When Should an Accident be an Accident?

Charles P. Edwards | Barnes & Thornburg LLP | November 27, 2017

Standard commercial general liability (CGL) insurance policies provide coverage for damages the policyholder is legally obligated to pay because of property damage or bodily injury caused by an “occurrence.” CGL policies typically define “occurrence” as an “accident.” Courts define an accident as “an unexpected happening without an intention or design.” Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1283 (Ind. 2006).

Simple, right? Unfortunately, a trilogy of cases from the Indiana Supreme Court have caused confusion on this issue, particularly where the policyholder may have errors and omissions (E&O) coverage.

In Harvey, a 16-year-old girl, Brandy, fell into a river and drowned after being intentionally pushed during an altercation with a boy, Toby. Toby admitted that he intended to push Brandy, but denied that he intended to harm her. Brandy’s parents filed a wrongful death action alleging Toby’s conduct was negligent and reckless and a declaratory judgment action against Toby’s homeowner’s insurer, Auto-Owners. Auto-Owners denied it had any duty to defend or indemnify Toby, arguing that Toby’s conduct was not an “occurrence” and that it fell under the exclusion for “intended and expected harm.”

The Indiana Supreme Court concluded that, “[u]nder the facts of this case … the meaning and application of this [occurrence] provision is unclear.” Id. at 1284. If judged by Toby’s conduct, there clearly was no accident; but if judged by the result – Brandy’s fall and drowning – then there was an accident, because Toby did not intend for that to happen. The court specifically rejected the rule applied by other courts that “a volitional act – which is always intended – does not constitute an accident, even where the results may be unexpected or unforeseen.” Id. at 1285. The court called such a rule “unclear, potentially confusing, and likely to result in subjective and unpredictable judicial applications.” Id. at 1285–86.

In discussing what constitutes an “occurrence,” the court mentioned, but did not expressly follow, a number of cases applying the definition “to circumstances remote from instances of specific personal physical conduct, but rather arising from claims based on commercial or professional conduct.” Those cases included R.N. Thompson & Assoc. v. Monroe Guar. Ins. Co., 686 N.E.2d 160, 164–65 (Ind. Ct. App. 1997), in which the Court of Appeals held that economic losses from construction defects are not an occurrence.

In 2009, the Indiana Supreme Court addressed the occurrence issue in Tri-Etch, Inc. v. Cincinnati Ins Co., 909 N.E.2d 997, 999 (Ind. 2009). That case involved a liquor store clerk (Young) who was abducted shortly before midnight, tied to a tree in a local park, and beaten. He was found the next day alive, but later died of his injuries. Young’s estate sued the alarm company (Tri-Etch) alleging it negligently failed to notify the store’s manager within 30 minutes of closing that the night alarm had not been set, and that if Tri–Etch had acted promptly, Young would have been found earlier and would have survived. The jury in that case found against Tri-Etch and awarded $2.5 million to Young’s estate.

In the coverage case, the Indiana Supreme Court considered whether Tri-Etch’s failure to notify the store manager after the alarm had not been set constituted an occurrence. In holding it was not, the court distinguished Harvey by noting that, “in Harvey, we noted the distinction between an ‘occurrence’ as the term is used in CGL policies, and claims based on ‘commercial or professional conduct.’” Id. at 1284. One of those cases, as mentioned, was R.N. Thompson.

The Tri-Etch court went on to note that, “[c]laims based on negligent performance of commercial or professional services are ordinarily insured under ‘errors and omissions’ or malpractice policies. For this reason, CGL policies typically exclude claims arising out of professional or other business services.” Id. Indeed, the court ultimately held that in addition to not being an “occurrence,” the claim was excluded by the professional services exclusion.

What the Tri-Etch court did not discuss, because it was not presented, is that most E&O and malpractice policies exclude coverage for bodily injury or property damage, because those damages are covered by CGL policies. As in Tri-Etch, a professional services exclusion may be added to a CGL policy, but that is usually a specific endorsement, which applies only to specific excluded services. Moreover, the mere offering of this exclusion in the insurance marketplace suggests insurers do intend to provide coverage for bodily injury and property damage caused by a professional error or omission in the absence of the exclusion.

