Wade Clark Mulcahy LLP

<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2022/01/Corter-Longwell-v.-Juliano.pdf">Corter-Longwell v. Juliano</a>,</em> the New York Appellate Division evaluated a common commercial contract provision, in which a transportation company was responsible for naming its contract partner, a landfill operator, as an additional insured. The dispute arose as the contract was imprecise regarding this responsibility, and the parties disputed whether a subsidiary of the landfill operator was covered as an additional insured.</p>
<p style="text-align: justify;">It has long been the law in New York that an ambiguous contract provision is subject to the court’s interpretation. The <em>Juliano</em> court applied reasoning from the First, Second, and Fourth Departments of the Appellate Division and held that a contract “cannot be interpreted as requiring the procurement of additional insured coverage unless such a requirement is expressly and specifically stated.”</p>
<p style="text-align: justify;">Here, the contract did not mention any obligation for the transportation company to name the landfill operator as an additional insured on its employers’ liability, workers’ compensation, or excess coverage policies. The contract did require additional insured coverage on the commercial general liability and automobile liability policies, but these contract provisions named only the landfill parent company (not the subsidiary).</p>
<p style="text-align: justify;">The court analyzed this ambiguity in the contract and denied the motions for summary judgment of both parties. It refused to hold as a matter of law that the above-referenced provisions provided (or failed to provide) coverage for the landfill’s subsidiary company, instead holding that the ambiguity was a matter of fact that required a trial. The parties could have avoided this ongoing litigation altogether if they had more specifically described the obligations of the respective parties in the contract.</p>
Thanks to Jason Laicha for his contribution to this article.  If you have any questions, please contact <a href="mailto:mcare@wcmlaw.com">Matthew Care</a>.