Utica Mutual Insurance Company v. State Insurance Fund, 58 N.Y.2d 942 (1983)

When an insurance policy contains a clear and unambiguous exclusion clause, it must be enforced as written, and courts should not rewrite the policy to provide coverage where none was intended.

Summary

Utica Mutual Insurance Company sought a declaratory judgment that it was not obligated to share in the defense and payment of a claim against Gene’s Bus Service. An employee of Gene’s Bus Service was injured while changing a tire on a bus and sued Firestone Tire & Rubber, who then brought a third-party claim against Gene’s. Utica Mutual argued that its policy with Gene’s excluded coverage for bodily injury arising out of the maintenance of an automobile owned or operated by the insured. The New York Court of Appeals reversed the lower court’s decision, holding that the policy exclusion applied because the employee was engaged in the maintenance of an automobile owned by Gene’s when he was injured. The court emphasized the clear language of the exclusion and distinguished prior cases.

Facts

Gene’s Bus Service Inc. was insured by Utica Mutual Insurance Company under an owner’s liability policy.

The policy excluded “bodily injury * * * arising out of the * * * maintenance * * * of (i) any automobile owned or operated by * * * insured.”

An employee of Gene’s Bus Service was injured while changing a tire on one of its buses.

The employee sued Firestone Tire & Rubber for personal injury.

Firestone Tire & Rubber brought a third-party claim over against Gene’s Bus Service.

The State Insurance Fund was Gene’s Bus Service’s compensation insurer.

Procedural History

Utica Mutual sought a declaratory judgment that it was not obligated to share with the State Insurance Fund in the defense and payment of the third-party claim.

Special Term denied Utica Mutual’s motion for summary judgment, construing the exclusion narrowly.

The Appellate Division affirmed the Special Term’s decision.

The New York Court of Appeals reversed the Appellate Division’s order and granted Utica Mutual’s motion for summary judgment.

Issue(s)

Whether the exclusion in Utica Mutual’s owner’s liability policy for bodily injury arising out of the maintenance of an automobile owned or operated by the insured applies to an employee’s injury sustained while changing a tire on the insured’s bus.

Holding

Yes, because the undisputed facts establish that the employee was engaged in the maintenance of an automobile owned by Gene’s when he was injured, thus bringing the claim within the policy exclusion.

Court’s Reasoning

The court emphasized the clear and unambiguous language of the exclusion clause in Utica Mutual’s policy. The policy explicitly excluded coverage for bodily injury arising out of the maintenance of an automobile owned or operated by the insured. The court found that the employee’s activity of changing a tire on the bus fell squarely within the definition of