New York State Supreme Court, Appellate Division, Second Department
Owner of Property Not Named as Insured in Policy Lacks Standing to Seek Damages Based on Inadequacy of Proceeds
Consistent with their business practices, and not because of any legitimate mutual mistake, Dweck and Sladkus were named as the insured persons in a policy issued by Transtate Insurance Company, even though one of the properties covered under the policy was owned by Bronxville Properties, Inc. Transtate issued checks payable jointly to Dweck and Sladkus, in connection with a fire loss at that property. Bronxville then commenced this action seeking to recover damages against Friedlander Group, Inc., the broker that procured the policy with Transtate, and against Prism General Services, the adjuster that evaluated the fire loss, alleging that Friedlander failed to adequately investigate the financial condition of Transtate, an insurer that later went into liquidation, and that Prism improperly evaluated the loss. The court dismissed the claim, holding that Bronxville had no standing to bring this action. It was the two persons named as insureds in the policy who, under the circumstances of this case, had standing to seek to recover damages based on any supposed inadequacy of the available insurance proceeds. This applies whether the recovery is sought from the insurer itself, from the Superintendent of Insurance as representative of the insurer in liquidation, from the broker that procured the policy, or from the adjuster which acted as the insurer’s agent. Plaintiff did not seek to reform the contract based on mutual mistake or fraudulently-induced unilateral mistake, and its status as the owner of the property where the loss occurred, and its consequential insurable interest in that property, did not in and of itself confer standing.
New York State Supreme Court, Appellate Division, Third Department
Evidence Rebuts Presumption of Permissive Use; Criminal Acts Exclusion Enforced
Delvecchios commenced a wrongful death action following the death of their son, who died as a result of a car accident after leaving an underage drinking party at the home of the Gooleys. New York Central insured Gooley’s parents under a homeowner’s policy. The car in which Delvecchios’ son was a passenger was owned by Piche, and was operated by Gooley. New York Central commenced this declaratory judgment action seeking a declaration that Nationwide, the insurer under homeowner’s and auto insurance policies issued to Piche, had a duty to defend and indemnify the Piches. The Delvecchios cross-claimed, seeking declarations that New York Central and Nationwide must defend and indemnify various parties. The court affirmed the lowers court’s holding that New York Central was required to defend and indemnify the Gooleys against the Delvecchios’ Dram Shop Act claim but no other causes of action, and that Nationwide was not required to defend or indemnify the Piches Sr. under either the homeowner’s or automobile insurance policies. The court held that Nationwide did not owe Piche a duty to defend or indemnify under the auto policy, as Gooley was not a permissive user. Nationwide rebutted the presumption of permissive use through sworn police statements from most of the party’s attendees that Gooley asked Piche for his car keys as Piche was too intoxicated to drive; Piche’s keys were hidden from him; Gooley had never been permitted to drive Piche’s car prior to this accident; the car was locked; Piche neither told nor implied that Gooley could drive the car; and the next morning Piche was unaware that his car was gone. Nationwide was not obligated to defend and indemnify the Gooleys under their homeowner’s policy as the criminal acts and motor vehicle exclusions applied.
07/03/03 CURANOVIC v NEW YORK CENTRAL MUT.
Plaintiff’s uninsured home sustained fire damage. After repairs were made to make the home habitable, plaintiff went to Partners Insurance Agency to obtain homeowner’s insurance. Plaintiff, who could not read or write English, answered Partners’ insurance application questions, then allegedly read and signed the application. Thereafter, an insurance binder was issued with New York Central. Shortly after plaintiff left Partners’ office, his son told him he gave inaccurate answers to the application questions. Specifically, plaintiff negatively replied to the question, “[A]ny losses, whether or not paid by insurance, during the last 3 years, at this or any other location?” Plaintiff’s home and its contents were totally destroyed by fire. New York Central denied plaintiff’s claim on the grounds that it was caused by arson and that plaintiff’s policy application contained material misrepresentations. This declaratory judgment action ensued. The court held that, while a misrepresentation had been made in the application, an issue of fact existed whether the misrepresentation was material. An insurer can demonstrate a material misrepresentation, as a matter of law, by presenting documentation regarding underwriting practices, such as underwriting manuals or bulletins, which establish that the insurer would not have issued the policy if the correct information were disclosed in the application. Conclusory statements from the insurer’s employees regarding such practices, without documentary evidence, are insufficient to establish a material misrepresentation. The court also held that dismissal of the complaint against Partners for negligent misrepresentation was proper, as Curanovic failed to show that there was a special relationship between himself and Partners which would have created liability. Insurance agents generally are not liable for anything more than obtaining the requested coverage, unless there is a special relationship with the insurance customer justifying reliance on the agent's speech. New York courts disfavor finding such a relationship, but can recognize an additional duty in exceptional situations, for example where the agent receives compensation for consultation beyond the premium payments, the insured relies on expertise of the agent regarding a raised question of coverage, or there is an extended course of dealing sufficient to put objectively reasonable agents on notice that their advice was being specially relied upon. In this case, the insured’s only encounter with the agent was the single appointment to obtain the policy; he made no payments beyond the premium and he never informed her that he could not read English even when she asked him to read over the application, so this was akin to a normal insurance agent/customer relationship.
