Travelers Property Casualty Company of America v. Arch Insurance Company

2

B ef or e t h e C o urt is a m oti o n f or s u m m ar y j u d g m e nt fr o m e a c h i ns ur er. Ar c h s e e ks dis miss al of t his l a ws uit. Tr a v el ers s e e ks b ot h a d e cl ar ati o n t h at Ar c h h a d a d ut y t o d ef e n d L P C a n d a n a w ar d of d a m a g es f or a m o u nts Tr a v el ers p ai d d ef e n di n g L P C a n d Fr a n c o. N ati o n al Fir e s e e ks a n a w ar d of d a m a g es f or its u nr ei m b urs e d d ef e ns e c osts of L P C. F or t h e f oll o wi n g r e as o ns, Ar c h's m oti o n is D E NI E D, Tr a v el ers' m oti o n is G R A N T E D I N P A R T a n d D E NI E D I N P A R T, a n d N ati o n al Fir e's m oti o n is D E NI E D.

A. T h e C o n st r u cti o n P r oj e ct a n d S u b c o nt r a ct L P C w as t h e c o ntr a ct or f or a c o nstr u cti o n pr oj e ct at t h e U ni v ersit y of B uff al o M e di c al S c h o ol ( t h e " Pr oj e ct ") . S e e D kt. N o. 5 3 -6. L P C hir e d Fr a n c o t o w or k as a s u b c o ntr a ct or o n t h e Pr oj e ct, a n d t h e t w o e x e c ut e d a c o ntr a ct t o g o v er n t h at w or k (t h e " S u b c o ntr a ct"). S O F ¶ 1 8; s e e D kt. N o. 5 3 -6. T h e S u b c o ntr a ct r e q uir e d Fr a n c o t o i n d e m nif y L P C f or b o dil y i nj ur y a n d pr o p ert y d a m a g e " arisi n g o ut of or r es ulti n g fr o m . . . a n y a cts or o missi o ns o n t h e p art of "

Fr a n c o or its e m pl o y e es. D kt. N o. 5 3 -6 at 1 3. T h e S u b c o ntr a ct als o r e q uir e d Fr a n c o t o " pr o c ur e a n d m ai nt ai n " i ns ur a n c e c o v er a g e as s et o ut i n att a c h m e nts t o t h e S u b c o ntr a ct. I d. at 1 2. Att a c h m e nt F t o t h e S u b c o ntr a ct r e q uir e d Fr a n c o t o o bt ai n a c o m m er ci al g e n er al li a bilit y i ns ur a n c e p oli c y f or b o dil y i nj ur y t h at w o ul d b e " pri m ar y o v er a n d a p pl y o n a n o n-c o ntri b ut or y b asis t o a n y ot h er c oll e cti bl e i ns ur a n c e pr o vi di n g c o v er a g e t o [ L P C]. " I d. at 6 4. A d diti o n all y, t h e S u b c o ntr a ct r e q uir e d t h at a n e n d ors e m e nt o n t h e i ns ur a n c e p oli c y r efl e ct "t h e i n cl usi o n of t h e i nt er ests of [ L P C] . . . f or b o dil y i nj ur y a n d pr o p ert y d a m a g e. " I d. at 6 5. L astl y, t h e S u b c o ntr a ct

3

T h e f oll o wi n g f a ct s ar e t a k e n fr o m t h e P arti es' j oi nt R ul e 5 6. 1 St at e m e nt ( D kt. N o. 5 0, " S O F ") a n d, w h er e t h e f a ct s ar e u n di s p ut e d or n ot m at eri all y di s p ut e d, wit h e vi d e n c e fr o m t h e r e c or d.

4

o bli g at e d Fr a n c o t o pr o vi d e a c ertifi c at e of i ns ur a n c e a c c e pt a bl e t o L P C t h at "r efl e ct [ e d] t h e i n cl usi o n of t h e i nt er ests of [ L P C] . . . as A D DI TI O N A L I N S U R E D S. " I d. at 6 6. B. T h e A r c h P oli c y

C o nsist e nt wit h t h e S u b c o ntr a ct, Fr a n c o pr o c ur e d a p oli c y fr o m Ar c h (t h e " Ar c h P oli c y "). T hr e e p orti o ns of t h e p oli c y ar e r el e v a nt t o t his l a ws uit, a d dr ess i n g w h at t h e p oli c y c o v er e d, w h o t h e p oli c y c o v er e d, a n d h o w t h e p oli c y r el at e d t o ot h er a p pli c a bl e i ns ur a n c e p oli ci es.

T h e p oli c y o bli g at e d Ar c h t o p a y d ef e ns e c osts of its i ns ur e d i n a l a ws uit st e m mi n g fr o m

" b o dil y i nj ur y. " S O F ¶ 3. T h e p a y m e nt of t h os e c osts w o ul d " n ot r e d u c e t h e li mits of i ns ur a n c e." I d. ¶ 5. H o w e v er, o n c e Ar c h p ai d $ 1 milli o n f or "j u d g m e nts or s ettl e m e nts, " t h e p oli c y w o ul d e x h a ust a n d Ar c h w o ul d n o l o n g er h a v e a n y d ut y t o d ef e n d or t o p a y d ef e ns e c osts. I d. ¶ ¶ 3, 6.

A s c h e d ul e i n t h e p oli c y i n cl u d e d as a d diti o n al i ns ur e d s " all p arti es w h er e r e q uir e d b y writt e n c o ntr a ct. " I d. ¶ 6. A n a m e n d m e nt t o t h at s c h e d ul e st at es t h at e ntiti es s p e cifi e d i n t h e s c h e d ul e ar e i ns ur e d " o nl y wit h r es p e ct t o li a bilit y f or ' b o dil y i nj ur y' . . . c a us e d, i n w h ol e or i n p art, b y " t h e " a cts or o mi ssi o n s" of Fr a n c o. I d.

Fi n all y , as t o h o w t h e p oli c y r el at e d t o ot h er a p pli c a bl e p oli ci es, t h e Ar c h P oli c y i n cl u d e d a n " Ot h er I ns ur a n c e " e n d ors e m e nt. S e e id. ¶ 8. T h e e n d ors e m e nt "s u p ers e d es a n y pr o visi o n t o t h e c o ntr ar y " a n d pr o vi d es t h at t h e Ar c h P oli c y's i ns ur a n c e is pri m ar y a n d Ar c h will n ot s e e k c o ntri b uti o n fr o m i ns ur a n c e a v ail a bl e t o a n a d diti o n al i ns ur e d pr o vi d e d t h at ( 1) "[t] h e a d diti o n al i ns ur e d is a N a m e d I ns ur e d u n d er s u c h ot h er i ns ur a n c e "; a n d ( 2) " Y o u [ Fr a n c o] h a v e a gr e e d i n writi n g i n a c o ntr a ct or a gr e e m e nt t h at t his i ns ur a n c e w o ul d b e pri m ar y a n d w o ul d n ot s e e k c o ntri b uti o n fr o m a n y ot h er i ns ur a n c e a v ail a bl e t o t h e a d diti o n al i ns ur e d. " I d.

