HNRK Coverage Corner

On January 9, 2023, Justice Lebovits of the New York County Supreme Court issued a decision in Peleus Ins. Co. v RCD Restorations Inc., 2023 NY Slip Op 50034(U), holding that an insurer could not recoup defense costs from its insured, without an express reservation of the right of recoupment.  The Court explained:

Although Peleus provided RCD with coverage in the underlying action/third-party action under a reservation of rights (see NYSCEF No. 17 [reservation of rights letter]), the letter notifying RCD of Peleus’s coverage position did not reserve the right "to recoup expenses ...

On December 30, 2020, the Second Department issued a decision in American W. Home Ins. Co. v. Gjonaj Realty & Mgt. Co., 2020 NY Slip Op 08027, ruling that an insurer was not entitled to recoup defense costs it paid, despite the court’s determination that the insurer had no duty to indemnify.

Under New York law, a liability insurer’s duty to defend is “exceedingly broad” and is triggered whenever there is a “reasonable possibility” of coverage.  Thus, "an insurer may be contractually bound to defend even though it may not ultimately be bound to pay, either because its insured is ...

On November 24, 2020, the First Department issued a decision in Wesco Ins. Co. v. Hellas Glass Works Corp., 2020 NY Slip Op 06975, holding that consideration of facts outside the complaint established an insurer’s duty to defend a personal injury action.

Affirming the motion court’s decision, which was previously discussed on this blog, the First Department explained:

Although the duty to defend is primarily determined by the complaint, wooden application of the “four corners of the complaint” rule would render the duty to defend narrower than the duty to indemnify.  Based ...

On August 20, 2020, the Fourth Department issued a decision in Scalzo v. Central Co-op. Ins. Co., 2020 NY Slip Op 04639, holding that an intentional assault was excluded from coverage under a liability policy, despite conclusory language in the complaint asserting a negligence claim in the alternative.

The plaintiff in the underlying personal injury lawsuit asserted two causes of action:  the first alleged that the insured (Scalzo) assaulted the plaintiff “by seizing him, striking him and punching him in the face” and that those actions were “willful, intentional ...

On September 16, 2020, Judge Failla of the SDNY issued a decision in Philadelphia Indemnity Ins. Co. v. Streb, Inc., Case No. 19-CV-366 (KFP), ruling that a CGL carrier had no duty to defend a personal injury action because undisputed “extrinsic evidence” (i.e., facts not alleged in the complaint) conclusively established that an exclusion applied.

The insured (Streb, Inc.), a not-for-profit dance and performance company, was a defendant in a personal injury action brought by a participant in an aerobics class who was severely injured on a trampoline.  Streb’s CGL policy ...