Opinion ID: 2144137
Heading Depth: 1
Heading Rank: 1

Heading: Itri Brick & Concrete Corp. v Aetna Cas. & Sur. Co.

Text: Plaintiff Itri Brick & Concrete Corp. was a masonry subcontractor on a construction project at Queens College. The general contractor on the job was a joint venture consisting of Mars Associates, Normel Construction Corp., and West Terrace Construction Corp. (MNT). Kizmann, an employee of Itri, was injured on the job, and sued MNT under theories of common-law negligence and Labor Law §§ 240 and 241. MNT in turn impleaded Itri, asserting claims for common-law indemnification and contribution, as well as contractual indemnification. [1] Itri made a demand to defend and indemnify upon its two insurers: the State Insurance Fund, Itri's workers' compensation carrier, which provided coverage for common-law indemnification and contribution claims, and Aetna, which had issued Itri a commercial general liability policy. Aetna responded that its policy did not cover the common-law claims, and that, while the policy did generally cover liability assumed by Itri under a contract or agreement, MNT's claim for contractual indemnification would be barred under General Obligations Law § 5-322.1 if Kizmann's injuries resulted in part from the negligence of MNT. [2] While the personal injury action was pending, Itri and the State Fund commenced this declaratory judgment action against Aetna demanding that Aetna partially defend and indemnify Itri. Upon a motion by Itri and the State Fund for summary judgment, Supreme Court denied the motion, searched the record and granted judgment in Aetna's favor. The court determined that the indemnification agreement was void under General Obligations Law § 5-322.1, and that MNT's claim for contractual indemnification against Itri was not covered by the Aetna policy. Two months later, the personal injury action settled. Shortly thereafter, Aetna and the State Fund entered into a stipulation: (1) that approved the settlement amount paid by State Fund on behalf of Itri in the personal injury action; (2) that specifically reserved the State Fund's right to seek to reargue Itri's coverage claim in the declaratory judgment action; and (3) that determined that MNT was 24.26% negligent, and Itri was 75.24% negligent. Thereafter, Itri and the State Fund moved to renew and to reargue the summary judgment motion. Supreme Court denied the motion to reargue, granted the motion to renew and adhered to its previous decision, again holding that since MNT had been found partially negligent, the indemnification agreement between MNT and Itri was unenforceable under General Obligations Law § 5-322.1. Itri and the State Fund appealed. The Appellate Division unanimously affirmed, holding that, because the stipulation determined that MNT was partially negligent, the indemnification agreement was invalid under General Obligations Law § 5-322.1 and therefore there was no coverage under the applicable provision of the Aetna policy. Leave to appeal to this Court was granted by the Appellate Division.