Katz v. Wessel
| Decision Date | 15 March 1955 |
| Parties | Gertrude Katz et al., Plaintiffs,<BR>v.<BR>Paul Wessel et al., Defendants.<BR>Pacific Hardware Corp., Third-Party Plaintiff,<BR>v.<BR>Ludwig Katz, Third-Party Defendant.<BR>Ludwig Katz, Fourth-Party Plaintiff,<BR>v.<BR>Liberty Mutual Insurance Company, Fourth-Party Defendant. |
| Court | New York Supreme Court |
Albert P. Thill for fourth-party defendant.
Leslie P. Glick for fourth-party plaintiff.
Gertrude Katz is the wife of Ludwig Katz. Ludwig is an employee of Pacific Hardware Corp. Pacific owns an automobile. Wessel (not connected with Ludwig or the latter's wife or employer) also owns an automobile. On a certain occasion, the two automobiles collided. At the time of the impact, Wessel was driving his car. At that time, Ludwig was operating Pacific's vehicle (with his employer's permission) and with his wife as a passenger (also with his employer's permission). Gertrude and Ludwig were injured and the Pacific vehicle was damaged. Litigation followed. Gertrude sued Pacific and Wessel. Ludwig and Pacific sued Wessel. The two actions were consolidated. Pacific was insured for liability. Liberty Mutual Insurance Company was the insurer.
Of course, Pacific would be liable to Gertrude only if Ludwig were negligent. On this basis, Pacific, proceeding in the consolidated action, served a third-party complaint upon Ludwig demanding judgment over. The indemnity insurance policy issued to Pacific — in defining the meaning of the "insured" coming within the protection of the policy — provides that (when the actual use of the Pacific automobile was "by the named insured or with his permission"), "the unqualified word `insured' [as used in the policy] includes the named insured [Pacific] and also includes any person while using the automobile." Claiming that he came within the purview and protection of the policy of insurance, Ludwig called upon Liberty to defend him as against his employer's (Pacific's) third-party action. Liberty refused, pointing out that Gertrude is Ludwig's spouse, that Pacific is liable to Gertrude (if at all) solely because of her husband's (Ludwig's) negligence, and that subdivision 3 of section 167 of the Insurance Law of this State provides that "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."
Maintaining his legal contention, Ludwig (in the same consolidated action) served a fourth-party complaint against Liberty, for the purpose of obtaining ultimate relief against it under the policy of insurance allegedly indemnifying Ludwig for any loss resulting from his liability to Pacific. Liberty moved for dismissal of Ludwig's fourth-party complaint against Liberty, or for summary judgment in Liberty's favor. That is the motion now before me for disposition. The only question presented is whether, in the light of the statute and the policy, Liberty is obligated to defend and indemnify Ludwig with respect to Pacific's claim over against him.
Where the spouse is the owner of the vehicle and is an insured expressly named in the policy, it has recently been authoritatively held that subdivision 3 of section 167 of the Insurance Law is applicable (Feinman v. Rice Sons, 285 App. Div. 926; cf. Kane v. Kane Ship Repair Corp., 202 Misc. 530). The issue before me is somewhat narrower: Does subdivision 3 of section 167 of the Insurance Law apply where, as here, the contract of insurance does not explicitly name the husband as the insured, but rather his corporate employer, and where the vehicle covered by the contract is not owned by the husband, but by the employer? The statute itself (Insurance Law, § 167, subd. 3) does not, in its precise language, apply. It states that (unless the policy provides to the contrary) it shall not "be deemed to insure against any liability of an insured because of death of or injuries to his or her spouse". (Italics mine.) This section had been amended thus to provide, as part of a single statutory plan (L. 1937, ch. 669). By that very same chapter, the clause of the Insurance Law relevant here (then § 109, subd. 3-a, now § 167, subd. 3) was adopted by the Legislature at the same time as were related amendments to the Vehicle and Traffic Law () and to the Domestic Relations Law (§ 57). These amendments were of a piece in implementation of the legislative purpose to permit certain lawsuits between spouses theretofore not allowed and concomitantly to permit insurance companies to protect themselves from possible frauds inherent in such actions (Fuchs v. London & Lancashire Ind. Co. of America, 258 App. Div. 603, motion for leave to appeal to the Court of Appeals denied, 259 App. Div. 731; Standard Acc. Ins. Co. v. Newman, ...
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