        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

740
CA 11-00156
PRESENT: FAHEY, J.P., CARNI, LINDLEY, AND GORSKI, JJ.


MERCHANTS MUTUAL INSURANCE COMPANY,
PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

NEW YORK STATE INSURANCE FUND,
DEFENDANT-APPELLANT,
ET AL., DEFENDANT.


TREVETT CRISTO SALZER & ANDOLINA P.C., ROCHESTER (MARK M. CAMPANELLA
OF COUNSEL), FOR DEFENDANT-APPELLANT.

HISCOCK & BARCLAY, LLP, ROCHESTER (ANTHONY J. PIAZZA OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.


     Appeal from an order and judgment (one paper) of the Supreme
Court, Erie County (Donna M. Siwek, J.), entered July 13, 2010. The
order and judgment granted the motion of plaintiff for summary
judgment, denied the cross motion of defendant New York State
Insurance Fund for summary judgment and awarded money damages to
plaintiff.

     It is hereby ORDERED that the order and judgment so appealed from
is unanimously affirmed without costs.

     Memorandum: Plaintiff commenced this action seeking, inter alia,
to recover funds from New York State Insurance Fund (defendant) based
on defendant’s alleged failure to indemnify Jerrick Waterproofing Co.,
Inc. (Jerrick Waterproofing), a third-party defendant in the
underlying wrongful death action. Jerrick Waterproofing held an
insurance policy issued by defendant that provided unlimited
employer’s liability coverage for employees subject to the Workers’
Compensation Law, and Jerrick Waterproofing also held a commercial
umbrella insurance policy issued by plaintiff that provided excess
coverage upon the exhaustion of all other insurance policy limits.
The plaintiff in the underlying wrongful death action sought damages
for injuries sustained by the decedent, a construction worker employed
by Jerrick Waterproofing, when he fell from scaffolding on a work site
where T&G Contracting, Inc. (T&G) was the general contractor and
Jerrick Waterproofing was a subcontractor. The wrongful death action
against T&G and the owners of the property on which the accident
occurred settled for approximately $2.2 million. All of the parties
to the instant action contributed toward that settlement.
                                 -2-                           740
                                                         CA 11-00156

     Defendant appeals from an order and judgment granting plaintiff’s
motion for summary judgment on the complaint against defendant and
awarding plaintiff damages in the amount of $600,000. We conclude
that Supreme Court properly granted the motion. Contrary to its
contention, defendant was obligated to provide unlimited coverage for
the accident, despite an exclusion in its policy for liability assumed
under a contract. Although T&G was granted summary judgment on its
contractual indemnification cause of action against Jerrick
Waterproofing in the underlying third-party action, T&G’s common-law
indemnification cause of action in that third-party action was still
viable at the time of the settlement. “The fact that [T&G’s] recovery
against [Jerrick Waterproofing] could have been based upon a contract
of indemnity does not preclude the existence also of a common-law
right to indemnity” (Aetna Cas. & Sur. Co. v Lumbermens Mut. Cas. Co.,
136 AD2d 246, 248, lv denied 73 NY2d 701; see O’Dowd v American Sur.
Co. of N.Y., 3 NY2d 347, 353). Where, as here, “the facts of the case
are such that the insured’s liability exists on one theory as well as
another and one of the theories results in liability within the
coverage, the insured may avail itself of the coverage” (Hawthorne v
South Bronx Community Corp., 78 NY2d 433, 438).

     Defendant further contends that the otherwise unlimited coverage
provided by its policy was limited by language on the declarations
page of the excess insurance policy issued by plaintiff, indicating
that defendant’s policy limit for bodily injury caused by an accident
was $100,000. We reject that contention. An excess insurer may be
bound by a misidentification of an underlying insurer’s liability
limit (see generally Liberty Mut. Ins. Co. v Insurance Co. of State of
Pa., 43 AD3d 666, 668). Here, however, the declarations page of the
policy issued by plaintiff unambiguously excludes coverage in
situations where the Workers’ Compensation Law is applicable, and the
language with respect to defendant’s policy limit for bodily injury
caused by an accident is applicable only to employees not subject to
the Workers’ Compensation Law. Thus, defendant was obligated to
provide unlimited coverage to Jerrick Waterproofing with respect to
its liability for decedent’s accident, and the obligation of plaintiff
to provide excess coverage was never triggered.




Entered:   June 17, 2011                       Patricia L. Morgan
                                               Clerk of the Court
