Wednesday, May 6, 2009

Policy for Dominos Pizza Deliveryman's Personal Auto is Primary

Eveready Ins. Co. v. Illinois Natl. Ins. Co.

(1st Dept., decided 5/5/2009)

Plaintiff insurer brought this declaratory judgment action todetermine the parties' respective obligations to contribute towards a settlement of an underlying personal injury action, which had stemmed from an accident involving a Dominos Pizza deliveryman's use of his personal auto to deliver a pizza.  Plaintiff insured the deliveryman under a personal auto policy; defendant insured Dominos under a commercial auto policy and took the position that its coverage was excess to plaintiff's.  New York Supreme granted defendant's motion for summary judgment, declaring that defendant was not required to contribute to the underlying settlement in the proportion that the limits of its policy bears to the total of the limits of both its policy and plaintiff's policy. 

Finding the "other insurance" clause of defendant's policy to be clear and unambiguous, the First Department AFFIRMED, holding:
The clear and unambiguous "other insurance" clause of defendant's policy limits its policy to "excess" coverage where a covered accident involves a vehicle not owned by its insured, Dominos Pizza. As it was undisputed that the vehicle involved in the accident belonged to plaintiff's insured, a deliveryman for Dominos Pizza who was making a pizza delivery, defendant is an excess insurer required to contribute to the settlement only after the exhaustion of plaintiff's policy (Federal Ins. Co. v Ryder Truck Rental, 189 AD2d 582, affd 82 NY2d 909 [1994]). There is no merit to plaintiff's argument that this "excess" provision of the other insurance clause is contradicted and negated by the "proportionate payment" provision of the same clause. The latter, by its terms, only applies to coverage that is "on the same basis," i.e., where the policy is primary and there are other primary policies, the policy will pay pro rata with the other primary policies, and where the policy is excess and there are other excess policies, the policy will pay pro rata with the other excess policies (General Acc. Fire & Life Assur. Corp. v Piazza, 4 NY2d 659, 669). Here, plaintiff's policy is primary and defendant's policy is excess.

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