5

C. T h e T r a v el e rs P oli c y a n d N ati o n al Fi r e P oli c y Li k e Ar c h, Tr a v el ers iss u e d a p oli c y t o Fr a n c o (t h e " Tr a v el ers P oli c y "). I d. ¶ 1 4 . It pr o vi d e d c o v er a g e f or b o dil y i nj ur y i n e x c ess of " pr o p er e x h a usti o n of t h e R et ai n e d Li mit, "

d efi n e d as t h e gr e at er of " all S c h e d ul e d U n d erl yi n g I ns ur a n c e. " I d. ¶ 1 5. Fi n all y, N ati o n al Fir e iss u e d a n i ns ur a n c e p oli c y t o L P C (t h e " N ati o n al Fir e P oli c y "). I d. ¶ 9. Li k e t h e Ar c h P oli c y, t h e N ati o n al Fir e P oli c y pr o vi d es c o v er a g e f or b o dil y i nj ur y. I d. ¶ 1 1. D. T h e A c ci d e nt

L P C hir e d Fr a n c o as a c o nstr u cti o n s u b c o ntr a ct or at t h e Pr oj e ct. I d. ¶ 1 8; s e e D kt. N o. 5 3 -6. D uri n g w or k o n J ul y 1 4, 2 0 1 6 , an L P C w or k er n a m e d J os e V e g a sli p p e d a n d str ai n e d his a b d o m e n. S O F ¶ ¶ 2 3, 2 6. L P C g e n er at e d a n E m pl o y e e A c ci d e nt R e p ort o n N o v e m b er 2 8, 2 0 1 6, w hi c h V e g a si g n e d (t h e " A c ci d e nt R e p ort "). I d. ¶ 2 3 - 2 4. It pr o vi d es t h e f oll o wi n g d es cri pti o n of t h e a c ci d e nt:

[ V e g a] w as o p er ati n g b u c k h oist. Fr a n c o w as r e m o vi n g d e bris/ m ort ar o n l e v el 8 t o d o c k. Fr a n c o e m pl o y e e p us h e d p all et j a c k o nt o b u c k h oist b ef or e Mr. V e g a w as a bl e t o l a y d o w n pl at e o v er o p e ni n g b et w e e n pl atf or m & b u c k h oist . P all et g ot st u c k i n g a p. Mr. V e g a tri e d t o assist i n g etti n g t h e p all et fr e e fr o m g a p. Mr. V e g a us e d a pi e c e of a n gl e ir o n t o us e as a l e v e l [si c] t o fr e e p all et j a c k. U p o n usi n g t h e a n gl e, Mr. V e g a sli p p e d a n d str ai n e d his a b d o m e n.

I d. ¶ 2 6. T h e r e p ort i d e ntifi e d " Fr a n c o e m pl o y e e m o v[i n g] p all et j a c k pri or t o t h e pl at e b ei n g s et f or g a p tr a nsiti o n " as a c o ntri b uti n g f a ct or t o t h e a c ci d e nt. I d. ¶ 2 7. V e g a als o i n cl u d e d a d es cri pti o n of t h e a c ci d e nt i n t h e A c ci d e nt R e p ort:

Fr a n k o [si c] br o u g ht m at eri al d o w n fr o m 8t h fl o or t o l o a di n g d o c k as t h e y c a m e of [si c] t o b u c k h oist I t ur n e d t o m a k e r o o m w h e n I t ur n e d h e r oll e d o n b u c k h oist wit h o ut p utti n g pl at e d o w n.

6

E. T h e V e g a A cti o n a n d T hi r d -P a rt y A cti o n V e g a s u ed L P C a n d t h e Pr oj e ct's o w n er i n N e w Y or k st at e c o urt o n O ct o b er 3 1, 2 0 1 8, all e gi n g n e gli g e n c e a n d vi ol ati o ns of N e w Y or k L a b or L a w i n c o n n e cti o n wit h t h e a c ci d e nt a n d V e g a's r es ulti n g i nj uri es (t h e "V e g a A cti o n "). I d. ¶ ¶ 2 9 - 3 0. O n D e c e m b er 2 6, 2 0 1 8, t h e Pr oj e ct's o w n er a n d L P C fil e d a t hir d -p art y a cti o n a g ai nst Fr a n c o f or, i nt er ali a, c o ntr a ct u al i n d e m nifi c ati o n i n c o n n e cti o n wit h t h e V e g a A cti o n , all e g i n g V e g a's a c ci d e nt r es ult e d fr o m Fr a n c o's a cts or o missi o ns (t h e " T hir d -P art y A cti o n "). I d. ¶ ¶ 3 1 - 3 2. O n e m o nt h l at er, N ati o n al Fir e t e n d er e d t h e d ef e ns e a n d i n d e m nifi c ati o n of L P C t o Ar c h, ar g ui n g L P C q u alifi e d as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y. I d. ¶ 4 9 ; D kt. N o. 1 -1 4 . Ar c h's t hir d -p art y cl ai ms a d mi nistr at or d e ni e d t h e t e n d er o n A pril 2 2, 2 0 1 9 , o n t h e gr o u n d t h at Fr a n c o's a ct a n d o missi o ns h a d n ot c a us e d V e g a's i nj uri es . S O F ¶ 5 0 ; D kt. N o. 1-1 5 . N ati o n al Fir e a n d l at er Tr a v el ers s u b mitt e d n u m er o us a d diti o n al t e n d ers as t h e liti g ati o n pr o gr ess e d, all of w hi c h Ar c h's cl ai ms a d mi nistr at or d e ni e d. S e e S O F ¶ ¶ 5 1 - 6 7 .

In t h e T hir d -P art y A cti o n, L P C e v e nt u all y m o v e d f or s u m m ar y j u d g m e nt a n d s o u g ht a d e cl ar ati o n t h at Fr a n c o w as c o ntr a ct u all y r e q uir e d t o d ef e n d a n d i n d e m nif y L P C b e c a us e Fr a n c o c a us e d V e g a's i nj ur y. I d. ¶ 3 9 . O n O ct o b er 4, 2 0 2 1, t h e st at e c o urt j u d g e d e ni e d L P C's m oti o n. I d. T w o y e ars l at er, i n J u n e 2 0 2 3, a n a p p ell at e c o urt r e v ers e d t h e tri al c o urt' s r uli n g. D kt. N o. 5 3 -2 0 at 4 . T h e a p p ell at e c o urt d et er mi n e d Fr a n c o c a us e d V e g a's i nj ur y a n d h el d Fr a n c o w as o bli g at e d t o i n d e m nif y L P C u n d er t h e S u b c o ntr a ct . I d.; s e e als o S O F ¶ 4 3. F oll o wi n g t h e a p p e al, t h e p arti es i n t h e V e g a A cti o n d e ci d e d t o p urs u e s ettl e m e nt dis c ussi o ns. T h os e dis c ussi o n s c ul mi n at e d i n a s ettl e m e nt o n A u g ust 2 4, 2 0 2 3. S O F ¶ 4 4. Ar c h p ai d $ 1 milli o n t o V e g a, a n d Tr a v el ers p ai d a c o ntri b uti o n . I d. H o w e v er, t h e s ettl e m e nt di d n ot r es ol v e t h e cl ai ms i n t h e T hir d-P art y A cti o n, a n d L P C m ai nt ai n e d t h at Fr a n c o w as o bli g at e d t o r ei m b urs e L P C f or its d ef e ns e c osts i n t h e V e g a A cti o n. S O F ¶ ¶ 4 4 - 4 5.

