This is an insurance-coverage action, arising from an underlying personal-injury action pending in Supreme Court, New York County. The parties, both insurers, are disputing which insurer must provide defense and indemnity coverage to four related companies involved in a large construction project at Rockefeller Plaza (the RXR Entities). Plaintiff, American Casualty Company of Reading, Pennsylvania (ACCO), contends that defendant, Colony Insurance Company, owes a primary duty to defend the RXR Entities in the underlying action and to reimburse ACCO for defense costs incurred in the underlying action so far. Colony contends that the RXR Entities are not entitled to additional-insured coverage under Colony's policies, so ACCO owes them the duty to defend.

This court concludes that Colony owes a primary duty to defend two of the RXR Entities; that only ACCO owes a duty to defend the other two; and that Colony must reimburse ACCO for part, but not all, of the claimed defense costs.

Several contractors and subcontractors were collaborating on a construction project located at Rockefeller Plaza. A demolition subcontractor on the project, All State Interior Demolition Inc., and the general contractor, RXR Construction & Development LLC, agreed in the All State subcontract that All State would obtain additional-insured insurance coverage for RXR Construction & Development and for several other companies involved in the project:; RXR Atlas LLC; RXR Construction & Development MRE, LLC; RXR Realty LLC; RXR Partners LLC; and 75 Plaza LLC. (See NYSCEF No. 18 at 93-94 §§ 3.01, 3.15 [subcontract].)

All State is insured by Colony. Four of the six companies that All State agreed to indemnify (75 Plaza LLC, RXR Realty LLC, RXR Construction & Development LLC, and RXR Atlas LLC, or, collectively, the RXR Entities) are independently covered by an insurance policy issued by ACCO.

The dispute arises out of a personal-injury action brought by a construction worker, Jose Mayorga, against the RXR Entities, in which Mayorga has alleged that he was injured due to their negligent operation and supervision of the project site. (See Mayorga v 75 Plaza LLC, Index No. 159760/2016 [Sup Ct, NY County].) The RXR Entities then brought third-party claims against All State for contractual and common-law indemnification, contribution, and breach of contractual obligations to procure insurance. ACCO assumed the defense of the RXR Entities in the underlying Mayorga action.

ACCO brought this action against Colony for a declaratory judgment that the RXR Entities are additional insureds under the Colony policy, that Colony owes the RXR Entities a duty to defend and indemnify, and that the Colony policy is primary to the ACCO policy. ACCO also seeks reimbursement of its defense costs incurred in the underlying action. Colony counterclaimed for a declaratory judgment that the RXR Entities are not additional insureds under the Colony policy, that Colony does not owe a duty to defend or to indemnify, and that in any event, the Colony policy is excess over the ACCO policy.

ACCO now moves for summary judgment on its declaratory-judgment claims that Colony owes the RXR Entities a primary duty to defend under additional-insured endorsements in the Colony policy, and on its claim for reimbursement of defense costs ($105,528,90 as of July 2023), plus interest; and also moves for summary judgment dismissing Colony's counterclaims.

ACCO's motion is granted on its declaratory judgment claim, and its request to dismiss Colony's counterclaims, with respect to RXR Atlas LLC and RXR Construction & Development LLC. ACCO's motion is denied, and summary judgment is granted to Colony as the nonmoving party, with respect to 75 Plaza LLC and RXR Realty LLC. ACCO's motion on its claim for reimbursement is granted in part and denied in part; and the question of the amount of defense costs for which Colony must reimburse ACCO is deferred pending further briefing on the amount in defense costs incurred to defend RXR Atlas and RXR Construction & Development.

Determining the presence or absence of a duty owed by Colony to defend the RXR Entities as additional insureds implicates three distinct, but related questions: whether (i) the RXR Entities are named as additional insureds under one of the Colony policy's additional-insured endorsements; (ii) the injuries were caused in whole or in part by All State's acts or omissions; and (iii) the injuries suffered by Mayorga occurred in the course of All State's performance of ongoing operations for the RXR entities. These questions are considered in turn.

The Colony policy contains two additional-insured endorsements.^[FN1] The first expressly enumerates the entities who qualify as additional insureds under the endorsement. Two of the four RXR Entities (RXR Realty LLC and RXR Construction and Development LLC) are named in that endorsement. (See NYSCEF No. 37 at 21.) With respect to the other two RXR Entities (75 Plaza LLC and RXR Atlas LLC), ACCO argues that they qualify as additional insureds under the other endorsement, which provides for additional-insured coverage for "[a]ll persons or organizations as required by written contract with the Named Insured." (Id. at 20.) This court agrees.

