88 Misc. 2d 336 | N.Y. City Civ. Ct. | 1976
In this Small Claims Court action, claimant has brought suit for $1,000 against defendant insurer on a policy denominated "Yacht Policy (All Risks)”. The parties have agreed that claimant is the owner of a 17-foot-long fiberglass pleasure boat, that claimant’s 85-horsepower motor was stolen, and that the reasonable value of the motor is $1,000. The issues before the court are (1) whether theft is a
In claimant’s policy, theft is neither excluded as a covered risk, nor is it included specifically among the risks covered. "Perils Insured” under the policy are defined as: "(1) All risks of physical loss or damage to the property covered from any external cause”.
In what appears to be the only New York case which has passed upon the question of whether theft coverage was included in an "all risk” marine policy,
The broad language of the "all risk” clause of the instant policy, and the subject matter insured, bring the policy within the ambit of the law governing "all risk” insurance issued to
An "all risk” policy has been defined as one which "provides coverage * * * against any loss without putting upon the insured the burden of establishing that the loss was due to a peril falling within the policy’s coverage. Although there may be exceptions to such coverage * * * it is incumbent upon the underwriter to demonstrate that the exception applies.” (Redna Marine Corp. v Poland, 46 FED 81, 86; Goix v Knox, 1 Johns Cas 337, 340; Jewelers Mut. Ins. Co. v Balogh, 272 F2d 889; Chase Rand Corp. v Central Ins. Co., 63 F Supp 626, affd 152 F2d 963; see Ann 88 ALE2d 1122, 1124.)
The precise question of whether a broad "all risk” clause encompasses theft appears to be one of first impression in this State. However, in at least three other jurisdictions, language substantially identical to that of the present policy has been construed to cover theft. (Imperial Ins. Co. v Ellington, 498 SW2d 368 [Tex]; Gottesfeld v Mechanics & Traders Ins. Co., 196 Pa Super 109; Advance Piece Dye Works v Travelers Ind. Co., 64 NJ Super 405.)
It is clear, and this court holds, that a small boat owner who takes out an "all risk” policy which does not exclude theft has a right to assume he has purchased coverage for loss by theft.
The insurer, in disclaiming liability for the theft of claimant’s motor, relies primarily on the machinery damage exclusion clause in the policy, which provides that the insurer is "Not liable for loss of or damage to any rudder, propeller, strut, shaft or machinery, inside or outside the vessel, unless caused by burning, collision with another vessel, or sinking resulting from a peril insured against”. Does this clause deny coverage to claimant for loss by theft of his motor?
No New York case has been found which has construed language similar to the machinery damage exclusion clause (supra) but in American Shops v Reliance Ins. Co. (22 NJ Super 564) a New Jersey court considered a clause almost identical to the one herein. The New Jersey court rejected the defendant insurance company’s contention that the word "machinery” embraced all the mechanical equipment on the boat. It held that the doctrine of ejusdem generis compelled a
In any case, the machinery damage exclusion clause must be read together with the rest of the policy. (Schloss v Fidelity Mut. Life Ins. Co., 193 Misc 121, affd 274 App Div 924; Malican v Blue Shield, 80 Misc 2d 1003.) At the very top of the policy is the statement, "In consideration of the premium charged, this company insures Sam H. Tuchman * * * Upon the 17 Ft. Fiberglass 'Crestliner’ Cruiser * * * 85 H.P. Mercury”. Under section "A”, "Property Covered” is listed as: "Hull, Spars, Sails, Tackle, Apparel, Machinery, Boats, and other Furniture of and in the yacht hereby insured”. (Emphasis added.) Further down, under section "A” appears "Other Insurance: — Warranted by the Insured that there will be no other insurance on the Hull or Machinery(Emphasis added.)
By specifying the 85-horsepower Mercury motor as property for which the premium is paid, and by listing "machinery” among the property covered by the policy, it is fair to assume that the parties intended to provide coverage for claimant’s motor. It is logical also to infer from the prohibition against other insurance on the machinery that coverage was intended to be complete. The court recognizes the improbability that the insured would intend or consciously make an agreement unfair to himself.
It must be concluded that the exclusionary clause relied upon by defendant is ambiguous, and that the policy as a whole supports the interpretation urged by claimant. The policyholder is entitled, under well-settled principles of law, to have all ambiguities resolved in his favor and against the insurer. (Lipton v Liberty Mut. Ins. Co., 34 NY2d 356; Silver-stein v Commercial Cas. Ins. Co., 237 NY 391; Appleton v Merchants Mut. Ins. Co., 16 AD2d 361.) Where ambiguity
Here, the defendant’s policy fails to meet the standards of clarity and notice of noncoverage to the policyholder which the law imposes. It cannot be said that theft of claimant’s motor is not a loss insured against.
Judgment for claimant.
. Loss or damage caused by explosions, bursting of boilers, breakage of shafts, latent defects in machinery or hull, and negligence, is covered in paragraph (2).
. The question of when the term "all other like perils” in marine insurance policies covers theft is considered in Ann 19 ALR3d 1150, 1153 together with the quaint distinctions between "thieves” and “assailing thieves”.
. For a history of how marine insurance evolved into "inland” marine and 'floater” insurance see 4 Appleman, Insurance Law and Practice, § 2104.