One case that tangentially dealt with this issue is M&M Realty of New York, LLC v. The Burlington Ins. Co., 2018 WL 3224090 (New York Co. Sup. Ct.). In M&M Realty, the plaintiff in the underlying action was employed by L&M. M&M, the property owner, had hired L&M to perform some painting work. M&MaEUR(TM)s insurer sought additional insured coverage for M&M under the L&M policy. The language in the contract was that L&M would provide aEURoeall necessary insuranceaEUR? to M&M, so the primary issue in the litigation was whether that language in the underlying trade agreement was sufficient to trigger M&MaEUR(TM)s entitlement to additional insured status in the first instance.
Interestingly, the vast majority of the partiesaEUR(TM) briefing in support of their respective summary judgment motions was related to the specific issue of whether M&M was entitled to additional insured status. Initially, the court determined that the language was sufficient to entitle M&M status.
However, the court then determined that even though M&M was entitled to additional insured status, L&MaEUR(TM)s insurer had no obligation to defend M&M because the additional insured endorsement limited additional insured coverage to bodily injury caused, in whole or in part, by L&MaEUR(TM)s acts or omissions or those acting on L&MaEUR(TM)s behalf. The court, citing Burlington, noted that the underlying complaint against M&M stated that the plaintiff worked for L&M but that the complaint did not allege that L&MaEUR(TM)s acts or omissions caused the accident. The court found it important that the complaint attributed the cause of the accident aEURoeexclusivelyaEUR? to M&MaEUR(TM)s negligence.
The court did not address the fact that because the underlying plaintiff was employed by L&M he was precluded by the Workers Compensation Law from naming L&M as a defendant in the action and blaming the accident on L&M. The court appears to have determined that because the accident must have been proximately caused by the named insured, then a complaint must contain a specific allegation against the named insured to trigger coverage and a carrieraEUR(TM)s obligation to defend the additional insured.
It is still early to determine whether the argument that Burlington impacted the duty to defend will gain any traction. We note that M&M filed a notice of appeal of the motion court judgeaEUR(TM)s decision.