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Reliance Insurance v. National Grange Mutual Insurance
Citations: 225 A.D.2d 1046; 639 N.Y.2d 615; 639 N.Y.S.2d 615; 1996 N.Y. App. Div. LEXIS 2870
Court: Appellate Division of the Supreme Court of the State of New York; March 7, 1996; New York; State Appellate Court
In July 1991, Ellis and Norma Davis initiated a legal action against the Saxtons, who sought defense and indemnification from their insurer, the defendant. The defendant disclaimed coverage, arguing that the pickup truck involved was not owned by Saxton Farms. After settling the original action, the plaintiffs filed a new claim against the defendant, seeking a declaration that the defendant was obligated to defend and indemnify the Saxtons, and to reimburse the plaintiffs for the costs incurred. The defendant's affirmative defense claimed that the pickup truck was not covered under its policy. After discovery, both parties sought summary judgment. The court ruled in favor of the defendant, determining that an April 11, 1989, amended endorsement that provided coverage for the truck was void, as coverage was applied post-loss without the insurer’s knowledge. This ruling was deemed erroneous because the policy, with the amended endorsement, indicated coverage for the truck if owned by the insured. The defendant did not claim the policy was void due to fraud, mistake, or lack of authority at the time of its disclaimer. The court acknowledged that a factual dispute remained regarding the ownership of the vehicle, leading to the denial of the plaintiffs' motion for summary judgment. The appellate court modified the judgment by denying the defendant's summary judgment and vacating the declaration in its favor. Two justices dissented, arguing that the defendant had properly raised arguments regarding agency and lack of authority following a deposition that revealed changes made to the coverage. They contended that these issues were relevant and should be upheld as part of the court's decision. The appeal originated from the Supreme Court, Erie County, with Judge Howe presiding over the summary judgment.