Plaintiff, a painting subcontractor, was sued in an underlying action alleging injury caused by the inhalation of paint or solvent fumes in an office building where the insured was performing stripping and painting work. Plaintiff sought defense and indemnification from its CGL carrier, who disclaimed coverage based on the policy’s “total pollution exclusion endorsement”. Plaintiff then commenced this action seeking a declaratory judgment that its insurer was obligated to defend and indemnify it in the underlying action. New York’s highest court held the total pollution exclusion was ambiguous as applied to the facts of this case. First, because the exclusion used terms such as “discharge, dispersal, seepage, migration, release or escape,” terms of art in environmental law used to reference damage or injury caused by disposal or containment of hazardous waste, the language did not clearly and unequivocally exclude claims arising from indoor exposures. The Court also concluded that the word “fumes” could not be isolated from its context in the endorsement. Even if the paint or solvent fumes were within the definition of “pollutant,” the exclusion applies only if the injury is caused by “discharge, dispersal, seepage, migration, release or escape” of the fumes. It could not be said that this language unambiguously applied to ordinary paint or solvent fumes that drifted a short distance from the area of the insured’s intended use and allegedly caused inhalation injuries to a bystander.
Plaintiffs in an underlying personal injury action leased an apartment at premises owned by the defendant Schliessman, who was the principal of the defendant H & S Landscaping, Inc. H & S’s office was located on adjacent premises, which Schliessman owned. The two parcels shared a common yard and driveway on which H & S’s truck was parked. Plaintiff heard his four-year-old son crying and observed him on top of a truck asking for help. Plaintiff was injured when he fell off the truck while trying to assist his son. Empire insured Schliessman and H & S, and commenced this action seeking a declaration that Utica Mutual was obligated to defend and indemnify Schliessman and H & S in the underlying action in accordance with a GGL policy it had issued. Court held that Utica Mutual was obligated to defend and indemnify Schliessman and H & S in the underlying action. Empire’s policy covered accidents resulting in bodily injury or property damage caused by an occurrence arising out of the “ownership, maintenance or use” of a covered auto. The determination of whether an accident has resulted from the use or operation of a covered vehicle turns on whether the accident arose out of the inherent nature of the vehicle and whether the vehicle itself produced the injury. “Negligence in the use of the vehicle must be shown, and that negligence must be a cause of the injury.” In this case, there were no allegations that the truck itself was used negligently, or that its condition in any way contributed to the accident. Rather, it was merely the location of, and incidental to, the accident.
The Supreme Court of Wisconsin used this case as an opportunity to clarify its definition of contextual ambiguity within the insurance coverage context. According to the court, in order to prevent contextual ambiguity, a policy does not have to be perfectly drafted, however, it must “avoid inconsistent provisions, provisions that build up false expectations, and provisions that produce reasonable alternative meanings.” In the present case, applying the definition, the court held that the policy provision limiting liability to $50,000 for bodily injury was not ambiguous.
An employer’s intentional tort does not negate an express policy exclusion for bodily injury to an employee “arising out of and in the course of employment by the insured.” The plaintiff in the underlying case was injured when she fell off a loading dock while working for Penn Traffic Co. Penn’s insurer’s declined to indemnify its insured. This court was asked to determine whether a CGL policy with a provision excluding “bodily injury to an employee” occurring in the course of employment is required to cover the employer’s liability for substantially certain intentional torts. The court defined substantially certain intentional torts as occurring when an employer “acts with the belief that injury is substantially certain to occur.” The court concluded that under such circumstances the “bodily injury to an employee” exclusion still applies, thus there is no CGL policy coverage.
Under Arkansas law, oral cancellation of an insurance policy did not relieve insurer of statutory duty to provide a 31-day grace period once the policy lapsed; insured’s policy was a group life policy covered by Ark. Code Ann. section 23-83-110.
Court holds that Kentucky courts would likely find that negligent hiring and retention of an employee constitutes an “occurrence” under the terms of an employer’s insurance liability contract, thus an insurer was obligated to defend the employer in a negligence action arising from a murder committed by an employee.
MetLife sold to plaintiff a whole life insurance policy under the guise of it being in insured retirement plan. Without having read the policy, for two and one-half years, plaintiff made her monthly premiums believing she was contributing to a “retirement plan” with a life insurance policy until she became aware of a class-action settlement involving MetLife and nurses who had purchased whole life policies after being led to believe that they were investing in retirement or savings plans. Plaintiff brought claims against MetLife for fraud and deceit, breach of fiduciary duty, and violation of a consumer protection statute four and one-half years after the policy was delivered to plaintiff. The district court judgment held that the two-year limitations period under Massachusetts law applied to all claims mirroring the cause of action set forth in the statute, even if those claims are brought under common law or the consumer protection statute. Plaintiff appealed and sought application of Massachusetts’ discovery rule which applies to tort actions and the consumer protection statute, and operated to toll a limitations period until a prospective plaintiff learns or should have learned that he has been injured. While condemning MetLife’s sales tactics as shameful, the appellate court refused to apply the discovery rule to plaintiff’s claims because she failed to read through the materials that MetLife provided to her, but which, had she done so, would have revealed to a reasonable fact finder that nothing in the folder could have constituted part of the retirement plan she thought she had purchased other than the life insurance policy, which was distinctively so labeled.
