Coverage Pointers - Volume III, No. 13
New York State Supreme Court, Appellate Division, First Department
Insurer’s 30-Day Delay in Disclaiming Coverage Deemed Unreasonable
Plaintiff commenced this action against its insurer for defense and indemnification under primary and umbrella commercial general liability policies for an underlying personal injury claim. The insurer disclaimed coverage on the ground that plaintiff did not give notice of the occurrence until more than five months after the accident, but the disclaimer was issued 30 days after receipt of notice. After this action was commenced, the insurer inadvertently served its answer on the attorney for the plaintiff in the underlying personal injury action, and plaintiff subsequently moved for entry of a default judgment, which the court granted. On appeal, the court held that entry of a default judgment was proper. Although the default was excusable, the insurer failed to demonstrate a meritorious defense. The late notice defense was obvious from the face of the notice of claim and accompanying complaint. Thus, the insurer’s 30-day delay in disclaiming coverage was deemed unreasonable as a matter of law.
01/10/02: PROGRESSIVE CASUALTY INS. CO. v. BAKER
New York State Supreme Court, Appellate Division, Third Department
Injuries Sustained While Operating Log Loader Attached to Logging Truck Arose From “Use or Operation” of Vehicle within Meaning of Policy and V&T Law §388
Russell was working as an independent contractor cutting logs for a logging business operated by defendants Baker. While Baker was operating the log loader attached to his 1987 logging truck, one of the logs slipped and struck Russell, causing him serious injuries. Litigation ensued, resulting in a settlement on the issue of Russell’s entitlement to no-fault insurance benefits and a still-pending personal injury action brought by Russell against the Bakers. The insurer of the logging truck then commenced this action seeking a declaratory judgment that it had no duty to defend or indemnify the Bakers or Russell. Plaintiff obtained a default judgment against the Bakers and moved for summary judgment against Russell, which Supreme Court ultimately granted, finding that no coverage existed because the use of the log loader fell within certain policy exclusions. On appeal, the court considered whether Russell’s injuries were sustained during the “use or operation” of the insured vehicle within the meaning of the policy and of Vehicle and Traffic Law §388, whether the log loading device involved in the accident fell under one of the exclusions to coverage in the policy and, if so, whether such exclusion was invalid because plaintiff was obligated to provide coverage in this instance. First, the court held that the history of V&T Law §388 makes clear that those activities are covered. “The policy of insurance issued must be as broad as the insured owner’s liability for use of the vehicle by the owner or anyone using the vehicle with his permission.” The court also rejected the insurer’s argument that, even if loading logs onto a logging truck with an attached log loader constituted “use and operation” of the truck, the use of the log loader when the truck was immobile fell within policy exclusions. The court held that the exclusions could not be interpreted in this way, as it would necessarily violate the statutory mandates set forth in V&T Law §388 and, as such, would be unenforceable as against public policy.
01/03/02: HANDLEBAR INC. v. UTICA FIRST INS. CO.
New York State Supreme Court, Appellate Division, Third Department
No Coverage for Bat Beating
In this declaratory judgment action, insured tavern owner sought coverage for personal injury claims in an underlying action alleging injuries sustained when the tavern owner’s employee struck the claimant with a baseball bat. The court held that the claims were barred by the “assault and battery” and “Dram Shop” exclusions in the policy.
12/31/01: TOWN OF SOMERS v. TITAN INDEMNITY CO.
New York State Supreme Court, Appellate Division, Second Department
Public Officials Liability Policy Does Not Afford Coverage to Non-supervisory Employees for Sexual Harassment Claim
In 1999, a former employee of the Town of Somers Highway Department commenced an underlying action alleging sexual harassment and civil rights violations against the Town and four of its employees, two of whom held non-supervisory positions. The insurer issued a Public Officials Liability policy to the Town, and agreed to provide coverage to the Town and the two supervisory employees under a reservation of rights, but disclaimed as to the non-supervisory employees on the ground that they were not acting within the scope of their employment when they allegedly committed the offensive acts. In this action for declaratory judgment seeking defense and indemnification in the underlying action, the court held that the insurer was not obligated to defend and indemnify the non-supervisory employees. The policy provided coverage only for acts or omissions by the insured “in the discharge of their duties for the public entity”, and that employees are insured “only for acts within the scope of their duties for [the Town]”. The alleged acts of the two non-supervisory employees -- intentional acts of sexual harassment -- were not within the scope of their employment and did not advance the Town’s interests.
