# Roldan v. Lewis

> District Court, E.D. New York · May 31, 2024

URL: https://www.frixlaw.com/law-library/cases/10311857

## Case

- **Court:** District Court, E.D. New York
- **Decided:** May 31, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10311857

## How later opinions describe it (automated extraction)

- affirming non-applicability of breach-of- contract exclusion because certain “claims . . . exist independent of the contract” alleged to have been breached

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SABRINA ROLDAN,
MEMORANDUM & ORDER
Plaintiff, 20-CV-03580 (HG) (MMH)

v.

ADOLFO LEWIS et al.,

Defendant.

CITY OF NEW YORK,

Third-Party Plaintiff,

v.

LEXINGTON INSURANCE CO. and
PHILADELPHIA INDEMITY INSURANCE
CO.,

Third-Party
Defendants.

HECTOR GONZALEZ, United States District Judge:
Plaintiff Sabrina Roldan sued the City of New York and various organizations and
individuals involved with her treatment in foster care between May 1997 and February 2012.
See ECF No. 186 ¶¶ 41, 175 (Underlying Second Amended Complaint, “SAC”). In this third-
party action, Third-Party Plaintiff the City of New York sues Lexington Insurance Co. and
Philadelphia Indemnity Insurance Co., insurers of the two at-issue foster care agencies in the
underlying action, seeking, among other relief, a declaration that Lexington and Philadelphia
have a duty to defend the City in that action. For the reasons explained herein, the City’s motion
is granted in part, and Lexington and Philadelphia have a duty to defend it.
BACKGROUND
A. The Underlying Action
As will be discussed further below, Ms. Roldan’s allegations cover a long period and
vary in their specificity. There are, however, a few key waypoints needed to establish the

relevant timeline. Ms. Roldan was born in 1992 and the City took her and her two siblings into
custody in 1997 because Ms. Roldan’s mother abandoned them and her father could not care for
them. SAC ¶¶ 8, 41–42. The City placed Ms. Roldan into the custody of Concord Family
Services, which the City contracted with to provide foster care services. Id. ¶¶ 14h, 43. In
October 1997, Concord moved Ms. Roldan into the foster home of Juan and Maria Rodriguez.1
Id. ¶ 44. Ms. Roldan alleges that she experienced severe sexual and physical abuse and neglect
at the hands of the Rodriguezes. Id. ¶¶ 46–59, 80–81, 83. In 2002, Concord moved Ms. Roldan
out of the Rodriguez home. Id. ¶ 83.
When Ms. Roldan was ten years old, Concord moved her into the home of Debra Shields.
Id. ¶ 85. Ms. Roldan claims that the City had previously confirmed that Ms. Shields had abused

or maltreated other children in her home. Id. ¶ 87. Concord had already placed two other male
foster children there by the time it moved in Ms. Roldan and her siblings. Id. ¶ 88. Ms. Roldan
alleges that one of those boys, among other illegal acts, tried to rape her, and that Ms. Shields
“pushed and physically assaulted [her] to punish [her] for the incident.” Id. ¶¶ 91–94. In
November 2003, Plaintiff was placed in her fourth foster home, and she alleges that between
May 1997 and December 2008, Concord placed her in more than ten different foster homes. Id.
¶¶ 96–97. Ms. Roldan claims that the City terminated its contract with Concord in “late 2008”

1 The Court includes the names of specific foster parents only for convenience and
consistency with the SAC. To be clear, none of these individuals is a Defendant in the
underlying action, and the Court expresses no view as to any potential liability on their part.
due to “gross mismanagement, fiscal impropriety including the misuse of government funds, and
criminal activity,” and that the City subsequently placed her into the custody of HeartShare
Human Services of New York and Heartshare St. Vincent’s Services (together, “HeartShare”),
which she alleges “was one of the most dangerous foster care agencies in the City.” Id. ¶¶ 99–

101. As with Concord, the City contracted with HeartShare to provide foster care services. Id.
¶ 14h.
In December 2008, HeartShare moved Ms. Roldan into Kiesha Bell’s “filthy,”
“malodorous,” and “overcrowded” home, which “adult men . . . would enter and leave
throughout the night.” Id. ¶¶ 103–06. Sometime thereafter, Ms. Roldan fled the Bell home and
went to stay with her brother in the home of Gary Hoyte, where she remained “with the
knowledge and approval” of the City and HeartShare. Id. ¶¶ 108–09. According to Ms. Roldan,
Mr. Hoyte was a “sexual predator” and HeartShare knew it. Id. ¶ 111. He “subjected [her] to
sexual abuse and sexual harassment for a period of approximately six months.” Id. ¶ 113. In
2009, HeartShare moved Ms. Roldan into the home of Dolores Shore, where Ms. Roldan alleges

that she was “sexually assaulted and terrorized on multiple occasions” by Ms. Shore’s adult son,
Max Shore, who also lived there. Id. ¶¶ 123–24. Ms. Roldan alleges that Mr. Shore tried to rape
her, and that he and his girlfriend “regularly subjected [her] to sexual harassment and sexual
threats.” Id. ¶ 127. Eventually, the City and HeartShare moved Ms. Roldan out of the Shore
home, but “left all of [her] possessions and all of [her] documents, including [her] birth
certificate” behind. Id. ¶ 130. She was then placed back into the Bell home, where she claims
she was again “mistreat[ed] and endanger[ed],” and into “numerous other foster homes” after
that. Id. ¶¶ 131–32. Later, Ms. Roldan was placed into Helen Lacy’s home, which had up to ten
other children in it, as well as Ms. Lacy’s former boyfriend, who had been charged with murder.
Id. ¶¶ 133–35. Eventually, Ms. Roldan was moved out of the Lacy home and into other foster
homes; in total, HeartShare moved her to more than ten foster homes. Id. ¶¶ 138–39.
Ms. Roldan signed herself out of foster care and left the City’s custody on February 10, 2012.
Id. ¶¶ 141, 175. Until that point, she had remained in the custody of the City and under

HeartShare’s care. Id. ¶ 176.
Based on the above conduct and more not summarized here, Ms. Roldan alleges that she
“suffered severe sexual, physical[,] and emotional abuse, in gross disregard of her constitutional,
statutory, and common law rights.” Id. ¶ 1. Among those she seeks to hold liable are the City,
Concord, and HeartShare. Id. ¶¶ 6–7. As will also be discussed in further detail below,
Ms. Roldan alleges numerous injuries, including “irreversible and permanent” “extraordinary
physical and mental injuries, pain and suffering, anguish, terror, confusion, and helplessness,”
but also “loss of funds” and the lost opportunity to continue her education. Id. ¶¶ 140, 171, 225.
B. The Third-Party Action
After Ms. Roldan initiated the underlying action, the City filed a Third-Party Complaint

against Lexington and Philadelphia. See ECF No. 22 (Third-Party Complaint). At different
points, Lexington insured Concord and Philadelphia insured Heartshare. See id. ¶¶ 36, 44.
Lexington issued a variety of insurance policies to Concord, providing coverage between July
2003 and July 2010. ECF No. 134 at 9–10 (City’s Rule 56.1 Statement and Counterstatement).2
These included general liability (“GL”) policies for the periods July 1, 2003, to July 1, 2004
(“2003 Policy”); July 1, 2004, to July 1, 2005 (“2004 Policy”); and July 1, 2005, to July 1, 2006.
(“2005 Policy”). See id. at 9. Lexington also issued primary policies, which included GL and
professional liability (“PL”) parts, for the periods July 1, 2006, to July 1, 2007 (“2006 Policy”);

2 The Court refers to the pages assigned by the Electronic Case Files system (“ECF”).
July 1, 2007, to July 1, 2008 (“2007 Policy”); July 1, 2008, to July 1, 2009 (“2008 Primary
Policy”); and July 1, 2009, to July 1, 2010 (“2009 Policy”). See id. at 9–10. In addition,
Lexington issued to Concord an umbrella policy3 for the period July 1, 2008, to July 1, 2009
(“2008 Umbrella Policy”). See id. at 10. In September 2020, the City requested that Lexington
defend it in the underlying action as an alleged additional insured4 under policies issued to

Concord. See id. at 8–9. On January 8, 2021, AIG, acting as claims administrator for the policy,
informed the City “that there is no coverage for the [underlying action]” under the 2006 and
2007 Policies. See ECF No. 134-3 at 2 (January 8, 2021, Letter from AIG to the City); ECF No.
134 at 9 (identifying the relevant policies).
Philadelphia also issued various primary liability policies to HeartShare from August 31,
2007, to May 1, 2016. See ECF No. 134 at 13. Specifically, the Philadelphia policies covered
the following periods: August 31, 2007, to August 31, 2008; August 31, 2008, to August 31,
2009; August 31, 2009, to August 31, 2010; August 31, 2010, to August 31, 2011; August 31,
2011, to August 31, 2012; August 31, 2012, to August 31, 2013; August 31, 2013, to August 31,

2014; May 1, 2014, to May 1, 2015; and May 1, 2015, to May 1, 2016. See id. at 13. On
September 28, 2020, Philadelphia informed HeartShare that it would defend its insured and its

3 “Primary insurance policies provide the first layer of insurance coverage,” while
“[u]mbrella insurance policies provide excess insurance,” or “an additional layer of coverage
after a predetermined amount of primary coverage has been exhausted.” See Utica Mut. Ins. Co.
v. Fireman’s Fund Ins. Co., 957 F.3d 337, 340 (2d Cir. 2020). Unless noted, case law quotations
in this Order accept all alterations and omit internal quotation marks, citations, and footnotes.

