Lee v. Aetna Casualty & Surety Co.

• Decision Date: 29 December 1949
• Docket Number: No. 79,Docket 21445.,79
• Citation: 178 F.2d 750
• Parties: LEE v. ÆTNA CASUALTY & SURETY CO.
• Court: U.S. Court of Appeals — Second Circuit

178 F.2d 750 (1949)

LEE v. ÆTNA CASUALTY & SURETY CO.

No. 79, Docket 21445.

United States Court of Appeals Second Circuit.

Argued December 6, 1949.

Decided December 29, 1949.

Benjamin H. Siff, New York City, H. L. Kanner, New York City, for plaintiff.

Daniel Miner, New York City, for defendant.

Before L. HAND, Chief Judge, and SWAN and FRANK, Circuit Judges.

L. HAND, Chief Judge.

Both parties appeal from a summary judgment in an action upon a policy of liability insurance. The complaint was in two counts, of which the judgment dismissed the first, and granted the relief demanded in the second. Judge Ryan's opinion in the district court¹ states the positions of the parties and the relevant facts, completely and accurately, and we shall not repeat them, but will proceed at once to the discussion of the legal questions involved. The validity of the first count depends upon whether the insured, the Trefflich Pet Shop, Inc., had "become obligated to pay by reason of the liability imposed upon him (sic) because of the hazards defined in the "Special Provisions" of the policy. The "Special Provisions" declared that the hazards included "bodily injury * * * caused by accident * * * arising out of (a) the ownership * * * or use of the Premises or the conduct of the business * * * carried on at the Premises," and (b) "the ownership * * * or use of the elevators described in the Declarations." Item three of the "Declarations" was a "Description of Elevators," and it was left blank except that under the caption, "Number of elevators" was written the word "None." The eighth item of the policy was entitled "Exclusions," and provided that "this insurance does not apply" to nine kinds of liability, separately lettered, of which the fourth, (d), was "to the ownership, maintenance or use of any elevator, unless described herein." The defendant was therefore liable to the insured — and to the plaintiff under the New York Insurance Law² — only in case the liability of the insured did not arise out of the "use" by the insured of an elevator. The plaintiff wished to buy a monkey; and monkeys were kept on the fifth floor. In order to take the plaintiff thither, the president of the insured led him to the door of an elevator, opened it, slid up a protecting gate, and beckoned the plaintiff to step in, which he did and fell to the bottom of the shaft. Was that a "use" of the elevator by the insured? We agree that in Marcus v. United States Casualty Company³ the "exclusion" was broader; it read: "bodily injuries sustained by reason of any elevator." A customer might well be injured "by reason of" an elevator which the insured had not "used," especially as the word, "elevator," was defined to include the "shaft or hoistway." For example, he might fall down a shaft, the door of which had been carelessly left open; his injuries would not then have arisen out of the insured's "use" of the elevator in his dealing with the customer; and to that the exclusion should be confined. On the other hand, unless the insured's invitation to the plaintiff to step into the elevator was a "use" of it, that word must be limited to occasions in which the insured in some way physically manipulated some part of it. Even so, the insured's president opened the door which led to the shaft and pushed up the vertically sliding gate; and the term "elevator," as used in the policy, like the same term in Marcus' case, supra, included "the shaft, hoistway, or other appliances or parts thereof." However, we do not wish to limit "use" to occasions in which the insured manually operates some "part" of the elevator. As always, the language is to be interpreted by its purpose, and the purpose was to exclude liabilities occasioned by the insured's availing itself of an elevator for the purpose of its business. One "uses" a thing when one "makes use" of it, and it would be absurd to say that a shopkeeper does not "make use" of an elevator shaft, when he invites a customer to step into it, so that he might be lifted to that part of the shop where the goods are kept which the customer wishes to buy. The judgment was clearly right which dismissed the first count.

The validity of the second count depends upon the meaning of the defendant's promise to "defend * * * any suit against the Insured alleging injury, sickness, disease or destruction covered by this Policy * * * even if such suit is groundless, false or fraudulent." This language means that the insurer will defend the suit, if the injured party states a claim, which, qua claim, is for an injury "covered" by the policy; it is the claim which determines the insurer's duty to defend; and it is irrelevant that the insurer may get information from the insured, or from any one else, which indicates, or even demonstrates, that the injury is not in fact "covered." The insurer has promised to relieve the insured of the burden of satisfying the tribunal where the suit is tried, that the claim as pleaded is "groundless." That was the decision of the New York Court of Appeals⁴ in a case where the promise was to "defend * * * any suit against the insured alleging such injury * * * even if such suit is groundless, false or fraudulent" — language which is for all practical purposes identical with that in the policy at bar. On the other hand, in that case the policy required that the injury should have "occurred before the completion of the actual course of the operations performed by the insured"; and the complaint in the action, which the insurer refused to defend, had alleged that the injury had happened "on or about April 13," and that the work had not been completed "until after April 13th." Thus the complaint did expressly allege facts which put the asserted liability within the terms of the policy. That was not true in the case at bar, for the...