Hurwitz & Fine, P.C. | Law Firm

Coverage Pointers

Volume IV, No. 15
Friday, February 14, 2003

A Biweekly Electronic Newsletter
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In Construction Case, Promise to Provide “Additional Insured” Protection to General Contract is Implied Promise to Provide Primary Coverage

General contractor (Pecker) required subcontractor (Upfront) to name Pecker as an additional insured on Upfront’s liability policy. Upfront did so through its policy with Travelers, but the “additional insured” provisions in the policy stated its policy would be excess unless the named insured (Upfront) agreed to provide “primary coverage” to the additional insured. The contract between Pecker and Upfront did not specifically require that primary coverage be provided. New York’s high court determined that contractual promise to provide coverage and additional insured status implied a promise to provide primary coverage. The court held that “additional insured” is a recognized term in insurance contracts -- the “well-understood meaning” of the term is “an ‘entity enjoying the same protection as the named insured.’” When Pecker engaged Upfront and in writing provided that Upfront would name Pecker as an additional insured, Pecker signified, and Upfront agreed, that Upfront’s carrier – “not Pecker’s” -- would provide Pecker with primary coverage on the risk. Pursuant to the policy provision at issue, Travelers agreed to provide primary insurance to any party with whom Upfront had contracted in writing for insurance to apply on a primary basis. When Upfront agreed to it, the policy provision was satisfied.

EDITORIAL NOTE: At a minimum, this case stands for the proposition that implicit in all construction contracts requiring coverage for contractors as “additional insureds” is the requirement that such coverage be afforded on a primary basis, unless the contract specifically provides otherwise, notwithstanding contrary provisions in the additional insured endorsement. But does the decision also purport to determine the primacy of coverage between Travelers and Upfront’s carrier, and signal an intent by the court to place the coverage issued by Travelers below the other? After all, the first sentence of the decision states that “[t]his case involves the relative obligations of two liability insurance carriers covering the same risk,” and later states that“ . . . Pecker signified, and Upfront agreed, that Upfront’s carrier – not Pecker’s -- would provide Pecker with primary coverage on the risk.”

We were curious, so we contacted respondent’s counsel and learned that the parties agreed Travelers would be co-primary (rather than sole primary) if the court held Travelers in as a primary carrier. Since the issue was never briefed or argued by the parties, we believe the court never decided the issue.

Action Against Insurance Agent Time Barred; Statute Permitting Direct Action by Injured Party After Judgment Inapplicable to Suits Against Agents

Court refuses to permit statute, which allows direct action against carrier who refuses to pay judgment, to revive time-barred claim against insurance agent.

Language in Contractual Indemnification Clause Requiring Indemnity “From and Against All Claims and Suits” is Broad Enough to Encompass Attorneys Fees and Disbursements

Plaintiffs commenced this Labor Law action seeking damages for injuries sustained by Boshnakov while employed by Color Technics. Supreme Court previously granted that part of defendant/third-party plaintiffs’ motions for summary judgment for common-law indemnification and the claim of defendant/third-party plaintiff Higgins for contractual indemnification from Color Technics, and the court granted their subsequent motion to recover attorney’s fees and disbursements from Color Technics. Public Service Mutual, Color Technics’ insurer for common-law indemnification only, appealed from the order directing it to pay 100% of the attorney’s fees and disbursements recoverable by defendants/third-party plaintiffs, plus interest. The court agreed with Public Service Mutual that ITT Hartford Group, Inc., the insurer of Color Technics with respect to claims for contractual indemnification, was required to pay an equal portion of those attorney’s fees and disbursements. The court held that a prior judgment establishing that Public Service Mutual was obligated to defend and indemnify Color Technics did not address whether Hartford must share in the obligation, as that issue was not before the court. The court also concluded that the language in the contractual indemnification clause pursuant to which Color Technics agreed to indemnify and hold Higgins harmless “from and against all claims or suits” was broad enough to encompass the attorney’s fees and disbursements, particularly in view of the fact that Color Technics was also obligated by the contract to defend Higgins.