7

S e e ki n g t o r es ol v e t h e T hir d -P art y A cti o n, Tr a v el ers s e nt Ar c h n u m er o us l ett ers, d e m a n di n g t h at Ar c h r ei m b urs e L P C 's d ef e ns e c osts as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y. I d. ¶ ¶ 5 6 - 6 7. Ar c h r ef us e d. I d. Alt h o u g h Ar c h h a d pr e vi o usl y ar g u e d it h a d n o o bli g ati o ns t o L P C b e c a us e Fr a n c o h a d n ot c a us e d V e g a's i nj uri es, its p ost -A u g ust 2 0 2 3 l ett ers ar g u e d t h at Ar c h h a d n o d ut y t o d ef e n d a n y i ns ur e d gi v e n Ar c h p ai d $ 1 milli o n i n s ettl e m e nt c osts t o V e g a a n d t h er ef or e t h e Ar c h P oli c y w as e x h a ust e d . S e e, e. g. , D kt. N o. 5 3 -3 3. O n F e br u ar y 1 6, 2 0 2 4, L P C m o v e d f or j u d g m e nt a g ai nst Fr a n c o f or $ 2 5 9, 2 9 3. 2 7 i n d ef e ns e c osts . S O F ¶ 4 5. D es pit e Tr a v el ers a n d N ati o n al Fir e's r e q u ests, Ar c h r ef us e d t o c o ntri b ut e t o a p ot e nti al s ettl e m e nt, a g ai n ar g ui n g t h e Ar c h Poli c y h a d b e e n e x h a ust e d . I d. ¶ 4 6. F. T h e S ettl e m e nt A g r e e m e nt

Si x m o nt hs l at er, i n A u g ust of 2 0 2 4, L P C a n d Fr a n c o e x e c ut e d a s ettl e m e nt a gr e e m e nt r es ol vi n g t h e T hir d-P art y A cti o n (t h e " S ettl e m e nt A gr e e m e nt "). I d. ¶ 4 7. Alt h o u g h t h e r e q u est e d j u d g m e nt w as $ 2 5 9, 2 9 3. 2 7, L P C a gr e e d t o a c c e pt a $ 2 4 5, 0 0 0 p a y m e nt t o r es ol v e its cl ai ms a g ai nst Fr a n c o . I d. ¶ ¶ 4 5, 4 7 . T h e S ettl e m e nt A gr e e m e nt e x pr essl y r es er v e d a n y ri g hts of Tr a v el ers, N ati o n al Fir e, L P C, a n d Fr a n c o t o p urs u e r e c o v er y fr o m Ar c h. S e e D kt. N o. 5 3 -2 2 at 2 ( " N ot hi n g h er ei n s h all c o nstit ut e a w ai v er or r el e as e of Fr a n c o's or Tr a v el ers ' ri g hts t o s e e k r e c o v er y of t h e S ettl e m e nt P a y m e nt fr o m Ar c h i n t h e [ d e cl ar at or y j u d g m e nt] A cti o n. "); s e e i d. ( "[ L P C] a n d its i ns ur a n c e c arri er, [ N ati o n al Fir e], e x pr essl y r es er v e t h eir ri g hts t o p urs u e r e c o v er y fr o m Ar c h . . . f or t h e a m o u nt of p ost-t e n d er att or n e ys' f e es . . . t h at e x c e e ds t h e a m o u nt of t h e S ettl e m e nt P a y m e nt. ").

II. P R O C E D U R A L HI S T O R Y A N D T H E P R E S E N T M O T I O N S

As n ot e d a b o v e, d uri n g t h e p e n d e n c y of t h e u n d erl yi n g pr o c e e di n gs, N ati o n al Fir e a n d Tr a v el ers r e p e at e dl y as k e d Ar c h t o p a y L P C's d ef e ns e c osts, c o nt e n di n g Ar c h w as i n vi ol ati o n of its o bli g ati o ns u n d er t h e Ar c h P oli c y. S e e, e. g. , D kt. N os. 5 3-3 2, -3 4 . Tr a v el ers als o r e p e at e dl y

8

t hr e at e n e d t o fil e s uit if Ar c h di d n ot m a k e p a y m e nts. S e e, e. g. , D kt. N o. 5 3-3 4 . O n A pril 5, 2 0 2 4, a p pr o xi m at el y f o ur m o nt hs b ef or e L P C a n d Fr a n c o e x e c ut e d t h e S ettl e m e nt A gr e e m e nt, Tr a v el ers m a d e g o o d o n its t hr e at a n d fil e d t his l a ws uit, n a mi n g Ar c h as D ef e n d a nt a n d N ati o n al Fir e as I nt er est e d P art y D ef e n d a nt. D kt. N o. 1. Tr a v el ers' c o m pl ai nt s o u g ht, i nt er ali a, a d e cl ar ati o n t h at "(i) Ar c h h as a d ut y t o d ef e n d L P C as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y wit h r es p e ct t o t h e U n d erl yi n g A cti o n; (ii) Ar c h is li a bl e f or t h e s u ms i n c urr e d i n t h e d ef e ns e of L P C i n t h e U n d erl yi n g A cti o n as s u p pl e m e nt ar y p a y m e nts u n d er t h e Ar c h P oli c y;

(iii) t h e c o v er a g e pr o vi d e d b y t h e Ar c h P oli c y t o L P C is pri m ar y; a n d (i v) Tr a v el ers h as n o o bli g ati o n u n d er t h e Tr a v el ers P oli c y f or t h e p a y m e nt of L P C's d ef e ns e c osts i n t h e U n d erl yi n g A cti o n. " I d. ¶ 7 4.

F oll o wi n g t h e cl os e of di s c o v er y, all t hr e e i ns ur er s m o v e d f or s u m m ar y j u d g m e nt. Ar c h's m oti o n s e e ks dis miss al of t his l a ws uit. D kt. N o. 4 7. Ar c h ar g u es t h at its $ 1 milli o n p a y m e nt t o V e g a e x h a ust e d t h e Ar c h P oli c y a n d it h as n o f urt h er o bli g ati o n s t o a n y p art y u n d er t h e Ar c h P oli c y. D kt. N o. 4 9 at 4. B e c a us e t his l a ws uit s e e ks r e c o v er y f or t h e a m o u nts p ai d f or t h e S ettl e m e nt A gr e e m e nt aft er t h e e x h a usti o n of t h e Ar c h P oli c y, Ar c h ar g u es, t h e C o urt s h o ul d r ej e ct Tr a v el ers a n d N ati o n al Fir e' s cl ai ms a n d e nt er s u m m ar y j u d g m e nt i n its f a v or. I d. at 6 - 1 3. Ar c h f urt h er ar g u es t h at a n y cl ai ms b y N ati o n al Fir e ar e m o ot b e c a us e it a c c e pt e d p a y m e nt fr o m Tr a v el ers i n f ull s atisf a cti o n of a n y cl ai m it c o ul d h a v e m a d e a g ai nst Ar c h. I d. at 1 4 - 1 5. Tr a v el ers' m oti o n s e e ks a d e cl ar ati o n t h at L P C q u alifi e d as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y, Ar c h t h us h a d a d ut y t o d ef e n d L P C, Ar c h's c o v er a g e of L P C w as pri m ar y t o N ati o n al Fir e's c o v er a g e, a n d Tr a v el ers h a d n o o bli g ati o n t o p a y L P C's d ef e ns e c osts. D kt. N o. 5 1. Tr a v el ers als o s e e ks a n a w ar d of c osts it p ai d f or t h e d ef e ns e of L P C a n d Fr a n c o. I d. Tr a v el ers ar g u es t h at Ar c h f or y e ars wr o n gf ull y d e ni e d c o v er a g e t o L P C alt h o u g h L P C q u alifi e d

9

as a n a d diti o n al i ns ur e d a n d dis c o v er y i n t h e V e g a A cti o n s h o w e d Fr a n c o pr o xi m at el y c a us e d V e g a's h ar m. D kt. N o. 5 5 at 1 - 3 . Tr a v el ers f urt h er c o nt e n ds t h at " n o pr o visi o n of t h e Ar c h P oli c y r etr o a cti v el y t er mi n at es Ar c h's o bli g ati o ns t o its i ns ur e ds a n d Ar c h's d ut y t o d ef e n d L P C i n t h e [V e g a ] A cti o n [t h at] pr e c e d e d t h e p ur p ort e d e x h a usti o n of t h e Ar c h P oli c y. " D kt. N o. 6 1 at 1.

