No defense was owed to the additional insured despite the argument that the insurer's denial was untimely. Houston Cas. Co. v. Cavan Corp. of NY, Inc., 2019 N.Y. Misc. LEXIS 3556 (N.Y. Sup. June 27, 2019).
Cavan Corporation entered a Construction Management Agreement (CMA), as the construction manager, with Puck Residential Association, LLC, as the owner. Cavan was to build six new residential condominium units in the Puck Building. Cavan secured a CGL policy with Houston Casualty Company (HCC) as required by the CMA. The policy included an additional insured endorsement adding as additional insureds "any person or organization for whom you are performing operations during the policy period when you and such person or organization have agreed in writing. . . that such person or organization be added as an additional insured on your policy."
J.D. Wilson Construction Corporation was hired as the project's sidewalk restoration contractor. Richard Wilson, the principle of J.D. Wilson, was allegedly injured at the premises during his work on the project. He sued the Puck Association, Cavan and others. Cavan tendered to HCC, who disclaimed coverage based upon the exclusion for bodily injury arising out of construction management.
HCC sued Cavan for declaratory judgment. The Puck Association was allowed to intervene. HCC then amended its complaint to add the Puck Association as a defendant. Cavan and HCC's cross-motions for summary judgment were denied. The appellate division decided, however, that HCC was entitled to summary judgment because the policy did not provide coverage to Cavan.
The Puck Association then moved for summary judgment. They contended that while the appellate division determined that the policy did not afford Cavan coverage, they were entitled to summary judgment declaring that HCC must defend and indemnify them in the underlying case because they did not receive a timely notice of disclaimer from HCC as mandated by New York statute.
The statute required a written notice disclaiming coverage as soon as reasonably possible. The Puck Association maintained that HCC did not respond to their tender until HCC filed its amended complaint, or a delay of seven months. Therefore, HCC could not rely on the construction management exclusion to deny coverage.
HCC argued that the appellate division's determination that the policy did not cover Cavan because of the construction management exclusion resolved all of the claims against HCC. Further, HCC contended that they disclaimed coverage as to the Puck Association within 30 days of receiving its tender.
The court agreed with HCC and granted it summary judgment.