New York State Supreme Court, Appellate Division, Second Department
Insured’s 22-Month Delay in Providing Notice of UIM Claim Deemed Unreasonable
Insured was involved in a motor vehicle accident, but did not notify his insurer of his underinsured motorist claim until some 22 months later. In this proceeding to permanently stay arbitration of the underinsured motorist claim, the court held that the insured did not give notice of his claim “as soon as practicable”, which requires “. . . notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured”. Here, the insured failed to demonstrate that he exercised due diligence in attempting to ascertain the tortfeasors’ policy limits.
The Insurance Department recently issued Circular Letter No. 36 concerning revisions to Regulation 68. The new proposal is aimed at improving the efficiency of the no-fault arbitration process. The following is a brief summary of the proposed changes:
● All evidence to be relied upon by either party must be submitted during the conciliation phase of the arbitration process. Further submissions will only be allowed with the consent of the arbitrator;
● The arbitrator will be permitted to impose sanctions upon an applicant that files a frivolous claim;
● The batching of cases that involve the same applicant and same insurer, as well as linking cases that involve claims arising out of the same accident;
● The appointment of 40-50 additional new arbitrators; and
● The prompt scheduling of hearings in matters where the claimant demanded arbitration within 90 days after the receipt of a denial of claim or within 90 days after the claim became overdue.
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: www.thefederation.org.
Second Circuit Applying New York Law
Estoppel Principles in the Context of a Malpractice Insurance Policy
Under New York common law, an insurer who undertakes the defense of an insured may be estopped from asserting a defense to coverage, no matter how valid, if the insurer unreasonably delays in disclaiming coverage and the insured suffers prejudice as a result of that delay. Further, prejudice to an insured may be presumed “where an insurer, though in fact not obligated to provide coverage, without asserting policy defenses or reserving the privilege to do so, undertakes the defense of the case, in reliance on which the insured suffers the detriment of losing the right to control its own defense.”
Prepared by Daniel R. Mawhinney of Thompson & Bowie in Portland, Maine.
Fifth Circuit (applying Texas law)
Certificate of Insurance Does Not Create Coverage
Under Texas law, a certificate of insurance that erroneously lists an additional insured is insufficient to create coverage for the insured where the certificate disclaims that ability, even if the insurer's authorized agent issued the certificate.
01/07/02: ALLSTATE INS. CO. v. DANA CORPORATION
Indiana Supreme Court
In Wide-Ranging Environmental Coverage Decision, Indiana High Court Consider Property Damage Claims
Polluted ground water on insured's property falls outside of general liability coverage. Court considers a variety of other environmental coverage issues in determining extent of excess liability coverage for pollution claims
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Appeal from an order of the Supreme Court (Bradley, J.), entered July 18,2001 in Ulster County, which, inter alia, denied a motion by defendant Utica First Insurance Company for summary judgment dismissing the complaint against it.
In this action, plaintiffs seek a declaratory judgment that defendant Utica First Insurance Company (hereinafter defendant) is obligated to defend and indemnify them in an underlying action brought by defendant Robert Myroniuk alleging injuries as a result of plaintiffs' negligence, violation of the Dram Shop Act and assault. That action was the result of an incident which occurred at the Blue Jay Way tavern in the City of Kingston, Ulster County, wherein Myroniuk alleged that he sustained personal injuries when plaintiff Daniel Greaves, an employee of plaintiff Handlebar Inc., struck Myroniuk with a baseball bat. In a criminal proceeding in Kingston City Court, Greaves described having an argument with Myroniuk during which Myroniuk picked up a steel bar stool. Greaves testified that he believed Myroniuk's intent was to strike him with the bar stool, but that he was prevented from doing so by another patron who seized hold of it. It was then that Greaves grabbed the baseball bat, ran from behind the bar and struck a hard blow to Myroniuk's leg.