N ati o n al Fir e's m oti o n s e e ks a n a w ar d of d a m a g es r e pr es e nti n g t h e diff er e n c e b et w e e n t h e S ettl e m e nt A gr e e m e nt a n d t h e a nti ci p at e d j u d g m e nt, pl us pr e -j u d g m e nt i nt er est t h at h as a c cr u e d si n c e 2 0 2 4. D kt. N o s. 5 6- 5 7 .

I. L E G A L S T A N D A R D O N S U M M A R Y J U D G M E N T

R ul e 5 6( a) of t h e F e d er al R ul es of Ci vil Pr o c e d ur e pr o vi d es t h at a c o urt s h all gr a nt s u m m ar y j u d g m e nt w h e n "t h e m o v a nt s h o ws t h at t h er e is n o g e n ui n e dis p ut e as t o a n y m at eri al f a ct a n d t h e m o v a nt is e ntitl e d t o j u d g m e nt as a m att er of l a w. " F e d. R. Ci v. P. 5 6( a). A g e n ui n e i ss u e of m at eri al f a ct e xists "if t h e e vi d e n c e is s u c h t h at a r e as o n a bl e j ur y c o ul d r et ur n a v er di ct f or t h e n o n m o vi n g p art y. " A n d ers o n v. Li b ert y L o b b y, I n c. , 4 7 7 U. S. 2 4 2, 2 4 8 ( 1 9 8 6).1 F2

" A f a ct i s ' m at eri al' w h e n it ' mi g ht aff e ct t h e o ut c o m e of t h e s uit u n d er g o v er ni n g l a w.' " M c C art h y v. D u n & Br a dstr e et C or p. , 4 8 2 F. 3 d 1 8 4, 2 0 2 ( 2 d Cir. 2 0 0 7) ( q u oti n g J effr e y s v. Cit y of N e w Y or k , 4 2 6 F. 3 d 5 4 9, 5 5 3 ( 2 d Cir. 2 0 0 5)). I n d et er mi ni n g w h et h er a g e n ui n e iss u e of m at eri al f a ct e xists, "[t] h e e vi d e n c e of t h e n o n -m o v a nt is t o b e b eli e v e d, " a n d a c o urt m ust dr a w " all j ustifi a bl e i nf er e n c es " i n f a v or of t h e n o n m o v a nt. A n d ers o n , 4 7 7 U. S. at 2 5 5 ( citi n g A di c k es v. S. H. K r ess & C o. , 3 9 8 U. S. 1 4 4, 1 5 8- 5 9 ( 1 9 7 0)).

10

U nl e ss ot h er wi s e i n di c at e d, c as e q u ot ati o ns o mit all i nt er n al cit ati o ns, q u ot ati o n m ar ks, f o ot n ot es, a n d o mi ssi o ns, a n d a d o pt alt er ati o ns.

11

O n c e t h e m o v a nt h as s h o w n t h at t h er e is n o g e n ui n e iss u e as t o a n y m at eri al f a ct a n d t h at it is e ntitl e d t o a j u d g m e nt as a m att er of l a w, "t h e n o n m o vi n g p art y m ust c o m e f or w ar d wit h 's p e cifi c f a cts s h o wi n g t h at t h er e is a g e n ui n e iss u e f or tri al ,' " M ats us hit a El e c. I n d us. C o. v. Z e nit h R a di o C or p. , 4 7 5 U. S. 5 7 4, 5 8 7 ( 1 9 8 6) ( q u oti n g F e d. R. Ci v. P. 5 6( e)), a n d " m a y n ot r el y o n c o n cl us or y all e g ati o ns or u ns u bst a nti at e d s p e c ul ati o n, " S c ott o v. Al m e n a s , 1 4 3 F. 3 d 1 0 5, 1 1 4 ( 2 d Cir. 1 9 9 8). I n ot h er w or ds, t h e n o n m o v a nt m ust off er " c o n cr et e e vi d e n c e fr o m w hi c h a r e as o n a bl e j ur or c o ul d r et ur n a v er di ct i n [t h e n o n m o v a nt's] f a v or. " A n d er s o n , 4 7 7 U. S. at 2 5 6. R eli a n c e u p o n " c o n cl us or y st at e m e nts " or " m er e all e g ati o ns " is n ot s uffi ci e nt t o d ef e at s u m m ar y j u d g m e nt. Yi n g Ji n g G a n v. Cit y of N e w Y or k , 9 9 6 F. 2 d 5 2 2, 5 3 2 - 3 3 ( 2 d Cir. 1 9 9 3).

II. A R C H' S M O T I O N F O R S U M M A R Y J U D G M E N T I S D E NI E D Ar c h att e m pts t o p ortr a y t his c as e as Tr a v el ers s e e ki n g r ei m b urs e m e nt f or t h e a m o u nt Tr a v el ers p ai d u n d er t h e S ettl e m e nt A gr e e m e nt. B e c a us e Ar c h h a d alr e a d y e x h a ust e d its p oli c y at t h e ti m e t h e S ettl e m e nt A gr e e m e nt w as e nt er e d , it ar g u es, it n o l o n g er h a d a n y o bli g ati o n t o d ef e n d or i n d e m nif y eit h er Fr a n c o or L P C, a n d t h e C o urt s h o ul d dis miss t his a cti o n. Ar c h's ar g u m e nt w h oll y mis c o nstr u es t h e b asis of t his d e cl ar at or y j u d g m e nt a cti o n. T h e Ar c h P oli c y i n cl u d e d a $ 1 milli o n c a p o n p a y m e nts f or j u d g m e nts or s ettl e m e nts . O n c e Ar c h p ai d V e g a $ 1 milli o n t o s ettl e t h e U n d erl yi n g A cti o n, Ar c h e x h a ust e d t h e c a p a n d it n o l o n g er o w e d a d ut y t o d ef e n d a n y i ns ur e d of t h e Ar c h P oli c y. Ar c h's pr o bl e m, h o w e v er, is t h at e x h a usti o n c a n n ot r etr o a cti v el y c h a n g e a n i ns ur er's d uti es t o its i ns ur e d. S e e, e. g. , R o y al I ns. C o. of A m. v. L e xi n gt o n I ns. C o., N o. 0 2 -C V -0 2 0 8 5 ( R C C), 2 0 0 4 W L 1 6 2 0 8 7 7, at * 3 ( S. D. N. Y. J ul y 2 0, 2 0 0 4) ( " D ef e n d a nt [i ns ur er] w as o bli g at e d t o d ef e n d [its i ns ur e d] u ntil its p oli c y li mit h a d b e e n e x h a ust e d t hr o u g h t h e p a y m e nt of eit h er a j u d g m e nt or s ettl e m e nt. "

( e m p h asis a d d e d)). U n d er t h e t er ms of t h e Ar c h P oli c y, d ef e ns e c osts d o n ot r e d u c e t h e a v ail a bl e

a m o u nt of t h e $ 1 milli o n f or j u d g m e nts or s ettl e m e nts. A n d t h e cr u x of t his a cti o n is t h at Ar c h o w es m o n e y b e c a us e it r ef us e d t o d ef e n d L P C i n t h e y e ars b ef or e it p ai d $ 1 milli o n t o s ettl e t h e U n d erl yi n g A cti o n. I n d e e d, th e v er y first p ar a gr a p h of Tr a v el ers' c o m pl ai nt is cl e ar t h at "[i] n t his a cti o n, Tr a v el ers s e e ks a d e cl ar ati o n t h at Ar c h wr o n gf ull y d e ni e d its d ut y t o d ef e n d [ L P C] . .

