Brooklyn Center for Psychotherapy, Inc. v. Philadelphia Indemnity, 955 F.3d 305

Brooklyn Center for Psychotherapy was sued by a deaf plaintiff under the ADA, Rehabilitation Act, NYSHRL and NYCHRL, alleging refusal to schedule an appointment and refusal to provide sign-language interpreter services (failure to accommodate and alleged intentional discrimination).
Brooklyn Center tendered its defense to its commercial general liability (CGL) carrier, Philadelphia Indemnity Insurance Company (PIIC); PIIC refused, asserting the claims alleged intentional acts and thus no "occurrence" (defined in the policy as an "accident").
Under the Policy PIIC had a duty to defend suits seeking covered damages caused by an "occurrence." New York law treats an "occurrence" as an "accident," excluding harms the insured intended or directly and immediately caused.
New York precedent and the State Superintendent guidance hold that disparate-treatment (intentional) discrimination is not covered, but disparate-impact (unintentional) discrimination can be covered; neither New York courts nor the Superintendent have squarely addressed failure-to-accommodate claims.
The district court granted PIIC's motion to dismiss Brooklyn Center's breach-of-contract claim, concluding the complaint alleged only intentional discrimination and thus no occurrence; the Second Circuit reserved decision and certified the dispositive question to the New York Court of Appeals.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a failure-to-accommodate discrimination claim qualifies as an "occurrence" (an "accident") triggering a CGL carrier's duty to defend	Failure-to-accommodate claims do not require discriminatory intent; if insured believed an accommodation was unreasonable or an undue hardship, any resulting harm is accidental and thus there is a reasonable possibility of coverage and a duty to defend	Refusal to provide an accommodation is an intentional act that directly and immediately causes harm; such intentional acts are not accidental and fall outside the policy's "occurrence" language	The Second Circuit certified the question to the New York Court of Appeals instead of deciding it, because New York law is unsettled on whether failure-to-accommodate claims are "occurrences."

City of Johnstown, N.Y. v. Bankers Standard Ins. Co., 877 F.2d 1146 (2d Cir. 1989) (explains "occurrence"/"accident" test focusing on whether insured intended the damages or whether damages flowed directly and immediately from an intentional act)
Mary & Alice Ford Nursing Home Co. v. Fireman’s Ins. Co. of Newark, N.J., 57 N.Y.2d 656 (N.Y. 1982) (holds damages flowing directly from intentional discriminatory act are not accidental and not covered)
Graphic Arts Mut. Ins. Co. v. Pine Bush Cent. Sch. Dist., 73 N.Y.S.3d 241 (N.Y. App. Div. 2018) (an intentional act may still be an "accident" if the insured did not expect or intend the harm)
J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., 21 N.Y.3d 324 (N.Y. 2013) (public policy bars coverage when insured intended to cause injury)
Am. Mgmt. Ass’n v. Atl. Mut. Ins. Co., 651 N.Y.S.2d 301 (App. Div. 1996) (permits coverage for disparate-impact discrimination)
Cont’l Ins. Co. v. Colangione, 484 N.Y.S.2d 929 (N.Y. App. Div. 1985) (distinguishes damages that flow directly from intended act from those arising out of an unintended chain of events)
Lavanant v. Gen. Acc. Ins. Co. of Am., 79 N.Y.2d 623 (N.Y. 1992) (emotional distress can constitute "bodily injury" under policy terms)