Zissu Obtains S.D.N.Y. Summary Judgment in Multi-Tower Priority of Insurance Coverage Dispute
Clausen Miller partner Jacob Zissu recently obtained a summary judgment decision in favor of Clausen Miller’s excess insurance client in the U.S. District Court for the Southern District of New York in a declaratory judgment action involving 8 insurers and 4 separate towers of insurance with intertwined additional insured coverage claims arising out of an underlying multi-million dollar property damage suit pending since 2017.
The plaintiffs in the declaratory judgment action were the primary insurers of two subcontractors on a construction project who were each alleged to have caused water damage in separate occurrences. In the underlying action, the owner sued the general contractor and subcontractors. The general contractor, who was a named insured under two separate policies issued by Clausen Miller’s client, tendered its defense and indemnification to each of the subcontractors’ insurers.
After initially rejecting, and later accepting the defense of the general contractor as an additional insured, the subcontractors’ insurers subsequently denied that there was coverage for the general contractor. The subcontractors then filed the S.D.N.Y. declaratory judgment action against their own insureds, as well as the owner, general contractor and the other insurers of the owner and general contractor.
In a 41 page ruling, the S.D.N.Y. held that Clausen Miller’s client owed no excess coverage by virtue of a cross-claims exclusion contained within the owner’s primary liability policy. The Court also held that there was untimely notice barring coverage by the general contractor’s primary liability carrier, meaning that any excess insurance could not be triggered. At the same time, the S.D.N.Y. found that the subcontractors’ insurers had waived their right to assert untimely notice by virtue of accepting the general contractor’s tender.
This was a multi-year effort by Jacob Zissu, with assistance from partners Tyler Jay Lory and Yesy Sanchez and many other members of the Clausen Miller team.
Jacob R. Zissu
Tyler Jay Lory
Yesy A. Sanchez