Cherry v. Metropolitan Property & Liability Ins. Co., 40 N.Y.2d 734 (1976)
An insurer’s duty to defend is broader than its duty to indemnify and extends to actions asserting alternative grounds, some within and some without the policy’s coverage, as long as the complaint alleges facts that, if proven, would fall within the scope of coverage.
Summary
Metropolitan Property & Liability Insurance Co. sought a declaratory judgment to avoid its duty to defend its insured, Cherry, in a wrongful death action. Cherry was convicted of manslaughter for the death, and Metropolitan argued that the conviction negated the element of “accident” in its policy. The wrongful death action included a negligence claim alongside an intentional tort claim. The New York Court of Appeals held that Metropolitan had a duty to defend Cherry because the negligence claim in the wrongful death action potentially fell within the policy’s coverage, regardless of Cherry’s manslaughter conviction or the intentional tort claim.
Facts
Cherry, insured by Metropolitan under a liability policy covering a 1964 Ford truck, was involved in an incident on April 26, 1967, where he operated his truck and struck and killed Rice. Subsequently, Cherry was indicted for manslaughter in the first degree under former section 1050 of the Penal Law. Patricia J. Rice, as administratrix, filed a wrongful death action against Cherry on August 10, 1967, alleging both negligence and intentional conduct causing Rice’s death. Cherry was convicted of manslaughter in September 1969.
Procedural History
The Special Term granted Metropolitan’s motion for summary judgment, concluding that Cherry’s manslaughter conviction was prima facie proof of a willful act, thus negating the accidental nature required for coverage. The Appellate Division reversed, awarding partial summary judgment to Cherry, compelling Metropolitan to defend Cherry and cover his counsel fees, and postponing determination of other claims until the wrongful death action concluded. Metropolitan appealed to the New York Court of Appeals.
Issue(s)
Whether an insurer is relieved of its duty to defend its insured in a civil action when the complaint alleges both negligence and intentional tort causes of action, arising from the same incident, and the insured has been convicted of manslaughter related to that incident.
Holding
No, because the civil complaint contains a cause of action grounded on negligence, which is within the risk covered by the policy. The policy requires the insurer to defend regardless of the insured’s ultimate liability, as the duty to defend is broader than the duty to pay.
Court’s Reasoning
The Court of Appeals emphasized that an insurer’s duty to defend is broader than its duty to indemnify. Even if some grounds for liability fall outside the policy coverage, the insurer must defend if the complaint alleges facts that, if proven, would fall within the policy’s coverage. The court cited International Paper Co. v. Continental Cas. Co., 35 NY2d 322, 325-327 and Goldberg v. Lumber Mut. Cas. Ins. Co. of N. Y., 297 NY 148, 154, reiterating this principle. The court stated, “The insurer’s duty to defend ‘includes the defense of those actions in which alternative grounds are asserted, some within and others without the protection purchased,’ and extends to any action, however groundless, false or fraudulent, in which facts are alleged within the coverage afforded by the policy.” The negligence claim in the wrongful death action triggered Metropolitan’s duty to defend Cherry, irrespective of the manslaughter conviction or the simultaneous claim of intentional conduct. This ruling underscores the broad protection afforded to insureds under liability policies, requiring insurers to defend whenever there is a potential for coverage based on the allegations in the complaint. As such, the key takeaway is that the *allegations* determine the duty to defend, not the ultimate outcome or other potential causes of action.