Allstate Ins. Co. v. Reliance Ins. Co.

Citation85 Misc.2d 734,380 N.Y.S.2d 923
PartiesALLSTATE INSURANCE COMPANY and Eleanor Cangelosi, Plaintiffs, v. RELIANCE INSURANCE COMPANY et al., Defendants.
Decision Date20 February 1976
CourtUnited States State Supreme Court (New York)

Rivkin, Leff & Sherman, Garden City, for plaintiff Allstate Ins. Co., by John F. Morrison, Garden City.

Bruno A. VonLorenz, Garden City, for defendant Reliance Ins. Co.

BERTRAM HARNETT, Justice.

I. CHILDREN AS NON-PEOPLE

To what extent are children non-people in the view of the law?

In our decades, the awakening to social disadvantage of women, Blacks, Native American Indians, people of varying sexual orientation, and others, has worked dramatic alteration in statutory rights and legal process. Now concerned adults rally to the cause of another major grouping of human beings they deem legally unfavored--children.

The unfair treatment of children in abusive situations, in custodial disputes, in property rights and litigation, and, in generally receiving their share of social distribution, has engaged serious-minded interest. Effective forensic work on behalf of children of the Citizen's Committee for Children of New York City, for instance, is commonly known. The Association of the Bar of the City of New York now maintains a Special Committee on Children's Rights. Publicly emerging child advocacy groups in this vicinity include the Community Service Society's Committee on Youth and Correction, the Juvenile Rights Project of the American Civil Liberties Union, the Children's Rights Project of the New York City Civil Liberties Union, and the Child Welfare League of America.

II. LIMITATIONS OF CHILDREN SUING THEIR PARENTS FOR NEGLIGENCE

Amidst more publicized flurries in executive, administrative, and legislative sectors, a significant series of principles affecting the legal rights of children is quietly unfolding in the New York courts. It relates to the circumstances under which children can sue their parents for damages for negligence.

Traditionally, in New York, by judicial fiat and not by statute, children could not sue their parents for negligence. In 1969, however, the New York Court of Appeals, the State's highest Court, dramatically cast aside that limitation. In Gelbman v. Gelbman, 23 N.Y.2d 434, 297 N.Y.S.2d 529, 245 N.E.2d 192, a mother who was a passenger while her son was driving the family car was permitted to sue him for causing an accident which injured her. Parents and children, by the Court's ruling, could sue each other for negligence.

In 1974, the issue returned to the Court of Appeals in another and more difficult manifestation. Holodook v. Spencer, 36 N.Y.2d 35, 364 N.Y.S.2d 859, 324 N.E.2d 338, posed three situations involving children injured at play. In each circumstance, the parent was accused of negligence in failing to provide adequate parental supervision. The Court found that negligent supervision by a parent was not an actionable wrong at all. As lawyers say it, inadequate parental supervision is not a tort.

A significant part of the Court of Appeal's reasoning in Holodook is overtly connected with a surfacing wariness of the consequences of its action in Gelbman in permitting children to sue their parents in the first place. Quite apparently, the Court entertains a residual concern for the preservation of familial harmony and avoidance of economic tension, although why those desirable goals are to be reached by sacrificing only the child's interest may be debatable. More cogently, the Court feels that parenthood is difficult enough to discharge without judicial monitoring, and that parental discretion is necessarily too individual to be measured against the norm of a reasonable parent, the fulcrum of classical negligence litigation.

This being so, what does Holodook really mean to children in light of some of its generalized language, subsequent commentary, and lower court interpretation? For instance, in our instant case, we are confronted with a mother who is charged with negligently entrusting her child with a dangerous instrumentality (here, an automobile) which injured the child in its anticipated use. If the car were entrusted to any unrelated child, the cause of action by the child would be maintainable without a speck of doubt. Restatement, 2d, Torts, § 390. Is the right to recover damages to be denied to a child because her mother's handing her that dangerous instrument is an abdication of proper parental supervisory practice, whatever else it also may be? Cf. Lampman v. Cairo Central School District, 81 Misc.2d 395, 366 N.Y.S.2d 579.

Is there a difference between a child being able to sue her parent for injury by negligent driving and for injury by negligently handing over the family car when the child is not competent to handle it? Is Gelbman, which allows one family member to sue another for negligent driving, being left marked as a special instance of compulsory auto liability insurance during a general judicial retreat from the lately proclaimed ability of children in New York to sue their parents? See, David D. Siegel, McKinney's Consolidated Laws, CPLR, Practice Commentary C3019:42, pp. 244--253; 1975 Supplementary Practice Commentary, C3019:42, pp. 10--11.