Plaintiff was sitting in the front passenger seat of Ozolins’s parked vehicle with his feet hanging out the window and his back to Ozolins while the two individuals engaged in a discussion. Ozolins removed a knife from his pocket, reached across the front of the vehicle from his position in the driver’s seat and cut off plaintiff’s left ear. The plaintiff then sued Ozolins, alleging negligent and reckless conduct. The carrier denied coverage based on the intentional act exclusion. In this action by the injured claimant to compel Royal to indemnify its insured, plaintiff relied on the fact that Ozolins pleaded guilty to a crime premised upon reckless, rather than intentional, conduct. The court held that merely because an assailant receives a favorable plea to a crime with a criminal intent element of recklessness does not necessarily foreclose finding that the underlying conduct falls within an insurance policy’s intentional acts exclusion. Although Ozolins’s recitation of the crime at his allocution was aptly characterized by Supreme Court as “disjointed” and “rambling,” it nevertheless revealed that he removed the knife from his pocket, opened it, swung it and struck plaintiff. In a sworn statement to police shortly after the incident, plaintiff stated that Ozolins grabbed his left ear before cutting it. Plaintiff later changed his position after commencing this action by claiming that he no longer recalled Ozolins grabbing his ear prior to the assault. Notwithstanding the change in plaintiff's version of events, the evidence in the record reveals that Ozolins removed the knife from his pocket, opened it, reached across the front of the car, swung the knife at plaintiff and cut off his ear. Under these circumstances, the court concluded that the injuries that plaintiff sustained could not be fairly characterized as unexpected, unusual or unforeseen. Ozolins’s conduct and the resulting injury to plaintiff were intentional within the meaning of the intentional acts exclusion in Royal’s policy.

Insurer Has Obligation to Defend Insured Charged With Discharging Weapon and Killing Plaintiff’s Decedent

The plaintiff’s decedent, Deetjen, sustained gunshot wounds from a weapon that discharged while in the defendant Allison’s possession. She died as a result of those injuries six days later. Allison was charged with murder in the second degree, manslaughter in the second degree, criminally negligent homicide, assault in the first degree, assault in the second degree, and criminal possession of a weapon in the fourth degree. After a non-jury trial, he was acquitted of all counts except criminal possession of a weapon in the fourth degree. The plaintiff commenced the underlying action against Allison to recover damages for wrongful death. After Allison’s insurer disclaimed coverage, the plaintiff commenced this action seeking a declaration that the appellant is obligated to defend and indemnify Allison in the underlying action. The appellant moved for summary judgment declaring that it was not required to defend or indemnify Allison because the shooting was not an “occurrence” as defined by Allison’s homeowner’s policy, and the policy excluded coverage for injuries that could have been reasonably expected from the insured’s conduct or intended by the insured. Court held that an insurer’s duty to defend is triggered whenever the allegations in a complaint, liberally construed, suggest a reasonable possibility of coverage, or when the insurer has actual knowledge of facts establishing such a reasonable possibility. An insurer may be relieved of its duty to defend only 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, or by proving that the allegations fall within a policy exclusion. If any of the allegations arguably arise from a covered event, the insurer must defend the entire action. The appellant failed to demonstrate as a matter of law that the shooting was not an occurrence covered by the policy or that Allison’s conduct fell wholly within a policy exclusion

Visit the HOT CASES section of the Federation of Defense and Corporate Counsel website for cases covering a broad range of legal issues from other jurisdictions.

$500,000 Compensatory Damage Award Against Fire Insurer Upheld -- Jury Properly Concluded Insurer Negligently Inflicted Emotional Distress on Policyholder in its Investigation and Denial of Property Claim

Court held that the evidence was not sufficient for a jury reasonably to conclude that defendant’s conduct in its fire investigation was extreme and outrageous. The plaintiff produced evidence that defendant did not conduct a thorough or reasoned investigation and may have decided too quickly that the fire had been set deliberately. As distressing as this insurance investigation may have been to plaintiff, however, it simply was not so atrocious as to trigger liability for intentional infliction of emotional distress. The plaintiff did prove the elements required for negligent infliction of emotional distress, and there was sufficient evidence that plaintiff’s distress was reasonable in light of the defendant’s conduct. The defendant conducted an arson investigation to establish whether the plaintiff had engaged in conduct that was criminal. Moreover, there was evidence from which the jury could have inferred that the defendant’s investigation was not only shoddy, but that it possibly was influenced by racial stereotypes.

