Nassau Ins. Co. v. Mel Jo-Jo Cab Corp.

• Decision Date: 02 January 1980
• Docket Number: JO-JO
• Citation: 423 N.Y.S.2d 813,102 Misc.2d 455
• Parties: NASSAU INSURANCE COMPANY, Plaintiff, v. MELCAB CORP., Joyce Cohen and David L. Knight, Defendants.
• Court: New York Supreme Court

Page 813

423 N.Y.S.2d 813

102 Misc.2d 455

NASSAU INSURANCE COMPANY, Plaintiff, v. MEL JO-JO CAB CORP., Joyce Cohen and David L. Knight, Defendants.

Supreme Court, Queens County.

Jan. 2, 1980.

Jerome J. Remer, Jamaica, for plaintiff

Edward Vogel, Brooklyn, for defendant Knight.

Kramer, Dillof, Tessel, Duffy & Moore, New York City, for defendant Cohen.

MEMORANDUM

HAROLD HYMAN, Justice.

In this action the plaintiff, Nassau Insurance Company (hereinafter "Nassau") seeks a judgment declaring that its attorney may withdraw his appearance as counsel for Mel Jo-Jo Cab Corp. (hereinafter "Cab Corp.") and that Nassau is not obligated under the policy of insurance issued to defendant Cab Corp., the named insured, to provide a defense or indemnification of Cab Corp. and/or defendant David L. Knight in the action instituted against said defendants by Joyce Cohen. A nonjury trial was held before this court on September 18, 1979.

Defendant Cab Corp. operated a taxi business and was covered by the plaintiff insurer under a statutory automobile liability insurance policy. On September 13, 1978, one Joyce Cohen, a passenger in one of defendant's taxicabs which was driven by David L. Knight, was allegedly "assaulted, abused and physically attacked" by Knight, "acting in the course and scope of (his) employment", "without cause or justification * * * and without any fault or want of care on the part of (Cohen)." (Pars. 6, 8 and 9 of complaint in assault action.)

These allegations form the basis of Cohen's action against Cab Corp. and Knight, commenced on or about November 5, 1978 by service of a summons only on Cab Corp. An attorney of record for Nassau appeared for Cab Corp. in that action. However, shortly following the receipt of the complaint, Nassau disclaimed liability on the grounds that the alleged assault and battery committed by Knight was not deemed an "accident" under the relevant provisions of its policy and, in any event, the injuries sustained by Cohen did not "arise out of the ownership, maintenance or use" of the taxicab. In substance, the plaintiff insurer maintains that the alleged assault is not covered by the terms of the policy. The question for this court, therefore, is two- fold: (1) Whether the intentional and unprovoked assault was an "accident" within the meaning of the policy, and (2) whether, if an accident, "by reason of the ownership, maintenance or use" of an automobile it comes within the meaning of the policy.

Before addressing itself to the construction of this policy, the court's role in this declaratory judgment action must be clearly defined. The test of coverage under this liability policy is determined by the complaint in the underlying personal injury action. If the allegations in that complaint show a cause of action by reason of an accident insured against, whether or not the allegations square with the objective truth or are utterly false and wholly groundless, the insurer is obligated to defend. (Grand Union Co. v. General Acc. Fire & Life Assur. Corp., 254 App.Div. 274, 4 N.Y.S.2d 704, affd. 279 N.Y. 638, 18 N.E.2d 38.) Concisely stated, the issue for determination is whether the plaintiff insurer must defend or indemnify a common carrier and/or its employee where said employee allegedly "acting within the scope of his employment," commits an unprovoked assault upon a passenger.

The plaintiff insurer issued a policy of automobile liability insurance to this taxi company wherein it agreed "to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury * * * sustained by any person, caused by accident and arising out of the ownership, maintenance or use of" the insured's taxicabs. (Coverage A Bodily Injury Liability.) The policy involved covers assault and battery as an accident "unless committed by or at the direction of the insured." (Condition 10.) It also included an omnibus clause which defined the insured as including "the named insured * * * and also includes any person while using the automobile and any person * * * legally responsible for the use (of the insured vehicle), provided the actual use * * * is by the named insured * * * or with the permission of (the named insured)."

