Opinion
Argued September 11, 1997
Decided October 16, 1997
APPEAL from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered November 8, 1996, which, with two Justices dissenting, affirmed a judgment of the Supreme Court (Joseph R. Glownia, J.), entered in Erie County, granting a motion by plaintiffs for summary judgment requiring defendant New York Central Mutual Fire Insurance Company to defend and indemnify defendant Christopher Buettner in an underlying personal injury action commenced by plaintiffs, and denying a cross motion by defendant New York Central Mutual Fire Insurance Company for summary judgment declaring that it had no duty to so defend and indemnify.
On November 25, 1992, Christopher Buettner resided with his mother, Karen Tigue, and her husband, Harvey Tigue. That day, while operating his automobile, which was covered by a liability insurance policy issued by Nationwide Insurance Company, Buettner was in an accident that resulted in personal injuries to plaintiff Paul Jerge. Thereafter, plaintiffs commenced an action against Buettner. Harvey and Karen Tigue were covered under a policy of automobile liability insurance with defendant New York Central Mutual Fire Insurance Company. The policy's declaration page listed two automobiles owned by the Tigues as "covered autos", and listed Harvey and Karen Tigue as the "named insureds". New York Central disclaimed on the ground that coverage was excluded because Buettner was operating his own owned automobile when this accident occurred, and the policy of insurance does not provide liability for his ownership, maintenance or use of his own vehicle; it also disclaimed on the ground that Buettner was not a "named insured". Plaintiffs then commenced this declaratory judgment action.
The majority at the Appellate Division, relying on Handelsman v Sea Ins. Co. ( 85 N.Y.2d 96), concluded that the ambiguity in coverage B of the New York Central policy results in Buettner, as a "family member", being an insured; that the exclusion, however, would deprive him of coverage as an insured; that the exclusionary clause is in direct conflict with the definition of an insured; that the insurance contract as drawn is equivocal, and that applying the usual rule of construction, the interpretation should be adopted that is most favorable to the insured.
The dissent at the Appellate Division concluded that this case is materially different from Handelsman, where the carrier had concededly failed to timely disclaim coverage pursuant to a policy exclusion; that it is undisputed in this case that the carrier issued a timely disclaimer to the insured based on the exclusion in the policy; that the language of the exclusion is clear and unambiguous, and excludes "Liability Coverage for the ownership, maintenance or use of * * * [a]ny vehicle other than `your covered auto' which is * * * owned by any `family member'"; that Buettner was a "family member" as defined by the policy; that Buettner owned a car that is not listed on the Tigues' policy as "your covered auto"; that the policy clearly and unambiguously excludes the Buettner vehicle from liability coverage under the Tigues' policy under the circumstances; that exclusions in automobile liability policies by their nature exclude a person or a vehicle from coverage because of some disqualifying circumstance, even though the person and vehicle come within the coverage provisions of the policy; that, thus, there is always a conflict between the coverage and exclusion provisions of an automobile liability policy; that without that conflict, the exclusions would be superfluous; that the conflict between the coverage and exclusion provisions of the policy at issue does not create an ambiguity with respect to the exclusion; that although the policy does provide coverage to the Buettner vehicle even though it is not listed as a "covered auto", the question is whether the exclusion provision of the policy unambiguously informs the insured that the policy excludes Buettner's vehicle when operated by Buettner, and it does; and that, accordingly, the court should declare that New York Central is not obligated to defend and indemnify Buettner in the action brought against him by the Jerges.
Jerge v Buettner, 225 A.D.2d 294, reversed.
Roy A. Mura, Buffalo, and Carolyn M. Henry for appellant.
Flaherty Shea, Buffalo ( James P. Shea and William E. Carey of counsel), for respondents.
Order reversed, with costs, plaintiffs' motion for summary judgment denied, cross motion of defendant New York Central Mutual Fire Insurance Company for summary judgment granted and judgment granted declaring that defendant insurer has no obligation to defend or indemnify Christopher Buettner in the subject underlying action, for the reasons stated in the dissenting opinion by then-Justice Wesley at the Appellate Division ( 225 A.D.2d 294, 298-299).
Concur: Chief Judge KAYE and Judges TITONE, BELLACOSA, SMITH, LEVINE and CIPARICK. Taking no part: Judge WESLEY.