An arbitration provision in a retrospective premium agreement made a dispute arising from a workers’ compensation claim arbitrable. A Pennsylvania bad-faith insurance claim was also arbitrable.

Clause Providing Policy Is Void for False Statements in Application Is Sufficient to Transform Insured’s Statements Into Warranties

Plaintiff is the owner/operator of several commercial hauling vehicles. Defendant insurer issued an automobile policy for plaintiff’s dump truck. In completing the application, plaintiff indicated that he was the only driver and that the truck would be used for hauling jobs within a 50 mile radius of Perrysburg, Ohio. Less than a month following the issuance of the policy, plaintiff moved the truck to New Jersey due to a lack of hauling jobs available in Ohio. Subsequently, the truck was destroyed in an accident and defendant insurer rescinded the policy based upon a misrepresentation of fact on the application, as plaintiff had moved the truck to New Jersey. In addition, at the time of the accident, plaintiff’s employee was driving the truck, despite plaintiff being listed as the only driver. The court stated that an insurer must clearly and unambiguously indicate in the policy that a misstatement by the insured shall render the policy void. If the policy is not clear, then a misstatement only renders the policy voidable, if it the misstatement is material to the risk and fraudulently made. In this case, just above the signature line, the policy included a statement indicating the insured agreed that the policy would be null and void if a statement in the application was false or misleading. The court held that the said clause was sufficient for the policy to unambiguously provide that the statements in the application were warranties and, if false, could render the policy void ab initio. The court reversed summary judgment as a genuine issue of fact remained as to whether the insured’s statements were false at the time of the application.

Prepared by Bruce Celebrezze and Steve Bermudez of Celebrezze & Wesley in Los Angeles

Insurers Not Liable for Attorney’s Misappropriation of Funds While Acting as a Title Insurance Agent

Florida Statutes § 627.792 makes title insurers liable for the misappropriation by their licensed title agents if the funds are held in trust. Plaintiffs brought suit alleging that defendant insurers were liable for the misappropriation of funds committed by a licensed Florida attorney who was serving as a title insurance agent on behalf of plaintiffs. Attorneys licensed to practice law in Florida who serve as title insurance agents are exempt from the title insurance licensing requirements, pursuant to Florida Statutes § 626.8417. Rather, an attorney may act as a title insurance agent pursuant to his license to practice law. Plaintiffs argued that the legislature intended a title insurer be liable for its agent’s misappropriation, regardless of whether the agent acts under the authority of his license as a title insurance agent or as an attorney. The court determined that the legislature’s intent was to create an avenue of relief for victims of non-attorney title insurance agents, since the Florida Bar provides relief for those injured by lawyers. Therefore, the court held that an insurer is not liable for the misappropriation of funds by an attorney acting as a title insurance agent pursuant to his license to practice law.

Prepared by Bruce Celebrezze and Steve Bermudez of Celebrezze & Wesley in Los Angeles

CGL Policy Does Not Cover Defamation or Slander of a Personal Nature As Such Actions Do Not Arise Out of Business Operations

Insured sought defense and indemnity from plaintiff insurer relative to a defamation, libel and slander complaint filed against them by the Ashes. Plaintiff filed a complaint for declaratory judgment seeking a declaration that the general commercial liability policy issued to the insured provided no coverage for the claims. The court noted that CGL policies are designed to protect the insured from losses arising out of business operations. The policy provided for “personal injury or advertising injury,” which may include claims of defamation. However, the policy requires that these injuries be caused by an offense arising out of the insured’s business. The court rejected the insured’s argument that the statements arose from the renting of property to the Ashes and thus arose from the insured’s business as a property owner. Since the defamations and slanders were of a personal nature, the court concluded that the alleged actions could not have arisen out of the business of owning property.

