Competing motions for summary judgment regarding the duty to defend an additional insured were both denied by the court in Detroit Public Schools Program Mgt. Team, LLC v. Valley Forge Ins. Co, 2010 U.S. Dist. LEXIS 40904 (E.D. Mich. April 27, 2010).
The Detroit Public Schools Program Management Team was organized to act as an agent for the Detroit Public Schools (DPS) by managing DPS's obligations under a 1994 bond program. As part of its duties, the Management Team recommended DPS hire Jenkins Construction to provide preconstruction services for a Technical High School project. On November 7, 2001, Jenkins entered a Consulting Agreement with DPS.
Evidently, there was no express requirement for Jenkins to provide liability coverage. Nevertheless, Jenkins had a liability policy with Valley Forge which included a Contractor's Blanket Additional Insured Endorsement. The Blanket Endorsement, however, covered only liability arising out of Jenkins' work for that additional insured.
As part of its duties, Jenkins oversaw the demolition of the Tanner Building owned by DPS. On December 18, 2001, a Jenkins employee was inspecting the Tanner Building pursuant to the Consulting Agreement and was injured. At the time of the accident, an employee of the Management Team was present and working with the injured employee. The employee later sued the Management Team.
When the Management Team tendered its defense to Valley Forge, coverage was denied. Valley Forge contended the employee's injury did not involve work done by Jenkins for the Management Team.
The coverage action followed and cross motions for summary judgment were filed. The Management Team argued Jenkins was obligated to name it as an additional insured under an exhibit attached to the Consulting Agreement. There was a factual dispute, however, over whether the exhibit was actually part of the Consulting Agreement. Therefore, the Management Team's motion was denied.
In its motion, Valley Forge argued that the occurrence that lead to the employee's injury did not involve Jenkins' "work for" the Management Team. At the time of injury, the employee was inspecting the Tanner Building for asbestos abatement, which Jenkins was doing for DPS under the Consulting Agreement. The Management Team, however, was responsible for supervising the asbestos abatement in the Tanner Building.
Valley Forge argued the work was done for DPS, not the Management Team. But the Consulting Agreement made the Management Team a third party beneficiary because Jenkins' work relieved the Management Team of some of its obligations to DPS. The issue was whether Jenkins and Valley Forge intended for the Blanket Endorsement's "work for" requirement to cover additional insureds under the facts presented. Given this ambiguity, Valley Forge's motion for summary judgment was also denied.
