LABATE v. LIBERTY MUTUAL FIRE INSURANCE COMPANY (2005)

In an action, inter alia, for a judgment declaring that the defendant Liberty Mutual Fire Insurance Company is obligated to defend and indemnify the plaintiffs in an action entitled Scappatura v. Labate, pending in the Supreme Court, Nassau County, under Index No. 10031/03, and a third-party action entitled Allstate Insurance Company v. Labate, interposed in an action entitled Scappatura v. Allstate Insurance Company, commenced in the Supreme Court, Nassau County, under Index No. 12691/01, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Davis, J.), dated August 3, 2004, as granted that branch of the plaintiffs' motion which was for summary judgment declaring that it was obligated to defend the plaintiffs in the underlying action and third-party action.

ORDERED that the appeal from so much of the order as granted that branch of the plaintiffs' motion which was for summary judgment declaring that it was obligated to defend the plaintiffs in the third-party action is dismissed as academic as the third-party action has been discontinued;  and it is further,

ORDERED that the order is affirmed insofar as reviewed;  and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs.

 “[T]he duty to defend is broader than the duty to indemnify” and “arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy” (Fitzpatrick v. American Honda Motor Co., 78 N.Y.2d 61, 65, 571 N.Y.S.2d 672, 575 N.E.2d 90;  see Town of Massena v. Healthcare Underwriters Mut. Ins. Co., 98 N.Y.2d 435, 443, 749 N.Y.S.2d 456, 779 N.E.2d 167).  “ ‘[T]he duty to defend arises whenever the allegations in a complaint against the insured fall within the scope of the risks undertaken by the insurer ․ [and, it is immaterial] that the complaint against the insured asserts additional claims which fall outside the policy's general coverage or within its exclusory provisions' ” (Town of Massena v. Healthcare Underwriters Mut. Ins. Co., supra at 443-444, 749 N.Y.S.2d 456, 779 N.E.2d 167, quoting Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 310, 486 N.Y.S.2d 873, 476 N.E.2d 272).   “[I]f the insurer is to be relieved of a duty to defend, it must demonstrate that the allegations of the underlying complaint place that pleading solely and entirely within exclusions of the policy and that the allegations are subject to no other interpretation” (Baron v. Home Ins. Co., 112 A.D.2d 391, 392, 492 N.Y.S.2d 50;  see County of Columbia v. Continental Ins. Co., 83 N.Y.2d 618, 627, 612 N.Y.S.2d 345, 634 N.E.2d 946;  Dayton Beach Park No. 1 Corp. v. National Union Fire Ins. Co., 175 A.D.2d 854, 856, 573 N.Y.S.2d 700;  National Cas. Ins. Co. v. City of Mount Vernon, 128 A.D.2d 332, 335-336, 515 N.Y.S.2d 267).

 Pursuant to the homeowners insurance policy issued by the defendant, Liberty Mutual Fire Insurance Company (hereinafter Liberty Mutual), to the plaintiffs, an “occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in ․ [p]roperty damage.”   Contrary to the arguments of Liberty Mutual, “the language of the occurrence clause herein ascribes no temporal relevance to the causative event preceding the covered [property damage], but rather premises coverage exclusively upon the sustaining of specified [property damage] during the policy period” (National Cas. Ins. Co. v. City of Mount Vernon, supra at 336, 515 N.Y.S.2d 267;  see United States Liab. Ins. Co. v. Farley, 215 A.D.2d 371, 373, 626 N.Y.S.2d 238;   Levine v. Lumbermen's Mut. Cas. Co., 147 A.D.2d 423, 425-426, 538 N.Y.S.2d 263).   The complaint in the underlying action entitled Scappatura v. Labate pending in the Supreme Court, Nassau County, under Index No. 10031/03 contains allegations of property damage sustained, in part, during the policy period.   It is immaterial whether the causative event happened during or before the policy period (see National Cas. Ins. Co. v. City of Mount Vernon, supra at 336, 515 N.Y.S.2d 267).   Thus, the Supreme Court correctly determined that the “occurrence” did not pre-date the inception of the homeowners policy and that the plaintiffs timely notified Liberty Mutual of the underlying action.

Liberty Mutual's remaining contentions are without merit.