Fidelity General Insurance Co. v. Aetna Insurance Co.

Appellate Division of the Supreme Court of New York

Fidelity General Insurance Co. v. Aetna Insurance Co.

27 A.D.2d 932, 278 N.Y.S.2d 787, 1967 N.Y. App. Div. LEXIS 4511

Appellate Division of the Supreme Court of the State of New York·Decided April 3, 1967·Published·Cited by 10 cases

Opinion

Judgment of the Supreme Court, Nassau County, entered March 18, 1966, affirmed, with costs. In our opinion, under the circumstances of this ease, there were reasonable grounds for appeal, thereby initially obligating defendant, under its covenant to defend, to prosecute an appeal on the insured’s behalf (Kaste v. Hartford Ace. & Ind. Co., 5 A D 2d 203). Moreover, the excess insurance policy issued by plaintiff did not contain any covenant to defend and we do not construe the clause under “ conditions ” as incorporating such covenant. In any event, even if the clause is susceptible of such construction, it is our opinion that the ensuing liability, from the very nature of the excess policy, is secondary and not equal to defendant’s primary obligation to defend and appeal. Accordingly, plaintiff, as excess insurer, in discharging defendant’s obligation, was entitled to be reimbursed for the reasonable expenses thereof as equitable subrogee to the rights of the insured (see, e.g., Fidelity & Cas. Co. v. Secured Cas. Co., 180 N. E. 2d 297 [Ohio] ; Standard Sur. & Cas. Co. v Metropolitan Cas. Co., 67 N. E. 2d 634 [Ohio App.]; Fireman’s Fund Ind. Co. v. Freeport Ins. Co., 30 111. App. 2d 69; American Sur. Co. v. Canal Ins. Co., 258 F. 2d 934). Beldock, P. J., Ughetta, Christ, Brennan and Hopkins, JJ., concur.

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Judgment of the Supreme Court, Nassau County, entered March 18, 1966, affirmed, with costs. In our opinion, under the circumstances of this ease, there were reasonable grounds for appeal, thereby initially obligating defendant, under its covenant to defend, to prosecute an appeal on the insured’s behalf (Kaste v. Hartford Ace. & Ind. Co., 5 A D 2d 203). Moreover, the excess insurance policy issued by plaintiff did not contain any covenant to defend and we do not construe the clause under “ conditions ” as incorporating such covenant. In any event, even if the clause is susceptible of such construction, it is our opinion that the ensuing liability, from the very nature of the excess policy, is secondary and not equal to defendant’s primary obligation to defend and appeal. Accordingly, plaintiff, as excess insurer, in discharging defendant’s obligation, was entitled to be reimbursed for the reasonable expenses thereof as equitable subrogee to the rights of the insured (see, e.g., Fidelity & Cas. Co. v. Secured Cas. Co., 180 N. E. 2d 297 [Ohio] ; Standard Sur. & Cas. Co. v Metropolitan Cas. Co., 67 N. E. 2d 634 [Ohio App.]; Fireman’s Fund Ind. Co. v. Freeport Ins. Co., 30 111. App. 2d 69; American Sur. Co. v. Canal Ins. Co., 258 F. 2d 934). Beldock, P. J., Ughetta, Christ, Brennan and Hopkins, JJ., concur.

Fidelity General Insurance Co. v. Aetna Insurance Co., 27 A.D.2d 932, 278 N.Y.S.2d 787, 1967 N.Y. App. Div. LEXIS 4511 (N.Y. Ct. App. 1967).

Pincite

27 A.D.2d 932 (Fidelity General Insurance Co. v. Aetna Insurance Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Opinion

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