It is undisputed that the All State/RXR Construction contract requires All State to obtain additional-insured coverage for 75 Plaza and RXR Atlas (as well as for RXR Realty LLC and RXR Construction & Development). (See NYSCEF No. 18 at 93-94.) Colony argues, though, that this contractual obligation is insufficient to trigger applicability of the written-contract additional-insured endorsement. Rather, Colony says, the endorsement's "as required by written contract with the Named Insured" language "unequivocally denotes that . . . there must be an agreement in writing . . . between Allstate and 75 Plaza that 75 Plaza be added as an additional insured; and between Allstate and RXR Atlas that RXR Atlas be added as an additional insured." (NYSCEF No. 54 at 8 [emphasis added].) Colony's argument overreads this contractual language.

The Colony endorsement at issue says only that additional-insured coverage exists when All State has been required in a written contract to obtain that coverage. It does not condition its applicability on All State's having contracted with any particular counterparty. The First Department has repeatedly held that when an additional-insured endorsement in a policy procured by named-insured A takes this form, a written contract between A and B requiring A to obtain additional-insured coverage for C will suffice to make C an additional insured under A's policy. (See Vargas v City of New York, 158 AD3d 523, 524-525 [1st Dept 2018]; Netherlands Ins. Co. v Endurance Am. Specialty Ins. Co., 157 AD3d 468, 469 [1st Dept 2018]; Carlisle SoHo [*2]E. Tr. v Lexington Ins. Co., 49 AD3d 272, 272 [1st Dept 2008].)

In doing so, the First Department has made clear that the privity condition contended for by Colony—e.g. here, that All State must have contracted with 75 Plaza and RXR Atlas to obtain them additional-insured coverage—exists only when the endorsement specifies both parties to the written contract requiring procurement of additional-insured coverage, not just the named insured. (See Netherlands Ins. Co., 157 AD3d at 469, quoting Gilbane Building Co./TDX Constr. Corp. v St. Paul Fire & Mar. Ins. Co., 143 AD3d 146, 149, 151 [1st Dep't 2016] [distinguishing between (i) an endorsement that affords coverage to "an[] entity required by written contract to be named as an insured" and (ii) an endorsement that affords coverage only to "any person or organization with whom you have agreed to add as an additional insured by written contract"] [emphasis in Netherlands Ins. Co.].) Because the Colony additional-insured endorsement does not specify the identity of All State's counterparty, All State's obligation under its contract with RXR Construction to obtain coverage for the RXR Entities was enough to trigger applicability of that endorsement here.

That the RXR Entities qualify as additional insureds under the Colony policy does not necessarily mean that their additional-insured coverage extends to the bodily-injury claims asserted in the underlying action. The Colony policy's additional-insured endorsements afford coverage only for bodily injury that is (i) "caused, in whole or in part" by "acts or omissions" of the named insured (All State) or those acting on All State's behalf, in (ii) "the performance of [All State's] ongoing operations for the additional insured(s)." (NYSCEF No. 37 at 20, 21.)

The parties dispute whether, given the allegations of the pleadings in the underlying action, these two additional requirements have been satisfied for purposes of the duty to defend. This court concludes that they have been—but only with respect to RXR Atlas and RXR Construction & Development, not the other two RXR Entities.

The first coverage requirement here is that Mayorga's injuries have been caused, partly or wholly, by the acts or omissions of All State or those acting on All State's behalf. ACCO has established as a matter of law that the allegations of the pleadings in the underlying action satisfy this requirement.

The relevant pleadings are Mayorga's complaint in the underlying action, brought against the four RXR Entities (NYSCEF No. 22); and the third-party complaint in that action, brought by 75 Plaza, RXR Realty, and RXR Construction & Development against All State (NYSCEF No. 23). Those pleadings, taken together, allege that Mayorga was injured while performing work on the jobsite for All State's subcontractor; and that those injuries resulted from the failure of All State to ensure that all applicable safety precautions were complied with. Those allegations are sufficient to satisfy the causation requirement of the Colony additional-insured endorsement for purposes of the duty to defend. (See All State Interior Demolition Inc. v Scottsdale Ins. Co., 168 AD3d 612, 613 [1st Dept 2019]; Indian Harbor Ins. Co. v Alma Tower, [*3]LLC, 165 AD3d 549, 549 [1st Dept 2018].^[FN2] )