Prepared by Bruce Celebrezze and Steve Bermudez of Celebrezze & Wesley in Los Angeles

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Donna L. Burden
Andrea Schillaci
Jody E. Briandi

This case involves the relative obligations of two liability insurance carriers covering the same risk. The outcome turns on whether the insurance policy in question extends primary or merely excess coverage to "additional insureds." We conclude that the policy provides primary coverage, and therefore affirm the order of the Appellate Division.

At the time of the injury giving rise to the present dispute, Pecker Iron Works engaged Upfront Enterprises to provide labor, materials and equipment for a construction project under the supervision of a general contractor. As a subcontractor, Upfront agreed "to furnish [Pecker] with certificates of insurance for Liability and Workers Compensation and name Pecker * * * as an additional insured." Upfront's insurance contract with the Travelers Indemnity Company of Connecticut* -- the policy at issue -- provided Upfront with primary coverage, and also covered such "additional insureds" as Upfront would designate in a written contract. Another provision of the policy provided that for those "additional insureds," coverage would only be excess, unless Upfront "ha[d] agreed in a written contract for this insurance to apply on a primary or contributory

An Upfront worker was injured at the site and brought suit against the owner of the property and the general contractor see Jansen v C. Raimondo & Son Constr. Co., 293 AD2d 574 [2002]). They in turn commenced a third-party action against Pecker. Pecker then brought this declaratory judgment action, seeking a judicial determination that Travelers was obligated to provide primary coverage for any liability resulting from the accident. Pecker based its claim on its contract with Upfront and on Upfront's policy with Travelers.

Supreme Court granted Travelers' motion to dismiss,concluding that, by its terms, the Travelers policy provided only excess coverage in the absence of a written, express designation of primary coverage and that the Upfront-Pecker contract contained no such written designation. The Appellate Division reversed, holding that there was no indication in the Pecker- Upfront agreement that as an "additional insured" Pecker would receive only excess, as opposed to primary, coverage. The Court thus determined that coverage for "additional insureds" was primary coverage unless unambiguously stated otherwise. We agree, and affirm.

Pecker's claim against Travelers arises from its status as an "additional insured" under the policy, so we begin with that document. It is undisputed that Travelers provided Upfront with primary coverage and that Upfront agreed to make Pecker an additional insured. "Additional insured" is a recognized term in insurance contracts, with an understanding crucial to our conclusion in this case. As cases have recognized, the "wellunderstood meaning" of the term is "an 'entity enjoying the same protection as the named insured'" (Del Bello v General Accid. Ins. Co., 185 AD2d 691, 692 [1992], quoting Rubin, Dictionary of Insurance Terms [Barron's 1987]; see also Jefferson Ins. Co. v Travelers Indemnity Co., 92 NY2d 363, 372 [1998]; Wong v New York Times Co., 297 AD2d 544, 546 [2002]). When Pecker engaged Upfront as a subcontractor and in writing provided that Upfront would name Pecker as an additional insured, Pecker signified, and Upfront agreed, that Upfront's carrier -- not Pecker's -- would provide Pecker with primary coverage on the risk. Pursuant to the policy provision at issue, Travelers agreed to provide primary insurance to any party with whom Upfront had contracted in writing for insurance to apply on a primary basis. When Upfront agreed to it, the policy provision was satisfied.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

CARCONE v D'ANGELO INSURANCE AGENCY

Appeal from an order of Supreme Court, Herkimer County (Kirk, J.), entered October 23, 2001, which granted the motion of defendant D'Angelo Insurance Agency for summary judgment dismissing the complaint against it.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed without costs.