4 An “additional insured” provision extends insurance coverage to an entity other than the
named insured, and it “enjoy[s] the same protection as the named insured.” See Kassis v. Ohio
Cas. Ins. Co., 913 N.E.2d 933, 934 (N.Y. 2009) (emphasis omitted). The purpose of such a
provision is to “protect additional insureds from vicarious liability for the named insured’s
negligence.” See Ohio Sec. Ins. Co. v. Travelers Indem. Co. of Conn., No. 19-cv-1355, 2021 WL
797670, at *3 (S.D.N.Y. Mar. 1, 2021).
employees in the underlying action under the “Sexual Abuse or Molestation Vicarious Liability
Coverage Form (‘SPAM Form’) only of” the “2011-2012 Primary Policy” issued to Heartshare.
See ECF No. 112-6 at 3 (Sept. 28, 2020, Letter from Philadelphia to Heartshare); see also ECF
No. 112-4 at 58 (2011-2012 Primary Policy Issued by Philadelphia, “2011-2012 Primary

Policy”). Setting the SPAM form aside, the 2011-2012 Primary Policy stated that Philadelphia,
under circumstances described in the insurance agreement, “w[ould] pay those sums that the
insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies.” See ECF No. 112-4 at 13. The 2011-2012 Primary
Policy also contained an exclusion—the Abuse or Molestation Exclusion (“Abuse Exclusion”)—
which made clear that the insurance did not cover “‘bodily injury,’ ‘property damage,’ or
‘personal and advertising injury’ arising out of” (1) “[t]he actual or threatened abuse or
molestation by anyone of any person while in the care, custody or control of any insured,” or
(2) the negligent employment, investigation, supervision, reporting to the proper authorities (or
failure to so report), or retention “of a person for whom any insured is or ever was legally

responsible and whose conduct would be excluded by” the conduct in the preceding paragraph
one. Id. at 38. The insurance policy listed the New York City Administration for Children’s
Services as an additional insured, id. at 7, but Philadelphia “disclaim[ed] coverage to the City for
the [underlying] action” under the 2011-2012 Primary Policy, see ECF No. 112-6 at 3 n.1.
In this third-party action, the City seeks a declaration that Lexington and Philadelphia
have a duty to defend it in the underlying action and pay its attorney’s fees and costs5 incurred in

5 This requested relief is encompassed by the Court’s conclusion concerning the insurers’
duty to defend because “the duty to defend is triggered by the filing of a complaint containing
allegations that could possibly bring the action within the scope of coverage provided by the
insurance policy.” See Smart Style Indus., Inc. v. Penn. Gen. Ins. Co., 930 F. Supp. 159, 163
defending that action based on its alleged status as an additional insured. ECF No. 22 ¶¶ 1, 17,
24. Philadelphia answered and filed a crossclaim seeking a declaration that Lexington’s
insurance policies “were in effect for some or all of the time period” of the underlying action.
See ECF No. 32 at 14 (Philadelphia’s Answer, Crossclaim, and Counterclaim). Philadelphia also

counterclaimed, seeking a declaratory judgment that it has no duty to defend nor indemnify the
City in the underlying action, among other relief. See id. Lexington filed an answer to the City’s
Third-Party Complaint, see ECF No. 39, and to Philadelphia’s crossclaim, see ECF No. 41.
On May 17, 2023, Philadelphia filed a motion for summary judgment, asking the Court to
rule that it has no duty to defend the City in the underlying action. See ECF No. 123
(Philadelphia’s Memorandum of Law). On the same day, Lexington filed a summary judgment
motion seeking dismissal of the City’s claim and Philadelphia’s crossclaim. See ECF No. 126-
15 (Lexington’s Memorandum of Law). On June 16, 2023, the City similarly filed a motion for
summary judgment on its claims that Philadelphia and Lexington each have a duty to defend it.
See ECF No. 136 (City’s Memorandum of Law). Philadelphia and Lexington filed Oppositions

on July 14, 2023. See ECF No. 142 (Philadelphia’s Opposition); ECF No. 143 (Lexington’s
Opposition). The City did the same on August 3, 2023. See ECF No. 144 (City’s Opposition).
On November 22, 2023, Ms. Roldan filed an Amended Complaint, which contained
several new claims, see ECF No. 145 (Underlying First Amended Complaint, “FAC”), and on
December 6, 2023, the City and certain other Defendants in the underlying action filed a motion

(S.D.N.Y. 1996). The City must be reimbursed for the fees and costs of defending the
underlying action. See Turner Constr. Co. v. Am. Mfrs. Mut. Ins. Co., 485 F. Supp. 2d 480, 490
(S.D.N.Y. 2007) (where defendants “breached their duty to defend” additional insured,
defendants were ordered to reimburse the additional insured for “reasonable attorneys’ fees and
necessary costs incurred by [the additional insured] in the defense of the underlying action[]”),
aff’d sub nom., Turner Constr. Co. v. Kemper Ins. Co., 341 F. App’x 684 (2d Cir. 2009).
to strike the FAC as not filed in conformity with Rule 15, see ECF No. 146. On the next day, the
Court entered an order requiring Ms. Roldan to explain why the FAC was procedurally proper
and directed the Third-Party Litigants to file a letter “describing their respective positions on
how, if at all, the claims in [the FAC] affect the [third-party] insurance dispute.” See Dec. 7,

2023, Text Order. On December 20, 2023, Philadelphia filed its letter, representing that FAC
“generally d[id] not affect” its position. See ECF No. 160 at 1. Philadelphia also sought leave to
file a supplemental brief in the event that the Court deemed the FAC operative. Id. at 1–2. On
the same day, the City took the same position as Philadelphia, stating that the FAC “d[id] not
materially affect the facts or law necessary to resolve the summary judgment[] motions [in the
third-party action] in their present form.” See ECF No. 161 at 1. On January 19, 2024,
Lexington adopted the same view. See ECF No. 176.
On March 18, 2024, the Court ruled that the FAC was proper under Rule 15(a)(1)(B) and
denied the motion to strike it. See Mar. 18, 2024, Text Order. The Court also directed
Ms. Roldan to file the SAC “to cure defects with respect to her allegations of diversity

jurisdiction.” Id. In addition, the Court granted Philadelphia’s request for supplemental briefing
concerning the effect of amendment on the instant summary judgment motions. See id.
Ms. Roldan filed the SAC on March 20, 2024. See ECF No. 186. Philadelphia filed its
supplemental brief on April 8, 2024, describing the differences in the SAC as “inconsequential”
to the insurance coverage dispute. See ECF No. 191 at 4 (Philadelphia’s Supplemental Brief).
Lexington took the same view. See ECF No. 192 at 5 (Lexington’s Supplemental Brief). On
April 15, 2024, the City filed a letter motion in which it claimed that the insurers’ Supplemental
Briefs went beyond the question presented by the Court concerning the effect of the SAC on the
third-party insurance dispute. See ECF No. 194 (City’s Second Motion to Strike). On the same
day, Philadelphia also filed an Opposition to Lexington’s Supplemental Brief, arguing that
Lexington has a duty to defend the City. See ECF No. 195 (Philadelphia’s Supplemental
Opposition Brief). The Court entered an Order on April 15, 2024, in which it stated that it would
construe the City’s Second Motion to Strike as its Opposition to the insurers’ Supplemental

Briefs. See Apr. 15, 2024, Text Order.
LEGAL STANDARD
Summary judgment is appropriate “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). A court should grant summary judgment “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The moving party
has the burden of demonstrating that there is no genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). “Where the moving party demonstrates the absence of a

genuine issue of material fact, the opposing party must come forward with specific evidence
demonstrating the existence of a genuine dispute of material fact.” Brown v. Eli Lilly & Co., 654
F.3d 347, 358 (2d Cir. 2011). In deciding a summary judgment motion, any ambiguities and
inferences drawn from the facts must be viewed in the light most favorable to the nonmoving
party. LaFond v. Gen. Physics Servs. Corp., 50 F.3d 165, 171 (2d Cir. 1995).
The Court has “broad discretion” to decline to exercise jurisdiction under the Declaratory
Judgment Act and its exercise of jurisdiction is guided by the following considerations “to the
extent they are relevant” in this case:
(1) whether the declaratory judgment sought will serve a useful purpose in
clarifying or settling the legal issues involved; (2) whether such a judgment would
finalize the controversy and offer relief from uncertainty; (3) whether the
proposed remedy is being used merely for procedural fencing or a race to res
judicata; (4) whether the use of a declaratory judgment would increase friction
between sovereign legal systems or improperly encroach on the domain of a state
or foreign court; (5) whether there is a better or more effective remedy; and
(6) whether concerns for judicial efficiency and judicial economy favor declining
to exercise jurisdiction.

Admiral Ins. Co. v. Niagara Transformer Co., 57 F.4th 85, 99–100 (2d Cir. 2023). “[C]ourts
may issue a declaratory judgment on the duty to defend, while holding that the duty to indemnify
is not ripe for adjudication.” See Atl. Cas. Ins. Co. v. Value Waterproofing, Inc., 918 F. Supp. 2d
243, 261 (S.D.N.Y. 2013).
DISCUSSION
“Under New York law, an insurer’s duty to defend policyholders is ‘exceedingly broad,’
and ‘broader than the . . . duty to indemnify.’” See Travelers Indem. Co. v. Harleysville Ins. Co.,
No. 21-cv-1089, 2023 WL 6214239, at *7 (E.D.N.Y. Sept. 25, 2023) (quoting Atl. Ave. Sixteen
AD, Inc. v. Valley Forge Ins. Co., 56 N.Y.S.3d 207, 209 (N.Y. App. Div. 2017)).6 “An insurer
may refuse to defend only if it could be concluded as a matter of law that there is no possible
factual or legal basis on which the insurer might eventually be obligated to indemnify the insured
under any provision of the insurance policy.” CGS Indus., Inc. v. Charter Oak Fire Ins. Co., 720
F.3d 71, 82 (2d Cir. 2013). To be sure, the duty to defend “is not an interminable one.”
Harleysville, 2023 WL 6214239, at *7. But “[i]f the complaint contains any facts or allegations
which bring the claim even potentially within the protection purchased, the insurer is obligated to
defend.” See Technicon Elecs. Corp. v. Am. Home Assur. Co., 542 N.E.2d 1048, 1050 (N.Y.
1989). Accordingly, “[w]here several claims arise from the same set of facts, if any of the claims

6 The parties agree that New York law controls this dispute, which is “sufficient to
establish choice of law.” See Fed. Ins. Co. v. Am. Home Assur. Co., 639 F.3d 557, 566–67 (2d
Cir. 2011).
are covered by the policy, the insurer consequently has a duty to defend the entire action under
any of the policies, including the uncovered claims.” CGS, 720 F.3d at 83; see also Great Am.
Ins. Co. v. Houlihan Lawrence, Inc., 449 F. Supp. 3d 354, 365 (S.D.N.Y. 2020) (“The insurer’s
duty to defend the entire action is triggered even if only one claim is potentially covered by the

insurance policy.”).
“To determine if a defense obligation exists, courts compare the allegations of the
complaint to the terms of the policy.” Houlihan, 449 F. Supp. 3d at 365. As such, the Court
must “liberally construe[]” the SAC’s allegations, see Century 21, Inc. v. Diamond State Ins.
Co., 442 F.3d 79, 83 (2d Cir. 2006), and interpret the insurance policies according to the
“ordinary rules of contractual interpretation,” see Houlihan, 449 F. Supp. 3d at 366. That being
said, the “allegations in the complaint are not necessarily the ‘sole criteria for measuring the
scope of the duty to defend.’” Id. (quoting Fitzpatrick v. Honda Am. Motor Co., 575 N.E.2d 90,
92 (N.Y. 1991) with alterations accepted). Indeed, “[t]he New York Court of Appeals has
eschewed wooden application of the four corners of the complaint rule,” in favor of a rule

requiring the insurer to also provide a defense where, notwithstanding the complaint allegations,
underlying facts made known to the insurer create a reasonable possibility of coverage.” See
QBE Ins. Corp. v. Adjo Contracting Corp., 997 N.Y.S.2d 425, 440–41 (N.Y. App. Div. 2014).
After determining whether there is coverage under the relevant policy, the Court may
consider if any exclusions raised by the insurer bar coverage. See Vill. of Piermont v. Am. Alt.
Ins. Co., 151 F. Supp. 3d 438, 451 (S.D.N.Y. 2015). Where an insurer invokes a policy
exclusion to try to avoid its duty to defend, it “bears the heavy burden of demonstrating that the
allegations of the complaint cast the pleadings wholly within that exclusion.” Stein v. N. Assur.
Co. of Am., 617 F. App’x 28, 30 (2d Cir. 2015). In other words, for an exclusion to apply, “the
insurer must demonstrate that the allegations of [the] underlying complaint place that pleading
solely and entirely within the exclusions of the policy and . . . the allegations are subject to no
other interpretation.” CGS, 720 F.3d at 77.
A. Philadelphia Has a Duty to Defend the City