The insured manufactured a product known as M-Gard, a wood preservative that was applied to utility poles to retard decay, which was purchased by companies that applied the product to utility poles. The utility poles, in turn, were bought by many utility companies throughout the country. Some of the utility companies discovered that the poles treated with M-Gard had prematurely decayed, which led to numerous lawsuits against the insured by the utilities and by the companies that had used M-Gard to treat the poles. The insurer filed a complaint for declaratory judgment, seeking a declaration of its rights and duties with respect to the lawsuits under an insurance policy purchased by the insured and naming other insurance companies that had contracted with the insured for liability coverage as defendants. The insured filed counterclaims seeking a declaration that the policies covered the claims. Each of the parties filed a motion for summary judgment, and the trial court granted the motions in favor of the insurance companies and denied the insured’s motion for summary judgment. The court of appeals affirmed the trial court’s decision and held that under the policies’ definition of “property damage,” there was no coverage under the definition's first prong because there was no “physical injury to or destruction of tangible property”; rather, M-Gard simply failed as a preservative to protect the utility poles from decay caused by exposure to natural elements. The appellate court also held that, for the same reason, there was no coverage under the second prong of the definition of “property damage,” defined as “loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.” The court stated that the poles’ gradual disintegration as a result of exposure to the elements was not an “occurrence” within the meaning of the policies’ language, nor did the deterioration of the poles and the product itself present a “harmful condition” under the policies’ definition of occurrence. Finally, the court held that, under commercial general liability insurance, which covers tort liability for physical damages to others and not for contractual liability of the insured for economic loss, the policies did not cover liability for the loss of use of the utility poles due to the alleged failure of M- Gard to preserve the poles as the insured had warranted.
Ending years of internal acrimony and confusion in the Wisconsin courts with respect to the availability of CGL coverage for environmental clean up claims, the Wisconsin Supreme Court has now formally disavowed its 1995 pro-insurer analysis in City of Edgerton and has ruled that a PRP letter will be treated as a “suit” for coverage purposes and that an insured’s costs of restoring and remediating damaged property, whether the costs are based on remediation efforts by a third party (including the government) or are incurred directly by the insured, are covered damages under applicable CGL policies, provided that other policy exclusions do not apply. Several dissenting justices decried the majority’s decision to abandon established Wisconsin precedent in violation of basic principles of stare decisis.
The court concluded that when an insurer has a duty to defend, but refuses to defend a suit against its insured, the insurer loses the right to control the defense of the action. In this case, the insurer refused to defend the insured under a reservation of rights, and thus, lost its right to control the insured’s defense of the underlying action. Further, the court held that under Iowa law, an insured is entitled to recover reasonable attorney’s fees for an insurer’s breach of its duty to defend its insured, and the question of what amount constitutes a reasonable attorney’s fee is an issue of fact to be determined by a jury.
The Connecticut Supreme Court has ruled that an insured must pay a pro rata share of the cost of defending long-tail cases reflecting periods of time for which the insured failed to purchase insurance or cannot now locate missing policies. The court rejected the insured’s arguments for joint and several liability and refused to find that pro rata allocation conflicting with general rules concerning the duty to defend.
Where insurance coverage is being or has been sought for personal injury or bodily harm resulting from an insured’s nonconsensual sexual contact with another, and where there is a genuine issue of material fact as to whether the insured’s acts were “unintentional” because of mental illness, as set forth in the holding of State Farm Fire & Casualty Co. v Wicka, 474 NW2d 324 (Minn. 1991), and therefore outside the scope of an insurance policy’s intentional act exclusion, the trial court should submit the issue to the jury and is not, as a matter of law, to infer the insured’s intent to cause injury.
The court was asked to decide whether Paulson may recover the amount of money representing the difference between the amount Paulson’s insurer paid and what her insurer settled for in negotiations with the tortfeasor’s insurer upon its subrogation claim. Because allowing the plaintiff to recover this sum would amount to double recovery, court held that Paulson may not recover that difference as damages. She has already collected the amount of property damages to which she is entitled and was not entitled to any additional recompense.
In an action alleging that an insurer was required to reimburse plaintiff for part of the cost of defending a counterclaim for trademark infringement, plaintiff was not entitled to coverage under the insurance policy because infringement fell outside the provisions of the policy relating to “advertising injury.”
In this action, Westoil sought coverage from Industrial for $11 million in indemnity and defense costs incurred in a lawsuit against it for environmental contamination of a facility subsequently operated by the plaintiff. Industrial denied coverage based on a limited pollution exclusion which excluded coverage for property damage arising out of the discharge of pollutants except where the discharge is “sudden, unexpected and unintended” and takes place during the policy period. The court concluded that, under the plain language of the exclusion, the exclusion does not apply only if a sudden discharge of contaminants takes place during the policy period and causes damage during the policy period. The court accordingly held there was no duty to defend, as there was no potential for coverage under the terms of the policy where the complaint sought damages for alleged negligence only during the time Westoil was operating the facility, 10 years before Industrial’s policy first became effective. The court rejected Westoil’s suggestion to apply the continuous trigger theory espoused under Montrose II.
Where previous decisions have already determined that carriers were improperly denying PIP benefits, it would be improper to certify class to determine amount individual claimants would recover. Issues of commonality do not predominate.
