HNRK Coverage Corner

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, unwarranted and without just cause or provocation”; the second alleged that Scalzo “negligently struck” the plaintiff and “acted in a reckless, careless and negligent manner.” The court concluded the “conclusory” allegations of negligence in the personal injury action were not sufficient to trigger the insurer’s duty to defend, explaining:

In assessing whether a policy exclusion for injuries “intentionally caused” by the insured applies, a court must look to the pleadings in the underlying action and limit its examination to the nature of the conduct of the insured as it is there described. The analysis depends on the facts which are pleaded, not conclusory assertions. When a complaint alleges in a conclusory manner that an assault was committed negligently, an insurer has no duty to defend where the insured does not provide evidentiary support for the conclusory characterization of the conduct as negligent or provide an explanation of how the intrinsically intentional act of assault could be negligently performed.  An insured may not exalt form over substance by labeling an underlying tort action as one to recover damages for negligence where the conduct is inherently intentional.

Here, the second cause of action in the Salerno complaint contains no more than a conclusory characterization of plaintiff’s conduct as negligent without any supporting factual allegations. Thus, the complaint in the underlying action does not contain sufficient allegations of negligence to avoid the policy exclusion. Further, plaintiff failed to provide evidentiary support for the conclusory characterization of his conduct as negligent or an explanation of how the intrinsically intentional act of assault could be negligently performed.  Moreover, even assuming, arguendo, that plaintiff intended only to punch Salerno but not to injure him, the injuries were intentionally caused inasmuch as harm was inherent in the nature of the acts alleged.

The outcome in this case is in tension with the general proposition that an insurer’s duty to defend is “exceedingly broad” and can be avoided only when “the allegations of the complaint cast that pleading solely and entirely within the policy exclusions.” Automobile Ins. Co. of Hartford v. Cook, 7 N.Y.3d 131, 137 (2006).  Thus, in another case covered on this blog, a court ordered a CGL insurer to defend a lawsuit alleging “a deliberate scheme” involving “trademark and trade dress infringement, fraud, racketeering, [and] unfair competition.”  The Court held that the policy’s exclusion for “knowing acts” was not necessarily triggered because the insured could be liable for trademark infringement even without a finding of knowing wrongdoing.