One year later, the Indiana Supreme Court again visited the “occurrence” issue in Sheehan Const. Co. v. Cont’l Cas. Co., 935 N.E.2d 160 (Ind.), opinion adhered to as modified on reh’g, 938 N.E.2d 685 (Ind. 2010). In Sheehan, the court overturned R.N. Thompson and held that faulty workmanship was an “accident” and “occurrence” under a CGL policy “so long as the resulting damage is an event that occurs without expectation or foresight.” Id. at 169. The court explained:

As applied to the case before us, if the faulty workmanship was the product of unintentional conduct then we start with the assumption, from Sheehan’s viewpoint, that the work on the Class members’ homes would be completed properly. The resulting damage would therefore be unforeseeable and constitute an “accident” and therefore an “occurrence” within the meaning of the Insurers’ CGL policies.

Id. at 170. This holding was consistent with the court’s earlier holding in Harvey, in that it focused on whether the act was intended to cause the result.

Sheehan should have put an end to any confusion caused by Tri-Etch and returned us to the clear rule of Harvey and clear focus on whether the act – even if intentional – was intended to cause the result. Unfortunately, it appears from a recent decision that Tri-Etch’s reliance on Harvey’s reference to pre-Sheehan cases and speculation about E&O policies may still have some traction.

In Allstate Ins. Co. v. McColly Realtors, Inc., No. 2:16-CV-00142, 2017 WL 4938154 (N.D. Ind. Oct. 31, 2017), a family died as a result of carbon dioxide emitted from a generator in the garage of a home they were renting. The estate filed suit against the realtor (McColly) for failure to warn of latent or concealed dangers and failure to register the home as a rental in McColly’s dealings with the owner of the home. McColly sought coverage under its CGL policy. The court concluded that Allstate did not have a duty to defend or indemnify McColly, following Tri-Etch’s discussion of E&O insurance. The court concluded that, “[t]his claim alleges a professional error or omission, rather than an accident or occurrence.” Id. at *8. The court’s conclusion likely means little to McColly if its E&O policy contains exclusions for bodily injury or property damage.

The interplay between CGL coverage and E&O coverage is illustrated by Wayne Twp. Bd. of Sch. Comm’rs v. Indiana Ins. Co., 650 N.E.2d 1205, 1207 (Ind. Ct. App. 1995). That case involved a school that was sued for its negligence in connection with its principal’s alleged molestation of a student. The school sought coverage under both its CGL policy and its E&O policy. The court held that the allegations against the school did allege an occurrence, noting that “Indiana Insurance has not designated any evidence demonstrating that the school’s alleged conduct was not an accident: there is no evidence that the school intended or expected Barger’s misconduct or that the molestation was the result of the school’s intent or design.” Id. at 1209. The court held that the claims against the school were, however, excluded under the E&O policy, which excluded “any damages, whether direct, indirect or consequential, arising from, or caused by, bodily injury, personal injury, sickness, disease or death.” Id. 1211–12.

Wayne Township reflects the correct “occurrence” analysis when evaluating CGL coverage for a company sued for negligently inflicted bodily injury or property damage. Courts should not speculate about what is or is not covered by any E&O policy. Nor should they determine the “occurrence” issue based on whether the claim is based on commercial or professional conduct, or alleges a professional error or omission. Many companies do not have E&O coverage (because they do not engage in professional services), and many E&O policies contain exclusions for bodily injury or property damage (precisely because those items of damage are covered by CGL policies). The sole focus, instead, should be on whether the complaint alleges an accident, which should be governed by Harvey/Sheehan rule – whether the conduct unintentionally results in bodily injury or property damage.

Construction Law Practice Tip: General Contractor Liability for Subcontractor Injury

Pierre Grosdidier | Haynes and Boone LLP | October 26, 2017

AIA Document A201TM, General Conditions of the Contract for Construction (the “General Conditions”), is a form agreement often incorporated into a main contract between an owner and a general contractor.1 The General Conditions place project control squarely in the hands of the general contractor. The issue is important because who controls the project might end up owing a duty of care to injured independent contractor employees.2 For example, in Saenz v. David & David Constr. Co., Inc., Saenz, an independent contractor employee, appealed the trial court’s take-nothing judgment in favor of David & David after a crane load struck him on the head, precipitating his fall from a roof.3 Saenz argued, inter alia, that the contract between the owner and David & David, and the subcontract between the latter and Saenz’s employer gave David & David control as a matter of law. The contract between the owner and the general contractor contained clauses almost identical to those in General Conditions §§ 3.3.1, 5.3, and 10.2.1.4 The contract provided that