Or, can a mother sue a child, but a child not sue the mother in automobile negligence?

The distaste of the current majority in Holodook for allowing a child to recover in negligence from an improperly supervising parent is by no means a firm platform to base a more general deprival of rights by demonstrably injured children. As we discuss below, there are numerous instances of parental obligation to or for children in appropriate circumstances. The law typically recognizes liability for breach of supervisory duty for those who afford child care in the shoes of parents, such as teachers, camp counselors, doctors, nurses, drivers, babysitters, playground directors, and others. Moreover, other states have given children the right to sue their parent for negligent supervision. Holodook, 36 N.Y.2d at 49, 364 N.Y.S.2d at 870, 324 N.E.2d at 345. And, we find Judge Jasen's dissent in the Holodook decision disturbingly acute, particularly as he raises the fundamental issues of a parent's 'breach of the duty of care reasonably to be expected' by a child, the rights of non-parent defendants to apportionment in the context of the evolving system of comparative fault, and the practical ubiquity of insurance in tort litigation. See, 36 N.Y.2d at pp. 51--53, 364 N.Y.S.2d at pp. 871--873, 324 N.E.2d at pp. 346--347.

III. BACKGROUND OF THIS PROCEEDING

Eleanor T. Cangelosi was a minor in 1972, living with her mother. She was seriously injured when the car she was driving collided with another. Her mother had given her the car to drive even though Eleanor had no driver's license. Now, Eleanor sues her mother for negligently entrusting a dangerous instrument (the car) to her. She also sues others not involved in this particular proceeding.

Allstate Insurance Company insured Mrs. Cangelosi's car for automobile liability, and it has so far been defending her in Eleanor's negligence suit. The mother also had a Homeowner's insurance policy with Reliance Insurance Company, which has refused to defend claiming its policy excludes liability coverage for the 'ownership, maintenance, operation, use, loading or unloading of automobiles' while away from the home.

Allstate brings this declaratory judgment action to resolve the rights and obligations of the insurers.

IV. THIS PROCEEDING IS REALLY AN INSURER CONFRONTATION

Actually, the proceeding we have here is strictly between two giant insurance companies. It arises as a declaratory judgment action by Allstate against Reliance.

The insurance setting is not novel. While the courts alternately move in a desired way because there is insurance, or articulate movement in another direction notwithstanding the presence of insurance, the posture here underlines the pragmatic proposition that in modern lawsuits insurance is rarely far from the table top.

The threshold question for our insurers is whether Reliance is exculpated by virtue of its automobile exclusion since the claim arises from an automobile accident. With that answer framed below in the negative, the major question emerges--can the mother be liable to the child at all under the Gelbman-Holodook synthesis? We answer that she can be liable. To both answers the pivotal conception is the dealing in a dangerous instrumentality.

The issue, while narrowly framed in insurance company accounts, is important to all children. Their special dependency leaves them voiceless in a world of adults. It is doubly important for the courts, pious declarers of responsibility for child welfare in countless instances ostensible guardians of infants' litigative efficacy, to be particularly tender to their rights as people. For children are people, and they are among our most defenseless ones.

V. THE AUTOMOBILE EXCLUSION OF ITS HOMEOWNER'S POLICY DOES NOT SHIELD RELIANCE INSURANCE COMPANY

Reliance cannot reach for its automobile exclusion to avoid coverage here. The claim in the tort action is only incidentally related to the 'ownership, maintenance, operation (or) use' of the Cangelosi car. It is principally based on the negligent entrustment of a dangerous instrument, which in this case happens to be a car.

The courts of this State have made plain this feature of Homeowners policy interpretation. In Lalomia v. Bankers & Shippers Insurance Co., 35 A.D.2d 114, 312 N.Y.S.2d 1018, affd. on op. App.Div., 31 N.Y.2d 830, 339 N.Y.S.2d 680, 291 N.E.2d 724, an insurer under a Homeowners policy was held susceptible to liability for the negligent entrustment of a motorized bicycle to a child notwithstanding the existence of a vehicular exclusion similar to the one in this case. See, Government Employees Insurance Co. v. Chahalis, 72 Misc.2d 207, 338 N.Y.S.2d 348.

Reliance does not dispute this so much as it argues that...

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