Wednesday, May 26, 2010

Intentionally Driving into Pedestrians Disqualifies Driver from Liability Coverage and Pedestrians from Uninsured Motorists Coverage

Matter of Travelers Indem. Co. v. Richards-Campbell
(2nd Dept., decided 5/18/2010)

Jamille Andrews intentionally drove Cheryl Holt's car into Shekenah, Shadrach and Shekeila Campbell, injuring them.  Andrews subsequently was charged criminally and pleaded guilty to three counts of assault in the second degree arising from the incident, admitting that she had  intentionally struck the Campbells.

The Campbells made third-party BI claims to Holt's auto insurer, Lincoln General, which denied liability coverage based on Andrews' intentional act.  The Campbells then filed uninsured motorists (UM) coverage claims with their mother's auto insurer, Travelers, which similarly denied UM coverage because their injuries were caused by Andrews' intentional criminal acts rather than an accident and because the Holt vehicle did not constitute an "uninsured motor vehicle" within the meaning of their mother's auto policy.  The Campbells demanded arbitration of their UM claim and Travelers commenced this special proceeding for a permanent stay of that arbitration.

In REVERSING the Orange County Supreme Court's order that had denied and dismissed Traveler's petition, the Appellate Division, Second Department, held:
The Supreme Court correctly determined that Lincoln was not obligated to provide coverage under its automobile insurance liability policy, given that the Campbells' injuries were not the result of an accident, but rather, of an intentional criminal act by Andrews (see Matter of American Mfrs. Mut. Ins. Co. v Burke, 63 AD3d 732, 733; State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281, 283; Met Life Auto & Home v Kalendarev, 54 AD3d 830, 831; State Farm Mut. Auto. Ins. Co. v Langan, 18 AD3d 860, 862). However, the Supreme Court improperly determined, in effect, that Travelers was obligated to provide uninsured motorist benefits under its policy with the Campbells (see McCarthy v Motor Veh. Acc. Indem. Corp., 16 AD2d 35, 42, affd no opn 12 NY2d 922). 

The record reveals that Travelers properly disclaimed the Campbells' claim for uninsured motorist benefits under the subject insurance policy by establishing that their bodily injuries were caused by Andrews's intentional criminal acts (see Matter of American Mfrs. Mut. Ins. Co. v Burke, 63 AD3d at 733; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927, 928; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680; Matter of Aetna Cas. & Sur. Co. v Perry, 220 AD2d 497), and that the offending vehicle was not an "uninsured motor vehicle" within the terms of the policy (McCarthy v Motor Veh. Acc. Indem. Corp., 16 AD2d at 46). Accordingly, the Supreme Court should have upheld Travelers' disclaimer and granted that branch of the petition which was to permanently stay arbitration. 
Note that Lincoln General's denial of liability coverage to Andrews did not render the Holt vehicle "uninsured" for purposes of a UM claim. See, McCarthy v. Motor Vehicle Acc. Ind., 16 AD2d 35 (4th Dept. 1962).

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