Although Philadelphia’s insured, HeartShare, took custody of Ms. Roldan after the City
ended its relationship with Lexington’s insured, Concord, the Court begins its analysis with
Philadelphia’s claims. This is because Philadelphia’s attempt to disclaim coverage touches on
certain first principles of New York insurance law which are also instructive for the duty to
defend analysis as it relates to Lexington’s effort to do the same.
i. At-Issue Policies
At the threshold, the Court must determine the universe of relevant Philadelphia policies.
In the Third-Party Complaint, the City asserts that Philadelphia has a duty to defend under “a
series of commercial [GL] and [PL] policies that were effective for some or all of the period of
the [underlying] action.” ECF No. 22 ¶¶ 22, 60. Although Philadelphia issued various policies

to HeartShare during the period covered by the underlying complaint, Philadelphia asserted in its
Rule 56.1 Statement attached to its pre-motion conference letter that “[t]he Philadelphia policy at
issue in the City[’s] third-party complaint . . . is Policy No. PHPK765993,” or the 2011-2012
Primary Policy, ECF No. 112-1 ¶¶ 1–2 (Philadelphia’s Rule 56.1 Statement), which was the
specific policy under which Philadelphia disclaimed coverage, ECF No. 112-6 at 3 n.1.
Philadelphia observes that the City failed to contravene its Rule 56.1 Statement. See ECF No.
123 at 8. The City retorts that under Local Rule 56.1, it was not obligated to do so at the pre-
motion conference letter phase but only at the instant motion stage, when it did file a
counterstatement. See ECF No. 136 at 50; ECF No. 134.
Although both sides devote much briefing to this issue, they lose the forest for the trees.
Philadelphia argues that the statement regarding the at-issue policy in its Rule 56.1 Statement is
“deemed admitted,” and that, accordingly, the 2011-2012 Primary Policy is the “only
Philadelphia policy at issue in this litigation.” ECF No. 123 at 8. For that proposition, it relies

on cases in which courts have deemed admitted uncontroverted Rule 56.1 statements. See id.
(citing, inter alia, Cason v. Doe 1–2, No. 16-cv-3710, 2018 WL 10610345, at *1 (E.D.N.Y. Nov.
27, 2018)). To be sure, Local Rule 56.1(c) warns litigants that failure to oppose another party’s
statement in accordance with the rule will result in that uncontroverted fact being “deemed . . .
admitted.” But Philadelphia’s position does not fully capture the law of this Circuit, which
makes clear that the Court “has broad discretion to determine whether to overlook a party’s
failure to comply with local court rules,” see Holtz v. Rockefeller & Co., 258 F.3d 62, 73 (2d Cir.
2001),7 and that there is a “strong preference for resolving disputes on the merits, rather than on
the basis of procedural issues,” see Fiedler v. Incandela, 222 F. Supp. 3d 141, 156 (E.D.N.Y.
2016).

The City also misses the mark on this point. As it ultimately concedes, see ECF No. 144
at 25, a nonmovant needs to contravene its adversary’s Rule 56.1 Statement at the pre-motion
conference letter phase. See Individual Practices, § IV.A.4. (discussing opposing Rule 56.1
Statements in the context of pre-motion conference letters). However, in light of the foregoing
discussion and because the Court can appropriately adjudicate this issue on the merits, it is
inappropriate to apply the automatic rule urged by Philadelphia to this case. That being said, and

7 Indeed, Philadelphia’s own authority, see ECF No. 123 at 8, recognizes the Court’s
discretion in this area. See Taylor & Fulton Packing, LLC v. Marco Int’l Foods, LLC, No. 09-
cv-2614, 2011 WL 6329194, at *4 (E.D.N.Y. Dec. 16, 2011) (“A nonmoving party’s failure to
respond to a Rule 56.1 statement permits the court to conclude that the facts asserted . . . are
uncontested and admissible.” (emphasis added)).
as the City recognizes, see ECF No. 144 at 26, it still has a burden to demonstrate that it is
entitled to summary judgment. See Amaker v. Foley, 274 F.3d 677, 681 (2d Cir. 2001)
(regardless of opposition, court must still satisfy itself that moving party has carried its burden
under Rule 56). And with respect to the realm of applicable Philadelphia policies, the City’s

position is confused and confusing. In the Third-Party Complaint, the City seeks a declaration
with respect to all relevant Philadelphia policies. See ECF No. 22 ¶ 60. Then, in its Rule 56.1
Counterstatement, it vaguely states that “[a]ll of Philadelphia[’s] policies issued to Heartshare
are ‘at issue,’ depending on the year in which an occurrence is alleged to have taken place.”
ECF No. 134 at 14 (emphasis altered). The City also references a letter in which Ms. Roldan
clarified that she allegedly experienced abuse between July 1, 2008, and February 28, 2009, see
ECF No. 134-1, which the City claims “potentially places each of the . . . Policies ‘at issue.’”
ECF No. 134 at 14 (emphasis added). Then, in its instant motion, the City suggests that only
four policies (spanning August 31, 2008, to August 31, 2012) are “relevant,” ECF No. 136 at 19,
before later claiming in that same motion that “Philadelphia must defend the City under all

nine . . . Philadelphia primary policies as Ms. Roldan has alleged an injury during all of them,”
id. at 39.
A moving party may not be a moving target. This is particularly true in the context of an
action for a declaratory judgment, a mechanism designed to “offer relief from uncertainty.” See
Admiral, 57 F.4th at 100. Thus, where the parties “talk past one another,” as here, it is
appropriate for the Court to isolate “the facts that are not in dispute” and rule accordingly. See,
e.g., Britt v. Thermald Realty I, LP, No. 13-cv-8289, 2015 WL 4922977, at *10 (S.D.N.Y. Aug.
18, 2015). In this case, Philadelphia effectively concedes that, before analyzing any possible
exclusions, there is coverage for at least some of Ms. Roldan’s claims under the 2011-2012
Primary Policy.8 Accordingly, the Court will accordingly limit its analysis to that policy.
However, as discussed further below, this narrowed analysis has no effect on the Court’s bottom-
line conclusion that Philadelphia has a duty to defend.9
ii. Coverage Under the 2011-2012 Primary Policy

As it relates to the threshold question of coverage under the 2011-2012 Primary Policy,
there is little in dispute, and even less in serious dispute. Philadelphia has conceded that the City
is an additional insured under the policy. See ECF No. 85 at 34:13–14 (Dec. 10, 2021, Conf.
Tr.); ECF No. 112-4 at 13; see also ECF No. 112-1 ¶ 5; ECF No. 134 at 14. Philadelphia also
does not seriously contest that the SAC’s allegations come within the 2011-2012 Primary
Policy’s scope, proceeding directly to the analysis of an exclusion in its motion. See ECF No.
123 at 16. That makes sense because the 2011-2012 Primary Policy applies to “‘bodily injury’
or ‘property damage’ . . . caused by an occurrence,” which is, in turn, defined as “an accident,
including continuous or repeated exposure to substantially the same general harmful conditions.”
See ECF No. 112-4 at 26, 33. The allegations against the City related to Ms. Roldan’s time in

HeartShare’s custody are replete with such allegations. See, e.g., SAC ¶¶ 136–37 (alleging that
the City and HeartShare took “no action” even after Ms. Roldan “begged” them to remove her
from Ms. Lacy’s home because she was “terrified”); id. ¶ 140 (alleging that “[b]ecause of the
frequency of the moves and the abuse [Ms. Roldan] suffered, [she] was unable to continue her
education”); id. ¶ 170 (“As a result of defendants’ failures, [Ms. Roldan] was subjected to

8 As discussed further below, Philadelphia briefly suggests the possibility that certain
claims are not covered by the 2011-2012 Primary Policy, but that argument fails.
9 To be clear, the Court does not conclude that Philadelphia has no duty to defend under
any of the other policies, only that the City has not carried its burden on summary judgment to
obtain that additional relief due to the uncertainty around its position.
repeated sexual, physical, and emotional abuse, and was denied adequate food, clothing, and
shelter.”).
Although Philadelphia does not specifically raise the issue, the fact that Ms. Roldan’s
allegations are imprecise with respect to timing does not relieve it of its duty to defend.

Ms. Roldan’s allegations are sufficient to “arguably fall within a risk covered by the policies.”
See Scottsdale Ins. Co. v. United Indus. & Constr. Co., 137 F. Supp. 3d 167, 175 (E.D.N.Y.
2015). “[A] policy protects against poorly or incompletely pleaded cases,” Ruder & Finn Inc. v.
Seaboard Sur. Co., 422 N.E.2d 518, 521 (N.Y. 1981), and that principle extends to a “complaint
that is so vague and indefinite that one cannot conclusively rule out coverage,” see United, 137
F. Supp. 3d at 178 (quoting Cohen v. Jacoby, 199 N.Y.S.2d 537, 539–40 (N.Y. Sup. Ct. 1960));
see also New York v. Blank, 27 F.3d 783, 790 (2d Cir. 1994) (“[W]here the allegations of the
underlying complaint are general, ambiguous, or inaptly phrased, courts construe the allegations
in favor of coverage.”). In this case, United is instructive. There, the court held that an insurer
could not “disclaim its duty to defend . . . based on controlling dates of the policies” in view of

the “broad pleadings in the [u]nderlying [a]ctions which fix the dates of [the insured’s] actions
in, around, and on the ‘cusp’ of each of the[] policies.” 137 F. Supp. 3d at 178 n.6. So too here,
where the Court “cannot . . . ascertain[] with certainty” that no covered act in the broad SAC
falls within policy period for the 2011-2012 Primary Policy.10 Id.
Philadelphia also suggests that the definition of “occurrence” precludes coverage for
certain claims. Specifically, it argues that the 2011-2012 Primary Policy “does not provide
coverage for Roldan’s breach of contract cause of action and causes of action for violations of

10 That is to say nothing of the potential applicability of one of the earlier Philadelphia
policies, which, for reasons previously explained, the Court cannot address here due to
imprecision in the parties’ briefing.
the Fourteenth Amendment and the New York State Constitution because these causes of action
do not constitute an ‘occurrence.’” See ECF No. 191 at 10–11; see also ECF No. 123 at 23.
However, Philadelphia provides only weak support for that position by citing cases in which
courts held that breach of contract claims fell outside of the definition of “occurrence.” See ECF

