Ploen v. Aetna Cas. and Sur. Co.

• Decision Date: 10 February 1988
• Citation: 525 N.Y.S.2d 522,138 Misc.2d 704
• Parties: John PLOEN, Plaintiff, v. The AETNA CASUALTY AND SURETY COMPANY, Defendant.
• Court: New York Supreme Court

Page 522

525 N.Y.S.2d 522

138 Misc.2d 704

John PLOEN, Plaintiff, v. The AETNA CASUALTY AND SURETY COMPANY, Defendant.

Supreme Court, Trial Term,

Nassau County, IAS Part 5.

Feb. 10, 1988.

Cullen & Dykman, Garden City, for plaintiff.

Rivkin, Radler, Dunne Bayh, Uniondale, for defendant.

BEATRICE S. BURSTEIN, Justice.

In this declaratory judgment action plaintiff seeks summary judgment, pursuant to CPLR 3212. The question raised, one of first impression in this State, is whether plaintiff's campaign activities while seeking re-election as union president are within the scope of a business exclusion of a liability policy provided by defendant. I find the exclusion does not apply.

The following facts are uncontroverted. During the relevant period encompassed by this action plaintiff had a full-time salaried position as president of a union local. As his term of office was reaching its conclusion, he ran for re-election, successfully. Opposing him for the position was one William Mason. After the election plaintiff sued William Mason for libel. William Mason counterclaimed, asserting a cause of action for libel against plaintiff. Both claims are based upon statements contained in each party's campaign literature. Mr. Mason alleges in his counterclaim that he was "injured in his profession and reputation and has suffered great pain, suffering and mental anguish" for which he seeks compensatory and punitive damages.

Plaintiff's request that defendant insurer defend and indemnify him on the counterclaim is based upon a homeowner's insurance policy defendant issued to him. When defendant refused plaintiff commenced this action, seeking a declaration that he is entitled to coverage pursuant to the terms of the policy. Plaintiff relies upon that portion of the policy which affords coverage for personal injury, and defines personal injury as "injury arising out of ... libel, slander or defamation of character". Defendant's refusal is predicated upon two portions of the policy. The first of these states that personal liability coverage does not apply "to bodily injury or property damage ... [a]rising out of business pursuits of any insured...." The second states "Personal Injury Coverage: ... This coverage does not apply to: Injury arising out of the business of any insured". ¹

Plaintiff contends that his activities during the course of the election had nothing to do with his employment as president of the union, but relate solely to his personal quest for re-election. In support of this position he presents a copy of that portion of the union's constitution and bylaws which sets forth the duties of the president. Defendant does not question the authenticity of this submission. The stated duties and obligations include appointing committees, filling vacancies among officers, designating counsel, countersigning vouchers, and calling meetings. As would be expected, the detailed statement of the president's functions does not include either running for re-election or campaigning for office.

Defendant relies upon the fact that plaintiff is a full-time salaried union officer, and that that is his profession and occupation, his livelihood. Defendant points out that in order to retain his livelihood plaintiff must seek re-election at the end of his term of office. It concludes that therefore the claim of libel arises directly out of plaintiff's business, and comes within the exclusions quoted above.

