Smith Pontiac-GMC Truck Center, Inc. v. Hartford Acc. Indem. Co.

• Decision Date: 10 June 1993
• Docket Number: PONTIAC-GMC
• Citation: 599 N.Y.S.2d 308,194 A.D.2d 906
• Parties: SMITHTRUCK CENTER INC., Respondent, v. HARTFORD ACCIDENT INDEMNITY COMPANY, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 308

599 N.Y.S.2d 308

194 A.D.2d 906

SMITH PONTIAC-GMC TRUCK CENTER INC., Respondent, v. HARTFORD ACCIDENT INDEMNITY COMPANY, Appellant.

Supreme Court, Appellate Division,

Third Department.

June 10, 1993.

Horigan, Horigan, Pennock & Lombardo, P.C. (Richard T. Horigan, of counsel), Amsterdam, for appellant.

Kelleher & Flink (Edward B. Flink, of counsel), Latham, for respondent.

Before WEISS, P.J., and YESAWICH, CREW, MAHONEY and HARVEY, JJ.

MAHONEY, Justice.

Appeal from an order of the Supreme Court (Kahn, J.), entered June 4, 1992 in Albany County, which granted plaintiff's motion for summary judgment.

At issue in this appeal is defendant's obligation to defend plaintiff on two third-party complaints. The facts are undisputed. In 1984 plaintiff, a franchised Pontiac dealer, was scheduled to receive for sale a certain 1984 Pontiac Fiero from the factory. While title documents were issued to it, due to an apparent delivery error the Fiero destined for plaintiff's dealership was delivered to Arrow Pontiac Inc. (hereinafter Arrow), another area Pontiac dealership. Following delivery, it remained on Arrow's sales lot until it was sold to Thomas Eichelser on May 25, 1984.

Inasmuch as plaintiff still had the title documents, transfer of title to Eichelser did not occur simultaneous with transfer of possession. As a result, Arrow accorded him the use of its dealer plates until title transfer could be effected. Later that same day the Fiero was involved in an accident in Massachusetts and this occurrence furnished the occasion for two lawsuits--a personal injury action in Massachusetts by a passenger in the Eichelser vehicle against Eichelser and Arrow, and a property damage action in New York by Eichelser against Arrow. Arrow interposed third-party claims against plaintiff in both actions seeking contribution or indemnity. In the personal injury action Arrow's third-party claim asserted that its liability for the passenger's personal injuries was predicated solely upon its inability to transfer title to Eichelser simultaneous with the sale which inability was caused, in turn, by plaintiff's negligence in failing timely to deliver title documents to it. In the property damage claim, Arrow sought contribution from plaintiff for whatever damages it might incur in the breach of contract claim brought against it by Eichelser grounded upon Arrow's failure to deliver proper title to the Fiero, claiming that plaintiff's negligence caused Arrow to breach its contract.

Upon receipt of the summons and complaint, plaintiff forwarded them to defendant who promptly disclaimed coverage on the ground that the incident which gave rise to the complaint was a "question of clear ownership" and was not an accident within the meaning of the policy. As a result, plaintiff retained counsel who successfully defended it on both claims. Plaintiff then commenced the instant action against defendant seeking to recover the $11,930.55 it had expended in counsel fees claiming breach of the duty to defend. Following some discovery, plaintiff moved for summary judgment. Supreme Court granted the motion and defendant appeals.

We reverse. Courts consistently have recognized that an insurer's duty to defend a claim extends to any action, however groundless, false or fraudulent, where the...