. as a n a d diti o n al i ns ur e d u n d er " its p oli c y. D kt. N o. 1 ¶ 1. B esi d es d e cl ar at or y r elief, Tr a v el ers s e e ks r ei m b urs e m e nt of L P C's d ef e ns e c osts w hi c h w er e "t h e o bli g ati o n of Ar c h t o its a d diti o n al i ns ur e d, L P C, as s u p pl e m e nt ar y p a y m e nts u n d er t h e Ar c h P oli c y. " I d. ¶ 3. T h er ef or e, a n d d es pit e Ar c h's a gr e e m e nt s t o t h e c o ntr ar y, t his l a w s uit is n ot a c o ntri v e d m e c h a nis m t o r e q uir e Ar c h t o r ei m b urs e t h e ot h er i ns ur ers f or d ef e ns e c osts i n c urr e d p ost -e x h a usti o n. N or d o Ar c h's r e m ai ni n g ar g u m e nts pr o vi d e a b asis f or s u m m ar y j u d g m e nt i n its f a v or. Ar c h ar g u es t h at L P C a n d N ati o n al Fir e m a d e a str at e gi c d e cisi o n t o p urs u e v erti c al e x h a usti o n of Fr a n c o's i ns ur a n c e p oli ci es b y fili n g t h e c o ntr a ct u al i n d e m nifi c ati o n a cti o n a g ai nst Fr a n c o, as o p p os e d t o a n a cti o n f or d e cl ar at or y j u d g m e nt a g ai nst Ar c h. T his ar g u m e nt i g n or es t h at, f or y e ars, N ati o n al Fir e a n d Tr a v el ers h a d t e n d er e d a n d r e -t e n d er e d d ef e ns e c osts t o Ar c h. F urt h er m or e, h a d Ar c h a gr e e d t o d ef e n d L P C at a n y ti m e i n t h e y e ars pri or t o t h e V e g a s ettl e m e nt , t h e T hir d-P art y A cti o n w o ul d h a v e c e a s e d. C orr al es -P ati n o v. Pr o ci d a C o nstr. C or p. , N o. 1 9-C V -0 5 5 7 9 ( E R ), 2 0 2 1 W L 5 3 3 1 5 2 8, at * 1 5 ( S. D. N. Y. N o v. 1 5, 2 0 2 1) ( citi n g N e w Y or k l a w a n d e x pl ai ni n g t h at t h e " a nti -s u br o g ati o n r ul e b ars a t hir d -p art y a cti o n w h er e b ot h p arti es w er e i ns ur e d u n d er t h e s a m e p oli c y ").

Ar c h's bri ef als o cit es c a s e l a w r ef er e n ci n g " w ai v er " a n d "l a c h es. " S e e D kt. N o. 4 9 at 1 5 - 1 6 . B ut n o w h er e d o e s Ar c h a ct u all y ar g u e t h at Tr a v el ers or N ati o n al Fir e " w ai v e d " t h eir ri g ht t o p urs u e cl ai ms a g ai nst Ar c h, or t h at a l a c h es d ef e ns e a p pli es. P art y pr es e nt ati o n

12

pri n ci pl es pr e v e nt t h e C o urt fr o m cr afti n g t h os e ar g u m e nt s o n Ar c h's b e h alf. S e e U nit e d St at es

v. Si n e n e n g -S mit h , 5 9 0 U. S. 3 7 1, 3 7 5- 7 6 ( 2 0 2 0) .2 F3

N e xt, Ar c h ar g u es t h e S ettl e m e nt A gr e e m e nt m o ots a n y cl ai ms N ati o n al Fir e c o ul d m a k e f or d a m a g es a n d t h e a c c or d-a n d -s atisf a cti o n d o ctri n e a p pli es. N ot s o. U n d er t h e S ettl e m e nt A gr e e m e nt, L P C a c c e pt e d fr o m Tr a v el ers l ess t h a n its f ull d ef e ns e c osts, l e a vi n g N ati o n al Fir e t o p a y t h e r e m ai n d er. N ati o n al Fir e h as st a n di n g t o s e e k t h at r e m ai n d er. T h e a c c or d -a n d - s atisf a cti o n d o ctri n e, m e a n w hil e, r e q uir es t h at a p a y m e nt or s ettl e m e nt e x pr essl y r es ol v e all o utst a n di n g iss u es. S e e M errill L y n c h R e alt y/ C ar ll B urr, I n c. v. S ki n n er , 6 3 N. Y. 2 d 5 9 0, 5 9 6 - 9 7 , 4 7 3 N. E. 2 d 2 2 9 (N. Y. 1 9 8 4 ) (fi n di n g t h e a c c or d a n d s atisf a cti o n d o ctri n e di d n ot a p pl y w h er e " n eit h er t h e c h e c k n or t h e l ett er a c c o m p a n yi n g it e x pr essl y st at e d t h at t h e c h e c k w as off er e d i n s ettl e m e nt of a n y o utst a n di n g dis p ut e arisi n g o ut of t h e c o ntr a ct "). T h e S ettl e m e nt A gr e e m e n t e x pr essl y di d n ot s ol v e all iss u es r el e v a nt t o t his s a g a. O n t h e c o ntr ar y, it e x pli citl y pr o vi d e d it di d n ot r es ol v e Tr a v el ers' or N ati o n al Fir e's cl ai ms a g ai nst Ar c h i n t his l a ws uit , a n d t h at Tr a v el ers, N ati o n al Fir e, a n d L P C r et ai n e d all ri g hts t h e y m a y h a v e a g ai nst Ar c h. S e e D kt. N o. 5 3 -2 2 at 2.

L ast, Ar c h ar g u es t h at Tr a v el ers a n d N ati o n al Fir e ar e att e m pti n g t o h ol d it li a bl e f or t h e d ef e ns e c osts of t h e Pr oj e ct's o w n er w h o als o s u e d Fr a n c o i n t h e T hir d -P art y A cti o n. N o e vi d e n c e i n t h e r e c or d s u bst a nti at es t his ar g u m e nt, s o t h e C o urt r ej e cts it .

13

R e g ar dl es s, t h e r e p e at e d t e n d er s a n d l ett er s fr o m N ati o n al Fir e a n d Tr a v el er s s h o w t h at n eit h er i ns ur er w ai v e d t h eir cl ai ms a g ai nst Ar c h , or s at o n t h eir ri g ht s s u c h t h at a l a c h es d ef e ns e c o ul d a p pl y . F urt h er m or e, l a c h es r e q uir es pr ej u di c e fr o m a n ot h er p art y' s d el a y i n bri n gi n g a l a ws uit, a n d Ar c h h as n ot ar g u e d t h at it s uff er e d pr ej u di c e fr o m Tr a v el er s bri n gi n g t his l a ws uit i n 2 0 2 4 as o p p os e d t o 2 0 1 8. First N ati o n wi d e B a n k v. C al a n o , 2 2 3 A. D. 2 d 5 2 4, 5 2 5, 6 3 6 N. Y. S. 2 d 1 2 2 ( 2 d D e pt. 1 9 9 6). N or c o ul d it, as a n y p a y m e nt of d ef e ns e c ost s Ar c h mi g ht h a v e m a d e pri or t o t h e V e g a S ettl e m e nt w o ul d n ot h a v e r e d u c e d t h e a m o u nt of i ns ur a n c e a v ail a bl e f or Ar c h' s p a y m e nt u n d er t h at s ettl e m e nt a gr e e m e nt.

