Mapfre Ins. Co. of N.Y. v. Ferrall, 2023 NY Slip Op 01082 (2d Dept)

Defendants were granted summary judgment in this declaratory judgment action, finding Mapfre Insurance was obligated to defendant and indemnify insured defendants.  The Appellate Division reversed, and summary judgment was denied.

Separate Respondents were involved in an altercation outside a bar, in which insured Respondent struck Co-respondent in the head with a baton.  Co-respondent commenced a personal injury action against insured, alleging insured negligently and recklessly caused Co-respondent’s injuries.  Mapfre Insurance commenced this DJ action seeking a judgment that it is not obligated to defend or indemnify the insureds.  Co-respondents moved for summary judgment declaring that Mapfre is obligated to defend and indemnify, and insureds separately moved for the same relief. 

An insurer's "'duty to pay” is determined by the basis of the insured's liability to third parties. "The duty to indemnify on the part of an insurer requires a determination that the insured is liable for a loss that is covered by the policy. The burden to establish coverage and a duty to indemnify lies with the insured. However, the insurer has the burden of proving facts establishing that the loss falls within an exclusionary clause of the insurance policy.

Here, the insurance policy at issue defines an "[o]ccurrence" as "an accident . . . which results . . . in . . . '[b]odily injury.'" Although the term "accident" is not defined in the policy, "in deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual and unforeseen". The policy also contains an exclusion for bodily injury "which is expected or intended by an 'insured.'"

In criminal proceedings against the insured, Co-respondent averred he saw his friends involved in an altercation, when he attempted to "diffuse" the situation. At some point he saw a baton, and he backed up. He then "got struck on the head, fell on the ground, lost consciousness momentarily, then got up and attempted to chase the male down."  Co-respondent identified the insured as the person who struck him.  According to the insured, he "didn't intentionally mean to hit anyone but create like a circle of just waving it to get them away" and did not recall how the five men reacted when he started swinging the baton.  The insured entered a plea of guilty to (1) assault in the third degree, admitting that he "recklessly" caused physical injury to another person, and (2) criminal possession of a weapon in the fourth degree, admitting that he knowingly possessed a weapon, i.e., the baton.

“Here, Groskopf and the Ferrall defendants failed to establish, prima facie, their respective entitlement to judgment as a matter of law on whether an "occurrence" was involved giving rise to policy coverage and, if so, whether such occurrence fell within the "expected or intended" injury policy exclusion. Notwithstanding that, at their depositions in the underlying action, Groskopf, and Edward both gave versions of the incident characterizing Edward's act in striking Groskopf in the head with an illegal baton as being unintentional, varying inferences regarding Edward's intent may nonetheless be drawn from the circumstances described where the incident occurred during a heated altercation between two groups of men in the early morning hours. Moreover, in Groskopf's sworn statement in support of the criminal proceedings against Edward, Groskopf did not suggest that Edward's conduct in striking him was accidental, and, in fact, requested that Edward be prosecuted "to the fullest extent" of the law.”

As Mapfre was not a party in the underlying action, it did not have an opportunity to participate as to the issue of the insured’s intent.  Mapfre’s providing counsel for the insured, under a reservation of its right to disclaim, does not establish privity. "To the contrary, the attorneys representing [the Ferrall defendants] . . . , although paid by [Mapfre] . . . , are obligated to act in the interest of [the Ferrall defendants]" (id.). As such, any determination in the underlying action regarding Edward's intent is not binding upon Mapfre (Indeed, in the underlying action, it was in the mutual best interests of Groskopf and the Farrell defendants to characterize Edward's conduct as accidental and, hence, within the coverage of the policy”.  Given the questions of fact and credibility summary judgment declaring that Mapfre is obligated to defend and indemnify was improper.