[t]he contractor shall be solely, subject to the terms of Article 4, responsible for and have control over construction means, methods, techniques, sequences and procedures and for coordinating all portions of the work under the contract unless contract documents give other specific instructions concerning these matters[;]5

and that

[t]he contractor shall take all necessary precautions for safety and shall provide all necessary protection to prevent damage, injury or loss to all persons on the work and other persons who may be affected thereby.6

But the contract also required the general contractor to pass its obligations on to its subcontractors via the following clause:

The contractor shall require each subcontractor, to the extent of the work to be performed by the subcontractor, to be bound to the contractor by terms of the contract documents and to assume towards the contractor all obligations and responsibilities which the contractor by the contract documents assumes towards the owner and architect.7

The court held that this last “contract clause modified the previous control clauses.” The subcontract gave effect to this last clause with the following clause:

Subcontractor . . . assumes the responsibilities of an employer for performance of the Work and acts as an employer of one or more employees by paying wages, directing activities, and performing other similar functions. Subject to the right (but not the obligation) of [David & David] to direct Subcontractor or its employees to cease or change unsafe work practices. Subcontractor is an independent contractor, free to determine the manner in which the Work is performed. (emphasis added).8

The court held that the contracts assigned “the contractor’s responsibility for controlling the construction means, methods, techniques, sequences and procedures” to the subcontractor. The court could not agree, in light of the two contracts, that “David & David’s control of the subcontractor’s work is uncontroverted and thus established as a matter of law.”9 The court overruled Saenz’s issue on appeal and affirmed the trial court’s take-nothing judgment in favor of David & David. This next case shows what happens when the subcontract does not include a provision that passes project control to the subcontractor for the latter’s scope of work.

In Maggi v. RAS Dev., Inc., the plaintiff, a subcontractor’s employee, fell from a height on a construction site and died of his injuries.10 A jury awarded Maggi’s estate $3.3 million against RAS Development, the general contractor. On appeal, RAS Development argued, inter alia, that it should not be held liable for Maggi’s death because it did not control or supervise his work. The subcontract between RAS Development and Maggi’s employer “expressly incorporated” AIA Document A201TM, including form language from §§ 3.3.1, 3.3.2, 10.1, 10.2.1, 10.2.3, and 10.2.6, which gave the contractor control of the worksite and responsibility for its safety. For example, the General Condition’s § 3.3.1 stated that

[t]he Contractor shall supervise and direct the Work, using the Contractor’s best skill and attention. The Contractor shall be solely responsible for and have control over, construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract, unless the Contract documents give other specific instructions concerning these matters.11

The court of appeals held that these clauses made it “clear that the parties intended RAS Development to be responsible for supervising, directing, and controlling the construction project,” and it affirmed the trial court’s judgment.12 We can infer that the subcontract did not contain a provision passing control to the subcontractor and making the latter an independent contractor, free to perform its work, as in Saenz.13 RAS Development might have avoided a holding of control-by-contract had such a provision been in place.14

Privity and Additional Insured Coverage

Larry P. Schiffer and Suman Chakraborty | Squire Patton Boggs | October 5, 2017

When a worker is injured on a construction job and sues the relevant parties, a side battle often ensues over which carrier has the duty to defend and indemnify the owner, general contractor or subcontractor based on the language in the various construction contracts requiring some or all of those parties to be named as additional insureds. When there are multiple subcontracts cascading down

to the injured worker’s employer, determining whether the employer’s policy must defend and indemnify other parties as additional insureds can be confusing. In a recent Summary Order, which does not have precedential effect, the Second Circuit Court of Appeals weighed in on this issue under New York law.

In Cincinnati Ins. Co. v. Harleysville Ins. Co., an employee of a sub-subcontractor was injured and sued the building owner, general contractor and subcontractor. The sub-subcontractor’s construction contract with the subcontractor required the sub-subcontractor to add the subcontractor, general contractor and owner as additional insureds to the sub-subcontractor’s insurance policy. The subcontractor’s carrier sued the sub-subcontractor’s carrier arguing that the latter carrier had to defend and indemnify the additional insureds. The district court granted the subcontractor’s carrier’s summary judgment motion in part by finding that the sub-subcontractor had a duty to defend and indemnify the building owner as an additional insured, but not the general contractor. On appeal, the Second Circuit reversed in part and held that the sub-subcontractor’s carrier had no duty as neither the building owner nor the general contractor were additional insureds under the policy.

According to the court, the sub-subcontractor’s policy had 2 endorsements that addressed additional insureds. The first was the “Privity Endorsement,” which grants additional insured coverage “when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.” The second was the “Declaration Endorsement,” which refers to the declarations section of the policy for a schedule of additional insureds.

