State v. Home Indem. Co.

• Decision Date: 10 October 1985
• Citation: 495 N.Y.S.2d 969,66 N.Y.2d 669,486 N.E.2d 827
• Parties: , 486 N.E.2d 827 STATE of New York, Respondent, v. HOME INDEMNITY COMPANY, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 969

495 N.Y.S.2d 969

66 N.Y.2d 669, 486 N.E.2d 827

STATE of New York, Respondent, v. HOME INDEMNITY COMPANY, Appellant.

Court of Appeals of New York.

Oct. 10, 1985.

Donald E. Deegan and Marian C. Rice, Hempstead, for appellant

Robert Abrams, Atty. Gen. (Richard J. Dorsey and Robert Hermann, Albany, of counsel), for respondent.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 106 A.D.2d 124, 483 N.Y.S.2d 834, should be affirmed, with costs.

This dispute centers on a liability insurance policy issued by defendant and naming as the insureds: "1) Jones Beach State Parkway Authority 2) The People of the State of New York as interests may appear." It arises out of a highway accident on January 3, 1974 when a vehicle driven by Richard Lattanzi skidded on the ice on Long Island's Southern State Parkway, veered off the road and hit a wooden guardrail which splintered causing him severe injuries. Lattanzi and his wife then commenced an action in the Court of Claims (see, Lattanzi v. State of New York, 74 A.D.2d 378, 428 N.Y.S.2d 331, affd. 53 N.Y.2d 1045, 442 N.Y.S.2d 499, 425 N.E.2d 887; Littanzi v. State of New York, 54 A.D.2d 1043, 388 N.Y.S.2d 686), and named as defendants the State of New York, the Long Island State Park and Recreation Commission (Commission) and the Department of Transportation (Department). The Jones Beach State Parkway Authority (Authority), the first-named insured on the policy, was not a defendant in the Court of Claims action. The insurer defended the State, the Commission and the Department in the Court of Claims action, but refused to indemnify the State when the Lattanzis obtained a money judgment against it for the actions of the Commission and the Department in the design, testing and construction of the guardrail system. Subsequently, the State brought the present action demanding indemnification pursuant to the liability policy issued by defendant.

In a single order, Supreme Court granted defendant's motion for a change of venue and denied the State's cross motion for summary judgment. The Appellate Division reversed, with one justice dissenting, and granted the State summary judgment as to its right to indemnification under the insurance contract. Defendant now appeals, contending that the term naming as insureds the "1) Jones Beach State Parkway Authority 2) The People of the State of New York as interests may appear" is ambiguous and requires that extrinsic evidence be examined to ascertain the intent of the parties to the contract, thus precluding a grant of summary judgment. We affirm.

Generally, the courts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies (Hartford Acc. & Indem. Co. v. Wesolowski, 33 N.Y.2d 169, 172, 350 N.Y.S.2d 895, 305 N.E.2d 907; see also, Newin Corp. v. Hartford Acc. & Indem. Co., 62 N.Y.2d 916, 919, 479 N.Y.S.2d 3, 467 N.E.2d 887). If, however, the language in the insurance contract is ambiguous and susceptible of two reasonable interpretations, the parties may submit extrinsic evidence as an aid in construction, and the resolution of the ambiguity is for the trier of fact (Fagnani v. American Home Assur. Co., 64 N.Y.2d 967, 488 N.Y.S.2d 646, 477 N.E.2d 1100, revg. on dissent at App.Div. 101 A.D.2d 803, 475 N.Y.S.2d 137). On the other hand, if the tendered extrinsic evidence is itself conclusory and will not resolve the equivocality of the language of the contract, the issue remains a question of law for the court (Hartford Acc. & Indem. Co. v. Wesolowski, supra ). Under those circumstances, the ambiguity must be resolved against the insurer which drafted the contract (Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351, 353, 413 N.Y.S.2d 352, 385 N.E.2d 1280; ...