Defendant disclaimed any responsibility to defend or indemnify plaintiffs based on two provisions found in the insurance policy or endorsements or attachments. The first of these endorsements (hereinafter referred to as the assault exclusion) provides as follows:
Notwithstanding anything contained herein to the contrary, it is understood and agreed that this policy excludes any and all claims arising out of any assault, battery, fight, altercation, misconduct or any other similar incident or act of violence, whether caused by or at the instigation of, or at the direction of the insured, his employees, customers, patrons, guests or any cause whatsoever, including but not limited to claims of negligence or improper hiring practices, negligent, improper or non-existent supervision of employees, patrons or guests and negligence in failing to protect customers, patrons or guests.
The second provision (hereinafter the Dram Shop exclusion) excludes coverage for claims arising out of bodily injury, resulting from the improper sale of alcohol. This provision specifically states that it excludes claims for bodily injury for which an insured may be liable:
(1) as a person or organization engaged in the * * * selling or serving of alcoholic beverages; or
(2) If not so engaged, as an owner * * * of premises used for such purposes, if such liability is imposed:
(a) by or because of the violation of any statute, ordinance or regulation pertaining to the sale * * * of any alcoholic beverage; or
(b) by reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person; * * *.
Defendant moved for summary judgment, contending that the assault exclusion relieved it of all liability to defend and indemnify plaintiffs for the negligence and assault causes of action and that the Dram Shop exclusion likewise entitled it to summary judgment with respect to the remaining cause of action. In addition to opposing defendant's motion for summary judgment, plaintiffs cross-moved for partial summary judgment, contending that the following policy language creates an ambiguity in the policy entitling them to a defense, if not indemnification:
WE DO NOT PAY FOR:
(a) bodily injury or property damage expected or intended from the standpoint of the insured. This exclusion does not apply to bodily injury resulting from the use of reasonable force to protect persons or property (emphasis supplied).
Plaintiffs argued that the assault exclusion applied to offensive conduct, whereas this policy provision applied to defensive conduct and that Greaves engaged in only defensive conduct by using reasonable force to protect himself and his patrons. Plaintiffs also cross-moved for additional discovery asserting that they were unable to factually determine if the assault exclusion was actually part of their policy. Supreme Court denied defendant's motion for summary judgment and partially granted plaintiffs' cross motion for partial summary judgment by directing that defendant has a duty to defend plaintiffs in the underlying action. Supreme Court's decision is silent with respect to the cross motion for additional discovery. Defendant appeals.
We perceive that whether or not the assault exclusion is a part of the policy is no longer at issue. In its brief, defendant asserts that it is part of the policy and governs the disposition herein. Plaintiffs, as limited by their brief, argue only that the basic policy provisions and the assault exclusion, "read together", create a duty to defend where the insured allegedly injured Myroniuk while acting in self-defense or in defense of others. As an alternative argument, plaintiffs only argue that an ambiguity is created by the two policy provisions. We therefore deem abandoned any claim that the assault exclusion is not part of the policy. This exclusion must be read with the policy, "and the words of the policy remain in full force and effect except as altered by the words of the endorsement" (County of Columbia v Continental Ins. Co., 83 N.Y.2d 618, 628, 612 N.Y.S.2d 345, 634 N.E.2d 946). The assault exclusion begins, "Notwithstanding anything contained herein to the contrary". Clearly, the language of the exclusion then controls over any contrary language in the policy.
