| Rhodes v Liberty Mut. Ins. Co. |
| 2009 NY Slip Op 08599 [67 AD3d 881] |
| November 17, 2009 |
| Appellate Division, Second Department |
| Devon Rhodes et al., Respondents, v Liberty MutualInsurance Co., Appellant, et al., Defendants. |
—[*1] Richard A. Fogel, P.C., Islip, N.Y., for respondents.
In an action, inter alia, for a judgment declaring that the defendant Liberty Mutual InsuranceCo. is obligated to defend and indemnify the plaintiff Devon Rhodes in an underlying personalinjury action entitled David v Robins, pending in the Supreme Court, Suffolk County,under index No. 08-16360, the defendant Liberty Mutual Insurance Co. appeals, as limited by itsbrief, from so much of an order of the Supreme Court, Suffolk County (Molia, J.), dated April27, 2009, as granted that branch of the plaintiffs' cross motion which was for summary judgmenton so much of the first cause of action as sought a judgment declaring that the defendant LibertyMutual Insurance Co. is obligated to defend the plaintiff Devon Rhodes in the underlyingpersonal injury action in accordance with the terms of the subject homeowner's insurance policy.
Ordered that the order is affirmed insofar as appealed from, with costs, and the matter isremitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that thedefendant Liberty Mutual Insurance Co. is obligated to defend the plaintiff Devon Rhodes in theunderlying personal injury action in accordance with the terms of the subject homeowner'sinsurance policy.
Preliminarily, the Supreme Court did not err in considering the plaintiffs' cross motion forsummary judgment, which was made before issue was joined, since the parties charted asummary judgment course by treating the motion as if issue had been joined (see Becher v Feller, 64 AD3d672, 676-677 [2009]; Roche vClaverack Coop. Ins. Co., 59 AD3d 914, 916 [2009]; Kline v Town ofGuilderland, 289 AD2d 741, 741 n [2001]).
Generally, it is the insured's burden to establish coverage and the insurer's burden to provethe applicability of an exclusion (see Consolidated Edison Co. of N.Y. v Allstate Ins.Co., 98 NY2d 208, 218-220 [2002]; Barkan v New York Schools Ins. Reciprocal, 65 AD3d 1061[2009]). Moreover, an insurer's duty to defend is broader than its duty to indemnify, and ariseswhenever the allegations in the complaint in the underlying action, construed liberally, suggest areasonable possibility of coverage, or where the insurer has actual knowledge of factsestablishing such a reasonable possibility (see Frontier Insulation Contrs. v Merchants Mut.Ins. Co., 91 NY2d 169, 175 [1997]; Burlington Ins. Co. v Guma Constr. Corp., 66 AD3d 622 [2009];City of New York v Insurance Corp. of N.Y., 305 AD2d 443 [2003]). As such, the dutyto defend arises if the claims against the insured arguably arise [*2]from a covered event, even if the claims may be meritless or notcovered, either because the insured is not liable or because the event is later determined outsidethe policy's scope of coverage (seeAutomobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]; Fitzpatrick vAmerican Honda Motor Co., 78 NY2d 61, 65-66 [1991]; Physicians' Reciprocal Insurersv Loeb, 291 AD2d 541, 542 [2002]). An insurer can be relieved of its duty to defend only "ifit establishes as a matter of law that there is no possible factual or legal basis on which it mighteventually be obligated to indemnify its insured under any policy provision" (Allstate Ins.Co. v Zuk, 78 NY2d 41, 45 [1991]; see Continental Cas. Co. v Rapid-AmericanCorp., 80 NY2d 640, 652 [1993]; Physicians' Reciprocal Insurers v Giugliano, 37 AD3d 442, 444[2007]).
Here, the plaintiffs established that Devon Rhodes (hereinafter Rhodes) was entitled tocoverage under the homeowner's insurance policy issued to her parents (see ConsolidatedEdison Co. of N.Y. v Allstate Ins. Co., 98 NY2d at 218, 220; Barkan v New York Schools Ins.Reciprocal, 65 AD3d 1061 [2009]). In contrast, the defendant Liberty Mutual InsuranceCo. (hereinafter Liberty) failed to establish that "there is no possible factual or legal basis onwhich it might eventually be obligated to indemnify its insured under any policy provision"(Allstate Ins. Co. v Zuk, 78 NY2d at 45). The complaint in the underlying action alleges,inter alia, that while attending a teenage party at which alcohol was served, Rhodes'"recklessness, carelessness, and negligence" caused serious personal injuries to Alava David, theplaintiff in the underlying action. Construing the complaint liberally, a possible legal or factualbasis exists by which Rhodes's conduct may be deemed accidental and, therefore, a covered"occurrence" under the subject Liberty policy, and not excluded from coverage on the groundthat the personal injuries allegedly sustained by David were expected or intended by Rhodes(see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 [1997];City of New York v Insurance Corp. of N.Y., 305 AD2d 443 [2003]; see also Automobile Ins. Co. of Hartford vCook, 7 NY3d 131, 137-138 [2006]; Merchants Ins. of N.H., Inc. v Weaver, 31 AD3d 945 [2006]).
Liberty's argument that obligating it to defend Rhodes in the underlying action raises aconflict of interest is not properly before this Court, as Liberty failed to raise it before theSupreme Court (see Granderson v Cityof White Plains, 29 AD3d 739 [2006]; Kohilakis v Town of Smithtown, 167AD2d 513 [1990]).
Since the complaint asserts a cause of action for a declaratory judgment, we remit the matterto the Supreme Court, Suffolk County, for the entry of a judgment declaring that Liberty isobligated to defend Rhodes in the underlying personal injury action pursuant to the subjecthomeowner's insurance policy (see Lanza v Wagner, 11 NY2d 317, 334 [1962],appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Mastro,J.P., Santucci, Belen and Chambers, JJ., concur.