Fish v Dryden Mut. Ins. Co.

[*1] Fish v Dryden Mut. Ins. Co. 2009 NY Slip Op 50596(U) [23 Misc 3d 1105(A)] Decided on March 31, 2009 Supreme Court, Cortland County Rumsey, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 31, 2009
Supreme Court, Cortland County

Edgar J. Fish d/b/a PREBLE HOTEL, Plaintiff,

against

Dryden Mutual Insurance Co., LISA STONE and GARY STONE, Defendants.



40472



EDWARD R. PURSER, ESQ.

Attorney for Plaintiff

4 Lincoln Avenue

P.O. Box 425

Cortland, New York 13045

LEVENE, GOULDIN & THOMPSON, LLP

By:John L. Perticone, Esq.

Attorneys for Defendant Dryden Mutual Insurance Co.

P.O. Box F-1706

Binghamton, New York 13902-0106

GREENE & REID, PLLC

By:Jeffrey G. Pomeroy, Esq.

Attorneys for Defendants Lisa Stone and Gary Stone173 Intrepid Lane

Syracuse, New York 13202

Phillip R. Rumsey, J.

In this action, plaintiff Edgar Fish, doing business as Preble Hotel, seeks a judgment declaring that defendant Dryden Mutual Insurance Company (Dryden Mutual) is required to defend and indemnify him in connection with an action commenced by Gary Stone (hereinafter Stone; Lisa Stone, his wife, sues derivatively) for injuries sustained by Stone on the premises of the Preble Hotel (see Stone v Fish, Cortland County Supreme Court Index No. 39068, hereinafter the Stone action). During the afternoon of March 20, 2004, Stone became involved in a verbal altercation with Jody Fish at the Preble Hotel, a tavern owned and operated by Edgar Fish.[FN1] During the altercation, Stone and Jody Fish left the barroom and stood on the front porch together. Stone alleged in his complaint, and later testified at his examination before trial, that he was then forcefully pushed down the front steps by Jody Fish and fell, thereby sustaining a serious injury to his right leg (Transcript of Examination Before Trial of Gary L. Stone [Stone EBT Transcript], at p. 28, Exhibit B to the Affirmation of Jeffrey G. Pomeroy, Esq., dated April 29, 2008 [Pomeroy Affirmation]). At his examination before trial, Jody Fish testified that he did not push Stone; rather, he testified that Stone fell when he backed away as Jody Fish approached Stone and directed a verbal comment at him (Transcript of Examination Before Trial of Jody Fish [Fish EBT Transcript], at p. 42 47, Exhibit D to the Pomeroy Affirmation). It is undisputed, for purposes of this motion, that the bottom step was in a state of disrepair at the time of the incident. At the time of the injury, Edgar Fish d/b/a Preble Hotel was insured by defendant under a commercial general liability insurance policy.

Shortly after the incident, Edgar Fish filed a notice of loss with defendant, seeking coverage under the policy. By letter dated June 3, 2004, Dryden Mutual disclaimed coverage in reliance upon the exclusion for claims arising from an assault or battery and the exclusion for violations arising from the Dram Shop Act (General Obligations Law §11-101) (Petricone Affidavit, at ¶¶ 6 and 8 and Exhibit F). Following commencement of the Stone action on January 11, 2005, Dryden Mutual advised Edgar Fish, by letter dated January 13, 2005, which contained a reservation of rights, that it would provide him with a defense to all claims asserted against him in the Stone action (Affirmation of Edward R. Purser, Esq., dated May 8, 2008 [Purser Affirmation], Exhibit A). By subsequent letter, dated January 28, 2005, Dryden Mutual notified Edgar Fish that it would neither defend nor indemnify him in connection with the Stone action, again citing the assault and battery and Dram Shop Act exclusions (Purser Affirmation, Exhibit B). Edgar Fish thereafter commenced this action, seeking a judgment declaring that Dryden Mutual is obligated to defend and indemnify him in the Stone action. Dryden Mutual has moved for summary judgment seeking a judgment that it has no duty to defend or indemnify Edgar Fish in the Stone action.

The Stone complaint asserts two separate causes of action against Edgar Fish. The first alleges that Stone's injuries were caused by the negligence of Edgar Fish, in his failure to control the conduct of Jody Fish, and in his failure to maintain the front steps of the Preble Hotel in a [*2]safe condition (Stone complaint at ¶10; Pomeroy Affirmation at ¶¶ 4 and 5). The second alleges that Edgar Fish violated the Dram Shop Act, by serving alcohol to Jody Fish while he was visibly intoxicated, and that such intoxication was a cause of Stone's injuries.[FN2] Dryden Mutual correctly notes, and neither plaintiff nor Stones dispute, that it is not obligated to defend or indemnify Edgar Fish with respect to the second cause of action, by reason of the Dram Shop exclusion.