Memorandum: Contrary to the contention of plaintiffs, Supreme Court properly granted the motion of defendant D'Angelo Insurance Agency (D'Angelo) to dismiss the complaint against it under, inter alia, CPLR 3211 (a) (5). The action as against D'Angelo sounds in

negligence and accrued, at the latest, in 1995, but it was not commenced until 2001. Thus, the complaint against D'Angelo is timebarred (see 214 [4]). Contrary to the further contention of plaintiffs, the complaint against D'Angelo was also properly dismissed

pursuant to CPLR 3211 (a) (7) to the extent that it purports to assert a cause of action under Insurance Law § 3420 against him. Section 3420 permits "a cause of action on behalf of the injured party against the insurer" (Clarendon Place Corp. v Landmark Ins. Co., 182 AD2d 6, 9, appeal dismissed 80 NY2d 918; see § 3420 [b] [1]). That statute is

in derogation of the common law and is therefore subject to strict construction (see Clarendon Place Corp., 182 AD2d at 9). Courts "'have consistently refused to grant any other or further privileges than the statute specifically provides'" (id., quoting Morton v

Maryland Cas. Co., 1 AD2d 116, 126, affd 4 NY2d 488). The statute does not provide for a direct cause of action by an injured party against an insurance broker, agent or agency, and thus plaintiffs have failed to state a cause of action against D'Angelo under that statute.

The court properly denied plaintiffs' cross motion seeking leave to amend the complaint. Plaintiffs failed to establish that any of the proposed additional causes of action against D'Angelo had merit (see Farrell v K.J.D.E. Corp., 244 AD2d 905, 905). Finally, we reject plaintiffs' contention that the court converted the motion to dismiss to one for summary judgment. The decision and the order establish that the complaint against D'Angelo was dismissed pursuant to CPLR 3211.

BOSHNAKOV v EDEN CENTRAL SCHOOL DISTRICT

Appeal from an order of Supreme Court, Erie County (Fahey, J.), entered January 22, 2002, which directed Public Service Mutual Insurance Company to pay 100% of the attorney's fees and disbursements recoverable by defendants-third-party plaintiffs against third-party defendant, plus interest.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by directing Public Service Mutual Insurance Company and ITT Hartford Group, Inc. to pay equally the attorney's fees and disbursements recoverable by defendants-third-party plaintiffs against third-party defendant, plus

Memorandum: Plaintiffs commenced this Labor Law action seeking damages for injuries sustained by plaintiff Vancho Boshnakov while employed by third-party defendant, Color Technics Painting Corp. (Color Technics). Supreme Court previously granted that part of the motion of defendants-third-party plaintiffs for summary judgment on their third-party claims for common-law indemnification and the claim of defendant-third-party plaintiff Higgins-Kieffer, Inc. (Higgins) for contractual indemnification from Color Technics, and the court granted their subsequent motion to recover attorney's fees and disbursements

from Color Technics. Public Service Mutual Insurance Company (PSM), the insurer of Color Technics with respect to claims for common-law indemnification only, now appeals from an order directing it to pay 100% of the attorney's fees and disbursements recoverable by defendants-third-party plaintiffs against Color Technics, plus

interest. We agree with PSM that ITT Hartford Group, Inc. (Hartford), the insurer of Color Technics with respect to claims for contractual indemnification, must pay an equal portion of those attorney's fees and disbursements (see Hawthorne v South Bronx Community Corp., 78 NY2d 433, 435; National Union Fire Ins. Co. of Pittsburgh, Pa. v State Ins. Fund, 222 AD2d 369, 372). The court erred in determining that a prior judgment (denominated order) granted in August 1998, which was affirmed by this Court (Public Serv. Mut. Ins. Co. v ITT Hartford Group, 267 AD2d 986, lv denied 94 NY2d 763), conclusively establishes that PSM is solely responsible for the attorney's fees and

disbursements at issue here. That prior judgment, inter alia, declared that PSM is obligated to defend and indemnify Color Technics, but the issue whether Hartford must share in PSM's obligation to pay attorney's fees and disbursements was not before the court. We agree with PSM that the language in the contractual indemnification clause

pursuant to which Color Technics agrees to indemnify and hold Higgins harmless "from and against all claims or suits" is broad enough to encompass the attorney's fees and disbursements (see Blair v County of Albany, 127 AD2d 950), particularly in view of the fact that Color Technics is also obligated by the contract to defend Higgins. We

therefore modify the order by directing PSM and Hartford to pay equally the attorney's fees and disbursements recoverable by defendants-third-party plaintiffs against Color Technics, plus interest.

