80 A.D.2d 661 | N.Y. App. Div. | 1981
Lead Opinion
Appeal from a judgment of the Supreme Court in favor of plaintiffs, entered February 22, 1980 in Saratoga County, upon a decision of the court at a Trial Term, without a jury. The question to be resolved on this appeal is whether subdivision 8 of section 167 of the Insurance Law, which requires that a liability insurer give written notice as soon as is reasonably possible of its disclaimer of liability or denial of coverage, applies where, under the terms of the insurance policy, there is no coverage. The facts are not in dispute. On July 20, 1975, a 1966 Mercedes Benz driven by plaintiff Michael Zappone and owned by his sister, plaintiff Judith Zappone, was involved in a collision which caused bodily injury to third parties and, in November of 1975, two of the injured parties commenced legal action against Michael and Judith Zap-pone to recover damages. The insurer of the Mercedes Benz, Aetna Insurance Company (Aetna), undertook their defense to this action and has offered to settle the matter up to the limits of its policy. At the time of the accident, Judith Zappone also owned a 1970 MG which was insured by the defendant Home Insurance Company (Home). In addition, Home insured a Chevrolet automobile owned by Dominick Zappone, the father of Michael and Judith. For many years prior to the incident, the Zappones lived together in the same household at Mechanicville, New York. On January 6, 1976, they notified Home of the accident which had occurred on July 20, 1975. Two weeks later Home responded that the policies issued to Judith and Dominick Zappone might not afford coverage, but that it would investigate the incident. However, it was not until April 14, 1977, some 15 months later, that Home forwarded a letter to Dominick and Judith Zappone advising them that their policies did not provide excess coverage beyond Aetna’s primary responsibility because the Mercedes Benz was neither an “owned automobile” nor a “non-owned automobile” under the terms and definitions of the Home policies. In September of 1979 the within action- for a declaratory judgment was commenced seeking, among other things, a determination that the denial of coverage was invalid and in violation of subdivision 8 of section 167 of the Insurance Law and that the Zappones are entitled to excess coverage by Home. The trial court found that the 15-month delay by Home was “unreasonable, untimely, invalid and ineffective” to relieve it of an obligation to defend and indemnify the Zappones. This appeal ensued. At the time of the accident, subdivision 8 of section 167 of the Insurance Law provided as follows: “If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident occurring
Dissenting Opinion
dissent and vote to affirm in the following memorandum by Casey, J. Casey, J. (dissenting). The majority, after recognizing that the wording of subdivision 8 of section 167 of the Insurance Law is “clear and unequivocal”, with “no exclusion or exception” (Preisch v Continental Cas. Co., 55 AD2d 117, 121, mot for lv to app den 41 NY2d 802), nevertheless construes the statute’s unconditional requirement that an insurer notify its insured of its denial of coverage as inapplicable where the policy affords no coverage. Notably, there is no citation of authority for this novel statutory construction, and in our view, had the Legislature intended such a result it would not have used the phrase “deny coverage” in the statute. It is undisputed that the liability policies in question were delivered or issued for delivery in this State by defendant Home, that plaintiffs Judith and Dominick Zappone were the named insured on those policies, and that
While the provisions of the policy in Newman could be characterized as an exclusion, the provisions in the other cases were, like the definition of owned and non-owned vehicle herein, delineations of the scope of coverage afforded by the policy. In any event, the effect of these cases was to create coverage by virtue of the insurer’s failure to comply with subdivision 8 of section 167 of the Insurance Law where none existed in the first instance, and dissatisfaction with such a result appears to be at the heart of the majority’s decision.