Thus, the determinative inquiry is whether Dryden Mutual has a duty to provide coverage to Edgar Fish with respect to the first cause of action, sounding in negligence. Dryden Mutual disclaimed coverage for the negligence claim, based upon an assault and battery exclusion, which provides:

Notwithstanding anything contained herein to the contrary, it is understood and agreed that this policy excludes any and all claims arising out of an assault, battery, fight, altercation, misconduct or other similar incident or act of violence, whether caused by or at the instigation of, or at the direction of the insured, his/her employees, customers, patrons, guests or any cause whatsoever, including, but not limited to claims of negligent or improper hiring practices, negligent, improper or non-existent supervision of employees, patrons or guests and negligence in failing to protect customers, patrons or guests.

(Endorsement LS-73 to the insurance policy, attached as Exhibit C to the Petricone Affidavit

[emphasis in original], see also Purser Affirmation, Exhibit B).

It must first be determined whether the conduct of Jody Fish, which may have contributed to Stone's injuries, is the type of conduct to which the assault and battery exclusion applies. An insurer is required to provide a defense whenever the allegations in a complaint state a cause of action covered by the policy (Fitzpatrick v American Honda Motor Co., 78 NY2d 61 1991]). In this case, the Stone complaint includes the allegation that Stone was "forcefully pushed down the front entranceway steps" by Jody Fish (Stone complaint at ¶¶6 and 16). Such conduct, constituting a battery or act of violence, is clearly conduct for which coverage is precluded by the assault and battery exclusion. Examination of the allegations of the complaint does not end the inquiry, however, because facts developed outside of the complaint may be considered in resolving issues of coverage (id. at 66; see also Durant v North Country Adirondack Cooperative Ins. Co., 24 AD3d 1165 [2005]). Jody Fish testified at his examination before trial that he did not push Stone; rather, he testified that Stone fell down the steps when he backed away as Jody Fish approached and directed a verbal comment at him. Notably, there is no suggestion that Stone fell of his own accord while using the stairs in a typical fashion. Both versions of the incident to which there were no other witnesses show that Stone fell after losing his balance while descending the stairs backwards (Stone EBT at p. 28; Fish EBT at pp. 43 and 45), and that his fall was caused, at least in part, by the actions of Jody Fish.

The scope of the assault and battery exclusion is broad. It applies to claims arising out of many acts which do not involve direct physical contact, for example, "assault, . . . , altercation, misconduct or other similar incident or act of violence." Under the circumstances of this case, [*3]the court concludes that even if Jody Fish's version of the incident is credited, i.e., that he did not push Stone, his conduct is nonetheless within the scope of the exclusion. It is undisputed that Stone and Jody Fish engaged in a heated verbal altercation at the bar within the Preble Hotel (Stone EBT at pp. 22 28; Fish EBT at pp. 29 34 and 36 42). They left the barroom together with their altercation in full swing, and Stone fell almost immediately thereafter (Stone EBT at pp. 28 29; Fish EBT at pp. 42 46). In that context, Fish's version of events on the porch is part of the ongoing "altercation, misconduct or other similar incident" in which he and Stone had engaged. Moreover, Jody Fish's testimony that Stone attempted to withdraw in the face of his advance shows that Stone considered Jody Fish's conduct on the porch to be threatening, in the nature of an "assault." Therefore, for the purposes of this action, the court concludes that, under either Stone's or Jody Fish's version of the incident, Stone was caused to fall down the stairs by conduct of Jody Fish, and that the assault and battery exclusion applies to such conduct.

It is now necessary to consider whether the assault and battery exclusion precludes coverage for Stone's claims when the alleged negligence of Edgar Fish the insured may have also contributed to Stone's injuries. There is no coverage for Stone's claims that Edgar Fish was negligent in failing to control the conduct of Jody Fish, or in failing to protect Stone from Jody Fish, because the assault and battery exclusion specifically excludes coverage for claims based on "negligent or improper hiring practices, negligent, improper or non-existent supervision of employees, patrons or guests and negligence in failing to protect customers, patrons or guests."[FN3]

