The Rogak Report: 31 May 2005 ** Anti-Subrogation Rule **
- CO-DEFENDANTS, INSURED UNDER SAME POLICY, CANNOT PURSUE CROSS-CLAIMS
Fidel Blanco, et al. v. CVS Corporation, d/b/a CVS 346, Indian Rock,
LLC et al. (2d Dept 2005) (Index No. 4950/99)
Plaintiff, an employee of G.W. Plumbing, Inc., was injured when he
fell from a scaffold while working on the construction of a drive-
through canopy at a newly-constructed CVS store. The defendants CVS
Corporation, d/b/a CVS 346, and CVS Suffern Store, LLC leased the
premises from the defendant landlord Indian Rock, LLC. Pursuant to
the terms of the lease, Indian Rock was required to maintain general
liability insurance coverage and was to name CVS as an additional
insured under that policy. Indian Rock procured its insurance through
CNA. The policy had a limit of $1,000,000 per occurrence. The lease
also required CVS to maintain general liability insurance coverage
and to name Indian Rock as an additional insured under its policy.
CVS procured its insurance through AIG. That policy contained a limit
of $1,750,000 per occurrence.
Plaintiff commenced this action against CVS and Indian Rock to
recover damages for personal injuries based upon violation of Labor
Law § 240(1). CVS and Indian Rock asserted cross claims against each
other for, among other things, contractual and common-law
indemnification. CNA assumed the defense and indemnification of CVS
as an additional insured under its policy.
The plaintiffs settled their action with CVS and Indian Rock for the
sum of $1,500,000. CVS and Indian Rock agreed that each would pay 50%
of the settlement sum but reserved their rights to pursue their cross
claims against one another. The trial court denied the cross claims
as barred by the anti-subrogation rule. Indian Rock appealed.
The Second Department held that Indian Rock was not entitled to
contractual or common-law indemnification from CVS. The anti-
subrogation rule provides that "an insurer has no right of
subrogation against its own insured for a claim arising from the very
risk for which the insured was covered." The rule applies to bar
indemnification up to the policy limits of the comprehensive general
liability policy at issue.
"Indian Rock's comprehensive general liability policy named CVS as an
additional insured and it contained a limit of $1,000,000 per
occurrence. Indian Rock's $750,000 share of the settlement fell
within these policy limits. Since the same insurance company covered
CVS and Indian Rock for the same risk, the anti-subrogation rule
applies to bar Indian Rock from indemnification for its part of the
settlement which was within the limits of the policy purchased by it.
Thus, Indian Rock's cross claims were properly denied."