As Ar c h h as pr o vi d e d n o ar g u m e nt or e vi d e n c e m eriti n g dis miss al of t his l a ws uit, its m oti o n f or s u m m ar y j u d g m e nt is D E NI E D.

III. T R A V E L E R S ' M O T I O N I S G R A N T E D I N P A R T A N D D E NI E D I N P A R T Tr a v el ers' m oti o n s e e ks b ot h d e cl ar at or y a n d m o n et ar y r eli ef. T h e m oti o n is G R A N T E D t o t h e e xt e nt it s e e ks a d e cl ar ati o n t h at L P C w as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y, Ar c h h a d a d ut y t o d ef e n d L P C, a n d t h e Ar c h P oli c y w as pri m ar y t o N ati o n al F ir e's p oli c y. All ot h er p orti o ns of t h e m oti o n ar e D E NI E D WI T H O U T P R EJ U DI C E.

A. L P C W as a n A d diti o n al I n s u r e d u n d e r t h e A r c h P oli c y

Tr a v el ers first s e e ks a d e cl ar ati o n t h at L P C w as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y. "I ns ur a n c e p oli ci es ar e c o ntr a ct s. " I n ci ni a C o ntr a cti n g, I n c. v. E v a nst o n I ns. C o., 8 0 6 F. S u p p. 3 d 3 7 2, 3 7 8 ( S. D. N. Y. 2 0 2 5 ). A s wit h a n y ot h er c o ntr a ct, a c o urt gi v es all t er ms i n a n i ns ur a n c e p oli c y t h eir pl ai n m e a ni n gs w hil e c o nsi d eri n g t h e b usi n ess p ur p os es t o b e a c hi e v e d b y t h e p arti es. M o u nt V er n o n Fir e I ns. C o. v. B eliz e N Y, I n c. , 2 7 7 F. 3 d 2 3 2, 2 3 7 ( 2 d Cir. 2 0 0 2). T h e Ar c h P oli c y's pl ai n t er ms s h o w t h at L P C w as a n a d diti o n al i ns ur e d. T h e Ar c h P oli c y i n cl u d e d a s c h e d ul e n a mi n g as a d diti o n al i ns ur e d " all p arti es w h er e r e q uir e d b y writt e n c o ntr a ct. " S O F ¶ 6. It als o st at e d t h at e ntiti es i n cl u d e d o n t h e s c h e d ul e w er e a d diti o n al i ns ur e d o nl y wit h r es p e ct t o li a bilit y f or b o dil y i nj ur y c a us e d i n w h ol e or i n p art b y t h e a cts or o missi o ns of Fr a n c o. I d. T h e N e w Y or k C o urt of A p p e als h as writt e n t h at " w h er e a n i ns ur a n c e p oli c y is r estri ct e d t o li a bilit y f or a n y b o dil y i nj ur y ' c a us e d, i n w h ol e or i n p art,' b y t h e ' a cts or o missi o ns' of t h e n a m e d i ns ur e d, t h e c o v er a g e a p pli es t o i nj ur y pr o xi m at el y c a us e d b y t h e n a m e d i ns ur e d. " B urli n gt o n I ns. C o. v. N Y C Tr a ns. A ut h. , 2 9 N. Y. 3 d 3 1 3, 3 1 7, 7 9 N. E. 3 d 4 7 7 ( 2 0 1 7). A c c or di n gl y, L P C q u alifi e d as a n a d diti o n al i ns ur e d u n d er t h e Ar c h P oli c y o nl y if ( 1) a writt e n c o ntr a ct s o r e q uir e d; a n d ( 2) L P C f a c e d li a bilit y f or b o dil y i nj ur y pr o xi m at el y c a us e d "i n w h ol e or i n p art " b y Fr a n c o. B ot h r e q uir e m e nts ar e s atisfi e d.

14

First, t h e S u b c o ntr a ct w a s a writt e n c o ntr a ct t h at r e q uir e d Fr a n c o t o pr o c ur e i ns ur a n c e i n cl u di n g L P C as a n a d diti o n al i ns ur e d. D kt. N o. 5 3-6 at 6 4 - 6 6 . F or e x a m pl e, Fr a n c o n e e d e d t o f ur nis h e n d ors e m e nts f or " all p oli ci es of i ns ur a n c e " a n d t h os e e n d ors e m e nt s n e e d e d t o r efl e ct

"t h e i n cl usi o n of t h e i nt er ests of [ L P C] . . . f or b o dil y i nj ur y a n d pr o p ert y d a m a g e, p ers o n al i nj ur y, a n d a d v ertisi n g i nj ur y arisi n g o ut of or i n c o n n e cti o n wit h t h e S u b c o ntr a ct or's W or k. " I d. at 6 5. A d diti o n all y, t h e S u b c o ntr a ct r e q uir e d Fr a n c o t o pr o vi d e a c ertifi c at e of i ns ur a n c e

"r efl e cti n g t h e i n cl usi o n of t h e i nt er ests of [ L P C] . . . as A D DI TI O N A L I N S U R E D S. " I d. at 6 6. T h e S u b c o ntr a ct ( a writt e n c o ntr a ct) cl e arl y a n d pl ai nl y r e q uir e d Fr a n c o t o h a v e a n i ns ur a n c e p oli c y u n d er w hi c h L P C w as a n a d diti o n al i ns ur e d. Fr a n c o di d t h at t hr o u g h t h e Ar c h P oli c y. S e c o n d, V e g a's l a ws uit a g ai nst L P C st e m m e d fr o m his b o dil y i nj ur y at t h e c o nstr u cti o n sit e. A n d Fr a n c o, "i n w h ol e or i n p art, " c a us e d V e g a's i nj ur y. V e g a's bill of p arti c ul ars all e g e d t h at h e " w as a n o p er ati n g e n gi n e er of t h e b u c k h oi st a n d h e s ust ai n e d his i nj ur y w h e n a pa ll et j a c k f ell i nt o a n o p e ni n g b et w e e n t h e fl o or of t h e b uil di n g a n d t h e el e v at e d pl atf or m of t h e b u c k h oist. " D kt. N o. 5 3 -1 0 ¶ 2. T h e A c ci d e nt R e p ort, w hi c h V e g a si g n e d, st at e d:

E m pl o y e e w as o p er ati n g b u c k h oist. Fr a n c o w as r e m o vi n g d e bris/ m ort ar o n l e v el 8 t o d o c k. Fr a n c o e m pl o y e e p us h e d p all et j a c k o nt o b u c k h oist b ef or e Mr. V e g a w as a bl e t o l a y d o w n pl at e o v er o p e ni n g b et w e e n pl atf or m &

b u c k h oist . P all et g ot st u c k i n g a p. Mr. V e g a tri e d t o assist i n g etti n g t h e p all et fr e e fr o m g a p. Mr. V e g a us e d a pi e c e of a n gl e ir o n t o us e as a l e v el t o fr e e p all et j a c k. U p o n u si n g t h e a n gl e, Mr. V e g a sli p p e d a n d str ai n e d his a b d o m e n.

S O F ¶ 2 6. It als o i d e ntifi e d as a c o ntri b uti n g f a ct or t o t h e a c ci d e nt " Fr a n c o e m pl o y e e m o v e d p all et j a c k pri or t o pl at e b ei n g s et f or g a p tr a nsiti o n. " I d. ¶ 2 7. T h es e d o c u m e nts i n di c at e t h at Fr a n c o, at l e ast i n p art, c a us e d V e g a's i nj ur y. C o nfir mi n g t his c o n cl usi o n, a N e w Y or k st at e a p p ell at e c o urt e x pr essl y h el d t h at Fr a n c o's n e gli g e n c e w as a pr o xi m at e c a us e of V e g a's h ar m.

