The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
COUNTY OF NIAGARA, et al.,
Plaintiffs,
Case # 14-CV-737-FPG
v.
DECISION AND ORDER
LIBERTY MUTUAL INSURANCE COMPANY, et al.,
Defendants.
This case concerns an insurance-coverage dispute related to a workplace accident occurring
in May 2008. Plaintiff County of Niagara seeks coverage under two policies issued by Defendants
Netherlands Insurance Company and Excelsior Insurance Company.1 See ECF No. 1-3.
In February 2018, the parties cross-moved for summary judgment. ECF Nos. 78, 79. The
matters were referred to Magistrate Judge Leslie G. Foschio, who issued a Report &
Recommendation (“R&R”) recommending that Defendants’ motion be granted and the County’s
denied. ECF No. 97. The County timely objected to the R&R. ECF No. 99. Having reviewed
the parties’ submissions, the record, and Judge Foschio’s well-reasoned order, the Court ADOPTS
the R&R in full, GRANTS Defendants’ motion for summary judgment, and DENIES the County’s
motion for summary judgment.
1 Originally, there were additional parties involved in the action. In 2016, the parties agreed to withdraw
all claims brought by Plaintiffs Niagara County Community College and the Board of Trustees of NCCC,
as well as all claims brought against Defendants Liberty Mutual Insurance Company and Peerless Insurance
Company. See ECF Nos. 15, 23. In addition, two other defendants—T.G.R. Enterprises, Inc. and Michael
Lombardo—were found to have been misjoined and subject to dismissal under Federal Rule of Civil
Procedure 21. See ECF No. 22 at 9; see also Fed. R. Civ. P. 21 (“[O]n its own, the court may at any time,
on just terms, add or drop a party.”).
LEGAL STANDARD
Generally, a court reviews portions of an R&R to which a party makes specific objections
de novo. Fed. R. Civ. P. 72(b)(2); 28 U.S.C. § 636(b)(1)(C). When a party does not object to the
R&R, however, the court will review it for clear error. EEOC v. AZ Metro Distributors, LLC, 272
F. Supp. 3d 336, 339 (E.D.N.Y. 2017). “When performing such a clear error review, the court
need only satisfy itself that there is no clear error on the face of the record in order to accept the
recommendation.” Boice v. M+W U.S., Inc., 130 F. Supp. 3d 677, 686 (N.D.N.Y. 2015) (internal
quotation marks omitted). After conducting the appropriate review, the court may “accept, reject,
or modify, in whole or in part, the findings or recommendations made by the magistrate judge.”
28 U.S.C. § 636(b)(1)(C).
Summary judgment is appropriate when the record 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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Disputes concerning material
facts are genuine where the evidence is such that a reasonable jury could return a verdict for the
non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding
whether genuine issues of material fact exist, the court construes all facts in a light most favorable
to the non-moving party and draws all reasonable inferences in the non-moving party’s favor. See
Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005). However, the non-moving party
“may not rely on conclusory allegations or unsubstantiated speculation.” F.D.I.C. v. Great Am.
Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010) (quotation omitted).
BACKGROUND
In Fall 2007, the County contracted with T.G.R. Enterprises, Inc. (“TGR”) to replace
windows and doors at Niagara County Community College. As part of the contract, TGR was
required to obtain certain types of insurance and name the County as an additional insured. As is
relevant here, TGR obtained a Commercial General Liability (“CGL”) policy from Netherlands,
and an Excess/Umbrella policy from Excelsior.
In May 2008, Michael Lombardo, a TGR employee, was working on the window project
at the college. To move windows from one area to another, Lombardo and a fellow employee
loaded the windows onto a truck owned by TGR, and Lombardo sat in the back while the other
employee drove. During the drive, windows fell on Lombardo’s leg, injuring him.
In July 2008, Lombardo file a notice of claim with the County, alleging that he had been
injured due to the County’s negligence. In early August, the County’s attorney provided a timely
notice to Netherlands and Excelsior regarding the claim and requested coverage.
