Colon v. Aetna Life & Casualty Insurance

Kane, J.,

dissents and votes to reverse in the following memorandum. Kane, J. (dissenting). The accident which formed *519the basis for the underlying negligence action occurred on December 4, 1977. A notice of disclaimer, dated January 25, 1978, was forwarded to Michael L. Colon by Aetna Life and Casualty Insurance Company, advising Colon that their investigation disclosed he did not have permission or consent, expressed or implied, from their insured to operate its vehicle, which was involved in the accident. He was also advised to contact his own insurance carrier since Aetna’s investigation had disclosed that he was the owner of a private passenger vehicle. A judgment of the Supreme Court entered February 16, 1982 against Colon, a defendant in the underlying negligence action, was based upon a verdict of a jury which specifically found that he was operating Palmier Oil Company’s insured vehicle without its permission or consent. The instant action was commenced by Colon by service of a summons dated March 29, 1983, apparently subsequent to the affirmance by this court of the determination of the jury in the underlying negligence action (Morris v Palmier Oil Co., 94 AD2d 911).

In order to succeed in this action, Colon must establish, as a matter of law, that Aetna breached its contractual duty to him under the terms of its insurance policy (see Robb v Royal Globe Ins. Co., 48 AD2d 935). This he cannot do, since the coverage question has been resolved in the prior action. Moreover, as a stranger to the contract, he cannot create coverage which never existed initially (Zappone v Home Ins. Co., 55 NY2d 131; Katz v Allstate Ins. Co., 96 AD2d 930).

In my view, Aetna fulfilled its obligation to its insured, Palmier Oil Company, by defending the action against it on the basis of unauthorized use of its vehicle by Colon. Their obligation was to protect their insured from a judgment against it up to or beyond the limits of coverage in the policy. I fail to see how this could be accomplished by providing a defense to Colon, particularly in view of his admission of liability in the underlying wrongful death action. It does not seem fair to penalize Aetna for exercising its right to make a good-faith disclaimer of coverage, founded on an independent investigation and considered judgment, merely because of an allegation in a complaint made with notice that such allegation lacked foundation in fact. Moreover, that judgment was vindicated by the verdict of the jury which was the forum where the question of coverage should be, and was, involved (see Cordial Greens Country Club v Aetna Cas. & Sur. Co., 41 NY2d 996).

I would reverse the order appealed from and grant summary judgment dismissing the complaint to Aetna.