Home Insurance v. American Home Products Corp.

550 N.E.2d 930, 75 N.Y.2d 196, 551 N.Y.S.2d 481, 1990 N.Y. LEXIS 90
CourtNew York Court of Appeals
DecidedJanuary 18, 1990
StatusPublished
Cited by144 cases

This text of 550 N.E.2d 930 (Home Insurance v. American Home Products Corp.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Home Insurance v. American Home Products Corp., 550 N.E.2d 930, 75 N.Y.2d 196, 551 N.Y.S.2d 481, 1990 N.Y. LEXIS 90 (N.Y. 1990).

Opinion

[199]*199OPINION OF THE COURT

Hancock, Jr., J.

A judgment for $9.2 million in compensatory damages and $13 million in punitive damages, based on a jury verdict, was recovered in an Illinois trial court against American Home Products Corp. (AHP). The damages were awarded for the grave and permanent injuries (including severe impairment of mental function) sustained by Marcus Batteast, a two-year-old boy, as a result of the administration of a drug, aminophylline, manufactured by AHP through its subsidiary, Wyeth Laboratories. On appeal to the appellate court of Illinois the judgment against AHP was unanimously affirmed (Batteast v American Home Prods. Corp., No. 806-16808 [Cir Ct, Cook County, Ill], affd sub nom. Batteast v Wyeth Labs., 172 Ill App 3d 114, 526 NE2d 428 [1st Dist 1988], lv granted 123 Ill 2d 556, 535 NE2d 398 [1988]).

The question to be decided — certified to this court by the United States Circuit Court of Appeals for the Second Circuit —concerns the insurance coverage under the excess liability policy issued by The Home Insurance Company (Home) to AHP and whether that policy covers the award for punitive damages in the Batteast case. Home commenced an action in New York State Supreme Court against AHP seeking a judgment declaring that it was not obligated to indemnify AHP for the amount of the punitive damages not covered by primary insurance. The action was removed to Federal court which declared that Home "is liable under its excess insurance policy for the punitive damages awarded in Batteast”. (Home Ins. Co. v American Home Prods. Corp., 665 F Supp 193, 197 [Duffy, J., SD NY 1987].) Home appealed to the Circuit Court of Appeals.

The Circuit Court of Appeals, noting that the question of coverage for punitive damages recovered in out-of-State judgments is one of first impression in this State and one which involves important New York public policy considerations, has certified to us the following question: "Would New York require the insurer to reimburse the insured for punitive damages awarded against the insured on the out-of-state judgment in this case?” (873 F2d 520, 522 [2d Cir 1989].)

For reasons which follow, we hold that to require Home [200]*200to indemnify AHP for such damages under its excess policy would be contrary to the public policy of this State. Accordingly, we answer the certified question in the negative.

I

The parties are in agreement that the answer to the question certified depends on an analysis of New York’s public policy and an application of that policy to the circumstances here.

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Bluebook (online)
550 N.E.2d 930, 75 N.Y.2d 196, 551 N.Y.S.2d 481, 1990 N.Y. LEXIS 90, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-insurance-v-american-home-products-corp-ny-1990.