149 Misc. 2d 1011 | N.Y. Sup. Ct. | 1991
OPINION OF THE COURT
By demand dated July 26, 1990, the respondent, Rhoda
By order dated October 4, 1990, the owner of the alleged offending vehicle, Norma Crummey, and the insurer of the vehicle, Liberty Mutual Insurance Company, were joined as additional respondents in the proceeding, and a temporary stay of arbitration was granted pending a hearing on the issue of whether the vehicle owned by Norma Crummey was the subject of a policy of insurance affording coverage to the respondent, Rhoda Mevorah. A hearing was conducted on February 4, 1991. Counsel for the petitioner was present at the hearing, as was counsel for each of the three respondents. At the conclusion of the hearing, the court reserved decision.
Based upon all the proceedings had herein, the court makes the following findings of fact: Norma Crummey purchased a new 15-seat van, vehicle identification No. 2B5WB31W4FK209704 in 1985. In 1987, she began to utilize the van to transport herself and some friends to work in Manhattan. Mrs. Crummey characterized the arrangement as a "car pool”. She testified that her friends agreed to pay $3 each trip. No details were elicited at trial as to the manner in which Mrs. Crummey and her friends arrived at the designated sum. As of September 1989, Mrs. Crummey, several friends with whom she had social relationships, and a number of "nonfriends” traveled to work on a daily basis in Mrs. Crummey’s van. The "nonfriends” apparently became riders through an acquaintance with someone already using the van to travel to work.
The van, usually driven by Mrs. Crummey’s husband, would make four trips each day; Mrs. Crummey’s friends were
Mrs. Crummey did not provide the passengers with receipts for the $3 payment. She did not provide the passengers with any information regarding the cost of gas, tolls, insurance or other expenses incident to the operation of the van. The riders did, however, contribute toward an increase in the cost of tolls. Mrs. Crummey testified that she made no profit transporting her friends and the “nonfriends” to work.
On or about January 19, 1988, Mrs. Crummey executed a New York automobile insurance plan application for a private passenger vehicle through Phoenix “A Betta” Insurance Brokerage, whereby she sought insurance coverage for the van herein, for use as a pleasure vehicle. The additional respondent, Liberty Mutual Insurance Company, was designated to issue a policy of insurance on the vehicle through the assigned risk plan. A policy of insurance was issued by Liberty Mutual for the period January 28, 1988 through January 28, 1989, and was renewed for the period January 28, 1989 through January 28, 1990.
The respondent, Mevorah, commenced an action alleging that she sustained serious multiple injuries as a passenger in Mrs. Crummey’s van on September 28, 1989. By letter dated May 23, 1990, Liberty Mutual notified Mrs. Crummey, and counsel for Rhoda Mevorah, in writing, that it was denying coverage under the policy of insurance on the basis that “exclusion 5” of the policy provides no coverage for liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee.
As set forth hereinabove, based upon this denial of coverage
CONCLUSIONS OF LAW
The ipsurer bears the burden of establishing the validity of the exclusion upon which it bases a denial of coverage under a policy of insurance. (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304; Facet Indus. v Wright, 62 NY2d 769; Insurance Co. v Chinoise Rest. & Trading Corp., 85 AD2d 712; American Fid. Fire Ins. Co. v Pardo, 32 AD2d 536; American Sur. Co. v National Fire Ins. Co., 25 AD2d 734.) Any exclusion or exception from insurance policy coverage must be specific and clear in order to be enforced. Exclusions or exceptions are not to be extended by interpretation or implication, but are to be accorded strict and narrow construction. (Seaboard Sur. Co. v Gillette Co., supra; Utica Mut. Ins. Co. v Prudential Prop. & Cas. Ins. Co., 103 AD2d 60, affd 64 NY2d 1049; National Grange Mut. Ins. Co. v Continental Cas. Ins. Co., 650 F Supp 1404; Board of Educ. v CNA Ins. Co., 647 F Supp 1495, affd 839 F2d 14.) When relying on an exclusionary clause, an insurer must show not only that its interpretation of the clause is reasonable, but that the clause cannot be reasonably interpreted in any other way. (Fagnani v American Home Assur. Co., 101 AD2d 803, revd 64 NY2d 967; American Home Assur. Co. v Port Auth., 66 AD2d 269; Budofsky v Hartford Ins. Co., 147 Misc 2d 691.) While the court should not strain to find ambiguity where the words of an exclusionary clause are definite and precise (Pergament Distribs. v Old Republic Ins. Co., 128 AD2d 760, lv denied 70 NY2d 607; Farmers Fire Ins.
DECISION OF THE COURT
Liberty Mutual contends that the $3 payment made by each rider for each trip constitutes the use of the van "to carry persons for a fee”, a use for which liability is excluded by the terms of its policy of insurance.
The policy of insurance issued to Norma Crummey for the van in question herein does not, however, exclude coverage for liability which arises by virture of the use of the vehicle in a "share-the-expense” car pool. One definition of a "share-the-expense” car pool describes a situation wherein a number of travelers agree to calculate documented travel expenses to a mathematical certainty, and then apportion those expenses according to an agreed upon formula. This is not, however, the only reasonable interpretation of the term. Pursuant to the rules of construction applicable herein whereby the court is charged with liberally construing ambiguous terms in favor of the insured, a "share-the-expense” car pool may encompass many varieties of less formal car pool arrangements. The court finds that a fair and reasonable definition of the term "share-the-expense” car pool extends to the situation herein, wherein Mrs. Crummey traveled to work on a daily basis and transported a small group of approximately eight regular riders, friends and nonfriends, over a period of time, charging them a sufficient amount to cover the expenses incurred for gas, tolls, insurance and other expenses incident to their use of the van. Mrs. Crummey did not solicit the general public as
The court finds that the use of the van in question on September 28, 1989, constituted a share-the-expense car pool. The disclaimer of insurance coverage by Liberty Mutual was, therefore, invalid. The petition by Aetna Casualty and Surety Company for an order permanently staying arbitration is granted.