In Automobile Ins. Co. of Hartford v. Cook, 2006 NY Slip Op 04456, the Court of Appeals held that an insurer had the duty of defend its policyholder under his homeowner's insurance policy in an underlying wrongful death action resulting from a shooting committed by the insured in self defense. The issue of indemnification was left to the finder of fact.
The Court framed the issues as follows:
Our inquiry is two-fold: whether an "occurrence" is involved that gives rise to policy coverage and, if so, whether it falls within the "expected or intended" injury policy exclusion. As relevant here, the insurance policy defines an "occurrence" as "an accident . . . which results, during the policy period, in . . . bodily injury." The policy also contains an exclusion for bodily injury "which is expected or intended by any insured."
The Court then set forth the relevant law:
It is well settled that an insurance company's duty to defend is broader than its duty to indemnify...
Thus, an insurer may be required to defend under the contract even though it may not be required to pay once the litigation has run its course....
When an insurer seeks to disclaim coverage on the further basis of an exclusion, as it does here, the insurer will be required to "provide a defense unless it can 'demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other interpretation' " ...In addition, exclusions are subject to strict construction and must be read narrowly... (Citations omitted).
The Court then concluded that the negligent conduct alleged in the Complaint fell within the definition of "occurrence" as set forth in the policy and that the exclusion was inapplicable since the insurer "failed to demonstrate that the allegations of the complaint are subject to no other interpretation than that (insured) 'expected or intended' the harm to (the victim)."
I loved this case. In part because of the unusual fact pattern (make sure to read the lengthy recitation of the facts in the decision). And, in part because I was involved in a successful declaratory judgment action against an insurer a few years back on behalf of our client who sought defense and indemnification in an underlying negligence suit with an equally strange fact pattern. As a result, I find these types of opinions to be of particular interest.
And, this case didn't disappoint--it was certainly interesting.