On August 13, 2008, one of Defendants’ agents sent a letter addressed to TGR disclaiming
coverage. ECF No. 78-6 at 2. The header of the letter states, “RE: Notice of Claim – Michael
Lombardo v. County of Niagara, et al.” Id. The body of the letter provides that it is written “on
behalf of the Netherlands and Excelsior Insurance Companies in regard to the above captioned
matter.” Id. The letter goes on to discuss the policy provisions that exclude coverage under the
circumstances. Although it was not explicitly addressed to the County, the letter was forwarded
to the County’s attorney. See id. at 8.
In November 2008, Lombardo brought a personal injury action in state court against, inter
alia, the County. That litigation was ultimately resolved by settlement in 2016. In the meantime,
the County brought this action against Defendants seeking coverage under the CGL and Umbrella
policies.2
2 The County initially brought the case in state court, but Defendants removed the action to this Court in
September 2014. ECF No. 1.
The parties moved for summary judgment in February 2018. ECF Nos. 78, 79. Judge
Foschio concluded that Defendants were entitled to summary judgment because (1) the CGL and
Umbrella policies unambiguously excluded coverage for Lombardo’s accident, and (2) Defendants
adequately disclaimed coverage in the August 2008 letter. ECF No. 97 at 23-42.
DISCUSSION
The County argues that Judge Foschio erred when he concluded that the Umbrella policy
unambiguously excluded coverage and that Excelsior adequately disclaimed that coverage in the
August 2008 letter.3 For the reasons discussed below, the Court disagrees.
I. Coverage under the Umbrella Policy
The parties agree that New York law governs their dispute. See ECF No. 99 at 20-21; ECF
No. 101 at 28-30. “Under well-settled law, New York courts resolving disputes over insurance
coverage first look to the language of the policy. The threshold question is whether the insurance
policy is ambiguous, which is a matter of law for the court to decide.” Standard Gen. L.P. v.
Travelers Indem. Co. of Conn., 261 F. Supp. 3d 502, 507 (S.D.N.Y. 2017) (internal quotation
marks and citations omitted). “A contract is unambiguous if the language it uses has a definite
meaning, unattended by danger of misconception in the purport of the contract itself, and
concerning which there is no reasonable basis for a difference of opinion. Courts must give clear
and unambiguous provisions their plain and ordinary meaning.” Id. (internal quotation marks,
brackets, and citations omitted). “If the meaning of policy language is otherwise plain, it does not
become ambiguous merely because the parties urge different interpretations in the litigation. But
if there is a reasonable basis for a difference of opinion on the meaning of policy language, then
3 The County does not raise any argument challenging Judge Foschio’s interpretation of the CGL policy.
Furthermore, the County raises an argument on an immaterial issue that the Court need not address. See
ECF No. 99 at 31-33.
the language is ambiguous and must be construed in favor of the insured.” Id. (internal quotation
marks and citations omitted).
As a general matter, the Umbrella policy “provide[d] for excess insurance coverage for
claims for which coverage [was] provided pursuant to the CGL Policy.” ECF No. 97 at 7.
However, the Umbrella policy contained an exclusion identified as the “Designated Automobile
Liability Exclusion.” ECF No. 79-4 at 305. It provided, “Insurance does not apply to any injury
or damage arising out of the ‘autos’” identified in the Schedule, which includes “Owned Autos.”
Id. “Owned Autos” are “[t]hose ‘autos’ you own and any trailer you do not own while attached to
power units you own. This includes those ‘autos’ you acquire ownership of after the policy
begins.” Id. “You” is defined as “the Named lnsured shown in the Declarations, and any other
person or organization qualifying as a Named lnsured under this policy.” Id. at 320. TGR is the
only entity identified as the Named Insured under the Umbrella policy. ECF No. 78-4 at 22.