Solicitation of Customers from a Customer List Does Not Constitute Advertising and Does Not Give Rise to the Insurer's Duty to Defend under Advertising Injury Provisions of Commercial General Liability Insurance Policies
Plaintiff-insured opened a beauty parlor and purchased from defendant commercial general liability insurance, which included coverage for advertising injury. When two hairdressers from a nearby competitor salon left to work for plaintiff, taking most of their customers with them, the salon sued plaintiff for appropriating its customer list and soliciting customers from it. The insurer refused to defend plaintiff on the grounds that plaintiff's conduct was not advertising. Reversing the appellate court's judgment that the insurer owed plaintiff a duty to defend, the supreme court found that plaintiff's limited solicitation of customers through phone calls and ValuPak mailers did not constitute advertising, and thus plaintiff was not eligible for coverage under the policy's advertising injury provisions. The court interpreted the term advertising as used in commercial general liability policies to mean widespread promotional activities usually directed to the public at large. One-on-one solicitation of a few customers does not give rise to the insurer's duty to defend the underlying lawsuit.
Plaintiff’s son and daughter-in-law were killed in an automobile accident. The decedents had five different insurance policies covering five different vehicles. Plaintiff sought to have the policies stacked, thus obtaining the coverage limits of all five. Defendants argue that they offered a multi-vehicle discount to the plaintiffs, which allowed them to contractually preclude policy stacking. The circuit court held that decedents were not given the opportunity to bargain for the discount, and thus the policies could be stacked. The supreme court of appeals held that the phrase “bargained for discount” allowed an insurance company to unilaterally give an insured a multi-car discount as consideration for the enforcement of anti-stacking language in an automobile insurance policy. Therefore, the circuit court erred in allowing plaintiffs to stack the insurance policies, and the lower court decision was reversed.
Plaintiff brought suit against Defendant insurance company, alleging breach of contract, after his claim for benefits under his father’s life insurance policy was denied. The insurance company defended on the ground that the policy listed certain conditions, among which was a blood test, which had to be satisfied before coverage would begin. Plaintiff's father died before completing the blood test. The Supreme Court found that no effective insurance policy was in place at the time of Plaintiff’s father’s death and as a result, summary judgment in favor of the insurance company was appropriate.
Defendants, husband and wife, purchased homeowners’ insurance from plaintiff-insurer. Each was insured under the policy, which excluded coverage for intentional loss. After defendants’ home burned down, the insurer paid out on the policy, but subsequently sought to recover the funds after the husband was convicted of arson and insurance fraud. Affirming a lower court’s order granting partial summary judgment in favor of the wife, the court held that while the intentional act and fraud exclusions in the insurer's policy unambiguously exclude coverage for innocent co-insureds, the plain language of the policy provides less coverage than is required by Idaho’s statutory standard fire policy. As the clauses that prevent the wife’s recovery cause the policy to violate Idaho insurance law, the clauses are unenforceable, and thus the wife may recover for her loss as an innocent co-insured.
Insured was denied coverage under a homeowner’s policy on the basis of a vacancy exclusion clause in the insurance policy. Plaintiff argued that the property was not vacant because he had engaged in sporadic remodeling projects and occasional overnight stays (on average, he stayed at the house two nights a week). The court, in upholding the district court’s ruling of summary judgment in favor of the Insurance Company, held that the house was vacant because it was not being used for its intended purpose as a dwelling.
Plaintiff-insured suffered physical injury as a result of an automobile collision. The vehicle she was driving at the time was insured by defendant. Plaintiff had two additional auto insurance policies issued by defendant that covered other vehicles uninvolved in the accident. The court rejected plaintiff's argument that she could stack the personal medical payment coverage of the vehicle she was driving with the coverage of one of the other vehicles she was not, noting that the second policy contained a "no coverage" provision, expressly excluding coverage for injuries sustained while occupying owned vehicles covered by other policies. While affirming previous case law that allows an insured to stack when two or more medical payment coverages apply to a given accident, the court held that no stacking issue exists unless there are multiple policies that actually cover the accident in question. As plaintiff's accident in her vehicle was covered by only a single policy, there was no second policy to stack.
Plaintiff was injured when she was a passenger in a vehicle that was involved in an accident. Neither driver was insured, but Plaintiff had uninsured motorist coverage under Insurer and another company. Insurer argued that the antistacking provision in the policy prevented recovery. Court held that the excess clause in Insurer's uninsured motorists coverage is ambiguous and illusory and, consequently, affirmed the lower court's order granting Plaintiff recovery.
The court reviewed and upheld its previous decision in Matarese v. New Hampshire Municipal Association Property-Liability Insurance Trust, Inc., 147 N.H. 396 (2002), that the phrase "legally entitled to recover" unambiguously imposes a condition precedent on the insured to prove the liability of an uninsured motorist before recovering uninsured motorist benefits. The court further ruled that the Matarese ruling must be applied retroactively to this case.
Plaintiff purchased a car, a service agreement, and optional credit life and disability insurance for the 60-month term of her financing contract. Plaintiff financed $ 20,711.45 and was informed that the finance charge resulting from her financing arrangement would be $ 2117.95, making the total amount she would pay over the life of the loan $ 22,829.40. The credit life insurance provided by defendant and for which plaintiff was charged a premium was for $ 22,829.40. Plaintiff filed a complaint in which she claimed the amount of life insurance for which she should have been charged was the amount of her indebtedness ($ 20,711.50 plus any accrued interest) rather than $ 22,829.40. The court construed O.C.G.A. § 33-31-4(a) to signify that for this type of policy the amount of insurance equals the total payments due through the life of the loan, i.e. $22, 829.40, not just the amount financed.
