Utica Mut. Ins. Co. v. Prudential Property and Cas. Ins. Co.

• Decision Date: 16 July 1984
• Citation: 103 A.D.2d 60,477 N.Y.S.2d 657
• Parties: UTICA MUTUAL INSURANCE COMPANY, Appellant, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 657

477 N.Y.S.2d 657

103 A.D.2d 60

UTICA MUTUAL INSURANCE COMPANY, Appellant, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, et al Respondents.

Supreme Court, Appellate Division Second Department.

July 16, 1984.

Rider, Drake, Sommers & Loeb, P.C., Newburgh (Bernard J. Sommers and H.W. Bernstein, Newburgh, of counsel), for appellant.

Schleider, Dupee & Madison, Goshen (James R. McCarl, Goshen, of counsel), for respondent Prudential Property and Casualty Insurance Company.

Before TITONE, J.P., and LAZER, MANGANO and BOYERS, JJ.

LAZER, Justice.

Following her purchase of wood panelling from the Conklin & Strong, Inc. store in Warwick, New York, store employees loaded the panelling into Doris Call's station wagon. During the course of Mrs. Call's drive home, the panelling shifted, fell upon her and caused serious injuries that became the basis for a negligence action she and her husband brought against Conklin & Strong. Utica Mutual Insurance Company, Conklin & Strong's liability carrier, then commenced this action for a declaration that the Calls' automobile liability carrier, Prudential Property and Casualty Insurance Company, was obligated to defend Conklin & Strong and pay any judgment the Calls might obtain within Prudential's policy limits. According to Utica Mutual, Conklin & Strong was covered under Prudential's policy because it defined "insured" as "any person using such automobile with the permission of the named insured" and defined "use" to include "loading and unloading". Moving for summary judgment dismissing the Utica Mutual complaint as against it, Prudential argued that Mrs. Call's injury was not caused by "loading and unloading" because that process had been completed by the time the injury occurred. Utica cross-moved for summary judgment.

Although Special Term found that the loading had caused the injury, it held that the Prudential policy limited loading and unloading coverage to the Calls as the named insureds, and the complaint was dismissed. Special Term based its reasoning on two primary sources--a regulation of the State Insurance Department and a paragraph of the Prudential policy. The regulation provided that:

"policy need not apply * * * to any person with respect to * * * injury * * * arising out of the loading or unloading of the motor vehicle" (11 NYCRR 60.1).

The paragraph of the Prudential policy was entitled "Financial Responsibility Laws" and read:

"When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, such insurance as is afforded by this policy for bodily injury liability or for property damage liability shall comply with the provisions of such law to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy" (emphasis supplied).

Since the Insurance Department regulation declared that loading and unloading coverage "need not apply" to others than the named insured and Prudential's Financial Responsibility clause afforded coverage to the "extent * * *required by * * * law", Special Term concluded that only the named insureds were entitled to loading and unloading coverage. In reasoning as it did, the court relied on certain dicta in the Fourth Department decision in Continental Ins. Cos. v. Transport Ins. Co. of Transport Group, 52 A.D.2d 210, 383 N.Y.S.2d 754. We believe that reversal is required.

At the outset of our analysis, we reject Prudential's contention that the accident was not a product of the loading process because it had been completed before Mrs. Call commenced her drive home. Loading and unloading coverage includes injuries resulting from the negligence of insured persons in the loading or unloading process (Cosmopolitan Mut. Ins. Co. v. Baltimore & Ohio R.R. Co., 18 A.D.2d 460, 240 N.Y.S.2d 88; 6B Appleman, Insurance Law and Practice, § 4322) and it is irrelevant that the harm is sustained at a different place and time than the loading or unloading (see, e.g., Crowley's Milk Co. v. American Mut. Liab. Ins. Co., 426 F.2d 752; Panhandle Gravel Co. v. Wilson, 248 S.W.2d 779 see 12 Couch, Insurance 2d, §§ 45:137-45:138). The issue in this case is the extent of policy coverage.

In its brief, Utica distinguishes the Continental case because the Continental policy contained no mention of loading and unloading coverage, while Prudential's policy insured persons who had permission to use the named insured's automobile and defined use to include loading and unloading of the vehicle. While the basic issue in Continental was whether "use" as defined in the policy encompassed "loading and unloading", in the course of deciding that it did not, the Fourth Department made a number of references to the Financial Responsibility clause in the policy and the same Insurance Department regulation that we consider now (Continental Ins. Cos. v. Transport Ins. Co. of Transport Group, 52 A.D.2d 210, 383 N.Y.S.2d 754, supra ). Although the instant policy expressly provides coverage for "loading and unloading"--as Continental's did not--Prudential argues that the effect of the Financial Responsibility provision is to limit that coverage to the named insureds.

In rejecting that argument, we first note that the Motor...