No. 123 at 24. Further, to the extent Philadelphia is trying to disclaim coverage for certain
claims, it is black-letter law that “the duty to defend [is] a binary proposition: either the insurer
has a duty to defend, in which case it must defend the entire lawsuit, or the insurer has no duty to
defend the lawsuit at all.” See Spandex House, Inc. v. Hartford Fire Ins. Co., 407 F. Supp. 3d
242, 260 (S.D.N.Y. 2019). Philadelphia seems to try do here precisely what the law does not
allow and “provide a defense for some claims in [the] lawsuit but not others.” Id.; accord
Houlihan, 449 F. Supp. 3d at 365–66. After all, “[t]he duty to defend . . . . includes the defense
of those actions in which alternative grounds are asserted, even if some are without the
protection purchased.” Ruder & Finn, 422 N.E.2d at 521. Thus, even if Philadelphia is right and
it is not ultimately obligated to indemnify the City for certain specific claims, that argument does

nothing to change the conclusion that it has a duty to defend the City.
iii. Attacks on the Merits of the Underlying Action
Having effectively conceded that at least some allegations come within the 2011-2012
Primary Policy’s coverage, Philadelphia advances two categories of arguments to avoid its duty
to defend. First, it claims that coverage for the underlying action is “entirely precluded” under
the 2011-2012 Primary Policy’s Abuse Exclusion. See ECF No. 191 at 8. Second, it presents
several arguments attacking the merits of Ms. Roldan’s allegations in the underlying action. See,
e.g., ECF No. 123 at 6. Neither argument is convincing.
The Court starts with Philadelphia’s second argument that certain of Ms. Roldan’s
allegations fail, which misapprehends first principles of New York law. Philadelphia claims that
Ms. Roldan’s Section 1983 claims are time-barred and were not permitted by New York’s Child
Victims Act (“CVA”), see ECF No. 123 at 20–23, “which revive[d] the time to commence

[certain] civil actions based upon sexual offenses,” see Kane v. Mount Pleasant Cent. Sch. Dist.,
80 F.4th 101, 104 (2d Cir. 2023). Philadelphia also contends that Ms. Roldan “has no authority
under the CVA to assert a breach of contract cause of action.” See ECF No. 123 at 24–25. In its
most recent submission filed in response to the SAC, Philadelphia reaches further, arguing that
neither the CVA nor New York’s Adult Survivors Act provides a standalone cause of action.
ECF No. 191 at 4–5. Philadelphia also claims it “has no duty to defend the City in the
[underlying] [a]ction because the allegations in [Ms. Roldan’s] Complaint, if proven true, would
not impose a duty to indemnify on the part of Philadelphia for the reasons set forth in pages 15 to
18 of Philadelphia’s opening [brief],” see ECF No. 142 at 13, thereby referring back to its
arguments about why the underlying Section 1983 claims fail, see ECF No. 123 at 20–23.

Remarkably, Philadelphia—an insurance company—even claims, in this duty to defend posture,
that “the Court must dismiss” certain causes of action advanced by Ms. Roldan “because they are
not legally viable.” See ECF No. 191 at 9. Although Philadelphia does not explicitly say as
much, it suggests that where an underlying plaintiff’s claims fail, there will be no coverage, and
“where there is no coverage . . ., there is no duty to defend any insured.” ECF No. 123 at 22–23
(quoting Atl. Cas. Ins. Co. v. Stone & Tile, Inc., No. 17-cv-5534, 2021 WL 8316280, at *7
(E.D.N.Y. Aug. 26, 2021)).
The fatal flaw in Philadelphia’s argument is that it equates its insured’s potential liability
in the underlying action with its own duty to defend. The City is right to observe that
Philadelphia’s view contravenes elementary principles of New York insurance law, see ECF No.
136 at 39, a cornerstone of which is that the duty to defend is much broader than the duty to
indemnify. See Harleysville, 2023 WL 6214239, at *7.11 Further, “the New York Court of
Appeals . . . [has] squarely reject[ed] the argument that ‘liability must be determined before an

additional insured is entitled to a defense.’” See Certain Underwriters of Lloyd’s, London v.
Travelers Cas. Ins. Co. of Am., 664 F. Supp. 3d 288, 293 (E.D.N.Y. 2023) (quoting BP Air
Conditioning Corp. v. One Beacon Ins. Grp., 871 N.E.2d 1128, 1132 (N.Y. 2007)).
Philadelphia’s argument is misguided because “[t]he merits of the complaint are irrelevant; if the
allegations suggest coverage, ‘the insurer must come forward to defend its insured no matter how
groundless, false or baseless the suit may be.’” Id. (quoting Ruder & Finn, 422 N.E.2d at 521).
Indeed, as the Second Circuit has explained, “[t]he New York cases establish that so long as the
claims asserted against the insured may rationally be said to fall within policy coverage,
whatever may later prove to be the limits of the insurer’s responsibility to pay, there is no doubt
that it is obligated to defend.” See Century 21, 442 F.3d at 83.

Philadelphia resists this outcome by repeating the uncontroversial principle that “when
the uncontroverted facts prove that no duty to indemnify exists the insurer must be relieved of its
duty to defend.” See ECF No. 123 at 25 (quoting Md. Cas. Co. v. Continental Cas. Co., 332
F.3d 145, 160 (2d Cir. 2003)). In other words, “if it can be concluded as a matter of law that
there is no possible factual or legal basis on which the insurer will be obligated to indemnify the
insured,” then an insurer owes no duty to defend. Continental, 332 F.3d at 160. But

11 After Philadelphia filed its instant motion, Plaintiff Roldan filed a letter urging the Court
to “not reach the merits of [Ms. Roldan’s] claims against Defendants in ruling on a Third Party’s
Motion in a Third-Party Action.” ECF No. 132 (Plaintiff Roldan’s Opposition to Philadelphia’s
Motion for Summary Judgment). As explained herein, her argument is well taken.
Philadelphia misses the point by focusing on the merits of Ms. Roldan’s claims rather than on the
contours of the coverage provided by the policies it sold. For example, in Stone & Tile, see ECF
No. 123 at 22–23, the court indeed held that the insurer had no duty to defend. 2021 WL
8316280, at *7. However, it did so where an insured sought a defense under a premises liability

policy in a case involving injuries not even sustained at the insured building but at an altogether
different one. See id. Similarly, in MIC General Insurance Co. v. Allen, see ECF No. 142 at 13,
the Second Circuit ruled that there was no duty to defend where a homeowner’s policy covered
only a residence where the insured resided, and it was undisputed that the insured did not
actually reside at the at-issue property. 697 F. App’x 717, 719–20 (2d Cir. 2017).
In sum, the cases relied on by Philadelphia are inapposite because they involved instances
in which the underlying claims “were outside the coverage of the policies at issue.” See Burt
Rigid Box, Inc. v. Travelers Prop. Cas. Co., 302 F.3d 83, 97 (2d Cir. 2002) (cited by
Philadelphia, ECF No. 142 at 13–14). They do not, as Philadelphia would have it, stand for the
proposition that the broad duty to defend is extinguished when the claims in the underlying

lawsuit against the insured may ultimately be doomed. This conclusion is consistent with the
case law, under which there is a duty to defend even where the underlying claims are
“untenable.” See Century 21, 442 F.3d at 82; see also Ruder & Finn, 422 N.E.2d at 521 (“[T]he
question is not whether the complaint can withstand a motion to dismiss . . . .”). As such,
Philadelphia’s attack on Ms. Roldan’s claims cannot relieve it of its duty to defend because it
cannot at all “eliminate the possibility” of coverage in the underlying action. See Stein, 617 F.
App’x at 31.
iv. Applicability of the Abuse Exclusion
Moving to Philadelphia’s more serious argument, it claims that it has no duty to defend
because the SAC’s allegations all fall within the Abuse Exclusion. See ECF No. 123 at 16. As
previously explained, that exclusion provided that the 2011-2012 Primary Policy did not cover

“‘bodily injury,’ ‘property damage,’ or ‘personal and advertising injury’ arising out of . . . [t]he
actual or threatened abuse or molestation by anyone of any person while in the care, custody or
control of any insured.” ECF No. 112-4 at 38. Philadelphia posits that this Abuse Exclusion
applies because Ms. Roldan was in the City’s care, custody, and control as a foster child, and that
“each and every cause of action relates to and seeks relief for ‘sexual, physical and emotional
abuse.’” See ECF No. 123 at 18. Concerning the Abuse Exclusion’s scope, Philadelphia points
to Scottsdale Indemnity Co. v. Beckerman, in which the Appellate Division held that the “arising
out of” language, like that here, “is interpreted broadly.” 992 N.Y.S.2d 117, 121 (N.Y. App.
Div. 2014). In Beckerman, the Appellate Division explicated the “but-for” test that the Court
must apply to determine the provision’s applicability: “[I]f the plaintiff in an underlying

action . . . alleges the existence of facts clearly falling within such an exclusion, and none of the
causes of action that he or she asserts could exist but for the existence of the excluded activity or
state of affairs, the insurer is under no obligation to defend the action.” Id. (citing Mount Vernon
Fire Ins. Co. v. Creative Hous., 668 N.E.2d 404, 405–07 (N.Y. 1996)). Thus, Philadelphia
contends, Plaintiff “Roldan could not have filed her action and/or any of her causes of action ‘but
for’ the alleged sexual abuse and/or molestation she incurred,” and the Abuse Exclusion applies.
ECF No. 123 at 18.
In response, the City concedes that at least some of Ms. Roldan’s claims fall within the
Abuse Exclusion. See ECF No. 136 at 41. Nevertheless, it insists that Philadelphia has a duty to
defend because Ms. Roldan “alleges injuries from conduct other than abuse” as well as “abuse
outside of the time she was in the custody, care or control of” an insured. Id. at 38. The City
points to various allegations of injuries it claims do not arise out of the alleged sexual abuse. See
id. at 42. To take just two examples, Ms. Roldan alleges that “[w]hen Defendants HeartShare

and City moved [P]laintiff out of the Shore home, they left all of [P]laintiff’s possessions and all
of [P]laintiff’s documents, including [P]laintiff’s birth certificate, in the Shore home.” SAC
¶ 130. And Ms. Roldan contends that HeartShare and the City failed to provide her with
personal identification as they were legally required to do, and that HeartShare’s failure to assist
her with obtaining identification following the loss of her birth certificate “caused [her] extreme
distress and anguish.” Id. ¶¶ 142, 147. Significantly, “New York courts have repeatedly held
that emotional distress of th[is] nature . . . constitutes ‘bodily injury’ for insurance law
purposes.” Jewish Cmty. Ctr. of Staten Island v. Trumbull Ins. Co., 957 F. Supp. 2d 215, 236
(E.D.N.Y. 2013) (cited by Philadelphia, ECF No. 131 at 23).
Philadelphia does not directly engage with this argument and instead retreats to familiar