After Plaintiff was indicted for arson, he sued Defendant insurance company and others alleging violations of his civil rights under 42 U.S.C. § 1983 and various state law causes of action. Plaintiff was already indemnified by Defendant for the underlying fire and he signed a release upon settling that claim. Plaintiff further alleged Defendant insurance company violated RICO with its continued dispute of coverage by “having [Plaintiff] indicted for insurance fraud in an attempt to have the consideration paid for the release returned via a criminal case.” The court ruled that, because of the breadth of its language, the release signed by Plaintiff in the previous civil suit precluded all possible claims against the insurance company, even those based on incidents that occurred after the release was signed. Defendant’s motion to dismiss was granted.
In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Rudolph, J.), entered July 16, 2001, as granted the amended motion of the defendant Friedlander Group, Inc., and the separate motion of the defendant Prism General Services, to dismiss the complaint.
The record establishes that, "consistent with [their] business practices [and] not because of any legitimate mutual mistake" (Pascal v Nova Cas. Co., 226 AD2d 688, 690), Jack S. Dweck and Harvey Sladkus (doing business as Omni Properties) were named as the insured persons in policy number TPP-2318647-0 issued by Transtate Insurance Company (hereinafter Transtate) for the period August 1, 1996, to August 1, 1997, even though one of the properties covered under the policy, 107-09-111 Kensington Road, Bronxville, New York., was owned by Bronxville Properties, Inc., the corporate plaintiff herein. As described in Matter of Transtate Ins. Co. (297 AD2d 684), Transtate, or the Superintendent of Insurance as successor to Transtate, issued checks totaling $182,159.35, payable jointly to Dweck and Sladkus, in connection with a fire loss at that property that occurred on May 14, 1997. Two checks (in the sums of $40,000 and $102,159.35) were also payable jointly to the Dime Savings Bank as mortgagee.
In this action, the plaintiff seeks to recover damages against Friedlander Group, Inc. (hereinafter Friedlander), the broker that procured the policy with Transtate, and against Prism General Services (hereinafter Prism), the adjuster that evaluated the fire loss of May 14, 1997. It alleges, among other things, that Friedlander failed to adequately investigate the financial condition of Transtate, an insurer that later went into liquidation, and that Prism improperly evaluated the loss.
We agree with the Supreme Court that the corporate plaintiff has no standing to bring this action. As is implicit in Matter of Transtate Ins. Co. (supra), it is the two persons named as insureds in the relevant policy, Dweck and Sladkus, who, under the circumstances of this case, have standing to seek to recover damages based on any supposed inadequacy of the available Insurance proceeds in covering all of the losses caused by the fire of May 14, 1997. This applies whether the recovery is sought from the insurer itself, from the Superintendent of Insurance as representative of the insurer in liquidation (see id.), from the broker that procured the policy, or from the adjuster which acted as the insurer's agent.
The plaintiff does not explicitly seek to reform the contract based on mutual mistake or fraudulently-induced unilateral mistake (cf. Judge v Travelers Ins. Co., 262 AD2d 983; Matter of Galaxy Ins. Co., 257 AD2d 351; Pascal v Nova Ins. Co., supra). Rather, it argues that, in light of its status as the owner of the property where the loss occurred, and its consequential insurable interest in that property, it was an "intended beneficiary" of the Insurance contract. We do not agree.
The fact that the plaintiff owned the insured property does not in and of itself confer standing (see Brownell v Board of Educ., 239 NY 369; Etterle v Excelsior Ins. Co. of N.Y., 74 AD2d 436, 440-441; Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d 27, 31-33, affd 49 NY2d 924; see also Pascal v Nova Ins. Co., supra). Further, it does not appear from the "four corners of the policy" that Transtate "intended to insure the plaintiff's interest," as opposed to that of Dweck and Sladkus (Orange Handling v American Mfrs. Mut. Ins. Co., 245 AD2d 768, 769; see also Stainless, Inc. v Employers Fire Ins. Co., supra). The plaintiff itself emphasizes that the one single policy was written so as to name Dweck and Sladkus as the only insured persons, even though the policy provided coverage relative to "six (6) separate properties owned by [different] entities." 20th Century Foods Pte. v Home Ins. Co.(1989 WL 99773 [SDNY, Aug. 22, 1989]), relied on by the plaintiff, is not to the contrary. In that case, the court cited specific language from the policy under review in support of its conclusion that such policy "expressly and clearly intended to benefit" a party not actually named as an insured (20th Century Foods Pte. v Home Ins. Co., supra at * 9). We see no similar evidence in this case, and note, again, that the named insureds, Dweck and Sladkus, were the payees to whom the checks representing the Insurance proceeds were issued, and were the individuals who have pursued, or who are pursuing, a claim against the Superintendent of Insurance in the liquidation proceedings (see Matter of Transtate Ins. Co., supra).
In an action for a judgment declaring, inter alia, that the defendant Utica Mutual Insurance Company is obligated to defend and indemnify the defendants Henry J. Schliessman and H & S Landscaping, Inc., in an action entitled Pietraniello v Schliessman, pending in the Supreme Court, Queens County, under Index No. 2934/98, the defendant Utica Mutual Insurance Company appeals, as limited by its brief, from so much of an order and judgment (one paper) of the Supreme Court, Queens County (LaTorella, J.), dated May 15, 2002, as granted the motion of the plaintiff Empire Insurance Company for summary judgment, and, in effect, declared that it is obligated to defend and indemnify Henry J. Schliessman and H & S Landscaping, Inc., in the underlying action.