In considering the scope of defendant's duty to defend and indemnify plaintiff several well-settled principles of law provide guidelines. When the insurer contracts to defend against specified claims, as here, the obligation to defend is broader than the obligation to indemnify, and centers upon whether the complaint alleges facts which fall within the coverage of the policy. Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 486 N.Y.S.2d 873, 476 N.E.2d 272 (1984). Any doubt in that regard is to be resolved against the insurer and in favor of the insured. Brook Shopping v. Liberty, 80 A.D.2d 292, 439 N.Y.S.2d 10 (1st Dept.1981). In determining the scope of the coverage, which involves interpreting and construing the policy, the intent of the parties is controlling. McGrail v. Equitable Life Assurance Society, 292 N.Y. 419, 55 N.E.2d 483 (1944). If the language is ambiguous, extrinsic evidence may be employed to determine intent. Reynolds v. Commerce Fire Ins. Co. of N.Y., 47 N.Y. 597 (1872). If the determination of the parties' intent depends upon the credibility of that extrinsic evidence or on a choice among reasonable inferences to be drawn from the extrinsic evidence, then that decision must be made by a jury. On the other hand, if the equivocality must be resolved without reference to extrinsic evidence, the issue to be determined is a question of law for the Court. Hartford Acc. & Ind. v. Wesolowski, 33 N.Y.2d 169, 172, 350 N.Y.S.2d 895, 305 N.E.2d 907 (1973). In either event, the burden of proving that the loss at issue is within the exclusion is upon the insurer. Seaboard Sur. Co. v. Gillette, supra; Facet Industries, Inc. v. Wright, 62 N.Y.2d 769, 477 N.Y.S.2d 316, 465 N.E.2d 1252 (1984). This includes showing that the exclusion is specific and clear, for it cannot be extended by interpretation or implication; rather the exclusion must be given a narrow and strict construction, with the insurer demonstrating that there is no reasonable interpretation other than the one it asserts. Seaboard Sur. Co. v. Gillette, supra.

In this case, resolution of this dispute can be made by this Court. Neither party has contended there is any extrinsic evidence bearing on the parties' intent when they entered into the agreement. Moreover, defendant requested the Court search the record and grant summary judgment in its favor, pursuant to CPLR 3212(b).

In determining whether an activity is a business pursuit, courts generally have followed the two-pronged test set forth in Home Insurance Co. v. Aurigemma, 45 Misc.2d 875, 879, 257 N.Y.S.2d 980 (Sup.Ct.Westchester Co.1965). For example, see Shapiro v. Glens Falls Ins. Co., 47 A.D.2d 856, 365 N.Y.S.2d 892, affd. on other grounds, 39 N.Y.2d 204, 383 N.Y.S.2d 263, 347 N.E.2d 624 (1976) (reversing that portion of the decision below which held that the insured's activity was a business pursuit); Cooper v. United States Fidelity & Guarantee Co., 82 A.D.2d 819, 439 N.Y.S.2d 438 (2d Dept.1981); Fadden v. Cambridge Mut. Fire Ins. Co., 51 Misc.2d 858, 274 N.Y.S.2d 235, affd. on other grounds 27 A.D.2d 487, 280 N.Y.S.2d 209 (3d Dept.1967); Krings v. Safeco Ins. Co. of America, 6 Kan.App.2d 391, 628 P.2d 1071 (1981); Annot: Construction and Application of "Business Pursuits" Exclusion Provision in General Liability Policy, 48 A.L.R.3d 1096 (1973). In Home, the Court stated that to constitute a business pursuit for purposes of exclusion under a liability policy, there must be two elements: continuity and a profit motive. As to the first, there must be a "customary engagement" or "stated occupation". Applying the first element here I find plaintiff's electioneering was neither his customary engagement nor his stated occupation, nor was it an activity in which he was continuously engaged.

Plaintiff's duties as set forth in the union bylaws and constitution demonstrate that his activities in his position as union president are vastly different from the activities involved in campaigning for re-election. For plaintiff, the process of seeking re-election is akin to searching for employment, not performing his duties while employed. Carried to its logical end, to find that plaintiff's electioneering was his customary engagement or stated occupation would indicate he was a perennial candidate, always running for office. Given his three-year term that is not the case. The above analysis supports a conclusion that plaintiff's campaigning was not his customary engagement or stated occupation. Therefore, the Court need not consider the other prong of the test, whether a profit motive was involved.

Further support for this result is found in the one reported opinion dealing directly with the applicability of the business exclusion clause to election campaigning, Burdge v. Excelsior Ins. Co., 194 N.J.Super. 320, 476 A.2d 880 (App.Div.1984). Research by the Court has not disclosed any other determinations on point. See cases collected in Annot: Construction and Applicati of "Business Pursuits" Exclusion Provision in General Liability Policy, 48 A.L.R.3d 1096 (1973) and supplemental service. In Burdge, the insured was being sued in the underlying action for personal injuries sustained when two vehicles collided. The plaintiffs in that suit claimed that the vision of the plaintiff-driver had been "obstructed, distracted and impaired" by a campaign sign erected on behalf of and with the...