territory, asserting, for example, that the Abuse Exclusion applies because Ms. Roldan “could
not have filed her . . . CVA . . . action, which is limited to damages for sexual abuse, but for the
alleged sexual [abuse] and/or molestation she incurred -- precisely what the exclusion is intended
to exclude.” ECF No. 142 at 5. Philadelphia thus tries to invoke the Abuse Exclusion by
shifting upward the level of generality at which the Court performs the but-for inquiry by
claiming that “[t]he only legal authority Roldan had to file [her] Complaint was the CVA.” Id. at
10 n.1; see also ECF No. 191 at 9 (arguing that any claims brought under the CVA and Adult
Survivors Act must be predicated on “extreme sexual abuse”). Despite this parsing,
Philadelphia’s claim is all-encompassing: “[C]overage for the SAC is entirely precluded by the
Abuse [Exclusion].” ECF No. 191 at 8.
Intentional or not, Philadelphia’s reading of the SAC is far too simplistic. Consistent
with the long time period covered by the SAC and the seriousness of the allegations contained

therein, Ms. Roldan’s factual assertions and theories of liability are broad and diverse.
Methodologically, Philadelphia identifies not one case in which a court has applied the but-for
test in the way it suggests—i.e., as “statutorily limited” to certain damages permitted under a
claims-enabling statute like the CVA. See ECF No. 142 at 9–10. Nor could it, because it is well
settled that to determine if a policy exclusion applies, the Court “examin[es] whether the asserted
claim could succeed but for the excluded conduct.” See Beazley Ins. Co., Inc. v. ACE Am. Ins.
Co., 880 F.3d 64, 71 (2d Cir. 2018) (emphasis added); see also, e.g., Hugo Boss Fashions, Inc. v.
Fed. Ins. Co., 252 F.3d 608, 623 n.15 (2d Cir. 2001) (affirming non-applicability of breach-of-
contract exclusion because certain “claims . . . exist independent of the contract” alleged to have
been breached). Put differently, the Court looks at the “operative act giving rise to any

recovery.” Mount Vernon, 668 N.E.2d at 406. Thus, for example, where a plaintiff alleged in an
underlying action that he was sexually assaulted at a camp, and that the camp was liable for
“negligent misrepresentation” due to its failure to provide adequate supervision, a sexual abuse
exclusion was effective because “[w]ithout the underlying ‘[a]buse or [m]olestation’ there would
[have] be[en] no claim for negligent misrepresentation.” See TIG Ins. v. Martin, No. 00-cv-
5766, 2003 WL 25796732, at *1, *4 (E.D.N.Y. Feb. 28, 2003).
In this case, by contrast, and consistent with the Court’s “obligation to interpret the
underlying claims liberally and exclusions narrowly,” the Court “cannot find that all of the
causes of action would not exist but for the existence of [the abuse] allegations.” See Houlihan,
449 F. Supp. 3d at 369–71. Even if Ms. Roldan’s claims related to, as the City puts it, “mis-
administration or administrative negligence,” ECF No. 136 at 43, which do not arise out of the
alleged abuse, are somewhat peripheral in view of the entire SAC, they nevertheless “cannot be
cast solely and entirely within the policy exclusion[].” See Piermont, 151 F. Supp. 3d at 451

(insurer had duty to defend where sexual abuse exclusion did not apply). For example, the Court
finds that no abuse allegation was needed for Ms. Roldan to seek relief with respect to her lost
property or inability to obtain proper identification.12 Philadelphia has not carried its heavy
burden of demonstrating “with certainty that all possible damages for which [the City] might
ultimately be held liable would” be attributed to the excluded conduct. See United, 137 F. Supp.
3d at 176.
Notably, like the insurer in Piermont, Philadelphia does not even try to explain how these
additional injuries identified by the City arise out of the excluded “operative act” of abuse. See
ECF No. 142 at 6. Instead it asserts: “All of Roldan’s allegations of negligent property damage,
loss of funds, the inability to finish her education and/or negligent administration of Roldan’s

foster care are a legal nullity, time barred, outside the scope of the CVA and [are] precluded
from coverage under the Policy.” ECF No. 123 at 19 n.1. That shotgun argument tucked into a
footnote is unpersuasive. As already explained, neither the CVA nor any other statute enabling a
plaintiff to bring certain claims sheds light on the but-for inquiry, and Philadelphia’s attempt to
prematurely litigate Ms. Roldan’s merits arguments fares no better. See, e.g., Ruder & Finn, 422
N.E.2d at 670 (“[A] policy protects against poorly or incompletely pleaded cases as well as those
inartfully drafted.”). To the extent Philadelphia claims that these injuries are not covered by

12 As previously explained, because this but-for analysis is conduct-based, the Court, at this
juncture, takes no view on whether this claim or any other will withstand a motion to dismiss.
2011-2012 Primary Policy whatsoever, such argument is unsupported and seeks to erect legally
insignificant fences around the scope of the coverage it sold. After all, Philadelphia itself rightly
observed in opposition to Lexington’s supplemental brief that even “[i]f the allegations of the
complaint are ambiguous or incomplete, the insurer is nevertheless obligated to defend if the

case is potentially within the coverage of the policy.” See ECF No. 195 at 6 (quoting Ogden
Corp. v. Travelers Indem. Co., 681 F. Supp. 169, 172–73 (S.D.N.Y. 1988)). Indeed, the very
reason why insurers face an uphill battle in duty to defend litigation is because that duty is
“meant to provide ‘litigation insurance’” in cases like this one. See Zurich Am. Ins. Co. v. XL
Ins. Am., Inc., 547 F. Supp. 3d 381, 404 n.7 (S.D.N.Y. 2021), as corrected, 556 F. Supp. 3d 301
(S.D.N.Y. 2021). The Abuse Exclusion does not apply, and Philadelphia has a duty to defend
the City.13
v. Conclusion
For the reasons explained in this subsection, the City’s motion for summary judgment
with respect to Philadelphia’s duty to defend is granted in part. Philadelphia’s motion for

summary judgment with respect to its duty to defend the City is denied.

13 The City does not contest Philadelphia’s argument that Ms. Roldan was in the care,
custody, and control of an insured, which is one requirement under the Abuse Exclusion. See
ECF No. 136 at 44. However, the City goes on to argue that the Abuse Exclusion ultimately
does not apply because some of Ms. Roldan’s claims “extend into time periods after [she] had
been discharged from foster care.” See id. at 45. That alternative argument is potentially
persuasive, but the Court need not reach it here because it has already concluded that the Abuse
Exclusion cannot apply here, and that Philadelphia has a duty to defend. See, e.g., Agway, Inc. v.
Agway Petrol. Corp., No. 93-cv-557, 1993 WL 771008, at *11 (N.D.N.Y. Dec. 6, 1993) (after
finding that one occurrence did not preclude coverage on notice grounds, finding it
“unnecessary” to examine potential notice issue related to a separate occurrence “[b]ecause the
court need only find that there exists one claim which could potentially fall within
the . . . coverage in order to impose a duty to defend as a matter of law”); Zurich, 547 F. Supp.
3d at 404 n.6 (where the court concluded that one complaint triggered a duty to defend, declining
to consider a second possible trigger).
B. Lexington Has a Duty to Defend the City
As it relates to Lexington, the City claims coverage under various GL policies or policy
parts which Lexington issued to Concord between 2003 and 2009. ECF No. 136 at 10; ECF No.
143-1 ¶¶ 15–20 (Lexington’s Rule 56.1 Counterstatement).14 Lexington argues that it has no

duty to defend the City under any policy, going through Ms. Roldan’s pleadings with a fine-tooth
comb to identify time periods which potentially implicate the Concord GL coverage. As relevant
here, Lexington isolates “abuse incidents between July 2003 and November 2003, in the home of
Debra Shields, a period for which a Concord GL policy was in effect but did not provide
additional insured coverage to the City for liability arising out of Concord’s operations.” ECF
No. 126-15 at 17. Then, Lexington points to “the period from November 2003 to December
2008, during which [Plaintiff] Roldan alleges that Concord moved her to various foster homes,
but does not allege any incidents of abuse or bodily injury.” Id. Finally, Lexington identifies
“abuse incidents after December 2008, when Roldan was no longer under Concord’s care.” Id.
i. 2003 Policy

Lexington does not contest that Ms. Roldan’s allegations concerning abuse in the Shields
home (where Concord placed Plaintiff sometime in 2002 and which she left in November 2003,
SAC ¶¶ 83–96) implicate the 2003 Policy. Those allegations certainly involve physical abuse,
see, e.g., id. ¶ 94, within the policy’s scope. However, Lexington argues that it has no duty to
defend pursuant to the 2003 Policy because (1) the City was not an additional insured; (2) there

14 Philadelphia briefly raises the argument that Lexington is not entitled to summary
judgment because it “failed to submit certified copies of all its policies issued to Concord.” See
ECF No. 131 at 23. In this context, that argument borders on frivolous. “[S]o long as evidence
will be presented in admissible form at trial, it may be considered on summary judgment.” See
Harleysville Worchester Ins. Co. v. Wesco Ins. Co., 750 F. App’x 90, 93–94 (2d Cir. 2019). The
Court will consider the policies provided by Lexington.
was no “occurrence” within the meaning of the 2003 Policy; and (3) the 2003 Policy’s abuse
exclusion precludes coverage. ECF No. 126-15 at 19–20. Lexington’s first argument prevails.
The 2003 Policy has distinct language concerning who qualifies as an additional insured.
Specifically, it provides additional coverage for “[a]ll those [p]ersons or [o]rganizations as

required by written contracts.” ECF No. 126-3 at 29 (2003 Policy) (emphasis omitted). And
here, Concord’s written contract with the City indeed required it to obtain coverage “no narrower
than that provided by ISO form CG 20-26 (11/85 ed.).” ECF No. 126-15 at 20 (quoting ECF No.
126-11 at 41 (Aug. 30, 2000, City-Concord Contract)). That form, in turn, mandated that
Concord obtain additional insured coverage “only with respect to liability arising out of
[Concord’s] operations or premises owned by or rented to [Concord].” ECF No. 126-14 (ISO
Form). Apparently, though, Concord failed to get such coverage, and instead bought insurance
“only for liability rising out of the operations for the Named Insured [Concord] by the Additional
Insured [the City].” ECF No. 126-3 at 29 (emphasis added). That presents a serious problem for
the City, which hired Concord to perform work for it when it entered into an “Agreement for