CARMEAN v ROYAL INDEMNITY COMPANY

Appeal from an order and judgment of the Supreme Court (Nolan Jr., J.), entered December 10, 2001 in Saratoga County, which, inter alia, granted defendant Royal Indemnity Company's motion for summary judgment dismissing the complaint against it.

Plaintiff seeks to compel defendant Royal Indemnity Company to indemnify its insured, defendant Peter A. Ozolins, for a default judgment that plaintiff obtained against Ozolins as a result of Ozolins cutting off plaintiff's left ear with a knife. On July 5, 1997, plaintiff was sitting in the front passenger [*2]seat of Ozolins' parked vehicle with his feet hanging out the window and his back to Ozolins while the two individuals engaged in a discussion ^[FN1]. Ozolins removed a knife from his pocket, reached across the front of the vehicle from his position in the driver's seat and cut off plaintiff's left ear. Ozolins was arrested upon a charge of first degree assault and, in September 1997, entered a plea of guilty to second degree assault. Thereafter, plaintiff commenced a personal injury action against Ozolins. Ozolins resided with his parents, who had a homeowners' insurance policy with Royal. Royal disclaimed coverage upon the ground that Ozolins' action fell within a policy exclusion for "bodily injury * * * which is expected or intended by the insured." Ozolins defaulted in the civil action and plaintiff entered a default judgment against Ozolins for $330,361.63 in February 1999.

In May 1999, plaintiff commenced the instant action seeking, inter alia, a declaration that Royal was obligated to indemnify Ozolins for the default judgment. Following disclosure, Royal and plaintiff moved for summary judgment. Supreme Court granted Royal's motion and denied plaintiff's motion. Plaintiff appeals.

Plaintiff contends that there is evidence indicating that Ozolins did not intend to injure him and, therefore, Supreme Court erred in granting summary judgment under the insurance policy's intentional acts exclusion ^[FN2]. Not every intentional act falls within the parameters of an insurance policy's intentional acts exclusion since "insurable 'accidental results' may flow from 'intentional causes'" (Slayko v Security Mut. Ins. Co., 98 NY2d 289, 293; see McGroarty v Great Am. Ins. Co., 36 NY2d 358, 364). "[I]n deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual and unforeseen" (Agoado Realty Corp. v United Intl. Ins. Co., 95 NY2d 141, 145 [*3][emphasis omitted]).

Plaintiff places considerable reliance upon the fact that Ozolins pleaded guilty to a crime premised upon reckless, rather than intentional, conduct (see Penal Law § 120.05 [4]). However, the fact that an assailant receives a favorable plea to a crime with a criminal intent element of recklessness does not necessarily foreclose finding that the underlying conduct falls within an insurance policy's intentional acts exclusion (see Pennsylvania Millers Mut. Ins. Co. v Rigo, 256 AD2d 769, 770-771). Although Ozolins' recitation of the crime at his allocution was aptly characterized by Supreme Court as "disjointed" and "rambling," it nevertheless revealed that he removed the knife from his pocket, opened it, swung it and struck plaintiff. In a sworn statement to police shortly after the incident, plaintiff stated that Ozolins grabbed his left ear before cutting it. Plaintiff later changed his position after commencing this action by claiming that he no longer recalled Ozolins grabbing his ear prior to the assault. Notwithstanding the change in plaintiff's version of events, the evidence in the record reveals that Ozolins removed the knife from his pocket, opened it, reached across the front of the car, swung the knife at plaintiff and cut off his ear. Under such circumstances, the injuries that plaintiff sustained cannot be fairly characterized as unexpected, unusual or unforeseen. We agree with Supreme Court that Ozolins' conduct and the resulting injury to plaintiff were intentional within the meaning of the intentional acts exclusion in Royal's policy (see id. at 770-771; Doyle v Allstate Ins. Co., 255 AD2d 795, 796-797; Utica Fire Ins. Co. of Oneida County, N.Y. v Shelton, 226 AD2d 705, 706; see also Dinneny v Allstate Ins. Co., 295 AD2d 797, 799).

