Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 588 (1978)

In the context of an automobile accident indemnification endorsement mandated by New York Insurance Law, the term “automobile” is interpreted to include “motorcycle,” ensuring broader coverage for insured individuals injured by uninsured motorists.

Summary

This case addresses whether the term “automobile” in a mandatory automobile accident indemnification endorsement includes “motorcycle.” Daniel Wagoner, injured while operating his motorcycle by a hit-and-run driver, sought coverage under both his motorcycle’s insurance policy (Country-Wide) and his father’s car insurance policy (Aetna), where he was also an insured. The dispute centered on whether Aetna’s coverage was primary (co-insurer) or excess, hinging on whether a motorcycle is considered an automobile under the “other insurance” clause. The court held that “automobile” includes “motorcycle,” making Aetna an excess insurer, thus prioritizing Country-Wide’s primary coverage.

Facts

Daniel Wagoner, residing with his father, owned a motorcycle insured by Country-Wide. His father also had an automobile insurance policy with Aetna, under which Wagoner qualified as an insured. Wagoner sustained injuries in a hit-and-run accident while operating his motorcycle. Both insurance policies contained identical “other insurance” clauses as mandated by New York Insurance Law § 167. Country-Wide argued that Aetna should share pro rata in covering Wagoner’s claim, contending that Aetna was a co-insurer.

Procedural History

Country-Wide initiated a proceeding seeking a declaration that Aetna was a co-insurer and a stay of arbitration. Special Term ruled in favor of Aetna, determining its policy provided only excess coverage and stayed arbitration against Aetna. The Appellate Division reversed, vacating the stay of arbitration. The New York Court of Appeals then reversed the Appellate Division’s order, reinstating the Special Term’s decision.

Issue(s)

Whether, in the context of the automobile accident indemnification endorsement mandated by Insurance Law § 167, the term “automobile” should be interpreted to include “motorcycle,” thus determining whether Aetna’s coverage is primary or excess under the “other insurance” clause.

Holding

Yes, because the term “automobile” as used in the endorsement is intended to include “motorcycle,” based on the legislative intent and the broader statutory definition of “motor vehicle,” making Aetna’s coverage excess to Country-Wide’s primary coverage.

Court’s Reasoning

The court reasoned that the endorsement was created to effectuate compulsory automobile liability insurance, ensuring coverage for insured individuals injured by financially irresponsible motorists. The court emphasized that the endorsement’s language, drafted by the Motor Vehicle Accident Indemnification Corporation with the approval of the State Superintendent of Insurance, should be interpreted in line with the underlying statute’s intent. Subdivision 2-a of section 167 refers to damages from an owner or operator of an uninsured “motor vehicle,” and subdivision a of section 601 defines “motor vehicle” to include “motorcycle.” The court found no logical reason to narrow the definition of “automobile” in the endorsement compared to the broader term “motor vehicle” used in the statute. The court cited previous decisions, such as Matter of Askey [General Acc. Fire & Life Assur. Corp.], that held the endorsement’s term “uninsured automobile” should be given the broader statutory definition. The court also noted the lack of legislative or administrative action to correct these judicial interpretations, suggesting acquiescence. The court stated, “Here, we perceive that the good sense of the situation is clear; it is the case and not one canon or another that must control.”