Purchase of Child Welfare Services.” ECF No. 126-11 at 3.
This basic understanding of the relationship between the City, as purchaser, and Concord,
as service provider, is consistent with the SAC’s allegations. See, e.g., SAC ¶ 14h (“Defendant
City contracted with defendants Concord and HeartShare to provide foster care to children, and,
in doing so, outsourced some of its constitutional obligations to those agencies.”). But the City
fights this conclusion when it claims that “ACS [the City’s Administration for Children’s
Services] performed work for Concord” because the City’s work was “so intertwined . . . with
Concord’s foster care responsibilities that it can only be construed as work ‘for’ Concord by the
City.” ECF No. 136 at 30 (emphasis omitted). In support of that argument, the City refers to
allegations in the SAC highlighting that coordinated relationship with the City and Concord. See
id. at 30–32. For example, Ms. Roldan alleges that Concord “acted jointly with Defendant City,
performed a government function, and w[as] entwined with the City in the provision of foster
care services to children,” that “the City had final decision-making authority” over certain issues,

and that Concord would “use the City’s tools.” Id. at 30–31 (citing SAC ¶¶ 14, 14o, 14x). Thus,
the crux of the City’s argument is that because it enabled Concord’s work, it did work “for
Concord,” rendering it an additional insured. Id. at 32–33.
Undoubtedly, the City is dissatisfied with the language of the 2003 Policy because it
bargained with Concord for precisely the kind of protection that may have covered it here. That
dissatisfaction, though, cannot lead the Court to accept the City’s “[s]trained and unnatural
reading[]” of the 2003 Policy’s terms, which must be construed to comport with “common
speech . . . and the reasonable expectation and purpose of the ordinary businessman.” See W.
Waterproofing Co. v. Zurich Am. Ins. Co., 685 F. Supp. 3d 157, 167 (S.D.N.Y. 2023). The Court
agrees with Lexington that “the relevant allegations . . . demonstrate the common-sense reality

that the City hires foster care agencies like Concord to do work for the City, not the other way
around.” ECF No. 126-15 at 23.
The City’s position that the work between the City and Concord was “intertwined” does
not compel a different conclusion because it relies on a tortured understanding of “for” which is
plainly inconsistent with the word’s everyday use. ECF No. 136 at 30. For instance, an engaged
couple is very likely to be closely “intertwined” with their wedding planner by supervising the
preparatory work, providing a guest list and seating arrangements, and exercising ultimate
decision-making authority over even the smallest details. Nevertheless, no reasonable person
could claim that the couple works for the wedding planner they hired. Precisely the opposite,
regardless of how “intertwined” they may be. It follows that because the language of the 2003
Policy did not make the City an additional insured, Lexington has no duty to defend it under that
policy. See Colony Ins. Co. v. Sw. Marine & Gen. Ins. Co., No. 22-cv-1590, 2024 WL 1195401,
at *7 (S.D.N.Y. Mar. 19, 2024) (no duty to defend party who does not qualify as additional

insured under relevant policy). Having concluded that the City is not an additional insured under
the 2003 Policy, the Court does not reach Lexington’s other arguments as to why there is no duty
to defend under that policy.
ii. 2004 Policy and 2005 Policy
The parties do not dispute that the City is an additional insured under the 2004 Policy and
the 2005 Policy, as confirmed by the insurance agreements themselves. ECF No. 126-4 at 25
(2004 Policy); ECF No. 126-5 at 24 (2005 Policy). Like the other at-issue policies, these two
cover “damages because of bodily injury or property damage” “caused by an occurrence.” ECF
No. 126-4 at 4; ECF No. 126-5 at 3. And according to the policies, an “occurrence” is “an
accident, which results in bodily injury or property damage neither expected or intended from the

standpoint of the insured.” ECF No. 126-4 at 14; ECF No. 126-5 at 13 (emphases omitted).
Here, the parties hotly dispute whether the underlying action implicates this coverage at all.
Lexington does not seem to contest that certain of Ms. Roldan’s allegations come within the
scope of these policies but does claim that they are not implicated because “[t]here are no
allegations of any abuse or bodily injury in the period between November 2003 and December
2008.” ECF No. 126-15 at 26. Indeed, all Ms. Roldan explicitly alleges about this time period is
that “[i]n total, defendant Concord and its employees placed plaintiff in more than ten different
foster homes between May, 1997, and December, 2008.” SAC ¶ 97. The City responds
primarily by pointing to a letter Ms. Roldan’s counsel sent to Philadelphia’s counsel. See ECF
No. 136 at 26. Because the parties spend so much time discussing that letter, the Court quotes it
at length:
Plaintiff now confirms that she was sexually, physically, and emotionally abused
and neglected in foster care during the eight-month period in question (July 1,
2008, through February 28, 2009). The abuse took place during that period in the
foster homes of Kiesha Bell and Gary Hoyte. See, Complaint ¶¶79-98. Plaintiff
was also sexually, physically, and emotionally abused in 2009 while she was a
foster child in the home of Dolores Shore (Cmplt. ¶¶99-106), but does not
remember whether that abuse began before February 28, 2009.

Plaintiff was also sexually, physically, and emotionally abused and neglected
while in foster care prior to July 1, 2008, and subsequent to February 28, 2009. It
is plaintiff’s understanding that those time periods are not the subject of the
present inquiry. Plaintiff is suing for the abuse prior to July 1, 2008, from July 1,
2008, to February 28, 2009, and subsequent to February 28, 2009.

ECF No. 134-1 at 2. The City seizes upon this representation to argue that allegations of abuse
“before July 1, 2008, between July 1, 2008, to February 28, 2009, and after February 28,
2009 . . . implicat[e] the entire series of Lexington policies.” ECF No. 136 at 26. In response,
Lexington argues that the City overstates that significance of the letter, claiming that it “does not
contain any allegations of abuse not contained in Roldan’s Complaint” and that the letter “merely
summarizes” the allegations therein. See ECF No. 143 at 14. In particular, Lexington argues
that the starting point for the abuse in 2008 was after Ms. Roldan was placed into Ms. Bell’s
home in December, thereby attempting to shift any liability onto HeartShare, Philadelphia’s
insured. Id. at 14–15.
The parties spend an excessive amount of time going back and forth about the importance
of this letter. Although the Court may consider it in determining whether there is a duty to
defend, see QBE, 997 N.Y.S.2d at 440–41, it is ultimately not necessary for the duty to defend
analysis as it relates to the 2004 and 2005 Policies. To be sure, based on the SAC (as well as the
letter just discussed), there is vagueness around what took place between November 2003 and
December 2008. See SAC ¶¶ 96, 103. But the Court reaches the same conclusion here as it did
with Philadelphia. The City has the better argument because there is at least some “factual
ambiguity” as to whether covered occurrences took place within the 2004 and 2005 Policies’
coverage periods, see Hugo Boss, 252 F.3d at 621–22, and the law requires the Court to resolve

that ambiguity in the insured’s favor, see Int’l Bus. Machs. Corp. v. Liberty Mut. Ins. Co., 363
F.3d 137, 144–45 (2d Cir. 2004); see also Olin Corp. v. Ins. Co. of N. Am., 218 F. Supp. 3d 212,
217–18 (S.D.N.Y. 2016) (resolving “ambiguous” timing allegations in favor of the insured).
Lexington does not contest that, had Ms. Roldan pinpointed incidents of abuse in the policy
periods, the allegations would be covered by the 2004 and 2005 Policies. Construing the SAC
“liberally,” as it must, see Century 21, 442 F.3d at 83, the Court cannot conclude “that there is no
possible factual or legal basis on which [Lexington] might eventually be obligated to indemnify”
the City, triggering Lexington’s duty to defend, see CGS, 720 F.3d at 82.
Lexington tries to finely slice up the SAC to extricate itself from any coverage obligation,
but it cannot, at least for the time being,15 circumvent the pleading’s “broad and general”

allegations. See Cohen, 199 N.Y.S.2d at 540 (finding a duty to defend). As already explained,
the SAC is sweeping and, at least at times, contains indeterminate allegations and theories of
liability. For instance, Ms. Roldan alleges that she was injured because Concord “improperly
investigated at least four different sets of foster parents and improperly licensed or certified
them,” and together with the City, “placed [P]laintiff in dangerous situations when they placed
her in the foster homes where she was sexually and physically abused” and “neglected and
emotionally abused.” SAC ¶¶ 241, 243–44 (emphasis added). She further alleges that the City

15 Of course, it may eventually be able to, because “the duty to defend lasts only until the
factual ambiguity is resolved in favor of the insurer.” Hugo Boss, 252 F.3d at 622.
“knew or should have known defendant[] HeartShare . . . had policies and practices of failing to
investigate prospective foster parents adequately, failing to supervise foster children adequately,
and failing to protect foster children from harm, including sex crimes.” Id. ¶¶ 255–56.
Ms. Roldan ultimately seeks to hold the City and Concord liable for the resulting “extraordinary

physical and mental injuries, pain and suffering, anguish, terror, confusion, and helplessness,”
which she contends are “irreversible and permanent.” Id. ¶ 260.16 As was already discussed at
length above, an insurer’s observation that there is uncertainty with respect to whether otherwise
covered allegations fall outside of the policy period will not, as here, be sufficient to defeat the
duty to defend. See supra at 16, 30–31. On this point, the City is right to observe that
“Lexington errs in its attempted dissection of the Roldan Complaint in a search for discrete
incidents confined to specific policy periods,” see ECF No. 136 at 26–27, when Ms. Roldan’s
allegations are of a much more general nature so as to create a reasonable possibility of a
coverage, see QBE, 997 N.Y.S.2d at 440–41.
In relation to the 2004 and 2005 Policies, Lexington mistakenly puts all its eggs in one

basket by pressing only the timing issue. Indeed, Lexington barely engages with either of these

16 Again, even setting aside the physical injuries, the allegations of emotional distress of
this sort also constitute “bodily harm” within the meaning of the policy. See Jewish Cmty. Ctr.,
957 F. Supp. 2d at 236. There are, however, certain limits on the City’s theory to support
coverage under the 2004 and 2005 Policies. It cites Plaintiff Roldan’s allegation that “defendant
Concord and its employees placed plaintiff in more than ten different foster homes between May,
1997, and December, 2008” and that “[b]ecause of the frequency of the moves and the abuse that
she suffered, plaintiff was unable to continue her education . . . . [and] dropped out of school.”
SAC ¶¶ 97, 140. The City therefore concludes that Plaintiff Roldan “plausibly alleg[es] property
damage covered by the Lexington policies.” ECF No. 144 at 19. That argument is creative, but
unfortunately for the City, such a theory of property damage cannot bring this allegation within
the policies’ scope, which limits “property damage” to “tangible property,” see ECF No. 126-4 at
15; ECF No. 126-5 at 14, an argument not actually raised by Lexington but that is nevertheless
clear on the face of the policies. Of importance, the definitions of “bodily injury” are not so
narrow, reaching “bodily injury, sickness or disease sustained by a person.” See ECF No. 126-4
at 11; ECF No. 126-5 at 10.
policies in its opposition. See generally ECF No. 143. However, earlier, with respect to the
2003 Policy, Lexington separately raised an alternate argument for non-coverage, claiming that
an allegation of “knowing misconduct and deliberate indifference on the part of the City” did not
come within that 2003 Policy’s definition of “occurrence.” ECF No. 126-15 at 23. That policy,

like the 2004 and 2005 Policies, defined an “occurrence” as “an accident, which results in bodily
injury or property damage neither expected or intended from the standpoint of the insured.” ECF
No. 126-3 at 15. Without explanation, Lexington cabined that argument just to the 2003 Policy,
see ECF No. 126-15 at 23; ECF No. 143 at 11, and makes no argument for why at least some of
the other conduct alleged in the SAC does not come within that definition of “occurrence.”17
In the context of the 2003 Policy only, Lexington contends that Ms. Roldan alleges that
the City “acted with deliberate indifference toward [her] safety and welfare,” and that allegations
of deliberate indifference cannot constitute an “accident” within the meaning of the policy. ECF
No. 126-15 at 24–25. Even if that were the case with respect to the policy period for the 2003
Policy, it does not persuade the Court when it comes to the policy periods for the 2004 and 2005

