Court: Appellate Division of the Supreme Court of the State of New York; February 12, 1997; New York; State Appellate Court
An appeal was made from a Supreme Court order that granted St. Paul Fire and Marine Insurance Company's motion for summary judgment, determining it was not obligated to defend the plaintiff in an underlying damages action brought by Kelly Williams and her husband. The underlying incident involved a verbal confrontation in a hotel gift shop where the plaintiff, a hotel guest, allegedly touched Williams, who was working there. Despite the police report indicating no injury and that the contact was not of a sexual nature, the Williamses filed suit claiming over $1 million in damages. St. Paul, the liability insurer for the plaintiff’s employer, disclaimed coverage based on a policy exclusion for intentional bodily injury.
The plaintiff sought declaratory relief asserting that St. Paul was obligated to defend him, while St. Paul cross-moved for a declaration of no obligation. The Supreme Court ruled in favor of St. Paul, leading to this appeal. The court emphasized that the issue of coverage hinges on whether the harm was "expected or intended" by the plaintiff, rather than whether the act was accidental. It stated that when allegations involve offensive contact that leads to physical or emotional harm, courts typically find that the resulting harm was intended or expected. However, in this case, while the plaintiff's actions were classified as intentional, the nature of the claims—minor acts described as "accost," "grab," and "assault"—did not inherently suggest the serious harm alleged. Thus, coverage is warranted when the claims can be interpreted as involving intentional contact that results in unintended serious harm.
The complaint alleges that Williams suffered emotional harm due to negligent actions, and the police incident report indicates that the plaintiff's intent was not malicious but rather playful, establishing a duty for the insurer to defend under the policy (referencing Merrimack Mut. Fire Ins. Co. v Carpenter). St. Paul argues that the plaintiff does not qualify as a protected person under the policy since he was allegedly not acting within the scope of his employment at the time of the incident. However, the underlying complaint states that the plaintiff was indeed an employee acting within the scope of his employment and furthering the insured’s business during the incident. The court finds that the nature of the alleged conduct does not support St. Paul's assertion that the plaintiff was acting outside of his employment scope. A declaration that an insurer has no obligation to defend can only be made if there is no possible factual or legal basis for eventual indemnification under the policy (citing Servidone Constr. Corp. v Security Ins. Co. and others). Since there is at least a possible factual basis for St. Paul’s potential indemnification obligation, the court declares that St. Paul has a duty to defend the plaintiff in the underlying action, reversing the previous order with costs, granting the motion, and denying the cross-motion.
