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Whiteman, Quinn, Selmeci and Frantz: First Department Permits First-Time Consideration of Extrinsic Evidence in Analysis of Duty to Defend, Upholds the Auto Exclusion

November 28, 2018

Brian Whiteman (Partner-New Jersey) argued and prevailed in a case before the N.Y. Appellate Division, First Department that Brian briefed with Thomas Quinn (Partner-New Jersey) and Judy Selmeci (Partner-New York). Judith Zuckerman Frantz (Of Counsel-White Plains) provided material assistance, setting the tone and direction for the appeal. Two workers injured at a construction site filed lawsuits that vaguely alleged a workplace accident and did not reference the injuries being caused during use of a truck.  An insurer that had issued a commercial auto policy (CAP), defended the insureds in the underlying actions, but then filed a declaratory judgment action seeking a ruling that our client, the general liability insurer, was obligated to defend and indemnify the insureds under the CGL policy it had issued, despite an automobile exclusion. 

The trial court ruled in the CAP insurer’s favor, finding the four-corners of the ambiguous complaints did not relieve our client of its duty to defend, despite the automobile exclusion. The appellate panel unanimously reversed, looking beyond the vague pleadings to the acknowledged facts set forth in extrinsic evidence, upholding our client's application of the automobile exclusion and concluding it was not obligated to defend the insureds. 

The favorable decision has not yet resolved the case as other insurers are involved and there is a possibility of further appeal by CAP insurer.

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