Liberty Mutual Insurance v. County of Onondaga

204 A.D.2d 1021, 614 N.Y.S.2d 958, 1994 N.Y. App. Div. LEXIS 6846

Opinion

—Judgment unanimously affirmed with costs. Memorandum: Liberty Mutual Insurance Company (Liberty) is not barred by our previous decision (Liberty Mut. Ins. Co. v County of Onondaga, 181 AD2d 1024, Iv denied 80 NY2d 753) from bringing the instant action seeking a declaration that it has no duty to indemnify the County of Onondaga (County) based upon the evidence adduced with respect to liability at the trial of the underlying personal injury action. While we agree with the contention of Liberty that its liability as the insurer depends upon the basis for liability that was adjudicated against its insured, the County, in the underlying action (see, Prashker v United States Guar. Co., 1 NY2d 584, 591), we disagree with its further contention that the evidence at the trial in the underlying action is insufficient to establish Liberty’s obligation to indemnify the County. Contrary to Liberty’s contention, plaintiff presented proof that the contractor breached its duty to sign the entire contract area and that the County failed to ensure that the contractor carried out that duty. That theory of liability against the County is covered by the Liberty policy.

Supreme Court properly denied Liberty’s motion to dismiss the County’s counterclaim for "bad faith” refusal to settle for reasons stated in that court’s decision. (Appeal from Judgment of Supreme Court, Onondaga County, Reagan, J.—Declaratory Judgment.) Present—Pine, J. P., Lawton, Callahan, Doerr and Davis, JJ.