Colony argues in opposition that treating allegations in a third-party complaint as sufficient to implicate additional-insured coverage would violate the principle that "insurance provides protection against risks or fortuitous losses," as opposed to "'intended or expected harms.'" (NYSCEF No. 54 at 13, quoting Consolidated Edison Co. of NY v Allstate Ins. Co., 97 NY2d 208, 220 [2002] [Con Ed].) This is because, Colony says, a party can "construct[] a pleading—specifically adding allegations that the plaintiff likely omitted—so that it can obtain additional insured coverage," which is the "exact opposite of fortuity or risk." (Id.) But the principle of fortuity discussed in Con Ed pertains to whether the underlying harm was fortuitous/accidental or expected/intended—not whether coverage for that harm was fortuitous or expected. (See 97 NY2d at 220 [explaining that because "[i]nsurance policies generally require 'fortuity' and thus implicitly exclude coverage for intended or expected harms," the requirement "of a fortuitous loss is a necessary element of insurance policies based on either an 'accident' or an 'occurrence'"].) That principle has no application here, where the question is whether coverage exists for an undisputedly accidental injury.

That the pleadings in the underlying action sufficiently allege that Mayorga's injuries were caused by the acts or omissions of All State or its subcontractor does not end the coverage inquiry. Both additional-insured endorsements in the Colony policy provide that those acts or omissions must also have occurred "in the performance of [All State's] ongoing operations for the additional insured(s)." (NYSCEF No. 37 at 20, 21.)

Here, All State was conducting its operations pursuant to its subcontract with RXR Construction & Development.^[FN3] And the First Department has held that in these circumstances, a subcontractor like All State is performing its ongoing operations not only for the general contractor but also for the owner of the construction site (i.e., RXR Atlas). (See Mt. Hawley Ins. Co. v American States Ins. Co., 168 AD3d 558, 558-559 [1st Dept 2019].)

The court reaches a different conclusion with respect to the other two RXR Entities (75 Plaza and RXR Realty). Absent a contract between All State and those entities—or, indeed, any connection with them beyond the obligation to name them as additional insureds—they do not qualify for additional-insured coverage on the Colony policy. Nor does ACCO identify any basis on which 75 Plaza and RXR Realty, in particular, might satisfy this ongoing-operations requirement.

ACCO has shown as a matter of law that RXR Atlas and RXR Construction & Development are entitled to additional-insured coverage under the Colony policy. The record also establishes as a matter of law that 75 Plaza and RXR Realty are not entitled to additional-insured coverage under the Colony policy.

ACCO also contends that Colony owes a primary and noncontributory duty to defend, such that the ACCO policy is not implicated until the Colony policies have been exhausted. This court agrees.

The Colony general-liability policy contains an other-insurance endorsement providing that with respect to "all persons or organizations as required by written contract with the Named Insured," the policy's coverage shall be "primary and non-contributing"; that any other valid and collectible insurance available to those entities "shall be considered excess over and above the insurance provided by this policy"; and that the other available insurance coverage "shall in no instance be considered as primary, co-insurance, or contributing insurance." (NYSCEF No. 37 at 22.) The Colony excess policy provides that for purposes of additional-insured coverage, the excess policy "shall be primary and non-contributory as respects to the Additional Insured(s)," except with respect to the underlying Colony general-liability policy itself. (NYSCEF No. 38 at 25.)

Colony does not dispute ACCO's interpretation of the Colony policies. It argues primarily that none of the RXR Entities are entitled primary coverage under the Colony policies because (Colony says) none of them are entitled to additional-insured coverage under those policies in the first place. As discussed above, this court disagrees.

Colony also contends that it would be premature to reach the question whether it owes a duty to defend under the excess policy before it has been shown that the amount of the general-liability policy has been exhausted. But if the excess policy is implicated (through exhaustion of the general-liability policy), then Colony does owe a duty to defend under that policy that is primary to the ACCO policy. To that extent the question of the duty to defend under the excess policy is ripe for decision now.

ACCO seeks both a declaration of Colony's duty to defend and also reimbursement of defense costs that ACCO had incurred as of the date of the motion (approximately $105,000). Colony argues that any reimbursement obligation should be reduced in proportion to the number of covered RXR Entities. This court is not persuaded that the computation may be rendered so mechanical, given the extent to which defense costs for the two covered and two noncovered entities might overlap as a practical matter. Instead, ACCO should move on notice to determine the reasonable costs of defending RXR Atlas and RXR Construction & Development (the two covered RXR Entities), in particular.

