it failed to alert its insured of that
purported deletion.
Gibraltar’s second point is essentially another attempt to cast the 2020 Policy
as “illusory,” which argument the Court has already rejected, as explained above. See

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Pl. Mem. at 24-25. Plaintiff argues that even if the 2020 Policy is not illusory, the
property damage exclusions within “rendered . . . coverage . . . meaningless, or close
to it, from the prospective [sic] of paper general contractors,” id. at 25, because “it is
essentially an excess policy covering situations where [Gibraltar] would not, in any
event, be liable under the law.” Plaintiff’s Opposition to Defendant’s Motion (“Pl.
Opp.”), DE [41-5], at 18. None of this explains what Rockingham did to “deceive” or
“mislead” Plaintiff. As explained above, the 2020 Policy states the terms under which
it operates as an excess policy. See Excess Coverage Provision, 2020 Policy at 232.
At no point does Gibraltar allege or show that Rockingham did not follow the terms
of its own Excess Coverage Provision. Moreover, insurance policies that are primary
under some circumstances and excess under others are not unprecedented. See
Hartford Underwriters Ins. Co. v. Hanover Ins. Co., 122 F. Supp. 3d 143, 155
(S.D.N.Y. 2015), aff'd, 653 F. App'x 66 (2d Cir. 2016) (“a primary policy with an excess
other insurance clause is a device by which a primary insurer seeks to limit[ ] or
eliminate its liability where another primary policy covers the risk.”) (citation
omitted). Thus, Gibraltar has failed to produce evidence that Rockingham engaged
in an “act or practice was deceptive or misleading in a material way.” Himmelstein,
McConnell, Gribben, Donoghue & Joseph, LLP, 37 N.Y.3d at 176, 171 N.E.3d at 1197
(2021). Accordingly, Defendant’s Motion is granted with respect to Plaintiff’s fourth
cause of action, and Plaintiff’s Motion is denied as to that claim.

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IV.

CONCLUSION

For the reasons set forth herein, the Court denies Plaintiff’s Motion in its
entirety, denies Defendant’s Motion with respect to Gibraltar’s first and second
causes of action, and grants Defendant’s Motion with respect to Gibraltar’s third and
fourth causes of action. The parties are directed to appear for a status conference on
October 28, 2024, at 11:00 a.m. in Courtroom 820.
Dated:

Central Islip, New York
September 25, 2024

s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge

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