Footnote 1:Although there is considerable evidence in the record indicating that plaintiff and Ozolins were, in fact, arguing, we accept for purposes of this appeal from the grant of a summary judgment motion plaintiff's current contention that they were not arguing.

Footnote 2:We note that, although plaintiff argues that Royal has a duty to both defend and indemnify, the issue at this juncture — following entry of a judgment against Ozolins — pertains to indemnification.

In an action, inter alia, for a judgment declaring that the defendant Nationwide Mutual Fire Insurance Company is obligated to defend and indemnify the defendant Mark Allison in an underlying action entitled Deetjen v Allison, pending in the Supreme Court, Kings County, under Index No. 38189/98, the defendant Nationwide Mutual Fire Insurance Company appeals from an order and judgment (one paper) of the Supreme Court, Kings County (Harkavy, J.), dated September 18, 2001, which denied its motion for summary judgment declaring that it is not obligated to defend and indemnify the defendant Mark Allison in the underlying action, and, in effect, upon searching the record, granted the plaintiff summary judgment and declared that it was obligated to defend and indemnify the defendant Mark Allison in the underlying action.

ORDERED that the order and judgment is modified, by deleting the provisions thereof granting the plaintiff summary judgment, and declaring that the defendant Nationwide Mutual Fire Insurance Company is obligated to defend and indemnify the defendant Mark Allison in an underlying action entitled Deetjen v Allison, pending in the Supreme Court, Kings County, under Index No. 38189/98, and substituing therefor a provision granting the plaintiff partial summary judgment and declaring that the defendant Nationwide Mutual Fire Insurance Company is obligated to defend the defendant Mark Allison in the underlying action; as so modified, the order and judgment is affirmed, without costs or disbursements.

The plaintiff's decedent, Natacha Deetjen, sustained gunshot wounds from a weapon which discharged while in the defendant Mark Allison's possession. Six days later, she died as a result of those injuries. Allison was charged with murder in the second degree, manslaughter in the second degree, criminally negligent homicide, assault in the first degree, assault in the second degree, and criminal possession of a weapon in the fourth degree. After a nonjury trial, he was acquitted of all counts except criminal possession of a weapon in the fourth degree.

The plaintiff, the administrator of Natacha Deetjen's estate, commenced the underlying action against Allison, inter alia, to recover damages for wrongful death. After Allison's insurer, Nationwide Mutual Fire Insurance Company (hereinafter the appellant), disclaimed coverage, the plaintiff commenced this action seeking a declaration that the appellant is obligated to defend and indemnify Allison in the underlying action. The appellant moved for summary judgment declaring that it was not required to defend or indemnify Allison in the underlying action, contending that there was no coverage because the shooting was not an occurrence as defined by Allison's homeowner's policy, and the policy excluded coverage for injuries that could have been reasonably expected from the insured's conduct or intended by the insured.

An insurer's duty to defend is triggered whenever the allegations in a complaint, liberally construed, suggest a reasonable possibility of coverage, or when the insurer has actual knowledge of facts establishing such a reasonable possibility (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175; Continental Cas. Co. v Rapid-Am. Corp., 80 NY2d 640, 648). An insurer may be [*3]relieved of its duty to defend only 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, or by proving that the allegations fall within a policy exclusion (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., supra at 175; Allstate Ins. Co. v Zuk, 78 NY2d 41, 45). If any of the allegations arguably arise from a covered event, the insurer must defend the entire action (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., supra at 175).

Here, the appellant failed to demonstrate as a matter of law that the shooting was not an occurrence covered by the policy or that Allison's conduct fell wholly within a policy exclusion (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., supra). Consequently, the Supreme Court correctly concluded that the appellant is obligated to defend Allison in the underlying action (see Allstate Ins. Co. v Zuk, supra). However, a determination as to whether the appellant is obligated to indemnify Allison should await the outcome of the underlying action (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., supra at 178).