In addition to moving for partial summary judgment in its favor, ACCO also moves for summary judgment dismissing Colony's counterclaims. The motion is granted in part and denied in part; and summary judgment on the counterclaims is granted in part to Colony as the nonmoving party.

Colony's first counterclaim seeks a declaration that the RXR Entities are not additional insureds on the Colony general-liability policy, and therefore that Colony does not owe them a duty to defend or to indemnify (or owe ACCO an obligation to reimburse defense costs). For the reasons set forth above in Point I, ACCO's request to dismiss this counterclaim is granted to the extent that it pertains to RXR Atlas and RXR Construction & Development. The request for dismissal is denied as it pertains to 75 Plaza and RXR Realty. As to those entities, summary judgment is granted to Colony as the nonmoving party, and the court will so declare.

Colony's second counterclaim seeks a declaration that, to the extent applicable, any defense and indemnity obligations owed by Colony to the RXR Entities are excess over other applicable insurance policies. For the reasons set forth above in Point II, ACCO's request to dismiss this counterclaim is granted.

Finally, for ACCO to prevail, it must prove the Colony policy is "primary and non-contributory," as compared to ACCO's "excess" policy.

Accordingly, it is

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking a declaration that Colony owes the RXR Entities a duty to defend under the Colony general-liability policy is granted with respect to RXR Atlas LLC and RXR Construction & Development LLC and is denied with respect to 75 Plaza LLC and RXR Realty LLC; and it is further

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking a declaration that Colony owes the RXR Entities a duty to defend under the Colony excess policy is conditionally granted with respect to RXR Atlas LLC and RXR Construction & Development LLC and is denied with respect to 75 Plaza LLC and RXR Realty LLC; and it is further

ORDERED that summary-judgment is granted to Colony as the nonmoving party dismissing ACCO's claim for a declaration that Colony owes a duty to defend 75 Plaza LLC and RXR Realty LLC, and that claim is dismissed; and it is further

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking a declaration that any duty to defend owed by Colony under its general-liability and excess policies is primary and non-contributory is granted; and it is further

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking [*4]dismissal of Colony's first counterclaim is granted with respect to RXR Atlas LLC and RXR Construction & Development LLC and is denied with respect to 75 Plaza LLC and RXR Realty LLC, and the first counterclaim is dismissed to that extent; and it is further

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking dismissal of Colony's second counterclaim is granted, and that counterclaim is dismissed; and it is further

ORDERED that summary judgment is granted to Colony as the nonmoving party on its first counterclaim with respect to 75 Plaza LLC and RXR Realty LLC; and it is further

ADJUDGED AND DECLARED that Colony owes a primary and noncontributory duty to defend RXR Atlas LLC and RXR Construction & Development LLC in Mayorga v 75 Plaza LLC, Index No. 159760/2016 (Sup Ct, NY County) under the Colony general-liability policy; and it is

ADJUDGED AND DECLARED that if the Colony general-liability policy is exhausted, Colony owes a primary and noncontributory duty to defend RXR Atlas LLC and RXR Construction & Development LLC in Mayorga v 75 Plaza LLC, Index No. 159760/2016 (Sup Ct, NY County) under the Colony excess policy; and it is

ADJUDGED AND DECLARED that Colony does not owe a duty to defend 75 Plaza LLC and RXR Realty LLC in Mayorga v 75 Plaza LLC, Index No. 159760/2016 (Sup Ct, NY County) under the Colony general-liability policy or the Colony excess policy; and it is further

ORDERED that the branch of ACCO's partial-summary-judgment motion seeking reimbursement of ACCO's defense costs incurred in defending the RXR Entities in Mayorga v 75 Plaza LLC through July 20, 2023 (plus interest) is granted in part and denied in part as set forth above; and it is further

ORDERED that ACCO may enter a supplemental judgment for the amount of its reasonable defense costs incurred through the date of entry of this order in defending RXR Atlas LLC and RXR Construction & Development LLC in Mayorga v 75 Plaza LLC (plus interest), with the amount of those costs to be determined by motion made on notice, supported by appropriate documentation; and it is further

ORDERED that the balance of the claims in this action are severed and shall continue; and it is further

ORDERED that ACCO serve a copy of this order with notice of its entry on Colony and on the office of the County Clerk (by the means set forth in the court's e-filing protocol, available on the e-filing page of the court's website, https://ww2.nycourts.gov/courts/ljd/supctmanh/E-Filing.shtml), which shall enter judgment accordingly.