Each of Myroniuk's negligence theories n1 is dependent on the assault and battery and, as they are solely and entirely within the exclusionary provisions of the assault exclusion, defendant has no duty to defend or indemnify plaintiffs (see, Mount Vernon Fire Ins. Co. v Creative Hous., 88 N.Y.2d 347, 351, 645 N.Y.S.2d 433, 668 N.E.2d 404; U.S. Underwriters Ins. Co. v Val-Blue Corp., 85 N.Y.2d 821, 823, 623 N.Y.S.2d 834, 647 N.E.2d 1342).
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -
n1 The negligence theories are negligent supervision and training of employees, negligent use of excessive force, failure to protect Myroniuk, failure to provide proper security at the establishment, negligent striking of Myroniuk with the baseball bat and negligence and carelessness in the removal of Myroniuk from the bar.
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Moreover, Myroniuk's allegations concerning a violation of the Dram Shop Act -- that alcoholic beverages were continually served to Greaves while he was visibly intoxicated -- fall squarely within the Dram Shop exclusion relieving the insurer of any duty to defend or indemnify (see, Cole's Rest. V North Riv. Ins. Co., 85 A.D.2d 894, 894-895, 446 N.Y.S.2d 734).
Cardona, P.J., Peters, Spain and Lahtinen, JJ., concur.
ORDERED that the order is reversed, on the law, without costs, plaintiffs' cross motion denied, motion by defendant Utica First Insurance Company granted, summary judgment awarded to said defendant and complaint dismissed against it.
In a proceeding pursuant to CPLR 7503 to permanently stay arbitration of an underinsured motorist claim, the petitioner appeals from an order of the Supreme Court, Suffolk County (Werner, J.), dated June 22, 2001, which denied the petition and dismissed the proceeding.
ORDERED that the order is reversed, on the law, with costs, the petition is granted, and arbitration is permanently stayed.
On September 14, 1995, the respondent was involved in the motor vehicle accident at issue. However, he did not notify his insurer, the petitioner, of his underinsured motorist claim until July 18, 1997, some 22 months later. We agree with the petitioner that the respondent did not give notice of his underinsured motorist claim "as soon as practicable" as required by his policy. In interpreting that phrase "as soon as practicable" in the context of underinsured motorist coverage, the Court of Appeals has held that "the insured must give notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured" (Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 N.Y.2d 487, 495, 693 N.Y.S.2d 81, 715 N.E.2d 107). Here, however, the respondent failed to demonstrate that he exercised due diligence in attempting to ascertain the tortfeasors' policy limits prior to May 27, 1997, when the respondent claims to have been made aware of those policy limits. Thus, the respondent did not give the petitioner notice of his underinsured motorist claim "as soon as practicable", and the petition should have been granted (see, Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, supra; Witterschein v State Farm Ins. Co., 278 A.D.2d 317, 718 N.Y.S.2d 192; Matter of Nationwide Mut. Ins. Co. v Wexler, 276 A.D.2d 490, 713 N.Y.S.2d 878; Matter of Eagle Ins. Co. v Bernardine, 266 A.D.2d 543, 699 N.Y.S.2d 85).
O'BRIEN, J.P., S. MILLER, McGINITY, SCHMIDT and TOWNES, JJ., concur.
Order, Supreme Court, New York County (Marilyn Shafer, J.), entered March 22, 2001, which granted plaintiff's motion for a default judgment pursuant to CPLR 3215, and denied defendant's cross motion to compel plaintiff to accept late service of the answer pursuant to CPLR 3012(d), unanimously affirmed, with costs. Appeal from order, same court and Justice, entered on or about June 15, 2001, which, inter alia, denied defendant's motion for reargument, unanimously dismissed, without costs, as taken from a nonappealable order.