15

D kt. N o. 5 3 -2 0 at 4 ( " D ef e n d a nt [ L P C] est a blis h e d as a m att er of l a w t h at it w as n ot n e gli g e nt a n d t h at [ V e g a's] i nj uri es ar os e o ut of Fr a n c o's w or k. ").

Ar c h hi g hli g hts t h at V e g a di d n ot all e g e i n his c o m pl ai nt Fr a n c o pr o xi m at el y h ar m e d hi m

" a n d t h er ef or e Ar c h d o es n ot o w e a d diti o n al i ns ur e d c o v er a g e t o L P C. " D kt. N o. 6 0 at 1 4. T his ar g u m e nt pr o c e e ds o n t h e pr e mis e t h at t h e C o urt i s r estri ct e d t o e x a mi ni n g V e g a's c o m pl ai nt, o nl y. It is n ot. T h e C o urt m a y c o nsi d er m at eri als r e v e al e d i n dis c o v er y as w ell as t h e N e w Y or k a p p ell at e c o urt's h ol di n g, b ot h of w hi c h c o nfir m Fr a n c o w as a pr o xi m at e c a us e of V e g a's h ar m . P e n n -St ar I ns. C o. v. L ori n g Pl a c e R e alt y L L C , N o. 2 2-C V -0 1 1 5 4 (J P O), 2 0 2 5 W L 2 4 0 7 5 3, at * 1 ( S. D. N. Y. J a n. 1 7, 2 0 2 5) ( c o nsi d eri n g a d e p ositi o n a n d d et er mi ni n g t h at, b as e d o n t h e d e p ositi o n, t h er e w as a li k eli h o o d t h at i ns ur e d w a s a pr o xi m at e c a us e of i nj ur y a n d t h er ef or e i ns ur er h a d a d ut y t o d ef e n d).

B. A r c h H a d a D ut y t o D ef e n d L P C

N e xt, Tr a v el ers s e e ks a d e cl ar ati o n t h at Ar c h h a d a d ut y t o d ef e n d L P C. A n i ns ur er 's d ut y t o d ef e n d a n i ns ur e d is " e x c e e di n gl y br o a d " u n d er N e w Y or k l a w a n d a p pli es w h e n e v er t h e all e g ati o ns i n a l a ws uit "' s u g g est . . . a r e as o n a bl e p ossi bilit y of c o v er a g e.' " B P Air C o n diti o n i n g C or p. v. O n e B e a c o n I ns. Gr p. , 8 N. Y. 3 d 7 0 8, 7 1 4, 8 4 0 N. Y. S. 2 d 3 0 2 ( 2 0 0 7) ( q u oti n g A ut o . I ns. C o. of H artf or d v. C o o k, 7 N. Y. 3 d 1 3 1, 1 3 7, 8 1 8 N. Y. S. 2 d 1 7 6 ( 2 0 0 6)).

" T his st a n d ar d a p pli es e q u all y t o a d diti o n al i ns ur e ds a n d n a m e d i ns ur e ds. " R e g al C o nstr. C or p.

v. N at 'l U ni o n Fir e I ns. C o. of Pitts b ur g h, P A, 1 5 N. Y. 3 d 3 4, 3 7, 9 0 4 N. Y. S. 2 d 3 3 8 ( 2 0 1 0). I n m a ki n g t his d et er mi n ati o n, c o urts m a y als o c o nsi d er d o c u m e nts r e v e al e d d uri n g dis c o v er y. P e n n -St ar I ns. C o. , 2 0 2 5 W L 2 4 0 7 5 3, at * 1. Ar c h h a d a d ut y t o d ef e n d L P C if V e g a's " b o dil y i nj ur y " w as c a us e d "i n w h ol e or i n p art " b y Fr a n c o. S O F ¶ 6. As dis c uss e d a b o v e, t his r e q uir e m e nt is s atisfi e d. A c c or di n gl y, Ar c h h a d a d ut y t o d ef e n d L P C i n t h e V e g a A cti o n.

16

C. A r c h's C o v e r a g e of L P C w as P ri m a r y t o N ati o n al Fi r e's N e xt, Tr a v el ers s e e ks a d e cl ar ati o n t h at Ar c h's c o v er a g e of L P C w as pri m ar y t o N ati o n al Fir e's. T h e Ar c h P oli c y' s " ot h er i ns ur a n c e " pr o visi o n i n cl u d e d a n e n d ors e m e nt "s u p ers e d[i n g] a n y pr o visi o n t o t h e c o ntr ar y " a n d pr o vi di n g t h at t h e Ar c h P oli c y's i ns ur a n c e w as pri m ar y pr o vi d e d t h at ( 1) "[t] h e a d diti o n al i ns ur e d is a N a m e d I ns ur e d u n d er s u c h ot h er i ns ur a n c e "; a n d ( 2) "[ y]o u h a v e a gr e e d i n writi n g i n a c o ntr a ct or a gr e e m e nt t h at t his i ns ur a n c e w o ul d b e pri m ar y a n d w o ul d n ot s e e k c o ntri b uti o n fr o m a n y ot h er i ns ur a n c e a v ail a bl e t o t h e a d diti o n al i ns ur e d. "

S O F ¶ 8 . L P C w as a n a m e d i ns ur e d u n d er t h e N ati o n al Fir e P oli c y. I d. ¶ 1 0 . A n d t h e S u b c o ntr a ct o bli g at e d Fr a n c o t o pr o vi d e i ns ur a n c e o n a pri m ar y a n d n o n -c o ntri b uti n g b asis. S e e s u pr a Pt. III( A) ; D kt. N o. 5 3 -6 at 6 4 . As a r es ult, t h e c o v er a g e t o L P C u n d er t h e Ar c h P oli c y w as pri m ar y t o t h at of t h e N ati o n al Fir e P oli c y. ^3F4

D. T r a v el e rs' R e q u est f o r D a m a g es Fi n all y, Tr a v el ers s e e ks a d e cl ar ati o n t h at it is e ntitl e d t o d a m a g es a n d s e e ks a n a w ar d of d a m a g es. T h e tr o u bl e wit h t his r e q u est is t h at Ar c h cl e arl y o w es Tr a v el ers a n d N ati o n al Fir e f or d ef e ns e c osts t h e y p ai d t h at Ar c h s h o ul d h a v e p ai d h a d it d ef e n d e d L P C as r e q uir e d , b ut Ar c h d o es n ot o w e m o ni es f or t h e S ettl e m e nt A gr e e m e nt or f or d ef e ns e c osts i n c urr e d aft er it

17

T h e s a m e c o n cl usi o n w o ul d f oll o w e v e n wit h o ut t h e e n d or s e m e nt. T h e S e c o n d Cir c uit h as h el d " a n i n d e m nit y a gr e e m e nt i n t h e u n d erl yi n g tr a d e c o ntr a ct b et w e e n i ns ur e ds g o v er ns o v er t h e t er m s of a n i ns ur a n c e p oli c y c o n c er ni n g pri orit y of c o v er a g e. " C e nt ur y S ur et y C o. v. M et r o . Tr a nsit A ut h. , 2 0 2 1 W L 4 5 3 8 6 3 3, at * 3 ( 2 d Cir. O ct. 5, 2 0 2 1). A c c or di n gl y, w h e n a s u b c o ntr a ct or e x e c ut es a n a gr e e m e nt t o i n d e m nif y a c o ntr a ct or, t h e s u b c o ntr a ct or' s i ns ur a n c e is pri m ar y t o t h e c o ntr a ct or' s i ns ur a n c e. I d.; s e e al s o Ar c h I ns. C o.