The plaintiffs in the underlying personal injury action, Vincent Pietraniello and Carol Ann Pietraniello, leased an apartment at premises owned by the defendant Henry J. Schliessman. Schliessman is the principal of the defendant H & S Landscaping, Inc. (hereinafter H & S). The H & S office is located on the adjacent premises, which Schliessman owns. The two parcels share a common yard and driveway on which H & S's truck was parked. Vincent Pietraniello heard his four-year-old son crying and observed him on top of a truck asking for help. Pietraniello was injured when he fell off the truck while trying to assist his son.
Pietraniello and his wife brought a personal injury action against Schliessman and H & S. The plaintiff Empire Insurance Company (hereinafter Empire) insured Schliessman and H & S. Empire commenced this action seeking a declaration, inter alia, that the defendant Utica Mutual Insurance Company (hereinafter Utica) was obligated to defend and indemnify Schliessman and H & S in the underlying action in accordance with a commercial general liability insurance policy it had issued. The Supreme Court granted Empire's motion for summary judgment and, in effect, declared that Utica was obligated to defend and indemnify Schliessman and H & S. We affirm.
Empire's policy contains a standard automobile liability provision which requires the insurer to defend and indemnify its insureds for accidents resulting in bodily injury or property damage caused by an occurrence arising out of the "ownership, maintenance or use" of a covered auto (see e.g. Elite Ambulette Corp. v All City Ins. Co., 293 AD2d 643; U.S. Oil Ref. & Mktg. Corp. v Aetna Cas. & Sur. Co., 181 AD2d 768; United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., 75 AD2d 1022). "Generally, the determination of whether an accident has resulted from the use or operation of a covered vehicle requires consideration of whether, inter alia, the accident arose out of the inherent nature of the vehicle and whether the vehicle itself produced the injury" (Eagle Ins. Co. v Butts, 269 AD2d 558, 558-559; U.S. Oil Ref. and Mktg. Corp. v Aetna Cas. & Sur. Co., supra). "Negligence in the use of the vehicle must be shown, and that negligence must be a cause of the injury" (Argentina v Emery World Wide Delivery Corp., 93 NY2d 554, 562).
However, "'[n]ot every injury occurring in or near a motor vehicle is covered by the phrase 'use or operation'. The accident must be connected with the use of an automobile qua automobile'" (Olin v Moore, 178 AD2d 517, 518; quoting United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., supra).
In this case, "[t]here were no allegations that the truck itself was used negligently" (Progressive Cas. Ins. Co. v Yodice, 276 AD2d 540, 542) or that its condition in any way contributed to the accident (see Eagle Ins. Co. v Butts, supra). Rather, it was merely the location of, and incidental to, the accident. Because the accident was not the result of any act or omission related to the ownership, maintenance, or use of the truck, the Supreme Court properly, in effect, declared that Utica was obligated to defend and indemnify Schliessman and H & S in the underlying action (see Elite Ambulette v All City Ins. Co., supra at 644).
In November 1997, plaintiff sustained a fire at his house, which had been uninsured for several months. A code enforcement officer determined that certain structural and electrical repairs needed to be completed and inspected before the house could be occupied. Plaintiff completed the electrical repairs and, on December 17, 1997, an inspector authorized reoccupancy of the premises. Prior to and after this fire, plaintiff had been staying with his sons at a home deeded to plaintiff as custodian for his minor son. In December 1997, plaintiff and one of his sons went to the offices of defendant Partners Insurance Agency to obtain homeowner's insurance. Partners' insurance agent, Mary Oliver, asked plaintiff questions and typed the answers on an application for insurance with defendant New York Central Mutual Fire Insurance Company. Plaintiff can neither read nor write English, but did not inform Oliver of this. Oliver handed plaintiff the completed application, asked him to read and sign it if no corrections were necessary, then plaintiff signed it. An insurance binder was issued. Shortly after leaving the office, plaintiff's son told plaintiff that there were some inaccurate answers on the application. One was the negative answer to the question, "[A]ny losses, whether or not paid by insurance, during the last 3 years, at this or any other location?" Oliver later admitted that when she read this question, she merely asked whether there were any losses in the prior three years. Many other misstatements by plaintiff were also alleged. Plaintiff never spoke to Oliver again and these misstatements were never corrected.
On January 18, 1998, plaintiff's house and its contents were totally destroyed by a fire. New York Central denied plaintiff's claim on the bases that it was arson and there were material misrepresentations on plaintiff's policy application. Plaintiff commenced this action against New York Central for breach of contract and against Partners for negligent misrepresentation. Both defendants moved for summary judgment dismissing the complaint. Plaintiff appeals from Supreme Court's order granting both motions.
