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Bacon Construction Co., Inc. v. Arbella Protection Insurance Co, Inc.

Supreme Court of Rhode Island

June 4, 2019

Bacon Construction Co., Inc.
Arbella Protection Insurance Company, Inc.

          Providence County Superior Court (PC 16-2169) Associate Justice Maureen B. Keough

          For Plaintiff: Peter H. Carroll, Esq.

          For Defendant: Lisa M. DeMari, Esq.

          Present Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.


          Maureen McKenna Goldberg Associate Justice.

         This case came before the Supreme Court on January 17, 2019, on appeal from a grant of summary judgment in favor of the defendant, Arbella Protection Insurance Company, Inc. (Arbella or defendant). The plaintiff, Bacon Construction Co., Inc. (Bacon or plaintiff), challenges the findings of a Superior Court justice that Arbella is not contractually obligated to provide insurance coverage to Bacon, which is listed as an additional insured on the insurance policy at issue. For the reasons set forth herein, we affirm the judgment of the Superior Court.

         Facts and Travel

         The material facts in this case are not in dispute. Bacon, having been hired as the general contractor for a construction project at the University of Rhode Island (the construction project), subcontracted with U.S. Drywall (U.S. Drywall or the insured) for structural work on the project. Pursuant to the subcontract agreement (the subcontract), U.S. Drywall was required to obtain a general liability insurance policy that listed Bacon as an additional insured. U.S. Drywall complied with this requirement by purchasing a commercial general liability insurance policy from Arbella (the Arbella policy), which included an endorsement naming Bacon as an additional insured. The Arbella policy itself provided for defense and indemnification costs to U.S. Drywall for its work on the project.

         On December 12, 2014, an employee of U.S. Drywall, Thiago Almeida (Almeida), while performing work at the construction project site, sustained severe injuries when he slipped on ice and fell down a staircase. On June 25, 2015, Almeida filed a complaint (the Almeida complaint) in Superior Court against Bacon, alleging that Bacon's negligent acts were the proximate cause of his injuries (the Almeida action). Notably, although the Almeida complaint averred that he was performing work in accordance with the subcontract, it contained no allegations of negligence against his employer, U.S. Drywall.[1]

         In response to Almeida's claims, Bacon initially filed a third-party complaint against U.S. Drywall, asserting that U.S. Drywall was contractually obligated to defend and indemnify Bacon; and, in an amended third-party complaint, Bacon included a claim for breach of contract against U.S. Drywall. However, on June 27, 2017, Bacon made what it characterized as "a strategic legal decision" to dismiss all claims in the suit, with prejudice, including those against U.S. Drywall.[2]

         Concomitantly, Bacon sought to recover indemnity and defense costs from U.S. Drywall's commercial general liability insurer, defendant, Arbella. Bacon alleged that, because the Arbella policy named Bacon as an additional insured, Bacon is entitled to indemnification. Arbella, however, took the position that, "based on the additional insured endorsements, Bacon would be an additional insured only with respect to liability for bodily injury caused by our insured acts or omissions." The additional insured endorsement that is contained within the Arbella policy forms the foundation of this appeal.

         On May 13, 2016, Bacon filed the present action seeking a declaratory judgment that Arbella is contractually obligated to indemnify and defend Bacon as an additional insured relative to the Almeida action. Bacon subsequently moved for summary judgment, arguing that, pursuant to the unambiguous provisions of the Arbella policy, Bacon, as an additional insured, is afforded the same coverage as U.S. Drywall. Arbella filed an objection, along with a cross-motion for summary judgment, countering that Arbella had no duty to defend or indemnify Bacon as an additional insured because the allegations against Bacon in the Almeida complaint fell outside the scope of coverage provided by the Arbella policy. Arbella asserted that Bacon is entitled to coverage only for liability caused by U.S. Drywall's acts or omissions; and, according to Arbella, because the Almeida complaint alleges negligence solely against Bacon, Arbella is not required to provide coverage with respect to the Almeida action.

         On July 26, 2017, the Superior Court justice heard arguments on both motions and issued a bench decision in which she determined that the Arbella policy is clear and limits additional insured coverage to "that which was due, at least in part, to U.S. Drywall's negligence." The hearing justice further explicated that, after "looking at the original complaint that contains only allegations against Bacon only for Bacon's own negligence[, ]" as well as "the insurance policy language, and the fact that there is nothing here to suggest that any of these actions could have been attributed to U.S. Drywall, [she did] not believe the facts as presented would trigger the additional insured coverage clause[.]" Arbella's cross-motion for summary judgment was granted, and Bacon's motion for summary judgment was denied. Judgment entered in favor of Arbella on September 1, 2017. Bacon timely appealed.

         Standard ...

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