Aetna Cas. & Sur. Co. v. Delosh

• Decision Date: 05 March 1973
• Citation: 73 Misc.2d 275,341 N.Y.S.2d 465
• Parties: AETNA CASUALTY AND SURETY COMPANY, Plaintiff, v. Floyd I. DELOSH, et al., Defendants. . Lawrence County
• Court: New York Supreme Court

Page 465

341 N.Y.S.2d 465

73 Misc.2d 275

AETNA CASUALTY AND SURETY COMPANY, Plaintiff, v. Floyd I. DELOSH, et al., Defendants.

Supreme Court, St. Lawrence County.

March 5, 1973.

[73 Misc.2d 276] MacKenzie, Smith, Lewis, Michell & Hughes, Syracuse, for plaintiff.

Crapser & Kirsch, Massena, John B. Leonard, Ogdensburg, for defendants DeLosh.

Herron, Lawler & Fischer, Malone, for defendant Steenberge.

DECISION

EDMUND L. SHEA, Justice.

In this action for the judgment declaratory of the rights of the parties under an automobile liability policy of insurance, Plaintiff moves for summary judgment.

Plaintiff insurance company issued an automobile liability insurance policy to Defendant Floyd DeLosh, effective between April 6, 1971, and April 6, 1972, which insurance covered a motorcycle. On May 9, 1971, while the motorcycle was being operated by Defendant Floyd DeLosh, with his wife, Defendant Pearl DeLosh, as a passenger, such vehicle became involved in an accident with a pick-up truck, owned and operated by Defendant Ralph Steenberge.

An action was commenced on January 24, 1972, by both Mr. and Mrs. DeLosh against Defendant Steenberge to recover damages for their personal injuries, each seeking $100,000 for their own injuries, and $25,000 arising out of their derivative damages for injuries to the respective spouse.

An answer containing general denials only was served on February 2, 1972. After the decision of the Court of Appeals on March 22, 1972, in Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288, Defendant Steenberge on or shortly after May 31, 1972, brought a third-party action against the driver of the motorcycle, Floyd DeLosh, for indemnity or apportionment of damages, if any, recovered by Defendant Pearl DeLosh, in the action brought by her against Defendant Steenberge, pursuant to the Dole v. Dow decision.

Plaintiff answered without disclaiming liability or reserving rights.

This action was thereafter commenced on October 24, 1972, for a declaratory judgment declaring that the Plaintiff insurance company is not obligated to indemnify Defendant Floyd DeLosh for any judgment that may be recovered against him in the third-party action brought by Defendant Steenberge. The answer of the Defendants Floyd DeLosh and Pearl DeLosh, in addition to denials, contains a separate defense alleging that the third-party summons and complaint of Defendant Steenberge v. Defendant Floyd DeLosh was forwarded to Plaintiff on June 6, 1972, and the Plaintiff has not given any notice of disclaimer and has entered into the defense of said third-party action on its merits without any reservations of rights.

Section 167 of the Insurance Law, paragraph 8, is as follows:

'If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.'

Plaintiff admits there has been no formal disclaimer given to anyone to the present time. Its reliance on the decision in Allstate Insurance Co. v. Manger, 30 Misc.2d 326, 213 N.Y.S.2d 901, which was followed in State Farm Mutual Insurance Co. v. Brown, 40 Misc.2d 694, 243 N.Y.S.2d 825, reversed, 21 A.D.2d 742, 250 N.Y.S.2d 244, also cited by Plaintiff, is indeed tenuous when the Court of Appeals, in Allstate Insurance Co. v. Gross, 27 N.Y.2d 263, 317 N.Y.S.2d 309, 265 N.E.2d 736, specifically considered the Allstate Insurance Co. v. Manger, Supra, decision, and the reasoning of the Court therein. The Court of Appeals, concluded not to follow such decision holding that Section 167(8) of the Insurance Law required a prompt decision to disclaim, and prompt notification of the decision. The Court of Appeals also held that the 'question of unreasonableness becomes a question of fact, or if extreme, of law, depending upon the circumstances of the case which make it reasonable for the insurer to take more or less time to make, complete, and act diligently on its investigation of its coverage or breach of conditions in its policy'.

It would appear, therefore, the separate defense in the answer of the Defendants DeLosh is not entirely without merit and raised a question of fact.

Of course, the real controversy concerns the effect of Insurance Law, Section 167, subdivision 3, which Plaintiff would like strictly construed to the end it would not be obligated to pay any portion of any recovery which Steenberge might recover under the Dole v. Dow decision.

There seems little doubt that under the Dole principle, Defendant Steenberge may claim that the accident was caused in part by the negligence of Defendant Floyd DeLosh and have the degree of culpability between the respective operators resolved at the trial, and the damages apportioned accordingly. (Moreno v. Galdorisi, 39 A.D.2d 450, 336 N.Y.S.2d 646) The fact Defendant Steenberge has incorrectly instituted a third-party action instead of asserting his claim by way of counterclaim which could have been pleaded after an appropriate motion to amend (C.P.L.R. 3025) may be disregarded as a mere irregularity. (Yarish v. Dowling, 70 Misc.2d 467, 333 N.Y.S.2d 508)

Insurance Law Section 167, subdivision 3, states:

'No policy or contract shall be deemed to insure against any liability of an insured because of death of or injuries to his or her spouse or because of injury to, or destruction of property of his or her spouse unless express provision relating specifically thereto is included in the policy.'

This subdivision was enacted in 1937 simultaneously with amendment of Section 57 of the Domestic Relations Law (L.1937, ch. 669). Prior to 1937, the law did not permit either spouse to sue the other for personal injuries. The amendment to the Domestic Relations Law, in 1937, granted either spouse the right of action against the other for negligent injury to person or property. In an early case construing these amendments to the Insurance Law and Domestic Relations Law, it was held 'These simultaneous enactments disclose a considered legislative intent to create a right of action theretofore denied, and at the same time to protect insurance carriers against loss through collusive actions between husband and wife'. (Fuchs v. London and Lancashire Indemnity Co., 258 App.Div. 603, 605, 17 N.Y.S.2d 338, 340). This expression of legislative intent that subdivision 8 of the Insurance Law was enacted to protect insurance companies from possible frauds inherent in suits between spouses is found in many subsequent cases (eg. Katz v. Wessel, 207 Misc. 456, 139 N.Y.S.2d 564; New Amsterdam Casualty Co. v. Stecker, 3 N.Y.2d 1, 163 N.Y.S.2d 626, 143 N.E.2d 357; Employers' Liability Assurance Corp. v. Aresty, 11 A.D.2d 331, 205 N.Y.S.2d 711, aff'd 11 N.Y.2d 696, 225 N.Y.S.2d 764, 180 N.E.2d 916).

In situations, as for example, where a spouse has been injured while a passenger in an automobile...