14-1353-cv
U.S. Underwriters Ins. Co. v. 101-19 37th Avenue LLC

                               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
14th day of March, two thousand sixteen.

Present:         ROSEMARY S. POOLER,
                 ROBERT D. SACK,
                            Circuit Judges.
                 KATHERINE POLK FAILLA,1
                            District Judge.

_____________________________________________________


U.S. UNDERWRITERS INSURANCE COMPANY,

               Plaintiff - Counter-Defendant - Counter-Claimant - Appellee,

                         v.                                                   14-1353-cv

101-19 37TH AVENUE LLC, FEREYDOUN POURATIAN,

           Defendants - Counter-Claimants - Counter-Defendants – Appellants.2
_____________________________________________________

Appearing for Appellant:          Jonathan A. Dachs, Shayne, Dachs, Sauer & Dachs, LLP, Mineola,
                                  NY.


1
 The Honorable Katherine Polk Failla, United States District Court for the Southern District of
New York, sitting by designation.
2
    The Clerk of the Court is directed to amend the caption as above.
Appearing for Appellee:       Steven Verveniotis (Miranda Sambursky, on the brief) Slone
                              Sklarin Verveniotis LLP, Mineola, NY.

Appeal from the United States District Court for the Eastern District of New York (Irizarry, J.).

     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the order of said District Court be and it hereby is VACATED and
REMANDED.

        101-19 37th Avenue LLC and Fereydoun Pouratian (together, “101-19”) appeal from the
March 27, 2014 memorandum and order of the United States District Court for the Eastern
District of New York (Irizarry, J.) declaring U.S. Underwriters Insurance Company was not
obligated to defend and indemnify them in a state court action arising out of a bodily injury that
occurred at their premises. U.S. Underwriters Ins. Co. v. 101-19 37th Ave. LLC, No. 12-cv-3062
(DLI)(MDG) 

(E.D.N.Y. March 27, 2014). We assume the parties’ familiarity
with the underlying facts, procedural history, and specification of issues for review.

        We review the district court’s interpretation of the terms of an insurance agreement de
novo, as it presents a question of law. VAM Check Cashing Corp. v. Fed. Ins. Co., 

,
729 (2d Cir. 2012). Under New York law, a court begins by “look[ing] to the language of the
policy,” and the court must “construe the policy in a way that affords a fair meaning to all of the
language employed by the parties in the contract and leaves no provision without force and
effect.” Platek v. Town of Hamburg, 

, 693-94 (2015) (citation and emphasis
omitted). The “insurer bears the burden of proving that an exclusion applies.” Ment Bros. Iron
Works Co. Inc. v. Interstate Fire & Cas. Co., 

, 121 (2d Cir. 2012) (citing Consol.
Edison Co. of N.Y. v. Allstate Ins. Co., 

, 218 (2002)).

        The exclusion at issue here barred coverage for any injury “arising out of or in the course
of the rendering or performing services of any kind or nature whatsoever by” a “contractor,
subcontractor or ‘employee’, ‘volunteer worker’, ‘temporary worker’ or ‘casual laborer’ of such
contractor or subcontractor.” U.S. Underwriters, 

, at * 7. The words
“contractor” and “subcontractor” are not defined in the policy at issue. As a result, we are unable
to determine whether Feldman Lumber, the employer of the injured party, is a “contractor” or
“subcontractor” within the meaning of the exclusion. For instance, it is unclear whether either
term is meant to encompass any party to a contractual agreement, or if it is limited to one who
provides goods as well as services. See Cont’l Cas. Co. v. Rapid-Am. Corp., 

, 652
(1993) (“To negate coverage by virtue of an exclusion, an insurer must establish that the
exclusion is stated in clear and unmistakable language, is subject to no other reasonable
interpretation, and applies in the particular case[.]”). Similarly, we are unable to determine on
this record whether Feldman Lumber provided any service to any of the defendants. We
therefore cannot sustain on appeal a finding that the exclusion’s provision governing bodily
injuries “to any ‘employee’ . . . of any contractor or subcontractor” bars coverage in this
instance. U.S. Underwriters, 

, at * 2.

       The district court relied on Atlantic Cas. Ins. Co. v. W. Park Assocs., Inc., 

323, 325–27 (E.D.N.Y. 2008) to support its analysis. While the district court correctly


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observed the fact pattern in Atlantic Casualty is substantially similar to the fact pattern here, it
overlooked that the policy language at issue in Atlantic Casualty is substantially different from
the policy language at issue here. The policy in Atlantic Casualty excluded coverage for injuries
“arising out of the actions of independent contractors/subcontractors for or on behalf of any
insured.” 

at 326. In that case, the court reasoned that because the employee
would not have been injured but for the subcontractor hiring the supplier to provide sheet rock,
coverage was excluded. 

Here, however, the policy language is not as expansive, and a
necessary predicate for the exclusion at issue here is that the injured party be an employee of a
contractor or subcontractor.

        Left unaddressed by the district court was 101-19’s argument that U.S. Underwriters
could not rely on the “casual laborer” language in the exclusion for failure to provide timely
notice of its intent to disclaim. In addition, U.S. Underwriters did not raise before the district
court the issue of whether the exclusion applies to the loss of consortium claim.3 We therefore
remand for the district court to consider these issues in the first instance. On remand, the district
court is directed to determine (1) whether U.S. Underwriters timely and adequately disclaimed
based on the exclusion’s “casual laborer” provision; (2) if so, does the provision apply here; and
(3) what, if any, obligations U.S. Underwriters has under the policy for the loss of consortium
claim.


         Accordingly, the order of the district court hereby is VACATED and REMANDED.


                                                                FOR THE COURT:
                                                                Catherine O’Hagan Wolfe, Clerk




3
 Although not raised before the district court, this claim has not been waived. “[W]here the issue is the existence or
nonexistence of coverage (e.g., the insuring clause and exclusions), the doctrine of waiver is simply inapplicable.”
Albert J. Schiff Assocs., Inc. v. Flack, 

, 698 (1980).

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