Whether there is coverage for Stone's claim that his injuries were caused, at least in part, by the negligence of Edgar Fish in failing to properly maintain the front steps, is governed by the "but for" test announced by the Court of Appeals in Mount Vernon Fire Ins. Co. v Creative Housing, 88 NY2d 347 (1996) (see also U.S. Underwriters, Ins. Co. v Val-Blu Corp., 85 NY2d 821 [1995] and Handlebar, Inc. v Utica First Ins Co., 290 AD2d 633 [2002], lv denied 98 NY2d 601 [2002]). Under this test, the determinative factor is the operative act which gave rise to the injuries, not the legal theory pleaded (Mount Vernon, 88 NY2d at 351 352). In Mount Vernon, the plaintiff in the underlying action was criminally assaulted by a third party on premises owned by the insured. In Val-Blu, the plaintiff in the underlying action was shot by an employee of the insured an assault and battery. In both cases, the injured parties asserted negligence claims against the premises owners negligent supervision, management and control of the premises, and negligent hiring and supervision, respectively and the insurers disclaimed coverage based on an assault and battery exclusion. The Court of Appeals held that, even though an insured's negligence may have been a proximate cause of the injuries, "inasmuch as the negligence claim could not be established without proving the underlying assault the exclusion applied" (Mount Vernon, 88 NY2d at 351, discussing Val-Blu).

In both Mount Vernon and Val-Blu, there was but a single operative act giving rise to the injuries sustained by the respective plaintiffs in each case an act which was clearly assaultive in nature and coverage for all damages flowing therefrom was excluded; there was no allegation [*4]of an additional, or intervening, cause for plaintiffs' injuries to which the "but for" test was applied. In this case, Stone argues that Edgar Fish's negligence in failing to maintain the steps in a safe condition is a proximate cause of his injuries, because the dilapidated condition of the steps prevented him from recovering his balance as he fell down the stairs.

Application of the "but for" test to an alleged intervening cause to determine whether coverage is excluded appears to be an issue of first impression in New York, and the court finds persuasive decisions from other jurisdictions that have dealt with this very issue under legal standards substantially similar to those to be applied in the present case. In Gilmore v Beach House, Inc., 38 Kan. App. 949, 174 P3d 439 (2008), the plaintiff in the underlying action was injured when he was intentionally shoved by another individual while standing on ice-covered steps outside of a bar operated by the insured. He commenced an action against the bar operator, alleging that his injuries were caused, in part, by the insured's negligent failure to remove snow and ice from the steps. The court held that the assault and battery exclusion relieved the insurer from any duty to defend the insured, when, as here, the assault or battery set in motion the events which culminated in injury.

In Gilmore v Westerman, 200 Wis.2d 492, 546 NW2d 886, 1966 WL 73972 (1996), the plaintiff was injured when he fell from the fire escape leading from the rear door of a bar operated by the insured, after being pushed or shoved out the door by another patron. He asserted that his injuries were caused, in part, by the insured's failure to maintain the fire escape steps in a safe condition in accordance with the applicable building code standards. The court noted that "an independent concurrent cause must provide an independent basis for a cause of action in and of itself and must not require the occurrence of the excluded risk to make it actionable." (id., 1966 WL 73972 at *3). The court held that, although a jury had determined that the building code violation was a cause of plaintiff's injuries, the assault and battery exclusion precluded coverage, because the plaintiff would not have been injured had he not been pushed or shoved out the door.

In this case, it is undisputed that Stone fell down the steps backwards rapidly and in an unbalanced fashion as a direct result of his ongoing altercation with Jody Fish. On these facts, then, Stone would not have descended the steps in the manner which culminated in his injuries, but for the conduct of Jody Fish. Thus, that the steps may have been in a state of disrepair due to the negligence of Edgar Fish does not provide an independent cause for Stone's injuries.[FN4]

Therefore, Dryden Mutual's motion seeking a declaratory judgment that it has no obligation to defend or indemnify its insured, Edgar Fish, in connection with the Stone action is granted.

This decision shall constitute the order and judgment of the court.

Dated:March 31, 2009

Cortland, New York

_______________________________ [*5]

HON. PHILLIP R. RUMSEY

Supreme Court Justice

ENTER Footnotes

Footnote 1: Except as otherwise noted, the relevant facts here summarized are taken from the complaint filed in the Stone action (Affidavit of John L. Petricone, Esq., sworn to March 28, 2008 [Petricone Affidavit], Exhibit D [the Stone complaint]).

Footnote 2: The Stone complaint asserts two additional causes of action the third alleges that Jody Fish is legally responsible for causing Stone's injuries, and the fourth is Lisa Stone's derivative claim against both defendants.

Footnote 3: While plaintiff may have a common law duty to provide for the safety of his patrons, and to protect them from the conduct of intoxicated guests (see Dryden Mutual Ins. Co. v Harr, 247 AD2d 684 [1998]), the assault and battery exclusion at issue in the instant action specifically excludes coverage for such claims.

Footnote 4: Dryden Mutual has no separate duty or obligation to defend or indemnify Edgar Fish against the claims of Lisa Stone, which are derivative of plaintiff's claims.