Hartford Insurance v. Halt

Callahan, J. (dissenting).

We are called upon once again to decide whether a "family member” is a "covered person” within the meaning of an exclusion (A. 8) in an automobile liability policy, or whether the phrases "family member” and "any person” define mutually exclusive classes. The majority acknowledges that the issue presented on this appeal is indistinguishable from the relevant facts and policy language that we previously addressed and that "[w]e decided precisely that issue” in December 1989 (see, Paychex, Inc. v Covenant Ins. Co., 156 AD2d 936). Subsequent to that decision, the Hartford Insurance Company (Hartford) issued an automobile policy effective April 1, 1993 to its named insured, Susan Latt, covering her 1985 Ford Ranger pickup truck. At the time of that contractual agreement, the provisions in the policy at issue were governed by the law enunciated in Paychex. All insurance carriers doing business in New York State were put on notice that the use of the terms "family member” and "any person” in exclusion A.8 of the policy created an ambiguity.

"[W]henever an insurer wishes to exclude certain coverage from its policy obligations, it must do so 'in clear and unmistakable’ language” (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311). If Hartford intended to exclude liability for family members who use a vehicle without a reasonable belief that they are entitled to do so, it could have done so and made that intention clearly known (see, Sperling v Great Am. Indem. Co., 7 NY2d 442, 447, rearg denied 8 NY2d 785). The language of this policy, issued after our decision in Paychex, continues to use the same language and fails to impose the exclusion of coverage upon a family member.

Paychex was decided by a unanimous Court. That Court found that the terms of the policy at issue "are at least ambiguous, and any ambiguity should be resolved * * * against the insurer (see, Venigalla v Penn Mut. Ins. Co., 130 AD2d 974, lv dismissed 70 NY2d 747)” (Paychex, Inc. v Covenant Ins. Co., supra, at 937; see also, Breed v Insurance Co. of N. Am., 46 NY2d 351, 353, rearg denied 46 NY2d 940; Kenyon v Newton, 144 AD2d 901). In my view, it is inconceivable that this Court would reach an opposite conclusion six years later on the same *216factual situation. Furthermore, to state that there is no ambiguity is to ignore the many disputes caused by these provisions and the different resolutions in various jurisdictions. Also, we need look no further than the lengthy dissertation in the majority decision endeavoring to prove that there is no ambiguity.

As we stated in Venigalla v Penn Mut. Ins. Co. (supra, at 975): "Where the provisions of an insurance contract are clear and unambiguous, they must be enforced as written (see, State of New York v Home Indem. Co., 66 NY2d 669, 671; Breed v Insurance Co., 46 NY2d 351, 355, rearg denied 46 NY2d 940; Prince v ITT Life Ins. Corp., 89 AD2d 779, 780). However, 'where the meaning of a policy of insurance is in doubt or is subject to more than one reasonable interpretation, all ambiguity must be resolved in favor of the policyholder and against the company which issued the policy’ (Little v Blue Cross, 72 AD2d 200, 203). This rule is enforced even more strictly when the language at issue purports to limit the company’s liability (Breed v Insurance Co., supra, at 353; Thomas J. Lipton, Inc. v Liberty Mut. Ins. Co., 34 NY2d 356; Matter of Hanover Ins. Co. [St. Louis], 119 AD2d 529, 532, appeal dismissed 68 NY2d 751; Little v Blue Cross, supra). If an ambiguity exists, the insurer bears the burden of establishing that the construction it advances is not only reasonable, but also that it is the only fair construction (see, Sincoff v Liberty Mut. Fire Ins. Co., 11 NY2d 386, 390; Bronx Sav. Bank v Weigandt, 1 NY2d 545, 551; Prince v ITT Life Ins. Corp., supra), viewed through the eyes of the 'average man on the street’ (Lacks v Fidelity & Cas. Co., 306 NY 357, 364, rearg denied 306 NY 941).”

To overrule our previous decision in Paychex has serious consequences. That case is the only one in New York. It has been the law in New York. Hartford was well aware of that determination when it sold this policy. It should be bound by that determination. Hartford could have easily revised its policy to make it clear and unambiguous. As the Court of Appeals has stated: "Always critical to justifying adherence to precedent is the requirement that those who engage in transactions based on the prevailing law be able to rely on its stability. This is especially true in cases involving property rights, contractual rights, and property dispositions, whether by grant or testament (see, e.g., United States v Title Ins. Co., 265 US 472, 486-487; Heyert v Orange & Rockland Utilities, 17 NY2d 352, 360, 362-363, supra [property rights]; United States v Flannery, 268 US 98, 105 [commercial transactions]; Matter of Eckart, 39 NY2d 493 * * *; Douglas, Stare Decisis, 49 Col L Rev *217735-736 [wills]; cf. Endresz v Friedberg, 24 NY2d 478, 488-489 [wrongful death action under EPTL 5-4.1] * * * )” (People v Hobson, 39 NY2d 479, 489).

"[A] precedent is entitled to initial respect, however wrong it may seem to the present viewer, if it is the result of a reasoned and painstaking analysis” (People v Hobson, supra, at 490). Our determination in Paychex was the result of a reasoned and painstaking analysis. We should adhere to that determination in the resolution of these appeals. I vote to affirm.

Pine, Balio and Davis, JJ., concur with Denman, P. J.; Callahan, J., dissents and votes to affirm in a separate opinion.

Judgment reversed, on the law, without costs, motion granted, judgment granted and cross motion denied in accordance with the opinion by Denman, P. J.