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The Plaintiff, an ironworker, was standing on a structural steel beam when a stream of oily water shot forth from a quench tank as it was being tested by an employee of the Insured. As the ironworker attempted to climb down a ladder from the beam, he slipped and fell approximately 5-6 ft. to the ground. The Plaintiff (ironworker) sustained a fractured ankle in three places that required surgery and permanent placement of pins. He filed a lawsuit against the building owner seeking an unspecified sum. The Plaintiff did not return to work and received over $363,000 from a worker's compensation settlement.

Approximately two years after the occurrence, and just before the statute of limitations expired, the Plaintiff added the Insured as a defendant in the litigation with the building owner. The exposure to the Insured was substantial because his negligence was the proximate cause of the injury.

There were allegations of both professional and general negligence in the complaint. Vince discussed these coverage issues with the Insured. Vince and the Insured worked together to tender the defense to the Insured’s General Liability carrier. The General Liability carrier rejected this tender and refused to appoint counsel to represent the Insured.

Acting upon Vince’s recommendation, the Insured agreed to retain counsel to represent its personal interests and filed a Declaratory Judgment action against the General Liability carrier for its failure to afford a defense and indemnification in this action. At this point, the plan went awry. The insured’s attorney believed both carriers were essential defendants in the action. Consequently, the Declaratory Judgment action named both the General Liability carrier and Professional Liability carrier (Vince’s client). Vince advised the Insured’s counsel that if he persisted in the action against the Professional Liability carrier, coverage would be admitted, subjecting the Insured to a $150,000 retention applicable to the defense costs.

The Insured, acting on advice from counsel, decided to drop the Professional Liability carrier from the Declaratory Judgment action.

In return, Vince agreed, on behalf of its client, that should the Insured be unsuccessful in its Declaratory Judgment action against the General Liability carrier, the Professional Liability carrier would afford coverage.

With this agreement in place, the Insured went forward in its Declaratory Judgment action solely against the General Liability carrier.

The Insured was successful in a motion for summary judgment. The court ruled that the General Liability carrier owed coverage for the complaint.

Peter Gavlin