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Indian Harbor Ins. Co. v. Alma Tower, LLC
Citation: 2018 NY Slip Op 7064Docket: 7433 159286/14
Court: Appellate Division of the Supreme Court of the State of New York; October 23, 2018; New York; State Appellate Court
Original Court Document: View Document
Indian Harbor Insurance Company filed a lawsuit against Alma Tower, LLC, and Vordonia Contracting Supplies Corp., seeking to avoid its obligation to defend them in an underlying personal injury action. The Supreme Court, New York County, granted the defendants' motion for summary judgment, declaring that Indian Harbor is obligated to provide a defense, and denied the insurer's cross motion for a stay pending a separate action for rescission of the insurance contract. The Appellate Division affirmed the lower court's order, noting that Alma Tower and Vordonia demonstrated that Indian Harbor had actual knowledge of facts indicating a reasonable possibility of coverage. The underlying personal injury claims involved allegations of common-law negligence and Labor Law violations related to injuries sustained while working on the property for a subcontractor, S. S. HVAC Corp. Alma Tower and Vordonia had initiated third-party actions against S. S., asserting negligence and seeking indemnification. Since Indian Harbor had knowledge that S. S. might have caused the injuries, the court concluded that there was a reasonable possibility of vicarious liability for Alma Tower and Vordonia. The ruling clarified that Indian Harbor's duty to defend was triggered when the underlying action was filed while the insurance policy was active, and the insurer must pay the defense costs until a judicial determination of rescission is made. The court also upheld the trial court's discretion to consider sur-reply letters submitted by the defendants.