This is an action for, inter alia, a declaratory judgment that defendant insurer is obligated to defend and indemnify plaintiff cooperative corporation against a personal injury claim under primary and umbrella commercial general liability policies. The accident giving rise to the claim occurred on October 11, 1999, but plaintiff did not give defendant notice of the occurrence until more than five months later, after it was served with the summons and complaint in the underlying personal injury action. Defendant received notice of the claim on March 28, 2000, and disclaimed coverage on April 27, 2000 on the ground that plaintiff had not complied with policy conditions requiring it to give notice of any occurrence that might give rise to a claim "as soon as practicable." After this action was commenced, defendant inadvertently served its answer on the attorney for the plaintiff in the underlying personal injury action, and plaintiff subsequently moved for entry of a default judgment herein.
Although defendant's default was excusable (see, CPLR 2005), the motion court correctly granted the motion for a default judgment on the ground that defendant failed to demonstrate a meritorious defense. Plaintiff's delay in notifying defendant of the occurrence giving rise to the claim, the sole ground on which defendant disclaimed coverage, was obvious from the face of the notice of claim and the accompanying complaint, and defendant had no need to conduct an
investigation before determining whether to disclaim. Defendant's 30-day delay in disclaiming coverage was therefore unreasonable as a matter of law under Insurance Law @ 3420(d) (see, City of New York v Northern Ins. Co., 284 A.D.2d 291, lv dismissed N.Y.2d , 2001 N.Y. LEXIS 3292; Matter of Nationwide Mut. Ins. Co. v Steiner, 199 A.D.2d 507, 605 N.Y.S.2d 391).
MEMORANDUM AND ORDER
Appeals (1) from an order of the Supreme Court (Sheridan, J.), entered February 7, 2001 in Warren County, which, inter alia, denied defendant Franklin Russell's cross motion to compel discovery, and (2) from an order of said court, entered June 19, 2001 in Warren County, which, upon reconsideration, inter alia, granted plaintiff's motion for summary judgment and declared that plaintiff had no duty to indemnify defendant Franklin Russell.
In July 1996, defendant Franklin Russell was working as an independent contractor cutting logs for Bernie Baker Logging, a logging business operated by defendants Bernie Baker and Bernie Baker Jr. According to Russell, while Bernie Baker Jr. was operating the log loader attached to his 1987 logging truck, one of the logs slipped and struck Russell, causing him serious injuries. Litigation ensued, resulting in a settlement on the issue of Russell's entitlement to no-fault insurance benefits and a still-pending personal injury action brought by Russell against the Bakers. Plaintiff, the insurer of the logging truck, commenced this separate action seeking a declaratory judgment that it had no duty to defend or indemnify the Bakers or Russell.
Plaintiff obtained a default judgment against the Bakers and thereafter moved for summary judgment against Russell. Defendant cross-moved for an order to compel discovery. Supreme Court initially denied plaintiff's motion as unnecessary in light of the default judgment and denied Russell's cross motion as moot. Upon reconsideration, however, the court granted plaintiff's motion for summary judgment, finding that no coverage existed because the use of the log loader fell within certain exclusions in the insurance policy, and denied Russell's cross motion. Russell appeals from both orders.
No dispute exists that the logging truck is an insured vehicle under the policy which plaintiff provided to the Bakers. The issues presented on appeal are whether Russell's injuries were sustained during the "use or operation" of the insured vehicle within the meaning of the policy and of Vehicle and Traffic Law @ 388, whether the log loading device involved in the accident falls under one of the exclusions to coverage in the policy and, if so, whether such exclusion is invalid because plaintiff was obligated, by State law, to provide coverage in this instance. Plaintiff contends that this third argument is unpreserved for our review because Russell failed to raise it before Supreme Court.
Although Russell argued the applicability of Vehicle and Traffic Law @ 388 before Supreme Court, he never squarely made the argument that, should that statute require coverage under these circumstances, any policy exclusion eliminating such coverage would be contrary to public policy and, thus, illegal. While the general rule is that a court will not review on appeal an issue not raised before the trial court (see, Telaro v Telaro, 25 N.Y.2d 433, 438, 306 N.Y.S.2d 920, 255 N.E.2d 158), "in the interest of justice, this court may always exercise its broad discretion to consider matters neither properly presented nor preserved below" (Matter of Woodin v Lane, 119 A.D.2d 969, 970, 501 N.Y.S.2d 495). In light of the public policy considerations that weigh
against enforcing an exclusion in an insurance policy which abrogates the insurer's statutory duty -- to the insured's detriment -- we opt to exercise our discretion and review the issue.
