Cragg v. Allstate Indemnity Corp.
17 N.Y.3d 118
NY2011Background
- Kayla Cragg drowned in the Kleins' pool in July 2001; plaintiff is Kayla's father, administrator of her estate.
- Kayla and her mother were insured under the Kleins' Allstate homeowner policy; plaintiff was not an insured.
- Allstate denied coverage under Coverage X, excluding bodily injury to an insured where any benefit would accrue to an insured.
- Kayla’s estate pursued wrongful death and conscious pain and suffering; Ward defaulted and was judgmented for wrongful death and pain and suffering.
- Supreme Court granted summary judgment for Allstate; Appellate Division affirmed, finding exclusion barred coverage for the noninsured plaintiff.
- Court of Appeals reversed, held the exclusion ambiguous and not to bar the noninsured plaintiff's wrongful death claim, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the exclusion bars noninsured wrongful death coverage | Cragg: exclusion should not bar noninsured wrongful death claim | Allstate: any benefit to an insured excludes coverage | Ambiguity: exclusion does not unambiguously bar noninsured wrongful death |
| Meaning of 'benefit' in the exclusion | benefit does not include defense/indemnification rights | benefit includes policy benefits to insured | Term ambiguous; should be read to exclude only payment-derived benefits, not defense/indemnification |
| Appropriate construction of an exclusion when ambiguous | interpret to favor insured where ambiguity exists | strictly apply exclusion as written | Exclusion construed narrowly in insured's favor; plaintiff prevails on wrongful death claim |
Key Cases Cited
- Heslin v. County of Greene, 14 N.Y.3d 67 (2010) (conscious pain and suffering belongs to estate; wrongful death to distributees)
- Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 N.Y.3d 302 (2009) (strict, narrow construction of exclusions; burden on insurer)
- County of Columbia v. Continental Ins. Co., 83 N.Y.2d 618 (1994) (interpret exclusions to give full effect to policy language)
- Allstate Ins. Co. v. Pestar, 168 A.D.2d 931 (1990) (prior exclusion language not unambiguously cutting off noninsured claims)