Policies. Certainly, at least certain damages—i.e., allegations of mental anguish resulting from
failure to properly investigate at least four different foster homes, SAC ¶¶ 243–44, 260—were
“unexpected, unusual and unforeseen,” and are “accidental” within the meaning of the 2004 and
2005 Policies. See Com. Union Assur. Co. v. Oak Park Marina, Inc., 198 F.3d 55, 59 (2d Cir.
1999). Those types of damages, which concern alleged mismanagement of Plaintiff’s care, arise
out of alleged negligence and do not “flow directly and immediately from an insured’s
intentional act” so as to land conclusively outside of the policy coverage. See id.; see also

17 In the same vein, Lexington cites no potentially relevant exclusion which would preclude
coverage under these policies.
Greenberg v. Nat’l Chiropractic Mut. Ins. Co., No. 96-cv-0052, 1996 WL 374145, at *2
(S.D.N.Y. July 3, 1996) (“If the Court cannot determine the theory of liability on which the
complainant is proceeding, the insurer is required to defend the insured.”). That is in marked
contrast to, for instance, a case relied on by Lexington, ECF No. 126-15 at 24, in which the court

concluded there was no duty to defend where the underlying Plaintiff “alleged only intentional
acts.” See Brooklyn Ctr. for Psychotherapy, Inc. v. Phila. Indem. Ins. Co., No. 18-cv-5892, 2019
WL 8501338, at *5 (E.D.N.Y. July 2, 2019). Indeed, that court suggested that the outcome
would have been different had it found allegations sounding in negligence, specifically rejecting
the assertion that it needed to accept the underlying plaintiff’s legal characterization of her
claims. Id. at *4 & n.10. In the face of the SAC’s broad and general nature, the Court concludes
that Lexington has a duty to defend under the 2004 and 2005 Policies.
iii. 2006 Policy
The City does not contest that it is not an additional insured under the 2006 Policy. See
ECF No. 136 at 25 n.7. Because the 2006 Policy does not cover the City, Lexington cannot be

obligated to defend the City pursuant to it. See Colony, 2024 WL 1195401, at *7.
iv. 2007 Policy and 2008 Primary Policy
The 2007 Policy and 2008 Primary Policy contain coverage parts for additional
insureds18 “for ‘bodily injury’, ‘property damage’ or ‘personal and advertising injury’ caused, in

18 Lexington passively asserts that “the Concord policies which extend additional insured
coverage do so only to those entities required to be named as additional insureds by written
contract, and the Concord Contract at issue here required the City to be named as an additional
insured only under Concord’s GL policies, not its PL policies.” ECF No. 126-15 at 28. The
reference to whatever was required in the contract between the City and Concord is a red herring
because the 2007 Policy, 2008 Primary Policy, and 2009 Policy all list the City as an additional
insured on the GL portion of those policies, see ECF No. 126-7 at 5 (2007 Policy); ECF No. 126-
whole or in part, by [Concord’s] acts or omissions or the acts or omissions of those acting on
[Concord’s] behalf . . . in performance of [Concord’s] ongoing operations; or . . . in connection
with [Concord’s] premises owned by or rented to [Concord].” ECF No. 126-7 at 52; ECF No.
126-8 at 51. As such, there is no material difference in their scopes of coverage from the 2004

and 2005 Policies’, and from the initial coverage perspective, the same rationale detailed above
as to why the SAC implicates the 2004 and 2005 Policies applies with equal force to the 2007
Policy and 2008 Primary Policy.
Lexington makes no argument to the contrary and instead points to the two policies’
Abuse and Molestation Endorsement (“Abuse Endorsement”), which covers, inter alia, “bodily
injury” and “mental injury” “arising out of . . . [a]ny abuse or molestation incident” under certain
conditions. See ECF No. 126-7 at 56–57; ECF No. 126-8 at 58–59 (emphases omitted).
Coverage under the Abuse Endorsement applies on a claims-made basis (as opposed to an
occurrence basis), meaning that “[t]he claim [under the Abuse Endorsement] must be made and
reported to [Lexington] or [its] authorized representative during the policy period or any

applicable extended reporting period.” ECF No. 126-7 at 57; ECF No. 126-8 at 59 (emphases
omitted). Thus, according to Lexington, the City cannot obtain coverage under these policies
because it never brought a timely claim. See ECF No. 126-15 at 26. As should now be clear,

8 at 5 (2008 Primary Policy); ECF No. 126-9 at 5 (2009 Policy), and the City claims that it is an
additional insured under those GL parts, see ECF No. 136 at 17–18.

Lexington also claims that these additional insured provisions “only amend the GL
coverage parts in those policies” and that “the City could not demonstrate that it would be an
insured under the PL coverage parts of the 2006-2009 Concord primary policies.” See ECF No.
126-15 at 29. Another red herring. As just stated, the City does not claim coverage under the PL
parts. And based on review of the insuring agreements, Lexington is entitled to summary
judgment on the narrow issue of the City’s lack of coverage under the PL parts of the 2006
Policy, 2007 Policy, 2008 Primary Policy, and 2009 Policy.
that argument fails because it relies on an impermissibly narrow and fragmented reading of the
SAC, and a liberal reading of the SAC and the theories of damages alleged therein entitle the
City to a defense under the GL parts of those policies without needing to rely on the Abuse
Endorsement.

For the same reason, Lexington’s contention that the City may not be covered due to a
lack of proximate cause “between the additional insured’s liability and the named insured’s”
fails. See ECF No. 143 at 18–19. Specifically, Lexington notes that the policies contain
language extending coverage to the City for certain injuries “caused, in whole or in part, by
[Concord’s] acts or omissions.” See ECF No. 126-8 at 51 (emphasis added). It goes on to claim
that the only allegation in the 2008 policy period relates to Ms. Roldan’s time that she spent in
the Hoyte home. See ECF No. 143 at 19. As cross-claimant, Philadelphia states that
Ms. Roldan’s allegation that Mr. Hoyte had previously “been investigated and licensed as a
foster parent, first by defendant Concord and then by defendant HeartShare,” SAC ¶ 110,
triggers Lexington’s duty to defend because of the link to Concord, ECF No. 131 at 9.

Lexington argues that that connection is so “distant” so as to fail the “in part” portion of the
additional insured term stated above. See ECF No. 143 at 18. This discussion, which the Court
explores in greater detail below, is ultimately a sideshow to the core of the duty to defend
analysis, as both sides focus on the allegations involving Mr. Hoyte at the expense of
Ms. Roldan’s much broader claims spanning her entire time in foster care.
Lexington raises no potentially relevant exclusions under the 2007 Policy or the 2008
Primary Policy. Instead, it is Philadelphia that (for reasons that will become clear shortly)
asserts the applicability of an exclusion under Lexington’s 2008 Primary Policy. See ECF No.
131 at 13–15. Both the 2007 Policy and the 2008 Primary Policy contained abuse or molestation
exclusions. See ECF No. 126-7 at 54; ECF No. 126-8 at 56. Philadelphia also adopts
Lexington’s argument that there is no coverage under the claims-made Abuse Endorsements due
to the absence of claims made by the City to Lexington. ECF No. 131 at 15. Philadelphia makes
no effort to explain how the claims-made Abuse Endorsements displaced the abuse exclusions in
the two Lexington policies.19 Indeed, it is telling that, in Lexington’s Opposition, it mentions

Philadelphia’s invocations of its own exclusions but does not adopt Philadelphia’s position,
joining Philadelphia only in the bottom-line contention “that the [2008 Primary Policy] does not
afford coverage.” See ECF No. 143 at 18. Lexington merely reasserts its original position that
the claims-made Abuse Endorsements do not entitle the City to a defense. Id. at 17. For the
reasons already explained, that argument fails.
v. 2008 Umbrella Policy
Lexington issued Concord an additional policy in 2008, which provided that Lexington
“shall have the right and duty to defend any claim or suit seeking damages covered by the terms
and conditions of this policy when,” inter alia, “[d]amages are sought for Bodily Injury, Property

Damage, Personal Injury or Advertising Injury covered by this policy but not covered by any
underlying insurance listed in the Schedule of Underlying Insurance or any other underlying
insurance providing coverage to the Insured.” ECF No. 126-10 at 20 (2008 Umbrella Policy)
(emphasis omitted). After attempting (and failing) to show that no duty to defend the City was
triggered by Lexington’s 2008 Primary Policy, Philadelphia claims that the 2008 Umbrella
Policy, which contains no abuse or molestation exclusion, “drops down” to provide excess

19 Philadelphia’s position is also completely internally inconsistent. In its Opposition, it
claims—in perfect opposition to its assertions in that same pleading—that “[t]he main Roldan
action . . . triggers . . . [the] Lexington 2008-2009 Primary Policy” and that “the Roldan Action
triggers the Lexington 2008[] primary and umbrella policies, as a matter of law.” ECF No. 131
at 5, 9.
coverage and triggers a defense obligation for Lexington. See ECF No. 131 at 17. As best the
Court can tell, Philadelphia’s theory is that because the allegations concerning Mr. Hoyte
apparently implicate the policy period for the 2008 Umbrella Policy but are not captured by an
exclusion, and because the City failed to make timely claims pursuant to the Abuse Endorsement

under the 2008 Primary Policy, Lexington has a duty to defend under the separate umbrella
policy. See id. at 15, 17. In response, Lexington contends that, even if the 2008 Primary Policy
is inapplicable, there is still no coverage because there was no occurrence as defined by the 2008
Umbrella Policy, advancing the same proximate cause argument it made to try to defeat coverage
under the primary policy. See ECF No. 143 at 18.
Both sides err by losing sight of the insuring agreement, which along with the SAC, is the
starting point of the Court’s analysis. As an umbrella policy, this one also has distinct features.
For a duty to defend to kick in pursuant to the 2008 Umbrella Policy, there must be certain
“damages . . . sought . . . [which are] not covered by any underlying insurance.” ECF No. 126-
10 at 20. The use of the term “not covered” in an umbrella policy like this one “delineates

uninsured risks” from insured ones. See Utica Mut. Ins. Co. v. Munich Reinsurance Am., Inc., 7
F.4th 50, 57–58 (2d Cir. 2021). What SAC allegations represent “uninsured risks” under the
2008 Primary Policy? According to Philadelphia, the ones within the 2008 Primary Policy’s
abuse and molestation exclusion, see ECF No. 131 at 17–18, as well as those potentially falling
under the Abuse Endorsement but for which the City failed to make a timely claim, see id. at 15.
Neither argument is convincing. An excess policy does not automatically take effect just
because there is no coverage under the primary policy. First, as previously mentioned, not even
Lexington takes the position that the risks identified by Philadelphia are precluded by an
exclusion in the primary policy; rather, it argues that it has no duty to defend because the City
failed to make a timely claim pursuant to the Abuse Endorsement. See supra at 37. Review of
the Abuse Endorsement confirms that it covers just the types of sex abuse claims identified by
Philadelphia. See ECF No. 126-8 at 58–60. Second, Philadelphia’s understanding of “coverage”
under the Abuse Endorsement is wrong. There is no lack of coverage, in the sense that the

