Court Dismisses Claims Against Insurer Because Certificate Of Insurance Does Not Modify Terms Of Policy To Include Additional Insured
July, 2011
In Golasiewski v. Waste Management of Pennsylvania, Inc., 2011 WL 2133788 (E.D.N.Y 2011), the District Court for the Eastern District of New York held that a third-party plaintiff could not claim to be an additional insured under a certificate of insurance where the third-party was not endorsed as an additional insured under the relevant policy and the certificate of insurance specifically stated that it did not modify the terms of the policy. The case arose out of injuries sustained by Janusz Golasiewski, who sued Waste Management of Pennsylvania, Inc. ("Waste Management") alleging that Waste Management's negligent supervision of a waste transfer station caused his injuries. Id. at *2. Golasiewski was alleged to be an employee of WB Services, Inc. ("WB") and LU Transport, Inc. ("LU") at the time of the accident. Id.
Prior to Plaintiff's accident, Waste Management entered into a service contract with WB. Id. at *1. Under the service contract, WB agreed to transport waste and the contract also required WB to indemnify Waste Management against any damages arising from any personal injury suffered by its employees. Id. Additionally, the service contract obligated WB to obtain insurance coverage and to name Waste Management as an additional insured under its coverage. To evidence compliance, WB was required to deliver a certificate of insurance naming Waste Management as an additional insured before performing its waste transportation duties. Id. The service contract permitted WB to hire subcontractors and required that any subcontractors comply with the terms and conditions of the service contract, including its insurance and indemnification provisions. WB subcontracted its waste transportation responsibilities to LU. Id.
WB and LU obtained insurance coverage as required under the service contract. WB's and LU's broker procured workers compensation and employer's liability coverage from National Union Fire Insurance Company ("National Union") and produced certificates of insurance with respect to both WB's and LU's policies. Id. at *1. Both certificates listed "Waste Management" as an additional insured. Significantly, the certificates of insurance stated that they were "issued as a matter of information only" and conferred "no rights upon the certificate holder." Id. at *2. The certificates further stated that they did "not amend, extend or alter the coverage afforded" by the underlying policies. Id. Furthermore, the reverse side of the certificates stated that the underlying policies had to be endorsed to reflect any additional insureds and that the "certificate does not confer rights to the certificate holder in lieu of such endorsement(s)." Id.
After Golasiewski commenced the litigation, Waste Management filed a third-party complaint asserting claims against WB, LU, National Union and others. Waste Management's third-party complaint alleged that WB and LU were related entities and that Golasiewski was acting within the scope of his employment with the two companies at the time he was injured. Id. Waste Management also claimed that National Union was obligated to defend and indemnify Waste Management as an additional insured under the insurance policies of WB and LU. Id.
National Union moved to dismiss Waste Management's claims on the basis that Waste Management was not endorsed as an additional insured under the relevant policy. Id. Waste Management argued that it was covered as an additional insured pursuant to the certificates of insurance. The Court found this argument unavailing in light of the language in the certificates themselves and the language in the policy, which provided that the "terms of this policy may not be changed or waived except by endorsement issued" by National Union. Id. at *5. National Union never issued an endorsement naming Waste Management as an additional insured. Thus, the Court concluded that the clear and unambiguous language provided that Waste Management was not covered under either of the policies issued by National Union. Id.
The Court determined that the inclusion of Waste Management as an additional insured on the certificates of insurance did not alter the result because the policies clearly stated that they could be amended only through an endorsement issued by National Union. Id. Moreover, the certificates specifically provided that they did not amend, extend or alter the coverage. The Court found that courts in New York and Pennsylvania which addressed this situation had concluded that certificates of insurance do not extend coverage beyond what is provided in the policy. Id. Accordingly, Waste Management could not establish that it was an additional insured under either WB's or LU's insurance policies with National Union.
Waste Management also argued that its third-party complaint should not be dismissed because Waste Management should be allowed an opportunity to conduct discovery on whether Golasiewski was WB's employee. The Court found no reason to allow further discovery on the employment issue as it would have no bearing on the issue of coverage under the National Union policy. The Court noted that Golasiewski's alleged status as WB's employee could affect National Union's duty relative to WB but this would not change the fact that there existed no insurance contract between National Union and Waste Management. The Court specifically noted that the issue of WB's duty to indemnify Waste Management pursuant to the service contract was a separate issue. With respect to claims against National Union, however, the language of the certificates and the policies provided no basis for relief and the Court dismissed Waste Management's claims against National Union.
Learning Point
It is important to pay close attention to any limiting language in a policy and determine whether insureds and additional insureds have complied with their requirements under the policy. Close attention to policy language and prudent motion practice leads to successful litigation results. Further, simply because a party is listed in a Certificate of Insurance as an additional insured does not make that party an additional insured.
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