Opinion
August 8, 1994
Appeal from the Supreme Court, Nassau County (McCaffrey, J.).
Ordered that the order and judgment is affirmed insofar as appealed from, with costs.
The underlying action in this insurance coverage dispute was commenced by a subway motorman employed by the New York City Transit Authority (hereinafter NYCTA) against L.K. Comstock Co., Inc. (hereinafter Comstock), and Perini Construction, Inc. (hereinafter Perini), alleging that injuries he sustained when a dangling electrical conduit fell on the train he was operating resulted from the defendants' negligence in performing a contract with NYCTA. Comstock, a construction subcontractor of Perini, had been hired and retained in connection with contract C-31234, a joint venture of NYCTA, inter alia, and Perini. Comstock then impleaded NYCTA, expressly incorporating the underlying complaint in the third-party complaint, whereupon NYCTA sought a defense and indemnification from Perini's comprehensive general liability insurance carrier, Aetna Casualty Surety Company (hereinafter Aetna). Under Perini's policy, both Perini and NYCTA are additional named insureds.
NYCTA commenced this action seeking declaratory relief, after Aetna refused to undertake the defense and indemnification of the NYCTA in the underlying action.
It is well established that an insurance carrier must provide a defense to its insured in an action if the underlying complaint, liberally construed, sets forth any claim which can reasonably be said to fall with the coverage of the policy or if the carrier has actual knowledge of facts which tend to establish the reasonable possibility of coverage (see, Continental Cas. Co. v Rapid-American Corp., 80 N.Y.2d 640, 648; Fitzpatrick v. American Honda Motor Co., 78 N.Y.2d 61; Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304). However, if the allegations of the underlying complaint allow for no interpretation that will bring them within the policy provisions, there is no duty to defend (see, Allstate Ins. Co. v. Mende, 176 A.D.2d 907; 44th Hotel Assocs. v. Zurich Ins. Co., 174 A.D.2d 475; Beattie v. Home Indem. Ins. Co., 170 A.D.2d 559).
Moreover, a carrier may also be relieved of its duty to defend if it can establish as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision (see, Allstate Ins. Co. v. Zuk, 78 N.Y.2d 41, 45; Servidone Constr. Corp. v. Security Ins. Co., 64 N.Y.2d 419; Spoor-Lasher Co. v Aetna Cas. Sur. Co., 39 N.Y.2d 875; Lionel Freedman, Inc. v Glens Falls Ins. Co., 27 N.Y.2d 364, 368).
We agree with the Supreme Court that the allegations of the third-party complaint, which incorporated the complaint in the underlying action, sufficiently set forth a claim that may reasonably be said to fall within the policy's coverage (see, Fitzpatrick v. American Honda Motor Co., supra). Moreover, we reject Aetna's reliance on the seventh policy exclusion. The joint venture contract with the NYCTA provides that NYCTA is an indemnified party. The exclusion does not preclude coverage for liability assumed by the insured under a contract that relates to the business of the insured.
We have examined Aetna's remaining contentions and find they are without merit. Rosenblatt, J.P., Copertino, Joy and Florio, JJ., concur.