58 N.Y.2d 753 (1982)
An insurance policy exclusion for property in the “care, custody, or control” of the insured applies only when the insured exercises a significant degree of dominion over the specific damaged property, considering the insured’s rights and actions regarding that property.
Summary
The County of Broome sought a declaratory judgment to compel Travelers Indemnity to defend and indemnify it under a liability insurance policy. A car, displayed at an event in the county’s arena, was damaged by a third party. Travelers disclaimed coverage, citing a policy exclusion for property in the county’s “care, custody, or control.” The New York Court of Appeals affirmed the Appellate Division’s ruling in favor of the County, holding that the exclusion didn’t apply because the county lacked sufficient dominion over the specific vehicle. The court reasoned that the county’s general control over the arena wasn’t equivalent to control over each item within it. The county had no specific involvement with the vehicle’s display or movement.
Facts
The County of Broome licensed its Veteran’s Memorial Arena to sponsors for a one-day bridal show. The sponsors agreed to secure property damage insurance to protect the county. The sponsors obtained a policy from Travelers, naming the county as an additional insured. The policy contained an exclusion for property in the “care, custody or control of the Insured”. A car, obtained by the sponsors from a local dealer for display, was damaged the day before the show when a third party moved it without authorization. The car’s keys had been left in the ignition. The only county employee present was a backdoor guard assigned to the arena’s general security, not specifically to the exhibits. The sponsors had requested general security for the move-in day, but it wasn’t specifically tied to the exhibited items.
Procedural History
The County of Broome sued Travelers seeking a declaratory judgment that Travelers had a duty to defend and indemnify it. Special Term granted summary judgment to Travelers. The Appellate Division reversed, granting summary judgment to the County. Travelers appealed to the New York Court of Appeals.
Issue(s)
Whether the exclusionary clause in the insurance policy, pertaining to property in the “care, custody, or control of the Insured”, applies to the damaged automobile, thereby relieving Travelers of its duty to defend and indemnify the County of Broome.
Holding
No, because the County did not exercise a sufficient degree of dominion or control over the specific damaged automobile to trigger the exclusionary clause in the insurance policy.
Court’s Reasoning
The court focused on whether the county exercised “care, custody, or control” over the specific automobile that was damaged, rather than general control over the arena itself. The court emphasized that ambiguities in insurance policy exclusions are construed in favor of the insured. The court found that the county had no specific involvement with the automobile’s display. The sponsors arranged for the car’s display without the county’s specific permission or participation. The county’s agreement with the sponsors didn’t reserve any right for the county to interfere with or supervise the exhibits. While the county provided a backdoor guard, his duties were geared toward the arena’s overall security, not the specific exhibits. The court drew an analogy to a night guard in a loft building, whose presence doesn’t place tenants’ merchandise under the landlord’s “care, custody, or control.” The dissent argued that the county did exercise control because the sponsors contracted for security, and the injury occurred during the period covered by that security agreement. Further, the dissent reasoned that the county failed to offer evidence countering the sponsor’s claim that security was requested and provided for the move-in day. The majority rejected the dissent’s argument, emphasizing the distinction between general premises security and specific control over individual items. The court stated that, in this context, the words of the agreement should be given their fair and reasonable meaning.