Plaintiff first argues that New York Central was required to show that any misrepresentation was intentional and material in order to void the policy. An insurer may avoid an insurance contract if the insured made a false statement of fact as an inducement to making the contract and the misrepresentation was material (see Insurance Law § 3105 [a], [b]). "Rescission is available even if the material misrepresentation was innocently or unintentionally made" (Nationwide Mut. Fire Ins. Co. v Pascarella, 993 F Supp 134, 136  [citation omitted]; see Holloway v Sacks & Sacks, 275 AD2d 625 , lv denied 95 NY2d 770 ; Meagher v Executive Life Ins. Co. of N.Y., 200 AD2d 720, 720 ; Tennenbaum v Insurance Corp. of Ireland, 179 AD2d 589, 592 ; see also Mutual Benefit Life Ins. Co. v JMR Elecs., 848 F2d 30, 32 ).
Despite plaintiff's claims that the misrepresentations were innocent, he signed the application indicating that all information was correct. The signer of a contract is conclusively bound by it regardless of whether he or she actually read it (see Maines Paper & Food Serv. v Adel, 256 AD2d 760, 761 ). The inability to understand the English language is insufficient to avoid this general rule (see id. at 761). Here, although portions of the application were read to plaintiff by Oliver, he made no effort to have someone else read or explain the entire document to him. "An insured cannot remain silent while cognizant that his insurance application contains misleading or incorrect information" (North Atl. Life Ins. Co. of Am. v Katz, 163 AD2d 283, 284  [citations omitted]), but "ha[s] a duty to review the entire application and to correct any incorrect or incomplete answers" (id. at 285). Whether or not plaintiff intended to provide inaccurate statements or misrepresentations at the time he filled out the application is irrelevant, as he was bound by those answers and swore to their accuracy by signing the application although he knew he could not read it, yet did not ask Oliver or his son to read the completed application to him. Additionally, when he discovered inaccuracies shortly after leaving Partners' office, he failed to comply with his duty to correct that information (compare Holloway v Sacks & Sacks, supra at 626).
While it is clear that plaintiff's application contained misrepresentations, as found by Supreme Court, those misrepresentations must be proven material before New York Central can avoid payment under the contract. Materiality is generally a question of fact (see Carpinone v Mutual of Omaha Ins. Co., 265 AD2d 752, 754 ). To establish materiality of misrepresentations as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins or rules pertaining to similar risks, to establish that it would not have issued the same policy if the correct information had been disclosed in the application (see id. at 754; see also Insurance Law § 3105 [c]; Iacovangelo v Allstate Life Ins. Co. of N.Y., 300 AD2d 1132, 1133 ). Conclusory statements by insurance company employees, unsupported by documentary evidence, are insufficient to establish materiality as a matter of law (see Carpinone v Mutual of Omaha Ins. Co., supra at 755; but cf. North Atl. Life Ins. Co. of Am. v Katz, supra at 285).
Here, New York Central has no written underwriting policies on the topic of plaintiff's misrepresentations and the conclusory affidavits by its employees are insufficient. The affidavit of the independent insurance broker is likewise deficient since it, like the affidavits of the employees and the testimony of Oliver, neither identifies a written underwriting policy nor does it identify any specific applicants with similar histories that were denied coverage (see Iacovangelo v Allstate Life Ins. Co. of N.Y., supra at 1133; Church of Transfiguration v New Hampshire Ins. Co., 207 AD2d 1039, 1039 , lv denied 1994 WL 712777 [4th Dept. 1994]; Alaz Sportswear v Public Serv. Mut. Ins. Co., 195 AD2d 357, 358 ). Thus, there is a question of fact regarding the materiality of the misrepresentations here which requires denial of the insurer's motion for summary judgment.
Plaintiff further contends that Partners is liable for negligent misrepresentation because a special relationship existed. Insurance agents generally are not liable for anything more than obtaining the requested coverage, unless there is a special relationship with the insurance customer justifying reliance on the agent's speech (see Murphy v Kuhn, 90 NY2d 266, 270 ; Catalanotto v Commercial Mut. Ins. Co., 285 AD2d 788, 790 , lv denied 97 NY2d 604 ). New York courts disfavor finding such a relationship, but can recognize an additional duty in exceptional situations, for example where the agent receives compensation for consultation beyond the premium payments, the insured relies on expertise of the agent regarding a raised question of coverage, or there is an extended course of dealing sufficient to put objectively reasonable agents on notice that their advice was being specially relied upon (see Murphy v Kuhn, supra at 272). Plaintiff's only encounter with Oliver was the single appointment to obtain the subject policy; he made no payments beyond the premium and he never informed her that he could not read English even when she asked him to read over the application, so this was akin to a normal insurance agent/customer relationship. Plaintiff is bound by the application after signing it and his duty to correct inaccuracies once discovered applies to Partners as well as New York Central.
Plaintiff also contends that there are questions of fact regarding his attempts to notify Oliver of the misstatements on his application and correct them. Plaintiff's deposition testimony indicated that he believed he and his son called Partners several times but Oliver was never available, that they left messages for Oliver and told the receptionist there were mistakes on the application, and they informed the receptionist of inaccuracies when plaintiff dropped off another document at Partners' office. His son, however, testified at his deposition that he never spoke to or called anyone at Partners after the application appointment, and he was not present when plaintiff later went to Partners' office. Additionally, Partners' records contain no mention of any contact by or on behalf of plaintiff regarding any inaccuracies. Although credibility questions are generally reserved for the jury, in certain circumstances credibility may be properly determined as a matter of law (see Bushman v Di Carlo, 268 AD2d 920, 922 , lv denied 94 NY2d 764 ; Home Mut. Ins. Co. v Lapi, 192 AD2d 927, 929 ; Rickert v Travelers Ins. Co., 159 AD2d 758, 759 , lv denied 76 NY2d 701 ). Supreme Court properly determined that plaintiff's statements were self-serving and incredible on these points, permitting summary judgment in favor of Partners.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as granted defendant New York Central Mutual Fire Insurance Company's motion for summary judgment; said motion denied; and, as so modified, affirmed.