In reversing, the court held that the Privity Endorsement did not confer additional insured status on the building owner or general contractor because there was no contractual privity between them and the sub-subcontractor. Simply put, the sub-subcontractor had no direct construction contract with the owner or the general contractor. The court noted that the law in New York was clear on this point and that New York courts had interpreted the identical provision to require contractual privity. The court stated that it did not matter if the sub-subcontractor’s construction contract required the owner and general contractor to be named as additional insureds (this was a matter for breach of contract), that contract could not modify the insurance policy because the Privity Endorsement was clear on its face that the construction contract had to be between the insured and the purported additional insureds. Because the insured had no construction contract with the owner or the general contractor there was no contractual privity and no coverage.

As to the Declaration Endorsement, the court noted that neither party were listed on the schedule as additional insureds. The court also found that a reference to a heading on the Declaration Endorsement that was the same as the Privity Endorsement did not expand the additional insured coverage grant automatically to every party when required in any construction agreement with the insured. Essentially, the court refused to write the Privity Endorsement out of the insurance policy. The court held that the Privity Endorsement modified the automatic status heading language in the declarations, not the other way around. In essence, the court held under New York law that in insurance contracts that require privity for additional insured coverage, the lack of a direct contract between the insured and the party seeking the additional insured coverage precludes extending additional insured coverage.

How Utah Evaluates a Worker’s Entitlement to PTD Benefits

Ryan B. Frazier | Kirton McConkie | August 28, 2017

Have you ever thought about how the word “limit” de­fines our perceptions of and interactions with the world around us? The concept of a “limit” engenders thoughts of a bound­ary, an edge, or an end. When we say something is limited, we are suggesting that it is restricted, constrained, or regulated. Something that is limited is imperfect or incomplete. We speak of pushing things to the limit when we are going to the edge of our abilities, or we declare the “sky’s the limit” to indicate that things are unrestricted.

The word “limit” also carries an abundance of meaning when it’s used in the context of analyzing a worker’s ability to perform basic work activities and whether an injured worker is entitled to permanent total disability (PTD) benefits under Utah’s workers’ compensation statutory scheme. The way the word is used in Utah law was key in a recent decision by the Utah Supreme Court addressing whether a construc­tion worker who was injured on the job was entitled to PTD benefits.

Decision makers go back and forth

Mark Oliver was working for D. Tyree Bulloch Con­struction on March 27, 2000. While he was on a Bulloch construction site, he fell from a suspended porch and was injured. For years after the injury, he worked in a variety of jobs, including as a construction worker, landscape de­signer, and delivery truck driver. In 2007, he stopped work­ing altogether.

Several years after he was injured on the job, Oliver applied to the Utah Labor Commission for PTD benefits under Utah’s Workers’ Compensation Act. The parties presented conflicting medical and vocational evidence to the commission. Both Oliver and Bulloch had medi­cal experts who provided opinions on Oliver’s ability to work. Dr. Mark Passey opined that Oliver is able to perform “just about any activities he wishes to do.” By contrast, Dr. Jacob Corry opined that he suffers from constant attention difficulties because of his pain and is severely restricted in his ability to walk, balance, and crouch.

In addition, the parties had vocational experts who testified about Oliver’s ability to work. Oliver’s voca­tional expert testified that he likely couldn’t perform basic work activities because of his inability to concen­trate. Bulloch’s vocational expert disagreed, opining that Oliver could perform “medium-duty” work and wasn’t limited in his ability to perform basic work ac­tivities. However, Bulloch’s vocational expert conceded that if Corry’s medical opinion was correct, Oliver likely wouldn’t be able to perform basic work activities.

Because of that conflicting evidence, an administra­tive law judge (ALJ) appointed an independent medical panel to perform an impartial review of the medical evidence. The panel determined that Oliver could per­form medium-duty work as long as he was able to be absent from work occasionally, elevate his legs for five to 10 minutes every hour, and take occasional unscheduled breaks. In addition, the panel concluded that he is able to perform basic work activities. It found that he could con­centrate, commute, communicate, work, remain at work, and cope with the work setting.

The ALJ reviewed the evidence, concluded that Oli­ver was permanently totally disabled, and tentatively awarded him PTD benefits. Bulloch appealed the award of benefits, and the commission reversed the ALJ’s deci­sion on two grounds.

