The court is also unpersuaded by Army’s arguments that “this is essentially a claim for indemnity with defense” and that the defense and breach of contract claims herein are identical and duplicative of those asserted in the underlying Stanley action. In the underlying Stanley action, City asserted a cross-claim against Army for contribution and/or indemnity. Here, the City moves for a declaration that, pursuant to the insurance provision in the contract between the parties, Army has a duty to defend City in the underlying Stanley injury action or alternatively, that Army has breached the contract between the parties in that it failed to obtain the insurance required under the terms of the Agreement. An insurer’s duty to defend an insured is separate and apart from an obligation to pay or indemnify an insured.
Accordingly, an insurer may be contractually obligated to defend on a claim for which it is not required to pay or indemnify because it is later discovered that the claim falls within an exclusion. Thus, although the causes of action asserted by the City here and in the underlying Stanley action arise out of the same subject matter or series of alleged wrongs, the nature of the relief sought is not the same or substantially the same and therefore are not duplicative.
The motion herein is for summary judgment declaring that Army is required to defend City in the underlying Stanley action. With respect to Army’s duty to defend, the Agreement provides that Army has no duty to defend the City in personal injury or property damage actions to which the subject insurance does not apply. The Agreement further provides that coverage for the City as an additional insured is only with respect to liability arising out of Army’s operations. In support of its motion, the City annexes a copy of the complaint in the underlying action. The Stanley complaint alleges, in relevant part,
that Army entered into an agreement with City to provide foster care services; that Army had the same non-delegable duty of reasonable care owed to plaintiffs in the placement, care, custody and supervision of infant plaintiff while in foster care; that foster parent Anita Nurse served at the will and was an agent of City and Army; that Army recklessly, carelessly, negligently and with wanton disregard for the best interests of the infant plaintiff failed to adequately care for and/or supervise the custodial services provided to the infant by Anita Nurse, pursuant to its agreement with the City; that City and Army, knew or should have known that defendant Nurse failed to properly and/or adequately care for and/or battered and/or caused the infant plaintiff to be inadequately supervised ultimately resulting in injury; that while the infant plaintiff was in the care and custody and/or placement by City and Army, with Nurse, he was caused to be permanently injured; that the defendants City and Army acted in the placement and post-placement supervision of the infant plaintiff with Nurse; and that infant’s plaintiff’s incident occurred due to the negligence by City and Army of their non-delegable duty to properly care for and supervise those in foster care and that defendants negligently entrusted the care of the infant plaintiff to an unfit foster parent, conducted inappropriate investigations into the background and abilities of said foster parent, to wit: Anita Nurse.
An insurer’s duty to defend is triggered whenever the facts or allegations of the complaint “potentially give rise to a covered claim” under the contract. Through its submissions, the City has established that the claims asserted against it in the Stanley action fall within the scope of the insurance coverage that Army agreed to provide under the Agreement. Thus, the City has met its prima facie burden in demonstrating its entitlement to a declaration that the Army is required to defend it in the Stanley action.
The burden now shifts to Army, as the opponent of the motion, to submit proof of a triable issue of fact. Army contends it has no duty to defend City because the claims asserted against the City do not arise out of Army’s operations and are thus an exception to coverage pursuant to ISO Form CG 20-26. Assuming arguendo that the language of ISO Form CG 20-26 qualifies as an exclusion Defendant’s argument that the clause is an exclusion is without merit for as an endorsement, it is an addition, rather than a limitation of coverage and the but only’ qualification does not change the meaning of the latter portion of the clause, an insurer who relies upon an exclusion in order to be relieved of its duty to defend and thus defeat an insured’s motion for summary judgment must demonstrate “that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other medical interpretation.
Army does not deny that the infant plaintiff was injured while in foster care with the Army’s foster boarding program. Rather Army argues that the claims asserted against the City are based on independent acts of negligence on the part of the City and thus do not arise out of Army’s operations. Army submits that the City had a duty, independent of any contractual responsibility on the part of Army, to supervise the placement and care of the infant plaintiff within the foster care system.
The decision in General Insurance Company of America v. City of New York, is instructive here. In that case, the City moved for partial summary judgment declaring that the insurer must defend it in a separate action commenced by an infant and his grandmother against the City of New York and Talbot-Perkins Agency, a private foster care agency, for injuries sustained by the infant while in foster care. The insurer cross-moved for a declaration that it was not obligated to defend or indemnify the City in the underlying Finch action.