"Executed" Means Signed or Fully Performed -- Additional Insured Coverage Denied

CGL – BLANKET ADDITIONAL INSURED ENDORSEMENT – "EXECUTED"
Burlington Ins. Co. v. Utica First Ins. Co.
(2nd Dept., decided 3/9/2010)

Manlyn Development Corp. (Burlington's insured) contracted to perform work as construction manager on a renovation project at a property located in Manhattan.  Manlyn subcontracted certain work at the site to New York Interiors, Ltd. (Utica First's insured), as memorialized in a purchase order. The purchase order required New York Interiors to obtain insurance in specified minimum amounts, and to name Manlyn as an additional insured on a certificate of insurance.  Although the purchase order was dated June 26, 2003, it was not signed and "authorized" by Manlyn until July 9, 2003, and it was not signed by New York Interiors until July 23, 2003.

New York Interiors apparently didn't wait until the purchase order was fully signed to start its work and one of its employee was injured on June 27, 2003, one day after the purchase order was dated but weeks before it was fully signed.  The employee sued, and Manlyn sought additional insured (AI) coverage from New York Interior's commercial general liability insurer, Utica First Insurance Company.  Utica First denied AI coverage to Manlyn, based on language of the blanket additional insured endorsement in New York Interior's policy, which provided that an "insured" included any person or organization the insured was required to name as an additional insured on the policy "under a written contract or written agreement." The endorsement further provided that the written contract or agreement must be, inter alia, "[c]urrently in effect or becoming effective during the terms of this policy; and . . . [e]xecuted prior to the bodily injury' [or] personal injury.'"

Utica First denied coverage to Manlyn on the ground that the purchase order was not signed at the time of the underlying plaintiff's alleged injury and, therefore, had not been "executed" as of that time.  Burlington and Manlyn then commenced this declaratory judgment action seeking AI coverage for Manlyn under New York Interior's policy in relation in the underlying action. 

Nassau Supreme denied Utica First's motion for summary judgment and Utica First appealed.  In REVERSING the order appealed from and granting summary judgment to Utica First, the Second Department ruled that the term "executed" as used in the blanket AI endorsement was not ambiguous and meant fully signed or performed:

Here, the term "executed" in the additional insured endorsement does not render the policy ambiguous. "[T]hat the term executed' can be interpreted in two ways does not render the contract uncertain or ambiguous" (Rodless Props., L.P. v Westchester Fire Ins. Co., 40 AD3d 253, 254). Rather, the defendant demonstrated that the contract was not "executed" at the time of the alleged accident on June 27, 2003, since it was both unsigned and had not been fully performed at that time (id.; see Nicotra Group, LLC v American Safety Indem. Co., 48 AD3d 253, 253-254). Moreover, there is no support for the plaintiffs' contention that the condition in the additional insured endorsement that the contract be "executed" prior to the bodily injury or personal injury could be satisfied by partial performance. Accordingly, that branch of the defendant's motion which was for summary judgment declaring that it was not required to defend or indemnify Manlyn in the underlying action should have been granted.