In a dispute among insurers for various defendants in the underlying case regarding the providing of a defense, the Second Circuit vacated, in part, the district court’s judgment and remanded the case. New Your Marine and Gen. Ins. Co. v. Fed. Ins. Co., 2026 U.S. App. LEXIS 18087 (2nd Cir. June 23, 2026).
Mary Guzman, who worked for a cleaning company, PBM, LLC, alleged that she was injured when a glass panel in a revolving door fell onto her as she cleaned the door. She filed suit in state court against the owners of the building as well as the lessee of the fifteenth floor where the accident occurred, Bank of New York Mellon (Bank). She alleged the owners and the Bank were negligent in creating the dangerous condition that caused her injury.
Owners filed third-party complaints against PBM and the Bank in Guzman’s action, alleging that each entity’s negligence caused Guzman’s accident. Owners’ insurer, LM Insurance Corporation, then filed this federal action against PBM’s insurer, New York Marine and General Insurance Company, and the Bank’s insurer, Federal Insurance Company, seeking a declaration that both companies had a duty to defend and indemnify owners in the underlying action. The district court concluded that Federal had a duty to defend owners, while New York Marine had no duty to defend either owners or the Bank.
On appeal, Federal challenged the district court’s determination that New York Marine had no duty to defend the bank or owners.
The Second Circuit noted that the owners and the Bank were additional insureds under the New York Marine Policy. PBM’s policy with New York Marine named as additional insured “[a]ny person or organization for whom you are performing operations when you and such person or organization have agreed in writing . . . that such person or organization be added as an additional insured on your policy.” Under their service contracts with PBM, both owners and the Bank required PBM to maintain a commercial general liability policy that included them as additional insureds. Therefore, the Bank and owners were additional insureds under PBM’s New York Marine policy.
Pursuant to the policy language, additional insureds were indemnified only for damages proximately caused by PBM’s negligence or other actionable “acts or omissions.” Guzman alleged that owners and the Bank caused her injuries by creating a dangerous premises under their control and management. The complaint did not mention PBM, Guzman’s employer. However, the owners’ third-party complaint against PBM alleged that if Guzman was injured as she alleged, her injuries arose out of the negligence of PBM. It further alleged that PBM caused the conditions alleged in Guzman’s complaint and was the primary wrongdoer. These allegations were sufficient to trigger New York Marine’s duty to defend.
Because owners alleged that PBM, which was liable for Guzman’s own conduct, caused the dangerouis condition, and that allegation was not facially frivolous, the court could not conclude that the pleadings had no basis for recovery within the coverage of the policy.
The pleadings gave no indication that PBM had any responsibility for maintaining the revolving doors. But absent discovery and a more complete evidentiary record, the pleadings did not rule out the possibility they alleged: that a negligent act of Guzman proximately caused the glass panel to fall. Therefore, the court could not conclude that there was no possible factual or legal basis to determine that PBM or Guzman herself proximately caused her injuries such that New York Marine would eventually be obligated to indemnify owners or the Bank.
Even though New York Maine had a duty to defend, it was premature to determine whether New York Marine had a duty to indemnify.
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