NGM Ins. Co. v. Firemen’s Ins. Co. of Washington, D.C., No. 307-6-08 Wmcv (Wesley, J., Mar. 9, 2011) 

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STATE OF VERMONT 

SUPERIOR COURT Civil Division 

Windham Unit. Docket No. 307-6-08 Wmcv 

NGM INSURANCE COMPANY and 

BRIAN McGUIRE, 

 Plaintiffs, 

 

 v. 

 

FIREMEN’S INSURANCE COMPANY 

OF WASHINGTON, D.C., 

 Defendant. 

Opinion and Order on

Cross Motions for Summary Judgment

 This case arises from a negligence action in which NGM Insurance Co. (“NGM”) 

defended and settled a claim against Brian McGuire. NGM argues that Mr. McGuire was 

entitled to defense and indemnification from Firemen’s Insurance Co. (“Firemen’s”) 

under a policy issued to his employer, Thayer Street Associates. NGM now and seeks 

reimbursement for expenses incurred defending and settling the suit. 

Both parties have filed motions for summary judgment focusing, for the most 

part, on Mr. McGuire’s status as either an independent contractor or employee. 

Firemen’s also argues that NGM waived any claim against it by defending the prior 

litigation without a reservation of rights or non-waiver agreement. Because the Court 

finds that NGM has waived the claim against Firemen’s, Defendant’s Motion for 

Summary Judgment is GRANTED. 

Summary Judgment is appropriate “if the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the affidavits, if any, referred to in 

the statements required by Rule 56(c)(2), show that there is no genuine issue as to any 
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material fact and that any party is entitled to judgment as a matter of law.” V.R.C.P. 

56(c)(3). Where both parties seek summary judgment, "each must be given the benefit of 

all reasonable doubts and inferences when the opposing party's motion is being 

evaluated." Northern Sec. Ins. Co. v. Rosenthal, 2009 VT 83, ¶ 4, 186 Vt. 578 (citation 

omitted). 

 The undisputed facts are as follows. Dominic Pulitano filed a negligence suit 

after he was injured when temporary stairs built by Brian McGuire collapsed at a 

construction site. At the time of the accident, Mr. McGuire was engaged as a carpenter 

on the project by Thayer Street Associates (“Thayer Street”) and insured as an 

independent contractor by NGM. Thayer Street was insured by Firemen’s. 

NGM defended the suit brought by Mr. Pulitano. During the course of this 

representation, NGM became aware of facts which suggested that Mr. McGuire was 

acting as an employee of Thayer Street, rather than an independent contractor.1

 Had Mr. 

McGuire been acting as an employee of Thayer Street, the accident would have been 

covered by Firemen’s under Thayer Street’s policy. However, NGM settled the case 

without reserving the right to pursue a cause of action for contribution, indemnity or 

subrogation against Firemen’s at a later time.2

Shortly thereafter, NGM brought this suit alleging that it should be indemnified 

by Firemen’s for its defense and settlement of the prior litigation, because Mr. McGuire 

was acting as an employee, rather than an independent contractor at the time of the 

accident. 

 In Jefferson Insurance v. Travelers Insurance, the Vermont Supreme Court held 

 

1

 Admitted ¶31 of Firemen’s Statement of Additional Undisputed Facts. 

2

 Admitted ¶11 of Firemen’s Statement of Additional Undisputed Facts. 
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“that when with knowledge of facts that would place liability for a loss on another 

insurer, an insurer negotiates and settles a claim against its insured without expressly 

reserving rights to pursue a cause of action for contribution, indemnity or subrogation at a 

later time, such a claim is waived.” Agency of Natural Resources v. Glens Falls 

Insurance Co., 169 Vt. 426, 436 (1999)(citing Jefferson Insurance v. Travelers 

Insurance, 159 Vt. 46 (1992)).3

 NGM admits that it was aware of the facts when it settled the claim on behalf of 

Mr. McGuire which arguably placed liability on Firemen’s, and that it never expressly 

reserved rights to seek indemnification, subrogation or contribution against Firemen’s. 

Therefore, the claim against Firemen’s has been waived. Jefferson Insurance, 159 Vt. at 

50–51. 

 NGM almost entirely ignores Defendant’s waiver argument. Its lone 

reference to this issue arises in its own motion for summary judgment which 

states, “McGuire, NGM and Firemen’s agreed that the issue of Brian McGuire as 

an employee and all amounts paid pursuant to this settlement agreement and any 

and all costs would be preserved for this suit,” citing the settlement agreement 

from the Pulitano Action. However, the settlement agreement provides no 

support for this contention. The relevant portion states: 

Nothing here shall constitute a waiver in the pending coverage 

action between NGM and Acadia. NGM and Acadia reserve the 

rights in the coverage action to pursue recovery amounts paid 

pursuant to this agreement and any and all costs set forth, or could 

be set forth in said action. 

This agreement says nothing of reserving rights against Firemen’s, or about the 

 

3

 While Defendant has raised and briefed the issue of waiver in its motion for summary judgment, neither 

party cited or addressed these cases, although the Court concludes that the holdings squarely govern the 

outcome here. 
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status of Mr. McGuire as an employee and any possible effect that status might 

have on a subsequent claim by NGM against Fireman’s. Nothing in the 

settlement agreement referenced by NGM qualifies as an express reservation of 

rights pursuant to Jefferson Insurance. 

 Choice of Law 

The issue of choice of law came up in Defendant’s pleadings, where 

Defendant maintained that Massachusetts law should govern this dispute. 

Plaintiff never responded to this argument and each party relies heavily on 

Vermont law to support its arguments. Regardless, Plaintiff has not argued that 

Massachusetts law would require a different outcome, and it appears that it would 

not. See Thach v. Safety Ins. Company, 10 Mass.L.Rptr. 500, (Mass.Super.Ct. 

1999) (citing Sarnafil, Inc. v. Peerless Ins. Co., 418 Mass. 295, 309, 636 N.E.2d 

247 (1994) (“A ‘reservation of rights' letter is a device which allows the insurer to 

give notice to its insured of some policy concerns while at the same time 

continuing to act in accordance with its legal duties. This is an acceptable method 

for an insurer to preserve its rights to later disclaim coverage, should information 

subsequently obtained warrant such disclaimer, while at the same time giving the 

insured notice of a potential problem so the insured is not lulled into failing to act 

to protect himself.”); Northern Sec. Ins. Co., Inc. v. R.H. Realty Trust, 78 

Mass.App.Ct. 691, FN2 (Mass.App.Ct., 2011)(Representation with a reservation 

of rights permits the insurer to assume the defense of the claim against the 

policyholder without waiving, surrendering, or losing the right to contend that the 

claim is not subject to indemnity under the policy). 
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Based on the foregoing, it is hereby ORDERED: 

 Defendant’s motion for summary judgment is GRANTED. 

 DATED , at Bennington, Vermont, 

 ______________________ 

 John Wesley 

 Presiding Judge