22-2697-cv

Zurich Am. Ins. Co. v. Certain Underwriters at Lloyd’s of London Subscribing to Policy Number B12630308616

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY 

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF 

APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY 

ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL 

APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY 

CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY 

COUNSEL. 

At a stated term of the United States Court of Appeals for the 

Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 

Foley Square, in the City of New York, on the 12th day of December, two 

thousand twenty-three.

PRESENT:

AMALYA L. KEARSE,

GUIDO CALABRESI,

ALISON J. NATHAN,

Circuit Judges.

_____________________________________

Zurich American Insurance Company,

American Zurich Insurance Company,

Plaintiffs-Appellees, 22-2697

v.

Certain Underwriters at Lloyd’s of 

London Subscribing to Policy 

Number B12630308616,
2

Defendant-Appellant,

Arch Insurance Company,

Defendant.

_____________________________________

FOR PLAINTIFFS-APPELLEES: GABRIEL E. DARWICK, Coughlin 

Midlige & Garland LLP, New York, 

NY.

FOR DEFENDANT-APPELLANT: STEVEN E. PEIPER (Dan D. Kohane, 

on the briefs), Hurwitz Fine P.C., 

Buffalo, NY.

Appeal from a judgment of the United States District Court for the 

Southern District of New York (Oetken, J).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, 

ADJUDGED, AND DECREED that the judgment of the district court is 

AFFIRMED. 

Appellees, Zurich American Insurance Company and American Zurich 

Insurance Company (together, Zurich) sued their coinsurers—Appellant Certain 

Underwriters at Lloyd’s of London Subscribing to Policy Number B12630308616 

(Lloyd’s) and Defendant Arch Insurance Company (Arch)—seeking a 
3

declaratory judgment that Lloyd’s is barred under New York law from bringing 

a common law indemnification or contribution claim against a party insured by 

Zurich, Arch, and Lloyd’s. The district court granted Zurich’s motion for 

summary judgment, holding that New York’s anti-subrogation rule precludes 

Lloyd’s from bringing that claim. Zurich Am. Ins. Co. v. Certain Underwriters at 

Lloyd’s of London, 627 F. Supp. 3d 325, 330 (S.D.N.Y. 2022). We assume the 

parties’ familiarity with the remaining underlying facts, procedural history, and 

issues on appeal, to which we refer only as necessary to explain our decision. 

As a preliminary matter, under the specific factual circumstances of this 

case, we conclude we have subject matter jurisdiction because “there is a 

substantial controversy, between parties having adverse legal interests, of 

sufficient immediacy and reality to warrant the issuance of a declaratory 

judgment.” Admiral Ins. Co. v. Niagara Transformer Corp., 57 F.4th 85, 92 (2d Cir. 

2023) (cleaned up). We review a grant of summary judgment de novo, 

“resolv[ing] all ambiguities and draw[ing] all inferences against the moving 

party.” Garcia v. Hartford Police Dep’t, 706 F.3d 120, 126–27 (2d Cir. 2013) (per 

curiam). “Summary judgment is proper only when, construing the evidence in 
4

the light most favorable to the non-movant, ‘there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.’” 

Doninger v. Niehoff, 642 F.3d 334, 344 (2d Cir. 2011) (quoting Fed. R. Civ. P. 56(a)). 

This dispute arises out of a large construction project at LaGuardia 

Airport. The Port Authority of New York and New Jersey (Port Authority)

hired LaGuardia Gateway Partners, LLC (LGA) as the developer for the project, 

which then subcontracted with a joint venture among Skanska USA Building 

Inc., Skanska USA Civil Northeast Inc., and Walsh Construction Company II, 

LLC (together, Skanska) to perform the necessary work. The contract required 

LGA to obtain a commercial general liability insurance policy under which 

Skanska, LGA, and Port Authority would be insureds. The contract also 

required Skanska to indemnify LGA and Port Authority for certain personal 

injury claims, including for “any losses suffered or costs incurred” from thirdparty personal injury claims arising from Skanska’s negligence. 

Pursuant to the contract, Skanska and LGA obtained a Contractors 

Controlled Insurance Program for the project, which included a “tower” of 

general liability insurance with $300 million of coverage in three layers. Zurich 
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underwrote the base layer of coverage, Arch provided a first layer of excess 

coverage, and then Lloyd’s provided a second excess policy, i.e. a third layer of 

coverage on top of Arch’s.

