Insurer of Contractor for Its (Primarily) Interior Work Was Not Entitled to Summary Judgment (Disclaiming Coverage) in Action Stemming from Building Collapse of Unknown Cause

The First Department, over a dissent, determined the insurer was not entitled to disclaim coverage as a matter of law and therefore was not entitled to summary judgment.  The insured (BCS) did (primarily) interior work (painting, carpentry, etc.) in the renovation of a building which included adding two floors.  There was a partial collapse of the building.  The insurer argued that the collapse could not be attributed to any of the specific (mainly interior-work) activities covered in the policy.  The court determined the lack of certainty about the cause(s) of the collapse precluded summary judgment:

Plaintiff issued a commercial lines insurance policy to BCS. The policy’s declarations page stated BCS’s “Business Description” as “Carpentry-Painting-Drywall-Plastering-Tile-Contractor.” Elsewhere, the work to be covered was separated into five separate “classifications,” namely, “Carpentry-Interior,” Painting-Interior-Structures,” “Dry wall or wallboard install,” “Plastering or stucco work,” and “Tile, Stone-Interior construction.” Plaintiff issued an endorsement to the policy clarifying that “[n]o coverage is provided for any classification code or operation performed by the Named Insured not specifically listed in the Declaration of this policy.” Another endorsement provided that the “policy shall not apply to [claims] arising out of operations performed for any insured by independent contractors or acts or omissions of any insured in connection with his general supervision of such operations.” * * *

Plaintiff would be entitled to summary judgment if it could establish that “there is no possible factual or legal basis upon which [it] may eventually be held obligated to indemnify [BCS] under any policy provision” … . In other words, the record before us would have to establish, as a matter of law, that the underlying claim did not arise out of any work BCS did in the areas of interior carpentry, interior painting, dry wall installation, plastering or stucco work (interior or exterior), or interior tile and stone construction. Plaintiff would have to demonstrate conclusively that all of the work out of which the claim arose was performed by an independent contractor.

This record permits no such conclusions,… . Tower Ins Co of NY v BCS Constr Servs Corp, 2014 NY Slip Op 04420, 1st Dept 6-17-14