— Order, Supreme Court, New York County (Burton Sherman, J.), entered on or about February 14, 1989, which, inter alla, directed the defendant to assume the defense of plaintiff insured in an underlying action and permitted the defendant to select the attorney of record for plaintiff in the underlying action, unanimously reversed to the extent appealed, on the law, facts and in the exercise of discretion, that part of the order permitting defendant to select the attorney of record for plaintiff vacated and plaintiff permitted to select its own attorney of record in the underlying action, with costs.
This is an action for a declaratory judgment in which plaintiff sought to compel defendant to assume its defense in the underlying action brought by an owner of a project in July 1986 against plaintiff here, the general contractor and severed subcontractors. The owner’s action sounded in both negligence, which was covered by insurance, and contract, which was not. Plaintiff’s insurance company, defendant Commercial, disclaimed coverage in September 1986. The disclaimer was without basis.
In view of the fact that plaintiff Major, because of defendant’s disclaimer, has had an attorney of its choosing for three years and because of potential conflicts between plaintiff and defendant on how the case should be pursued, we deem it appropriate that plaintiff choose its own counsel. (Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392, 401 [1981].) Concur— Kupferman, J. P., Carro, Rosenberger, Ellerin and Smith, JJ.