WOODS v. GENERAL ACCIDENT INSURANCE CGU CGU (2002)

Plaintiff purchased a 540 cubic inch engine that he intended to install in a boat.   He picked up the engine in Ohio, and the following day it was stolen from the back of his pickup truck, which was parked in a motel parking lot.   Defendants disclaimed coverage for the loss under plaintiff's homeowner's insurance policy, citing an exclusion in the policy for losses “caused by theft that occurs off the ‘residential premises' of watercraft, including their furnishings, equipment and outboard engines or motors”.   Plaintiff commenced this action seeking, inter alia, a declaration that the policy covered the loss.

 Supreme Court properly denied defendants' motion for summary judgment dismissing the complaint and granted in part plaintiff's cross motion for summary judgment, declaring that the loss is covered under the policy.   Where an insurance policy is clear and unambiguous, it must be enforced as written (see, Venigalla v. Penn Mut. Ins. Co., 130 A.D.2d 974, 975, 515 N.Y.S.2d 939, lv. dismissed 70 N.Y.2d 747, 519 N.Y.S.2d 1034, 514 N.E.2d 392).   Where, however, the policy is ambiguous, “all ambiguity must be resolved in favor of the policyholder and against the company which issued the policy” (Little v. Blue Cross of W.N.Y., 72 A.D.2d 200, 203, 424 N.Y.S.2d 553;  see also, Westview Assocs. v. Guaranty Natl. Ins. Co., 95 N.Y.2d 334, 340, 717 N.Y.S.2d 75, 740 N.E.2d 220).  “This rule is enforced even more strictly when the language at issue purports to limit the company's liability” (Venigalla v. Penn Mut. Ins. Co., supra, at 975, 515 N.Y.S.2d 939;  see also, Burriesci v. Paul Revere Life Ins. Co., 255 A.D.2d 993, 994, 679 N.Y.S.2d 778).  “If an ambiguity exists, the insurer bears the burden of establishing that the construction it advances is not only reasonable, but also that it is the only fair construction” (Harrington v. Amica Mut. Ins. Co., 223 A.D.2d 222, 228, 645 N.Y.S.2d 221, lv. denied 89 N.Y.2d 808, 655 N.Y.S.2d 888, 678 N.E.2d 501).   Here, defendants failed to meet their burden of establishing that their construction of the exclusionary language is the only fair construction.   The language could reasonably be interpreted to exclude coverage for a watercraft and items of furnishings or equipment that are attached to it, but not items that at the time of the loss were not installed on or otherwise part of a watercraft.   Thus, the court properly construed the policy against defendants and declared that this is a covered loss.

It is hereby ORDERED that the judgment so appealed from be and the same hereby is unanimously affirmed with costs.

MEMORANDUM: