County of Erie v Selective Insurance Company of America and Zurich American Insurance Company
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Attorneys and Parties
Brief Summary
Insurance coverage, specifically whether commercial insurers had a duty to defend a county in an underlying action.
Supreme Court, Erie County, granted the County of Erie's motion for summary judgment, denied Selective Insurance Company of America's cross-motion for summary judgment, and declared that both defendants were obligated to defend the County in the underlying action.
The Appellate Division modified the order by denying the County's summary judgment motion insofar as it was against Selective Insurance Company of America and vacating the declarations entered against Selective.
The court applied the reasoning stated in the companion appeal, County of Erie v Selective Ins. Co. of Am. (appeal No. 1), and concluded that the County was not entitled to summary judgment against Selective on the duty-to-defend issue. The order was otherwise affirmed.
Background
The County of Erie brought a coverage action against Selective Insurance Company of America and Zurich American Insurance Company seeking a declaration that the insurers were obligated to defend it in an underlying lawsuit. Both insurers appealed from an order and judgment that granted the County summary judgment and declared a duty to defend.
Lower Court Decision
The lower court granted the County's motion for summary judgment, denied Selective's cross-motion for summary judgment, and declared that Selective and Zurich were obligated to defend the County in the underlying action.
Appellate Division Reversal
The Appellate Division unanimously modified the order and judgment by denying the County's motion insofar as it sought summary judgment against Selective Insurance Company of America and by vacating the declarations against Selective. As modified, the order and judgment was affirmed without costs, and the matter was remitted to Supreme Court, Erie County, for further proceedings consistent with the memorandum in the companion appeal. The ruling otherwise left intact the disposition as to Zurich American Insurance Company.
Legal Significance
This decision shows that, even where a trial court declares a duty to defend, an appellate court may withdraw that declaration as to one insurer if the record does not justify summary judgment under the governing coverage analysis. It also reflects the Appellate Division's use of a companion appeal to supply the controlling reasoning for a related insurance-coverage dispute.
The County could not keep summary judgment declaring Selective's duty to defend; the appellate court vacated that relief as to Selective and sent the matter back for further proceedings, while otherwise affirming the order.