Each layer of coverage, including Lloyd’s, contains a standard employer’s 

liability exclusion, which carves out from coverage liability for bodily injury to 

an employee of the insured arising from the employee’s employment by the 

insured. However, there is an exception to this exclusion. The policy does 

cover liability assumed by the insured in an “insured contract” such as the 

contract between Skanska and LGA. App’x 422.

All of this background is necessary to understanding the present dispute, 

which arose from a personal injury suit filed against Port Authority and LGA by 

a Skanska employee injured while working on the LGA project. Zurich agreed 

that the general liability insurance policy provided coverage for the suit and 

arranged for counsel to represent Port Authority and LGA beginning in August 

2018. Roughly three years later, Lloyd’s contacted that counsel and requested 

that LGA and Port Authority commence a third-party claim for common law 

indemnification or contribution against Skanska. Counsel analyzed the 
6

feasibility of such a claim but concluded that New York’s anti-subrogation rule 

would bar it. After continued disputes between Lloyd’s, Zurich, and counsel 

for each, Zurich commenced this action, seeking a declaratory judgment that the 

anti-subrogation rule would indeed bar the indemnification or contribution

claim against Skanska.

We agree with the district court that New York’s anti-subrogation rule 

prevents Lloyd’s from bringing the claim. The anti-subrogation rule is an 

exception to an insurer’s usual right of subrogation against third parties. See 

Pennsylvania Gen. Ins. Co. v. Austin Powder Co., 502 N.E.2d 982, 985 (N.Y. 1986). 

It provides that “[a]n insurer has no right of subrogation against its own insured 

for a claim arising from the very risk for which the insured was covered.” Id. at 

983. As New York’s courts have explained, the anti-subrogation rule is needed 

“both to prevent the insurer from passing the incidence of loss to its own insured 

and to guard against the potential for conflict of interest that may affect the 

insurer’s incentive to provide a vigorous defense for its insured.” N. Star 

Reinsurance Corp. v. Cont’l Ins. Co., 624 N.E.2d 647, 653 (N.Y. 1993). The rule also 

prevents an insurer from “‘fashion[ing] the litigation’” against its own insured 
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“so as to minimize its own liability by triggering coverage under other insurance 

policies.” Nat’l Cas. Co. v. State Ins. Fund, 641 N.Y.S.2d 665, 667 (N.Y. App. Div. 

1996) (quoting N. Star, 624 N.E.2d at 654).

The anti-subrogation rule prevents an insurer from recouping losses from 

its insured “even where the insured has expressly agreed to indemnify the party 

from whom the insurer’s rights are derived and has procured separate insurance 

covering the same risk.” Pennsylvania Gen. Ins. Co., 502 N.E.2d at 983. As the 

New York Court of Appeals has explained, the important public policies served 

by the rule mean that it “must take precedence over the parties’ private 

contractual arrangements.” Id. at 986.

Nor can an insurer bypass the anti-subrogation rule by asserting a 

common law indemnity claim against its insured when it only covers the insured 

for contractual indemnity claims. See Ohio Cas. Ins. Co. v. Transcon. Ins. Co., 372 

F. App’x 107, 111-12 (2d Cir. 2010) (summary order) (discussing New York law);

Leyden v. Square Arch Realty Corp., 626 N.Y.S.2d 352, 354 (N.Y. Sup. Ct. 1995); 16 

Couch on Insurance 3d § 224:4.

The two key elements for the anti-subrogation rule to apply are present 
8

here. Lloyd’s insures Skanska under the general liability policy. That policy, 

through the insured contract provision, covers Skanska for the obligation it 

assumed in the contract to indemnify LGA and Port Authority for losses 

resulting from third-party claims for bodily injury like the one underlying the 

present action. Thus, Lloyd’s cannot subrogate against Skanska—its own 

insured—for losses arising from the underlying suit, exactly the risk for which 

Lloyd’s insures Skanska. What Lloyd’s proposes is precisely what the antisubrogation rule prohibits. Straightforward application of the rule bars the 

claim.

* * *
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We have considered the remaining arguments advanced by Lloyd’s and 

find them to be without merit. Accordingly, we AFFIRM the judgment of the 

district court.

FOR THE COURT: 

Catherine O’Hagan Wolfe, Clerk of Court