State Farm Mutual Automobile Insurance Co. v. Westlake, 35 N.Y.2d 587 (1974)

An automobile insurance policy does not provide coverage for injuries sustained by the insured’s spouse unless the policy contains an express provision specifically relating to such coverage, as mandated by New York Insurance Law § 167(3).

Summary

This case addresses whether an automobile liability insurance policy covers injuries sustained by an insured’s spouse when the policy lacks an express provision for such coverage, as required by New York Insurance Law § 167(3). The New York Court of Appeals held that absent an explicit provision in the policy covering spousal injuries, the insurer is not obligated to defend or indemnify the insured against claims arising from injuries to their spouse, even in a third-party action. The court emphasized that the statute mandates express coverage to prevent collusion and fraud.

Facts

James Westlake had an automobile liability policy with State Farm. While driving his car with his wife, Wanda Westlake, as a passenger, he collided with another vehicle. Wanda Westlake sued the other driver (the Christs) for her injuries. The Christs then filed a third-party action against James Westlake, alleging his negligence contributed to Wanda’s injuries. Westlake demanded that State Farm defend him in the third-party action and cover any resulting judgment. The State Farm policy did not contain the spousal coverage provision required by New York Insurance Law § 167(3).

Procedural History

State Farm initiated a declaratory judgment action seeking a declaration that it had no duty to defend or indemnify Westlake. The trial court ruled in favor of State Farm. The Appellate Division reversed, directing judgment for Westlake. State Farm appealed directly to the New York Court of Appeals.

Issue(s)

Whether State Farm is obligated under its automobile insurance policy to defend and indemnify James Westlake in a third-party action for injuries sustained by his wife, Wanda Westlake, when the policy does not contain an express provision relating to spousal injury coverage, as required by New York Insurance Law § 167(3)?

Holding

No, because New York Insurance Law § 167(3) specifically requires an express provision in the insurance policy to provide coverage for spousal injuries; absent such a provision, the insurer has no obligation to defend or indemnify.

Court’s Reasoning

The court reasoned that while a married woman has the right to sue her husband for tortious acts, New York Insurance Law § 167(3) explicitly exempts insurers from liability for spousal injuries unless the policy contains a specific provision covering such injuries. The court stated, “[n]o policy or contract [of insurance] shall be deemed to insure against any liability of an insured because of * * * injuries to his or her spouse * * * unless express provision relating specifically thereto is included in the policy.” The court emphasized that this statutory requirement is designed to prevent collusion and fraud. The court rejected Westlake’s argument that the principle of apportionment among joint tortfeasors established in Dole v. Dow Chem. Co. could override the statutory requirement for express spousal coverage in insurance policies. The court noted that to impose liability on State Farm without the required express provision would effectively rewrite the insurance contract and expose the insurer to a risk for which it was not compensated. The court noted, “Before the right of coverage upon which a suit might be predicated could exist, it was requisite that such coverage be declared in specific language.”