N. Lekas Corp. v. Travelers Insurance

Botein, J. (dissenting).

We must not lose sight of the fact that this is an action upon a contract. The liability of defendant insurance company under this contract need not be coterminous with plaintiff’s liability to the person injured upon its premises. By exception from coverage, as in this case, an insurance company and its insured may ag’ree that certain portions of the insured’s premises are excluded from the coverage of their contract of insurance.

The parties to an insurance contract may agree that its provisions will not cover any accident occurring inside an elevator shaft, irrespective of how many other elements of causation falling within the policy coverage may combine to cause the accident. That is exactly what the parties to this action agreed upon; and we may not impose upon the contract terms of common-law tort liabilities obviously never contemplated by the parties.

Of course, the insurance company must word such coverage exclusions, like all other policy provisions, so clearly and unambiguously that the average businessman may readily understand them (Bird v. St. Paul Fire & Marine Ins. Co., 224 N. Y. 47, 51; Silverstein v. Metropolitan Life Ins. Co., 254 N. Y. 81; Hartol Prods. Corp. v. Prudential Ins. Co., 290 N. Y. 44, 49). The exclusion in this case, however, could not be overlooked by any businessman who bothered even to glance at his policy. The first clause on the first page provided that [t]he insurance afforded is only with respect to such and so many of the following coverages and divisions thereunder as are indicated by specific premium charge or charges.” The only *23premium charge indicated on the policy was for the hazard “ 1. Premises — Operations”. Alongside the hazard — “2. Elevators ’ ’ — was the letter “ x ”, indicating no premium was charged for the elevator hazard. In the next column appeared the following:1 ‘ The letter ‘ X ’ in any premium space shall mean that insurance is not afforded with respect to the hazard stated in the division opposite thereto.” All of these exclusory provisions were not tucked away somewhere in fine print, but prominently displayed on the first page, in the box containing the limits of liability and premium charges — the first features of a policy that a businessman would be likely to examine.

Condition 4 reads as follows: 11 Elevator Defined. The word ‘ elevator wherever used in this policy shall mean any hoisting or lowering device operated between floors or landings and all appliances thereof including any car, platform, shaft, hoistway, stairway, runway, power equipment and machinery.” There can be no question, therefore, that injuries sustained in a shaft or hoistway are excluded from the policy coverage.

Viewing this contract in such a perspective, the parties clearly intended that defendant did not undertake to indemnify plaintiff for the results of any accident occurring in an elevator or elevator shaft, irrespective of other contributing or concurring proximate causes. Elevator shafts are deep holes, and it is common knowledge that deep holes in building floors are dangerous. Insurance rates reflect claim experience, and such experience dictates an additional premium when dangerous elevator shafts are to constitute part of the insured area. The policy unmistakably informed plaintiff that if it wished to be insured against such a notorious hazard it would have to pay an additional premium. It chose not to pay and got exactly what it contracted for — no insurance against the claim in issue here.

To expand the coverage to include a conjunctive cause of the accident is unrealistic and imparts an esoteric shading into the contract never intended by the parties. In fact, the assured itself assumed for two and one-half years following the accident that it was not covered by insurance. The parties when making the contract knew that the elevator shaft constituted a separately insurable hazard, not to be splintered by such considerations as whether the injured person fell down it partly because of another insurable act of negligence. The reality of the hazard against which plaintiff chose not to buy insurance coverage is best evidenced by the fact that if the injured person had opened the door to a closet instead of an elevator shaft there would have been no accident.

*24Plaintiff likewise is not entitled to the costs of defending the original suit. While the duty to defend is broader than the duty to pay, at no time did the pleadings in the insured person’s action allege a cause of action within the coverage of the policy.

To hold that there is any issue of fact as to coverage for the injuries resulting from the accident as alleged in the complaint “ would virtually be making a new contract for the parties ” (Marcus v. United States Cas. Co., 249 N. Y. 21, 25). And it is apparent that the Court of Appeals designedly extended itself in the Marcus case to express the so-called dictum quoted in the majority opinion.

The order of December 2, 1953, should be modified to the extent of granting defendant’s motion for summary judgment dismissing the first cause of action and otherwise affirmed. The order of October 28, 1953, denying plaintiff’s motion for summary judgment, should be affirmed.

Rabin and Cox, JJ., concur with Bergan, J.; Botein, J., dissents in opinion, in which Peck, P. J., concurs.

Orders affirmed.