1. Introduction

This commentary examines the Appellate Division, Second Department’s decision in NGM Insurance Co. v. MGC Design & Construction Corp., 2025 NY Slip Op 02215, decided April 16, 2025. At issue was whether NGM Insurance Company (“Plaintiff/Insurer”) could, as a matter of law, refuse to defend or indemnify MGC Design & Construction Corp. (“MGC”) or related entities in an underlying personal-injury action brought by Carlos Guichay (“Injured Worker”), on the ground that Guichay did not suffer a “grave injury” as defined in Workers’ Compensation Law (WCL) §11(1). The key questions were (a) the standard for summary judgment in a declaratory-judgment action; (b) the insurer’s right to seek a declaration of no duty to defend or indemnify; and (c) the statutory requirement that an injured employee have suffered a “grave injury” before third-party indemnity or contribution claims survive.

Parties:

• Plaintiff/Insurer: NGM Insurance Company
• Defendant/Insured: MGC Design & Construction Corp.
• Additional Appellant: IE Construction Management, LLC (“Construction Manager”)
• Underlying Plaintiff: Carlos Guichay (and derivative claims by his wife) in Guichay v. Barr

Background: On November 24, 2017, Guichay allegedly sustained a brain injury when he tripped and fell at a construction site. He sued Barr and IE Construction Management (among others). Those defendants impleaded MGC seeking indemnification and contribution. NGM initially defended MGC under a reservation of rights, then sued for a declaratory judgment that no duty to defend or indemnify exists because Guichay did not suffer the statutorily defined “grave injury.”

2. Summary of the Judgment

The Supreme Court, Suffolk County (Bergmann, J.), granted NGM’s motion for summary judgment declaring it had no duty to defend or indemnify MGC or any other entity in the underlying action Guichay v. Barr or the related third-party and second third-party actions. On appeal, the Second Department affirmed. The appellate court held:

• The Construction Manager failed to show that further discovery might produce evidence creating a triable issue as to whether Guichay suffered a “grave injury.”
• NGM met its prima facie burden by submitting deposition transcripts of three medical experts and a neuropsychological consultant, each concluding Guichay remained employable in some capacity.
• Because WCL §11(1) extinguishes indemnity/contribution claims where the employee lacks a “grave injury,” NGM demonstrated there was no possible legal basis to indemnify MGC.
• The matter was remitted for entry of a declaratory judgment consistent with the order.

3. Analysis

3.1 Precedents Cited

• WCL §11(1): Immune employers from contribution/indemnity unless the employee suffers a “grave injury.”
• Great Am. E & S Ins. Co. v. Commack Hotel, LLC, 211 AD3d 704 (2d Dep’t 2022): An insurer may be relieved of its duty to defend if no possible basis for indemnity exists under any policy provision.
• Velazquez-Guadalupe v. Ideal Bldrs. & Constr. Servs., Inc., 216 AD3d 63 (2d Dep’t 2023): Definition and application of “grave injury” immunity under WCL §11.
• Grech v. HRC Corp., 150 AD3d 829 (2d Dep’t 2017): A “permanent total disability” requires that the worker be unemployable in any capacity.
• Rubeis v. Aqua Club, Inc., 3 NY3d 408 (2004): Clarified the “permanent total disability” standard for “grave injury.”
• Lanza v. Wagner, 11 NY2d 317 (1962): Remand to entry of a declaratory judgment after summary determination.

3.2 Legal Reasoning

The court’s reasoning proceeds in two steps:

1. Summary Judgment Standard: Under CPLR 3212, a defendant seeking summary judgment must demonstrate entitlement as a matter of law and that no triable issues of fact exist. An opposing party relying on premature discovery must identify facts exclusively in the movant’s control or show that discovery will yield material evidence (Vasquez v. Vullis Corp., 220 AD3d 906).
2. No Duty to Defend/Indemnify: If the insurer establishes that there is no possible factual or legal scenario in which it might owe indemnity, it is entitled to summary relief from the defense obligation (Great Am. E & S Ins. Co., 211 AD3d at 705). WCL §11(1) bars indemnity if the claimant’s injury is not “grave,” defined as an acquired brain injury with permanent total disability. The insurer submitted multiple expert reports concluding the injured worker remained employable, thus defeating any grave-injury claim. The construction manager did not identify any missing or withheld medical evidence.

3.3 Impact

This decision underscores several trends:

• Strict Application of WCL §11: Insurers and employers may seek early dismissal of indemnity claims by focusing on the grave-injury threshold. Claimants must produce clear evidence of permanent total disability to overcome summary judgment.
• Reservation of Rights and Declaratory Actions: Insurers can preserve coverage defenses while advancing a defense, then obtain early judicial resolution of their obligations.
• Discovery in Declaratory Actions: Courts will not tolerate mere speculation that further discovery will yield evidence to defeat summary judgment; parties must identify specific missing evidence.
• Forecast for Future Litigation: Third-party defendants and their insurers are likely to litigate the precise vocational capacity of injured employees, often via competing medical experts, to trigger or avoid WCL §11 immunity.

4. Complex Concepts Simplified

• “Grave Injury” (WCL §11[1]): A serious brain injury from an external force that leaves the worker permanently unable to work in any capacity. If this threshold is not met, third-party indemnity claims fail automatically.
• Permanent Total Disability: The worker’s total loss of employability anywhere in the job market; not merely an inability to perform prior duties.
• Duty to Defend vs. Duty to Indemnify: An insurer must defend any potentially covered suit unless it establishes there is no conceivable covered claim. If no duty to indemnify can ever arise—here because no grave injury exists—the duty to defend falls away.
• Summary Judgment in Declaratory Actions: A party must show both entitlement to judgment as a matter of law and absence of material factual disputes. Opposition based on hoped-for future discovery is insufficient.

5. Conclusion

The NGM Insurance Co. v. MGC Design & Construction Corp. decision crystallizes the insurer’s right to terminate defense and indemnity obligations when an injured worker’s claim does not satisfy the “grave injury” standard of WCL §11(1). By affirming summary judgment for NGM, the Second Department reinforces strict adherence to statutory coverage thresholds and illustrates the effectiveness of declaratory judgment actions for early coverage resolutions. Insureds, insurers, and third-party defendants should carefully assess the medical record for indications of permanent total disability before advancing or defending indemnity claims under New York workers’ compensation law.