Paychex, Inc. v. Covenant Ins. Co.
| Decision Date | 20 December 1989 |
| Citation | 156 A.D.2d 936,549 N.Y.S.2d 237 |
| Parties | PAYCHEX, INC., Respondent, v. COVENANT INSURANCE COMPANY, Appellant, Thomas H. School and David A. School, Defendants. |
| Court | New York Supreme Court — Appellate Division |
Lewis & Lewis, P.C. by Michael Skoney, Buffalo, for appellant, Covenant Ins. Co.
Hurwitz & Fine, P.C. by Robert Crawford, Jr., Buffalo, for respondent, Paychex, Inc.
Before CALLAHAN, J.P., and DENMAN, BOOMER, BALIO and DAVIS, JJ.
The insured's son, who lived in his father's household, drove his father's automobile into a building, causing substantial property damage. The building owner sued both the son and the father; the father's insurance company disclaimed coverage for the son, contending that he was not an insured within the terms of the insurance policy.
The policy defines covered person as:
1. You [the named insured] or any family member for the ownership, maintenance or use of any auto or trailer.
2. Any person using your covered auto.
Expressly excluded is "liability coverage for any person * * * using a vehicle without a reasonable belief that that person is entitled to do so."
The insurance company contends that, since the son was not licensed to drive, he had no reason to believe that he was entitled to use his father's automobile, and thus, the son is not a covered person under the terms of the insurance policy.
The plaintiff in the underlying negligence action brought this action for a judgment declaring that the son is a covered person under the policy and directing the company to defend and indemnify him. Supreme Court granted summary judgment to the plaintiff. We affirm.
The exclusion may be construed to refer solely to the second definition of "covered person", namely, "any person using [the] covered auto". Thus, a "family member" would still be a "covered person" even though he might be a person using the automobile without a reasonable belief that he was entitled to do so ( see, Meridian Mutual Insurance Co. v. Cox, 541 N.E.2d 959 [Ind App]; Economy Fire & Casualty Co. v. Kubik, 142 Ill.App.3d 906, 97 Ill.Dec. 68, 492 N.E.2d 504). The terms of the policy are at least ambiguous, and any ambiguity should be resolved in favor of the policyholder and against the insurer (see, Venigalla v. Penn Mut. Ins. Co., 130 A.D.2d 974, 515 N.Y.S.2d 939, appeal dismissed 70 N.Y.2d 747, 519 N.Y.S.2d 1034, 514 N.E.2d 392).
Order unanimously affirmed with costs.
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