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Melina METALIOS, et al., Plaintiffs–Appellants, v. TOWER INSURANCE COMPANY OF NEW YORK, et al., Defendants–Respondents.
Order and judgment (one paper), Supreme Court, New York County (Louis B. York, J.), entered June 17, 2009, which granted defendants' motions for summary judgment declaring they had no duty to defend or indemnify plaintiffs in an underlying personal injury action, unanimously modified, on the law, to deny the motion of defendant The Automobile Insurance Company of Hartford, Connecticut (AIC), and otherwise affirmed, without costs.
Plaintiff Metalios hosted a party on February 12, 2005 for employees and friends at her Pluck U restaurant after closing hours. Early the next morning, Metalios witnessed a guest and former employee engaged in a verbal altercation with someone in the restaurant's kitchen, and a fight ensued. Shortly thereafter, a Pluck U employee fatally stabbed the guest and injured another person outside the restaurant.
The court properly declined to find that defendant Tower had a duty to defend or indemnify, based on the “assault and battery” exclusion in the commercial lines policy issued to Pluck U (see Marina Grand, Inc. v. Tower Ins. Co. of N.Y., 63 A.D.3d 1012, 882 N.Y.S.2d 435 [2009]; New York Cas. Ins. Co. v. Ward, 139 A.D.2d 922, 527 N.Y.S.2d 913 [1988] ). Because the complaint's negligence allegations could not survive except for the assault, those claims are deemed to have arisen from the assault and are thus subject to the assault and battery exclusion (see Mount Vernon Fire Ins. Co. v. Creative Hous., 88 N.Y.2d 347, 353, 645 N.Y.S.2d 433, 668 N.E.2d 404 [1996] ). Nor is there merit to Pluck U's argument that the exclusion is inapplicable because the insured was not involved in the assault. That the endorsement containing the exclusion was unsigned is also irrelevant because it was part of the insuring agreement. Where, as here, “the policy has been duly countersigned, an endorsement or rider which was a part of the policy when it was issued is valid even though not signed or countersigned by the insurer or its authorized representative” (68A N.Y. Jur. 2d, Insurance § 752; see also Ruiz v. State Wide Insulation & Constr. Corp., 269 A.D.2d 518, 519, 703 N.Y.S.2d 257 [2000] ).
However, the court erred in finding that defendant AIC had no duty to defend or indemnify, based on the “business pursuits” exclusion in the homeowners policy issued to Metalios (see United Food Serv. v. Fidelity & Cas. Co. of N.Y., 189 A.D.2d 74, 76–77, 594 N.Y.S.2d 887 [1993]; Stewart v. Dryden Mut. Ins. Co., 156 A.D.2d 951, 549 N.Y.S.2d 246 [1989]; Home Ins. Co. v. Aurigemma, 45 Misc.2d 875, 879–880, 257 N.Y.S.2d 980 [1965] ). We recognize that a business purpose may render an otherwise social activity, such as the party at issue here, a business pursuit, even if the gathering was partially motivated by social interests (see West Am. Ins. Co. v. California Mut. Ins. Co., 195 Cal.App.3d 314, 324, 240 Cal.Rptr. 540, 545 [1987] ). However, it is beyond cavil that “an insurer seeking to exclude coverage ‘must do so “in clear and unmistakable” language’ and any exclusions are given a strict and narrow interpretation” (Bragin v. Allstate Ins. Co., 238 A.D.2d 773, 774, 656 N.Y.S.2d 468 [1997], quoting Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 311, 486 N.Y.S.2d 873, 476 N.E.2d 272 [1984], quoting Kratzenstein v. Western Assur. Co. of City of Toronto, 116 N.Y. 54, 59, 22 N.E. 221 [1889] ). Furthermore, we recognize that it is the insurer's burden to establish the applicability of the claimed exclusion, and any ambiguity perceived in its language “must be strictly construed against the insurer ” (Allstate Ins. Co. v. Noorhassan, 158 A.D.2d 638, 639, 551 N.Y.S.2d 942 [1990] [emphasis added] ).
The exception to the exclusion, that “[t]his exclusion does not apply to: (1) activities which are ordinarily incident to non-business pursuits,” dictates a result contrary to that reached by the motion court. The exception focuses on the objective nature of the activity itself rather than on the motivation of the policy holder. We find on this record that a social gathering is “ordinarily incident to a non-business pursuit.” Thus, even if Metalios's motivation was in part that of employee morale, a party itself falls under the exception to the exclusion. Even were the exception somewhat ambiguous, it nevertheless must be strictly construed against AIC.
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Decided: October 14, 2010
Court: Supreme Court, Appellate Division, First Department, New York.
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