First, relying on the medical panel’s report, the commission concluded that Oliver failed to prove that he was limited in his ability to perform basic work activities. The commission noted that although the panel determined that he might require unscheduled breaks and occasionally need to be absent from work, it found that the “indefinite circumstances do not present a rea­sonable limitation on [his] ability to do basic work activi­ties,” particularly in light of its conclusion that he could work, remain at work, and cope with work changes. The commission also noted that being required to elevate his legs for five to 10 minutes every hour wasn’t enough to show that he was reasonably limited in his flexibility and endurance. Second, the commission disagreed with the ALJ’s determination that Oliver couldn’t perform the essential functions of his work as a delivery truck driver.

The commission denied Oliver’s claim for PTD ben­efits for two reasons:

(1) He was not limited in his ability to perform basic work activities.

(2) He was not prevented from performing the essential functions of the work for which he was qualified up to the time of his on-the-job injury.

Oliver appealed the commission’s decision to the Utah Court of Appeals, which reversed the denial of benefits. The court found that the commission misinter­preted the “basic work activities provision” of the stat­ute applicable to permanent total disabilities. The court also consulted the U.S. Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook (which wasn’t in the record as evidence during the commission proceedings) and concluded that the commission’s determination that Oliver was qualified to work as a delivery truck driver wasn’t supported by substantial evidence. The court of appeals reinstated the ALJ’s PTD benefits award. Bull­och appealed to the Utah Supreme Court.

Proving entitlement to PTD benefits

The Utah Supreme Court reversed the decision of the Utah Court of Appeals and concluded that the com­mission properly denied Oliver’s application for PTD benefits. To put the issues into context, the supreme court first explained what an employee must prove to qualify for PTD benefits. Under Utah Code Section 34A- 2-413(1), an employee seeking an award of PTD benefits must meet six factors:

(1) He sustained a significant impairment as a result of the work-related injury.

(2) He is not gainfully employed.

(3) He has an impairment or a combination of impair­ments that limits his ability to perform basic work activities.

(4) His impairment or impairments prevent him from performing the essential functions of the work for which he was qualified until the time of the accident.

(5) He cannot perform other work that’s reasonably available.

(6) The industrial accident or occupational disease is the direct cause of his permanent total disability.

The court clearly placed the burden of proving each of those elements by a preponderance of the evidence on the employee. Most of the inquiries focus on the employ­ee’s ability to work. If the employee fails to prove even one of the six elements, his claim for PTD benefits will be denied.

Pushing the limits

The Utah Supreme Court first examined the “basic work activities” element of Section 34A-2-413(1)(c)(ii). This element requires employees seeking PTD benefits to prove they have “an impairment or combination of impairments that limit [their] ability to do basic work ac­tivities.” The issue in this case was the meaning of the word “limit” as it is used in the statute.

The court of appeals maintained that employees can show a “limit” on their ability to do basic work activities by producing evidence of any limitation on their abil­ity to work, no matter how slight. In other words, even employees capable of performing basic work activities would be able to establish a claim for PTD benefits if they can show “some limitation” on their performance of basic activities.

The supreme court disagreed with the court of ap­peals’ interpretation, concluding that it was at odds with the “basic work activities” element in the statute. Looking to Provo City v. Utah Labor Commission, a case it decided in 2015, the supreme court explained that it has previously held that “basic work activities” are not just any activities performed in the workplace; rather, they are the activities that are essential to “a broad spectrum of jobs available.” In other words, they are the abilities that allow an employee to perform most jobs, including more sedentary lines of work.

The court then turned to an examination of how “limit” is used in the statute. It acknowledged that “limit” has a variety of possible meanings, but the word is not used in isolation in the statute. According to the court, it’s clear that in the context of the statute, whether an employee is “limited” in his ability to per­form basic work activities depends on whether, irrespec­tive of any impairments, he is meaningfully able to per­form the “core tasks” that are the basic requirements for employment.

Being “limited” in the ability to perform basic work activities is really a question of whether an employee has the abilities and aptitudes necessary for most jobs. If a limitation doesn’t hinder the employee from mean­ingfully engaging in the workforce, he may be limited in performing typical activities, but he isn’t limited in performing “basic” work activities. Thus, the supreme court concluded that the court of appeals incorrectly interpreted the word “limit” in the statute, and the commission correctly interpreted it.