By State law, liability is imposed on all vehicle owners for accidents resulting from negligence in the permissive "use or operation" of their vehicles (Vehicle and Traffic Law @ 388 ; see, Argentina v Emery World Wide Delivery Corp., 93 N.Y.2d 554, 558, 693 N.Y.S.2d 493, 715 N.E.2d 495). Vehicle and Traffic Law @ 388 continues, "all * * * policies of insurance issued to the owner of any vehicle subject to the provisions of this section shall contain a provision for indemnity or security against the liability and responsibility provided in this section" (Vehicle and Traffic Law @ 388 ; see, 11 NYCRR @ 60-1.1 [a] [mandating automobile liability insurance coverage for liability related to accidents arising out of the "use or operation" of a motor vehicle]). The Court of Appeals has already resolved one of the issues disputed here in holding that, "while Vehicle and Traffic Law @ 388 (1) does not itself speak to whether loading and unloading fall within its reach, the history of the provision makes clear that those activities are indeed covered" (Argentina v Emery World Wide Delivery Corp., supra, at 558; see, Smith v Zink, 274 A.D.2d 885, 886, 711 N.Y.S.2d 594). Accepting Russell's version of the facts, as we must at this stage (see, Bershaw v Altman, 100 A.D.2d 642, 643, 473 N.Y.S.2d 72), plaintiff is unable to articulate any meaningful distinction between the manner in which the accident occurred in this case and the activity at issue in Argentina, where the plaintiff was injured when a steel plate being unloaded from a cargo truck fell and struck him (Argentina v Emery World Wide Delivery Corp., supra). Instead, plaintiff relies on the fact that Argentina addressed only the owner's liability under section 388 and not the scope of coverage under an insurance policy.
We conclude that, as pertinent here, this is a distinction without a difference given that Vehicle and Traffic Law @ 388 (4) -- quoted above -- expressly requires all insurance policies to contain a provision guaranteeing indemnity against the liability created by the statute (see, Royal Indem. Co. v Providence Washington Ins. Co., 92 N.Y.2d 653, 657, 684 N.Y.S.2d 470, 707 N.E.2d 425; Cohn v Nationwide Mut. Ins. Co., 286 A.D.2d 699, 700-701; see also, 11 NYCRR 60-1.1). "The policy of insurance issued must be as broad as the insured owner's liability for use of the vehicle by the owner or anyone using the vehicle with his permission" (Rosado v Eveready Ins. Co., 34 N.Y.2d 43, 49, 356 N.Y.S.2d 8, 312 N.E.2d 153, citing Vehicle and Traffic Law @ 388). Thus, we hold that, pursuant to Vehicle and Traffic Law @ 388, plaintiff was required to issue a policy which would insure the Bakers against the negligent loading or unloading of logs on this logging truck.
Plaintiff next argues that, even if loading logs onto a logging truck with an attached log loader falls within the general definition of "use and operation" of the truck, the use of the log loader when the truck is immobile falls within specific exclusions to coverage detailed in the policy. If we were to interpret these exclusions -- as plaintiff urges -- to deny coverage even if Russell's injuries are ultimately proven to have resulted from the negligence in the use and operation of the truck, then the policy would necessarily violate the statutory mandates set forth in Vehicle and Traffic Law @ 388 (see, Royal Indem. Co. v Providence Washington Ins. Co., supra, at 657). As such, the exclusions would be unenforceable as against the public policy of New York because "to tolerate such an exclusion would leave innocent victims, acting in good faith, and presumably, in reliance upon [plaintiff's] compliance with the law, without legal redress or prospect of recompense for injuries sustained ( Rosado v Eveready Ins. Co., supra, at 48; see, Royal Indem. Co. v Providence Washington Ins. Co., supra, at 658; GE Capital Auto Lease v Allstate Ins. Co., 281 A.D.2d 456, 457, 722 N.Y.S.2d 549, lv dismissed ___ N.Y.2d ___ [Nov.