Judge Foschio read the exclusion as follows: Coverage is excluded for injuries arising out
of “Owned Autos,” which are those autos “you” own. “You” means the Named Insured, which is
TGR. This language captures Lombardo’s accident: his injuries arose from an accident involving
a vehicle that TGR owned. Therefore, coverage is excluded. See ECF No. 97 at 28-30.
The County attempts to inject some ambiguity into this straightforward interpretation. It
argues that “you” in the phrase “‘autos’ you own” is ambiguous in that it could refer to the named
insured (TGR) or an additional insured (like the County). Thus, one could read the exclusion to
apply to accidents involving a vehicle owned by the County. Because the County did not own the
truck involved in the accident, the exclusion does not apply. See ECF No. 79-5 at 32; ECF No. 99
at 38 (“Under [its] interpretation, the . . . Exclusion would apply only if the injury arose from use
of a vehicle owned by the County.”).
To get around the provision that explicitly states that “you” refers to the Named Insured
(TGR), the County raises a few other considerations. However, Judge Foschio fully addressed the
County’s arguments in the R&R, and the County raises no new arguments to support its
interpretation. Having conducted a de novo review of the record, the policy language, the parties’
briefs, and the relevant case law, the Court fully concurs with Judge Foschio’s view that the term
“you” unambiguously refers to TGR and cannot be reasonably interpreted to refer to the County.
Therefore, the Court is not persuaded by the County’s argument. The Exclusion applies to bar
coverage under the Umbrella policy.
II. The August 2008 Disclaimer
“[U]nder New York law, an insurer must ‘give written notice as soon as is reasonably
possible of [a] disclaimer of liability or denial of coverage to the insured and the injured person or
any other claimant.’” Atl. Cas. Ins. Co. v. Coffey, 548 F. App’x 661, 663 (2d Cir. 2013) (summary
order) (quoting N.Y. Ins. Law § 3420(d)(2)). “Such notice must promptly apprise the claimant
with a high degree of specificity of the ground or grounds on which the disclaimer is predicated,
or the insurer will waive its right to rely on that ground for excluding coverage.” Id. (internal
quotation marks and citations omitted).
The County argues that there are sufficient ambiguities in the disclaimer to conclude that
it did not adequately disclaim coverage with respect to the County. Furthermore, the County
asserts that, because it was addressed to TGR, the disclaimer could not constitute adequate notice
to the County.
The Court has conducted a de novo review of the County’s arguments, the case law, and
the record, and it agrees with Judge Foschio’s analysis: notwithstanding the deficiencies the
County points out, the disclaimer apprised the County with a “high degree of specificity” of the
grounds on which disclaimer was predicated. Id.; see also ECF No. 97 at 39-42. Indeed, the
disclaimer expressly identified and disclaimed coverage under the “Designated Automobile
Liability Exclusion.” See ECF No. 78-6 at 7. As with its interpretation of the policy, the County’s
attempt to create ambiguity with respect to the disclaimer fails in light of its plain language and
the context in which it was sent. The disclaimer leaves the clear impression that coverage would
not be available to the County under the Umbrella policy due to the Automobile Exclusion.
Therefore, Defendants complied with § 3420(d).
CONCLUSION
For the reasons stated, the Court rejects the County’s objections to the R&R. Furthermore,
the Court finds no other clear error warranting rejection of the R&R. Accordingly, the R&R (ECF
No. 97) is ADOPTED, Defendants’ motion for summary judgment (ECF No. 78) is GRANTED,
and the County’s motion for summary judgment (ECF No. 79) is DENIED.
By virtue of this Decision and Order, as well as the prior orders in this case (ECF Nos. 22,
25, 27), all defendants have been terminated from this action. The Clerk of Court shall enter
judgment and close this case.
IT IS SO ORDERED.
Dated: February 6, 2020
Rochester, New York :
be FRANK P. A JR.
Chief, United States District Court