In short, the supreme court concluded that only im­pairments that strike at the heart of the abilities and ap­titudes necessary for most jobs actually limit an employ­ee’s ability to do basic work activities. In other words, an impairment must meaningfully inhibit an employee from performing the core tasks of a wide swath of jobs, making it unreasonable for an employer to ask the em­ployee to perform those tasks.

The supreme court noted that interpretation isn’t consistent with federal disability law. However, federal law doesn’t govern the interpretation of the word “limit” as it’s used in the state’s workers’ comp law. Applying its interpretation, the supreme court concluded the com­mission’s determination that Oliver failed to satisfy the basic work activities element was supported by substan­tial evidence.

Analyzing the essential functions provision

The Utah Supreme Court also analyzed the essen­tial functions provision of the statute when it considered Oliver’s application for PTD benefits. Under the statute, an employee must show that his impairments “prevent [him] from performing the essential functions of the work activities for which [he] has been qualified until the time of the industrial accident.” The commission found that Oliver failed to prove that his impairments prevented him from performing the “essential func­tions” of a delivery truck driver, a job he was qualified to perform at the time of his work-related accident.

The court noted that an employee merely has to present evidence that the only job he is qualified to perform is the job he held at the time of the injury. However, an employer can counter that evidence with proof that the employee is qualified for another job (in this case, deliv­ery truck driver). The employee must then respond with evidence that he cannot perform the essential functions of that position. Oliver couldn’t do that. Accordingly, the court concluded that he failed to meet his burden on the essential functions element of the statute.

The supreme court also noted that the court of ap­peals shouldn’t have considered information about the qualifications of delivery truck drivers from the BLS that wasn’t on the record before the commission. The su­preme court upheld the denial of Oliver’s application for PTD benefits. Oliver v. Utah Labor Commission, Workers’ Compensation Fund, 2017 UT 39 (Utah July 25, 2017).

Lessons learned

This case illustrates that under Utah’s workers’ comp statute, an employee will be entitled to PTD ben­efits only if he is limited in the abilities and aptitudes necessary to perform most jobs. When confronted with a claim for PTD benefits, you should focus on whether the employee has the ability to perform the basic job duties—i.e., the core functions—of the majority of jobs, including sedentary jobs. If you concentrate on satisfy­ing that standard, you will be better able to defeat over­reaching claims for PTD benefits.

No Duty To Defend Additional Insured When Bodily Injury Not Caused by Insured

Tred Eyerly | Insurance Law Hawaii | July 19, 2017

The court found there was no duty to defend a suit for bodily injury against the additional insured where the injury was not caused by the insured. Consigli Constr. Co. v. Travelers Indem. Co., 2017 U.S. Dist. LEXIS 95339 (D. Mass. June 21, 2017).

Consigli was the general contractor for a renovation project at a high school. Among the subcontractors was American Environmental, Inc., who was responsible for demolishing concrete floors within the existing structures, and Costa Brothers, who did the masonry work. Wellington M. Ely was an employee of Costa Brothers and worked as a mason on the project.

Costa Brothers had a CGL policy with Travelers. As a subcontractor, Costa Brothers agreed to name Consigli as an additional insured on its policy.

Ely was injured when he tripped and fell over exposed wire where where the concrete floor had been broken up. American Environmental had demolished the concrete floor, allegedly without removing protruding wires or warning workers of the potential tripping hazard. Ely alleged that American Environmental and Consigli were both responsible for his injuries because American Environmental performed its demolition work negligently and Consigli failed to maintain a safe working environment.

Ely sued American Environmental and Consigli. Consigli tendered its defense to Travelers. The tender was denied because Travelers contended that Costa Brothers was not the cause of the loss.

Consigli settled with Ely and sued Travelers. Travelers moved for summary judgment. The court noted that Costa Brothers agreed to name Consigli as an additional insured, but only as to some injuries. Consigli qualified as an additional insured “[o]nly with respect to liability for ‘bodily injury’, ‘property damage’ or ‘personal injury'” and “[i]f and only to the extent that, the injury or damage is caused by acts or omissions of [Costa Brothers] . . .”

There was no possibility, based on the allegations of the underlying complaint, that Costa Brothers caused the injury to Ely. American Environmental caused the wire to be exposed by demolishing the floors negligently. Costa Brothers was not alleged to have undertaken work in the area where the accident occurred. Therefore, there was no act or omission by Costa Brothers identified in the complaint that would make Costa Brothers the proximate cause of Ely’s injury or would show that Costa Brothers brought about or provoked Ely’s injury.

Travelers had no duty to defend and was granted summary judgment.