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Insurance Company Claims they are not Obligated to Pay in Construction Accident Claim


The respondent in the case is the New York State Insurance Fund. The appellants in the case are Merchants Insurance Company of New Hampshire, Inc., and CPN Construction Corporation.

About the Case

The defendant in the case, Merchants Insurance Company of New Hampshire, seeks an inter alia for a judgment that was made by the Kings County Supreme Court which orders that the company is required to defend and indemnify the CPN Construction Corporation in a personal injury suit titled Salinas versus Briarwood Ave. Association. The defendant is appealing the order from the Supreme Court that granted the plaintiffs motion for a summary judgment and declared they are obligated to defend the defendants, CPN Construction Corporation and Building Block Contracting Corporation in the personal injury action.

Case Facts

Merchants Insurance Company of New Hampshire issued separate insurance policies to both CPN Construction Corporation and Building Block Contracting Corporation. Building Block entered into a contract with Hallet’s Cove, a general contractor.

The personal injury suit pertains to Jubencio Salinas, who was working for Building Block, CPN, or both when he fell from a height in a construction accident. Salinas and his wife are seeking to recover damages for the personal injuries he sustained from the accident. They commenced their action against Hallet’s Cove. Hallet’s Cove then entered a third party action against CPN and Building Block to seek contractual indemnification and contributions.

Merchants Insurance Company was unable to find the principal coverage for Building Block and disclaimed coverage a year and a half after the third party action was commenced. Merchants Insurance Company also disclaimed coverage on the policy that was issued to CPN. They cited a clause in the policy that excludes bodily injury of an employee of the insured. A New York Injury Lawyer said the policy that was issued to CPN provided that the exclusion did not apply to liability assumed under an “insured contract.” Merchants Insurance Company claims that there was no contract between Hallet’s Cove and CPN.

A Brooklyn Personal Injury Lawyer said the action in this case by the New York State Insurance Fund is to declare that Merchants Insurance Company is obligated to indemnify and defend both CPN and Building Block in the underlying personal injury suit and this was granted by the Supreme Court.

Case Outcome

This court feels that the granting of the summary judgment to the New York State Insurance Fund was an error in regard to the policy issued by Merchants Insurance Company to CPN. It is found that the exclusion for bodily injuries for CPN employees is applicable in this case as the contract with Hallet’s Cove was made by Building Block and not by CPN.

However, a Long Island Personal Injury Lawyer said that there is a question of fact that exists to prevent the grant of a summary judgment to Merchants Insurance Company to uphold their disclaimer under the insurance policy that they issued to CPN. To grant this disclaimer, it must be found that Salinas was employed by CPN. A trial for this issue is necessary and therefore a summary motion cannot be granted.

Since it is confusing as to who employed Salinas at the time of the accident, a 49 day delay to issue the disclaimer is not unreasonable and is thereby granted by the Court.

The remaining contentions as made by Merchants Insurance Company are without merit, unpreserved for appellate review, and need not be reached.

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