Appeal from that part of an order of the Supreme Court (Canfield, J.), entered April 29, 2002 in Rensselaer County, which granted a cross motion by defendant Nationwide Mutual Insurance Company and declared that said defendant is not obligated to defend or indemnify defendants Robert Piche Sr., Nicholas Piche and Robert Piche Jr. in an underlying action.
An action was commenced by defendants Mark Delvecchio and Janice Delvecchio to recover for pain, suffering and the wrongful death of their son, who died as a result of a car accident. Aaron Gooley was the driver of a car owned by defendant Robert Piche Sr., in which the Delvecchios' son was a passenger. Plaintiff was the insurer under a homeowner's policy issued to John Gooley and Bonnie Gooley, Aaron Gooley's parents and owners of the home where an underage drinking party occurred shortly before the accident. Plaintiff commenced this declaratory judgment action seeking a declaration that defendant Nationwide Mutual Insurance Company, the insurer under homeowner's and automobile insurance policies issued to Robert Piche Sr., had a duty to defend and indemnify the Piches. The Delvecchios cross-claimed, seeking declarations that plaintiff and Nationwide must defend and indemnify various parties. Following motions for summary judgment, Supreme Court determined that plaintiff must defend and indemnify the Gooleys against the Delvecchios' Dram Shop Act cause of action but no other causes of action, and Nationwide was not required to defend or indemnify Robert Piche Sr. and defendants Nicholas Piche and Robert Piche Jr. under either the homeowner's or automobile insurance policies. The Delvecchios appeal.
The Delvecchios contend that Nationwide should be required to defend and indemnify the Piches under its automobile insurance policy. A vehicle owner is vicariously liable for the negligence of anyone operating his or her vehicle with express or implied permission (see Vehicle and Traffic Law § 388 ). The statute creates a rebuttable presumption that an operator of a motor vehicle is driving with the owner's consent (see Bost v Thomas, 275 AD2d 513, 514 ; Ames v Cross, 177 AD2d 771, 772 ). Although the question of permission is generally one for the jury, the presumption may be rebutted as a matter of law upon an uncontroverted factual showing (see Leonard v Karlewicz, 215 AD2d 973, 974-975 ; Ames v Cross, supra at 772).
Sworn police statements from most of the attendees of the party, including Aaron Gooley, and Nicholas Piche's statement to an insurance investigator indicate that Aaron Gooley asked Nicholas Piche for his car keys to prevent him from driving after having consumed alcohol, the keys were put away so Nicholas Piche would not find them, Aaron Gooley had never been permitted to drive the Piche vehicle before, the vehicle was locked, Nicholas Piche did not then nor ever tell nor imply to Aaron Gooley that he could drive the vehicle, and the next morning Nicholas Piche was not aware that his car was gone, was not sure who had taken it, and was upset that someone had taken it. Nicholas Piche's statement was consistent with the other statements except he did not remember giving his keys to Aaron Gooley. This information rebuts the presumption and establishes a lack of permission for Aaron Gooley to operate the Piche vehicle (compare Leonard v Karlewicz, supra; Polsinelli v Town of Rotterdam, 167 AD2d 579 ). As Nationwide's automobile policy only insured permissive users, Supreme Court properly determined that Nationwide was not required to defend or indemnify the Piches under that policy.
The Delvecchios also contend that Nationwide should be required to defend and indemnify the Piches under its homeowner's policy. That policy contained an exclusion, relied upon in Nationwide's disclaimer letter, excluding coverage for bodily injury "caused by or resulting from an act or omission which is criminal in nature and committed by an insured * * * regardless of whether the insured is actually charged with, or convicted of a crime." Contrary to the Delvecchios' arguments, such an exclusion is not contrary to public policy, as the Legislature has expressed a preference to facilitate rather than hinder insurers' efforts to remove coverage for persons who perform criminal acts (see Slayko v Security Mut. Ins. Co., 98 NY2d 289, 295-296 , citing Insurance Law § 3425 [c]  [B]). Under the homeowner's policy, the Delvecchios believe coverage should extend under their negligence and Dram Shop Act claims (General Obligations Law § 11-101) based on allegations that Nicholas Piche, then 17 years old, purchased alcohol for the party using identification belonging to and provided to him by his 22-year-old brother, Robert Piche Jr. These actions by the Piche brothers violated criminal statutes (see Penal Law § 190.25  [criminal impersonation in the second degree]; § 260.20  [unlawfully dealing with a child in the first degree]; see also Alcoholic Beverage Control Law §§ 65, 65-b, 65-c  [all offenses, not crimes]). The Delvecchios even noted in their complaint that the cause of action against the Piche brothers was based on their "illegal providing of alcoholic beverages." Additionally, injury arising out of the use of a motor vehicle was an exclusion under the policy, which was raised in the disclaimer letter. As the motor vehicle and the criminal acts exclusions apply, Nationwide has no obligation to defend or indemnify the Piches.