Nassau argues for the application of the above-quoted definition of the insured to the assault and battery clause and, further, that the insured, in the exception, includes the driver-employee Knight, an omnibus insured. At the outset, this court does not agree with those opinions (e. g., American Fidelity Fire Insurance Co. v. Allstate Insurance Co., 212 Va. 302, 184 S.E.2d 11) construing this form of assault and battery clause as referring only to the named insured and not to an omnibus insured. The rationale of such a constrained interpretation is the belief that assault could never be an accident; and so if the clause was construed as proposed by the insurer. This belief, however, is ill founded. Notwithstanding the fact that coverage may, in the end, be withheld from the named insured or an omnibus insured actually responsible for the commission of the assault or directing it to be committed, a view indicated by the discussion to follow, it is illogical to indiscriminately exclude from coverage all insureds whenever an assault is committed, without distinguishing the responsibility, if any, of the particular insured for that specific assault. Without allowing gross distortion of the term "the insured", a pattern unfortunately followed in some jurisdictions, this court reaches the conclusion that Knight is an "insured" under the omnibus clause of the policy. Moreover, this assault and battery clause can preserve its intended effect so as to give equitable and fair treatment to the insurer, the named insured, and the omnibus insured.

In that regard, differentiation must be made between (1) assault committed by the named insured and Not at the direction of the omnibus insured; (2) assault committed by the omnibus insured And at the direction of the named insured, and (3) assault committed by the omnibus insured and Not by or at the direction of the named insured.

As for the first fact pattern, the law is well settled in New York both by virtue of judicial interpretation of the term "caused by accident" and by virtue of the express assault and battery clause, "that an injury caused by an assault and battery committed by the Named insured himself is not an accident within the meaning of the policy." (Emphasis added.) (McCarthy v. MVAIC, 16 A.D.2d 35, 42, 224 N.Y.S.2d 909, 916, affd. 12 N.Y.2d 922, 238 N.Y.S.2d 101, 188 N.E.2d 405.) Purely on public policy grounds, and justifiably so, if the term "caused by accident" were construed to include coverage for an assault by the named insured, it would be in conflict with the public policy of this State forbidding coverage of the insured against his own criminal acts. (Morgan v. Greater N. Y. Taxpayers Mut. Ins. Assn., 305 N.Y. 243, 248, 112 N.E.2d 273, 275; Messersmith v. American Fid. Co., 232 N.Y. 161, 165, 133 N.E. 432, 433.)

In the next category of cases, it has been held that an assault committed by an officer of a corporation in the course of his duties is also an assault by the named insured, the corporation, thereby excluding Both from coverage. Essentially, by virtue of the close identity of the officer and the corporation, the assault is deemed to have been committed "by and at the direction of" the corporate named insured. In Greater N. Y. Mutual Insurance Co. v. Perry, 6 A.D.2d 432, 178 N.Y.S.2d 760, app. dsmd. 7 N.Y.2d 718, 193 N.Y.S.2d 455, 162 N.E.2d 636, the insurer brought an action against the insured corporation, the vice-president of the insured, and the party allegedly assaulted by the vice-president, for declaratory judgment that the public liability policy issued by the insurer did not require the insurer to defend the action which had been brought by one allegedly assaulted against the insured and the vice-president. The policy contained a special "assault and battery" clause and also included under the definition of assureds "executive officer or directors" of the named assured. The court found the vice-president to be an "additional assured" under the provisions of the policy, thereby finding that his commission of the assault excluded Him from the right to indemnity. The court, however, extended this exclusion to the corporate named assured on the theory that the corporate named assured acts through its agent and the act of the agent is the act of the corporation. (See, also, DeLuca v. Coal Merchants Mut. Ins. Co., 203 Misc. 261, 59 N.Y.S.2d 664 (assault by corporation's manager and president).) Decisions along this line have been subject to criticism, for example, as follows:

"A corporation can act only through an agent and in one sense any act of an agent in the course of his employment is the act of the corporation. It would, however, be unrealistic to interpret the...