Accordingly, we hold that plaintiff's motion for summary judgment should have been denied. As conceded in Russell's brief, his cross motion for discovery should be denied as unnecessary in light of our holding that the policy exclusions are unenforceable.
Cardona, P.J., Mercure, Crew III and Peters, JJ., concur.
ORDERED that the order entered February 7, 2001 is affirmed, without costs.
ORDERED that the order entered June 19, 2001 is modified, on the law, without costs, by reversing so much thereof as granted plaintiff's motion for summary judgment; motion denied; and, as so modified, affirmed.
In an action for a judgment declaring that the defendant Titan Indemnity Company is obligated to defend and indemnify the plaintiffs Robert Brandt and Edward Von Minden under a Public Officials Liability insurance policy issued to the plaintiff Town of Somers in an underlying action entitled O'Hearn v Town of Somers, pending in the United States District Court, Southern District, New York, under case no. 99 CIV 2098, the plaintiffs appeal from an order of the Supreme Court, Westchester County (Lefkowitz, J.), dated June 12, 2000, which granted the defendant's motion for summary judgment dismissing the complaint and denied the plaintiffs' cross motion for summary judgment, inter alia, declaring that the defendant is obligated to defend and indemnify the plaintiffs Robert Brandt and Edward Von Minden in the underlying action.
ORDERED the the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Westchester County, for entry of a judgment declaring that the defendant is not obligated to defend and indemnify the plaintiffs Robert Brandt and Edward Von Minden in the underlying action.
In 1999 a former employee of the Town of Somers (hereinafter the Town) Highway Department, commenced the underlying action against the Town and four of its employees. Two of the employees were in supervisory positions and two employees, the plaintiffs Robert Brandt and Edward Von Minden, were in nonsupervisory positions. The underlying action seeks to recover damages for sexual harassment and civil rights violations based on acts allegedly committed by Brandt and Von Minden. The defendant Titan Indemnity Company (hereinafter Titan) issued a Public Officials Liability insurance policy to the Town, and agreed to provide coverage to the Town and the two supervisory employees under a reservation of rights, but disclaimed as to Brandt and Von Minden on the ground that they were not acting within the scope of their employment when they allegedly committed the offensive acts.
The Town, Brandt, and Von Minden commenced the instant action for a judgment declaring that Titan is obliged to defend and indemnify Brandt and Von Minden under the subject policy. Titan moved for summary judgment dismissing the complaint and the plaintiffs cross-moved for summary judgment declaring that Brandt and Von Minden were entitled to a defense and indemnity. The Supreme Court granted Titan's motion and denied the plaintiffs' cross motion. We affirm.
The subject policy provides coverage for acts or omissions by the insured "in the discharge of their duties for the public entity". Employees are insured "only for acts within the scope of their duties for [the Town]". The alleged acts of Brandt and Von Minden, intentional acts of sexual harassment, were not within the scope of their employment and did not advance the Town's interests (cf., Adams v New York City Trans. Auth., 88 N.Y.2d 116, 643 N.Y.S.2d 511, 666 N.E.2d 216; Meyers & Sons Corp. v Zurich Am. Ins. Group, 74 N.Y.2d 298, 546 N.Y.S.2d 818, 545 N.E.2d 1206; Lippold v Duggal Color Projects, US Dist Ct, SD, NY, Aug. 25, 1997, Martin, J.). Accordingly, the Supreme Court properly determined that Titan had no duty to defend or indemnify Brandt and Von Minden in the underlying action.
The plaintiffs' remaining contentions are without merit.
KRAUSMAN, J.P., McGINITY, H. MILLER and SMITH, JJ., concur.