WESTCHESTER FIRE INSURANCE CO v. American Excess Assurance Ass'n., et al., Defendants.

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Supreme Court, Appellate Division, First Department, New York.

WESTCHESTER FIRE INSURANCE CO., et al., Plaintiffs-Respondents-Appellants, v. METROPOLITAN LIFE INSURANCE CO., Defendant-Appellant-Respondent, United States Fidelity & Guaranty Co., Defendant-Respondent-Appellant, The Travelers Insurance Co., et al., Defendants-Respondents, American Excess Assurance Ass'n., et al., Defendants.

Decided: February 08, 2001

TOM, J.P., ANDRIAS, ELLERIN and RUBIN, JJ. James J. Duggan, for Plaintiffs-Respondents-Appellants. Jerold Oshinsky, for Defendant-Appellant-Respondent. Walter J. Andrews, for Defendant-Respondent-Appellant. Allan B. Taylor, James E. Carroll, Meryl R. Lieberman, Christopher P. Foley, Judith F. Goodman, John R. Sachs, Jr., Philip S. Kaufman, for Defendants-Respondents.

Orders, Supreme Court, New York County (Charles Ramos, J.), entered January 25, 2000, February 10, 200 and August 2, 2000, which, inter alia, declared that the various primary, umbrella and excess insurers are not obligated to defend or indemnify Metropolitan Life Insurance Co. (“MetLife”) in 18 underlying actions involving deceptive sales practices claims, and that Westchester Fire Insurance Co. and The North River Insurance Co. (collectively, “Westchester”) must defend MetLife in a nineteenth underlying action, titled Dong Li v. Metropolitan Life Insurance Co., that includes defamation claims as well as deceptive sales practices claims, unanimously affirmed, with one bill of costs payable by Metropolitan Life Insurance Co. to plaintiffs.

 The claims in the 18 underlying actions that MetLife trained its employees to defraud customers into buying certain life insurance policies do not qualify as an “occurrence” within the meaning of the various policies issued to MetLife, and are therefore not covered, notwithstanding that the underlying actions include a theory of negligent hiring and supervision (see, Mount Vernon Fire Ins. Co. v. Creative Hous., 88 N.Y.2d 347, 351-352, 645 N.Y.S.2d 433, 668 N.E.2d 404;  U.S. Underwriters Ins. v. Val-Blue Corp., 85 N.Y.2d 821, 823, 623 N.Y.S.2d 834, 647 N.E.2d 1342;  George A. Fuller Co. v. United States Fid. & Guar. Co., 200 A.D.2d 255, 259-260, 613 N.Y.S.2d 152, lv. denied 84 N.Y.2d 806, 621 N.Y.S.2d 515, 645 N.E.2d 1215).   In addition, the policies' exclusionary clauses for professional services and insurance-related services bars coverage of the deceptive sales claims, and therefore, under the above authorities, the negligent supervision claims arising therefrom.   However, the circumstances surrounding the sending of the allegedly defamatory letter in the nineteenth underlying action, Dong Li, cannot be determined from the record, and thus Westchester has not established that the defamation claim therein falls within one of its professional services exclusions.