claims were uninsured, just because the City may have failed to follow the Abuse Endorsement’s
claims-made procedure. See Bausch & Lomb Inc. v. Lexington Ins. Co., 414 F. App’x 366, 370
(2d Cir. 2011) (even where claims are covered, insured must follow insuring agreement’s
procedure to trigger duty to defend). When an umbrella policy contains “a condition precedent
to triggering the duty to defend,” it must be met “before the excess policy will provide a
defense.” See Preferred Constr., Inc. v. Ill. Nat’l Ins. Co., 494 F. App’x 162, 164–65 (2d Cir.
2012). Because Ms. Roldan does not seek damages not covered by the 2008 Primary Policy but
otherwise covered by the 2008 Umbrella Policy, there can be “no present obligation to provide a
defense” under the latter. See id. (no duty to defend under umbrella policy where coverage was
available only after exhaustion of primary policy, which had not yet been exhausted). At least

for now, Lexington has a duty to defend pursuant to multiple policies, but this is not one of them.
vi. 2009 Policy
The same is true when it comes to the 2009 Policy. That policy, which was in effect from
July 1, 2009, to July 1, 2010, provides additional insured coverage to the City to the same extent
as the 2007 Policy and 2008 Primary Policy. See ECF No. 126-9 at 5, 55. On this point,
Lexington points to Ms. Roldan’s allegations that the City ended its relationship with Concord in
“late 2008” and Philadelphia’s insured, HeartShare, placed Plaintiff into Ms. Bell’s home in
December 2008. SAC ¶¶ 97–98, 103. Ms. Roldan also alleges that she later left the Bell home
for the Hoyte home. Id. ¶ 108. And she then claims that at some point in 2009, HeartShare
moved her to the Shore home. Id. ¶ 123. Thus, says Lexington, the 2009 Policy cannot trigger a
duty to defend because there are no allegations concerning Concord during the 2009 Policy’s
coverage period. The City responds by pointing to the letter from Ms. Roldan’s counsel, see
ECF No. 136 at 26, in which she stated that she “is suing for the abuse . . . subsequent to

February 28, 2009,” ECF No. 134-1 at 2 (Letter from Ms. Roldan’s Counsel). Compare that to
the SAC, where the only allegation that specifically implicates Concord after Ms. Roldan left
Concord’s care is in late 2008 concerns her time in the Hoyte home, as Ms. Roldan alleges that
Mr. Hoyte “had been investigated and licensed as a foster parent, first by defendant Concord and
then by defendant HeartShare.” SAC ¶ 110.
To determine whether there is a duty to defend under the 2009 Policy, the Court must
resolve two issues. The first is a familiar timing problem. To escape the duty to defend on this
basis, Lexington would need to show that “liability coverage does not exist because injury
occurred outside the policy period.” See Am. Home Prods. Corp. v. Liberty Mut. Ins. Co., 565 F.
Supp. 1485, 1499 (S.D.N.Y. 1983). But in this duty to defend posture, it is not “unequivocally”

clear that that is the case. See Olin, 218 F. Supp. 3d at 217–18. In this instance, too, there is
much factual ambiguity around when Ms. Roldan stayed in the Hoyte home. Because she was
there in or sometime after December 2008 and for a “period of approximately six months,” SAC
¶¶ 103, 108, 113, and that ambiguity must be resolved in favor of the insured, Olin, 218 F. Supp.
3d at 217–18, Lexington cannot defeat the duty to defend based on timing alone.
The more difficult question is whether the allegations concerning Concord and Mr. Hoyte
are sufficient to trigger a duty to defend on Lexington’s part because Ms. Roldan stayed with
him when she was entrusted to HeartShare’s care. See SAC ¶¶ 103, 108. Although she was not
in Concord’s care at this point, Ms. Roldan’s SAC suggests that it may share in the potential
liability for the alleged abuse and neglect in the Hoyte home because, at some earlier point,
Concord had “investigated and licensed [Mr. Hoyte] as a foster parent.” Id. ¶ 110. As
previously mentioned in a different context, Lexington opposed Philadelphia’s argument that
such connection could trigger a duty to defend on Lexington’s part, stating that “Concord’s

alleged investigation and licensing of [Mr.] Hoyte years earlier” did not “provide[] a sufficient
nexus between the City’s liability and Concord’s actions to make the City an additional insured
under a Concord policy.” ECF No. 143 at 18. As a reminder, under the 2009 Policy, the City is
an additional insured “only with respect to liability for ‘bodily injury,’ ‘property damage’ or
‘personal and advertising injury’ caused, in whole or in part, by [Concord’s] acts or omissions or
the acts or omissions of those acting on [Concord’s] behalf” under certain conditions. ECF No.
126-9 at 55 (emphasis omitted).
Did Concord’s earlier licensing of Mr. Hoyte result in a covered injury “caused . . . in
part . . . by [Concord’s] acts or omissions”? The meaning of this “common language” is “now
well settled as a matter of New York law”: “[C]aused by requires a showing that the named

insured’s operations proximately caused the bodily injury for which indemnity was sought.” See
Ohio, 2021 WL 797670, at *3. The City must “raise a reasonable possibility that [Concord]
proximately caused [Ms. Roldan’s injuries].” See id. at *6. But it does not once address this
issue, nor does it address how the 2009 Policy requires a materially different duty to defend
analysis because of how it maps onto Ms. Roldan’s allegations. It has thus failed to carry its
burden to establish coverage in the first instance. See id. at *3.
vii. Timeliness of Disclaimers
The City argues that Lexington waived “all” policy exclusions because it failed to
comply with New York Insurance Law Section 3420(d)(2). See ECF No. 136 at 23–25. That
provision provides that “in cases involving death and bodily injury claims arising out of a New
York accident and brought under a New York liability policy,” the insurer is “require[d] . . . to
provide a timely disclaimer for denials of coverage.” See Penn-Star Ins. Co. v. Loring Place
Realty LLC, No. 22-cv-1154, 2024 WL 1255423, at *6 (S.D.N.Y. Mar. 25, 2024). When such a

disclaimer is based on a policy exclusion, “failure to provide a timely disclaimer under Section
3420(d) precludes denial of coverage.” Id.
Here, the parties again talk past each other, with neither explaining the significance of the
fact that the City initially sought coverage only under the 2006 and 2007 Policies, nor that these
two policies were the only ones under which Lexington initially disclaimed coverage. See ECF
No. 134-3 at 2. Nevertheless, in view of the preceding analysis, the City’s argument is no longer
relevant since the Court finds that Lexington has a duty to defend, and for those policies under
which it has no duty to defend (the 2008 Umbrella Policy or 2009 Policy), the lack of a duty is
not predicated on an exclusion but rather non-coverage. Cf. Penn-Star, 2024 WL 1255423, at *6
(“[A] provision that is a fundamental grant of Policy coverage, not an exclusion, is not subject to

the timeliness requirements of Section 3420(d).”). This lack of coverage in the first place also
defeats Philadelphia’s more sweeping argument that Lexington’s supposedly untimely disclaimer
altogether precludes it from denying coverage under, as now remains relevant, the 2008
Umbrella Policy. See ECF No. 131 at 22–23. As previously explained, there is no duty to
defend under that Policy because, at least for now, the claim “falls outside the scope of the
policy’s coverage portion” and failure to disclaim cannot “create coverage where it never
existed.” See Penn-Star, 2024 WL 1255423, at *6.
viii. Estoppel
In support of its crossclaim, Philadelphia asserts that “Lexington is estopped from
asserting that the Lexington policies do not provide a defense to the City in the Roldan Action
because Lexington’s position is inconsistent with the position it took” in cases involving

Ms. Roldan’s siblings, in which it defended the City. See ECF No. 131 at 18–22. In support of
this position, Philadelphia invokes the “doctrine of estoppel against inconsistent positions.” Id.
To determine if judicial estoppel applies, the court must consider “(1) whether the party’s later
position is clearly inconsistent with its earlier position; (2) whether the party’s position has been
adopted in some way by the court in the earlier proceeding; and (3) whether the party asserting
the two positions would derive an unfair advantage against the party seeking estoppel.” See
Kennedy v. Basil, 531 F. Supp. 3d 828, 838 (S.D.N.Y. 2021). Notably, Philadelphia points to no
case in which a court has estopped an insurer from denying a defense in one action based on its
decision to provide a defense in a similar action (and Philadelphia, an insurer, would surely be
uneasy with such a general rule). That aside, Philadelphia has not come close to showing that it

has met the requirements for the application of estoppel here. That is particularly true in the face
of Ms. Roldan’s pleadings, in which she sometimes explicitly distinguishes her situation from
that of her siblings. See, e.g., SAC ¶ 96 (Ms. Roldan alleges that she was separated from her
brother while in Concord’s care). Lexington does not have to supply the City with a defense in
this case merely because it provided a defense to the City in other cases.
ix. Conclusion
For the reasons explained in this subsection, the City’s motion for summary judgment
with respect to Lexington’s duty to defend is granted in part. Accordingly, Philadelphia’s
motion for summary judgment on its crossclaim regarding Lexington’s duty to defend is also
granted in part. Lexington’s motion for partial summary judgment as to lack of coverage under
the PL parts of the 2006 Policy, 2007 Policy, 2008 Primary Policy, and 2009 Policy, is also
granted.
CONCLUSION

For the reasons explained herein, the City’s motion for summary judgment is granted in
part. Philadelphia has a duty to defend under the 2011-2012 Primary Policy and Lexington has a
duty to defend under the 2004 Policy, 2005 Policy, 2007 Policy, and 2008 Primary Policy. The
City is entitled to reimbursement for the fees and costs of defending the underlying action.
Accordingly, Philadelphia’s motion for summary judgment on its counterclaim against the City
is denied but is granted in part as to its crossclaim with respect to Lexington’s duty to defend.
Lexington’s motion for partial summary judgment that it has no duty to defend the City under the
PL parts of the 2006 Policy, 2007 Policy, 2008 Primary Policy, and 2009 Policy is also granted.
No party having requested it do so, the Court has not and need not reach any question of
indemnification under any policy discussed herein.

Having considered the Admiral factors, the City is hereby awarded a declaration of its
right to a defense from Philadelphia and Lexington in the underlying action, including
reimbursement. Philadelphia is also awarded a declaration that Lexington has a duty to defend
the City in the same action. The Clerk of Court is respectfully directed to enter judgment
consistent with this Order.
On or before June 14, 2024, the City, Philadelphia, and Lexington shall meet and confer
and file a joint letter indicating if there is any reason the Court should not dismiss any remaining
claims and close this third-party case. If any Third-Party Litigant indicates that this case should
not be closed, it shall identify with specificity what issues remain, and each party shall provide
its position with respect to those issues.
/s/ Hector Gonzalez
HECTOR GONZALEZ
United States District Judge
Dated: Brooklyn, New York
May 31, 2024

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10311857. Public record. Not legal advice.