While I agree that Atlantic had no duty to defend Terk since all of the factual allegations in the complaint are premised on intentional “knowing” conduct and fall squarely within the “knowledge of falsity” exclusion in the policy, I disagree with the majority’s reliance, in what seems to be dicta, upon the outcome of the underlying federal action as additional justification for such conclusion. The majority aptly states the well-settled principle that if the allegations in the underlying complaint allow for no interpretation which brings them within the policy provisions, then no duty to defend exists. That should be where the inquiry ends and there is no reason to go further and to decide an issue not raised by the parties. The majority’s reliance upon our recent decision in Kajima Constr. Servs. v CATI, Inc. (302 AD2d 228 [2003]) is misplaced since there the issue was whether one insurance carrier or another would be required to afford primary or excess coverage to their insured, which determination could not be made until a determination as to liability was made in the underlying action. The only mention of the insurer’s duty to defend related to the issue of defense expenses. Since the insured was already being defended by one of the carriers, there was no practical need for the other insurer to contribute to that effort given that the issue of coverage with respect to indemnity was necessarily deferred pending a determination of the underlying action, which determination would also resolve the issue of primary responsibility for defense expenses. Such decision adds nothing to the issue decided here and its citation as authority for the statement that the duty to defend “is not an inflexible rule but, rather, one of expedience” is, in the context of this case, a non sequitur and is liable to create mischief in the future.
Buckley, P.J., Sullivan and Friedman, JJ., concur. Andrias, J., concurs in result only in a separate opinion.
Judgment, Supreme Court, New York County, entered June 12, 2002, affirmed, without costs.