Kedex Properties, LLC v Trisura Specialty Insurance Company
Attorneys and Parties
Brief Summary
Commercial general liability (CGL) insurance coverage dispute over the insurer’s duty to defend and indemnify an owner in a workplace-injury suit, in light of exclusions for employer’s liability, construction/demolition, workers’ compensation, and medical payments.
Denied the insured’s motion for summary judgment seeking declarations that the insurer owed a defense and indemnity.
The denial of summary judgment on the duty to defend was modified to grant a declaration that the insurer must defend.
The complaint alleged an accidental occurrence triggering coverage, and the insurer failed to show that the pleadings fell solely and entirely within policy exclusions. However, indemnity remained unresolved due to triable fact issues about the scope of work (including potential demolition) and whether the claimant was an employee of the insured.
Background
Kedex Properties, LLC owned a property in Jackson Heights insured under a CGL policy issued by Trisura Specialty Insurance Company (Dec 10, 2020–Dec 10, 2021). After an April 6, 2021 fire, Kedex hired First Response Cleaning Corp., which hired Core Scaffolding Systems, Inc. to install scaffolding. On April 8, 2021, Anibal Fernando Cabrera Ochoa allegedly fell from a scaffold while performing work at the property and later sued Kedex and First Response alleging negligence and New York Labor Law violations. In the underlying case, Ochoa alleged he was employed by Core. Trisura disclaimed coverage relying on employer’s liability, construction, workers’ compensation, and medical payments exclusions. Kedex then brought this declaratory judgment action seeking defense and indemnity.
Lower Court Decision
The Supreme Court, Queens County, denied Kedex’s motion for summary judgment on the complaint, declining to declare that Trisura owed a defense or indemnity.
Appellate Division Reversal
The Appellate Division held that the allegations presented a reasonable possibility of coverage and that exclusions did not indisputably apply. It modified the order to grant summary judgment declaring Trisura must defend Kedex in the Ochoa action, remitting for entry of the defense declaration. It affirmed the denial of summary judgment on indemnity due to unresolved factual issues about whether demolition work triggered the construction exclusion and whether Ochoa was Kedex’s employee, potentially invoking employer’s liability and workers’ compensation exclusions.
Legal Significance
Reaffirms New York’s exceedingly broad duty to defend under CGL policies and the strict, narrow construction of exclusions. An insurer must defend unless it shows the pleadings fall solely and entirely within an exclusion; any potential inapplicability of an exclusion triggers the duty to defend. The duty to indemnify remains narrower and fact-dependent.
In New York, if the complaint even potentially falls within CGL coverage and exclusions are not indisputably applicable, the insurer must defend; indemnity turns on later-resolved facts such as the nature of the work and employment status.