v. N ati o n wi d e Pr o p . & C as . I ns. C o., 1 7 5 A. D. 3 d 4 3 7, 4 3 8 ( Fir st D e pt. 2 0 1 9) ( " Si n c e O w n ers w er e e ntitl e d t o c o ntr a ct u al i n d e m nifi c ati o n fr o m S &J a n d a c o m pl et e p ass t hr o u g h of li a bilit y, t h e N ati o n wi d e u m br ell a p oli c y i ss u e d t o S & J m ust r es p o n d b ef or e t h e Ar c h pri m ar y p oli c y iss u e d t o O w n e r s "). Cr u ci all y, t h e S u b c o ntr a ct st at e d, "[t] o t h e f ull est e xt e nt p er mitt e d b y l a w, S u b c o ntr a ct or s h all d ef e n d, i n d e m nif y, a n d h ol d h ar ml ess . . . [ L P C] . . . fr o m a n d a g ai nst a n y a n d all l oss es, cl ai m s, a cti o ns, d e m a n ds , d a m a g es, lia bi liti es, or e x p e ns es, i n cl u di n g b ut n ot li mit e d t o att or n e y's f e es, . . . [f or] li a bilit y . . . b e c a us e of b o dil y i nj uri es. "

e x h a ust e d its p oli c y b y p a yi n g t h e V e g a s ettl e m e nt . T his is a fi ni c k y ( y et cr u ci al) disti n cti o n i n t his c as e. B ut it is a disti n cti o n t h at Tr a v el ers ' bri efi n g at ti m es eli d es , pr e cl u di n g t h e C o urt fr o m i ss ui n g f urt h er d e cl ar at or y r eli ef or a n a w ar d of d a m a g es at t his j u n ct ur e.4 F5

T o b e cl e ar: Tr a v el ers ( a n d N ati o n al Fir e) ar e e ntitl e d t o d a m a g es. B ut t h e m e as ur e of Tr a v el ers' a n d N ati o n al Fir e's d a m a g es ar e a m o u nts t h e y p ai d i n d ef e ns e c osts t h at Ar c h s h o ul d h a v e p ai d u p u ntil Ar c h e x h a ust e d its p oli c y wit h t h e V e g a s ettl e m e nt . Ar c h is n ot o n t h e h o o k f or eit h er p ost-e x h a usti o n d ef e ns e c osts or t h e pr e ci s e a m o u nt of t h e S ettl e m e nt A gr e e m e nt. 5 F6

As Tr a v el ers' bri efi n g d o es n ot s e e m t o w h oll y gr as p t his disti n cti o n, t h e C o urt will D E N Y WI T H O U T P R EJ U DI C E t h e r e m ai n d er of Tr a v el ers' m oti o n.

I V. N A T I O N A L FI R E' S M O T I O N I S D E NI E D

L ast, N ati o n al Fir e m o v e s f or s u m m ar y j u d g m e nt t h at it is e ntitl e d t o t h e diff er e n c e b et w e e n t h e a m o u nt of t h e a nti ci p at e d j u d g m e nt it s o u g ht i n t h e T hir d-P art y A cti o n a n d t h e a m o u nt Tr a v el ers p ai d i n t h e S ettl e m e nt A gr e e m e nt. B ut it is u n cl e ar w h et h er N ati o n al Fir e is s e e ki n g u nr ei m b urs e d d ef e ns e c osts pr e -d ati n g t h e e x h a usti o n of t h e Ar c h P oli c y or s ettl e m e nt c osts p ost -d ati n g t h e e x h a usti o n. F urt h er m or e, t h e c orr e ct m e as ur e of d a m a g es is t h e a m o u nt t h at N ati o n al Fir e p ai d t o d ef e n d L P C t h at Ar c h s h o ul d h a v e p ai d pri or t o e x h a usti o n , n ot t h e

18

S u m m ar y j u d g m e nt i s n ot a p pr o pri at e o n Tr a v el er s' cl ai m s f or e q uit a bl e s u br o g ati o n or u nj ust e nri c h m e nt , eit h er. Tr a v el er s h as n ot a d e q u at el y bri ef e d w h et h er it s p a y m e nt s w er e "i n v ol u nt ar y, " as w o ul d b e n e c ess ar y f or e q uit a bl e s u br o g ati o n t o a p pl y. U nj ust e nri c h m e nt, m e a n w hil e, w o ul d n ot pr o vi d e Tr a v el er s a n a v e n u e f or r eli ef gi v e n s e v er al c o ntr a ct s — t h e S u b c o ntr a ct, Ar c h P oli c y, N ati o n al Fir e P oli c y, a n d Tr a v el er s P oli c y, g o v er n t hi s s u bj e ct m att er. S e e O hi o Pl a y ers, I n c. v. P ol y gr a m R e c or ds, I n c., N o. 9 9-C V -0 0 0 3 3, 2 0 0 0 W L 1 6 1 6 9 9 9, at * 4 ( S. D. N. Y. O ct. 2 7, 2 0 0 0) ( e x pl ai ni n g t h at u nj ust e nri c h m e nt is a q u asi -c o ntr a ct u al cl ai m t h at " or di n aril y c a n b e m ai nt ai n e d o nl y i n t h e a bs e n c e of a v ali d,

a m o u nt of N ati o n al Fir e' s a nti ci p at e d j u d g m e nt. 6 F7

N ati o n al Fir e als o m o v es f or a n a w ar d of pr e- j u d g m e nt i nt er est. T h es e a m o u nts cl e arl y c orr es p o n d t o j u d g m e nt c osts a n d n ot L P C's pr e- e x h a usti o n d ef e ns e c osts. As n eit h er of N ati o n al Fir e's r e q u est e d a w ar ds ar e a p pr o pri at e o n t h e pr es e nt r e c or d , N ati o n al Fir e's m oti o n f or s u m m ar y j u d g m e nt is D E NI E D.

F or t h e f or e g oi n g r e as o n s, Ar c h's m oti o n f or s u m m ar y j u d g m e nt is D E NI E D, Tr a v el ers' m oti o n f or s u m m ar y j u d g m e nt is G R A N T E D I N P A R T a n d D E NI E D I N P A R T, a n d N ati o n al Fir e's m oti o n f or s u m m ar y j u d g m e nt is D E NI E D.

It is f urt h er O R D E R E D t h at t h e p arti es m e et a n d c o nf er o n t h e p ossi bilit y of a s ettl e m e nt a n d s u b mit a j oi nt l ett er o n or b ef or e Fri d a y, S e pt e m b er 1 8, 2 0 2 6, i nf or mi n g t h e C o urt w h et h er t h e p arti es h a v e s ettl e d a n d, if n ot, w h et h er all p arti es a gr e e t o a s ettl e m e nt c o nf er e n c e b ef or e t h e assi g n e d M a gistr at e J u d g e . If t h e p arti es ar e u n a bl e t o s ettl e a n d d o n ot wis h t o s c h e d ul e a s ettl e m e nt c o nf er e n c e , t h e C o urt will iss u e a n or d er s c h e d uli n g bri efi n g f or s u p pl e m e nt al m oti o ns a d dr essi n g d a m a g es.

19

A g ai n, it m a y w ell b e t h at t h e a m o u nt Ar c h o w es t o N ati o n al Fir e f or d ef e ns e c osts it s h o ul d h a v e p ai d will mirr or t h e a m o u nt N ati o n al Fir e s o u g ht i n t h e a nti ci p at e d j u d g m e nt. B ut t h at c a n n ot b e d et er mi n e d o n t h e pr es e nt r e c or d.