The Supreme Court for New York County has held that a policyholder’s guilty plea for assault does not authorize the denial of liability coverage for a lawsuit arising from the same incident. In United Servs. Auto. Ass’n v. Iannuzzi, the insurer sought a declaratory judgment that it had no duty to defend and indemnify a policyholder for a lawsuit arising from an altercation. The insurer’s argument was based upon policy language limiting liability coverage to claims arising from “occurrences,” which is in turn defined as an “accident.” The insurer argued that as the policyholder had pled guilty for criminal assault with regard to the same incident, the incident concerned intentional conduct rather than an “accident,” and was therefore not an “occurrence” for which coverage was owed. The insurer further contended that given the guilty plea, the policyholder was precluded from arguing that the incident was not intentional.
The policyholder responded by contending that the lawsuit concerned injuries purportedly sustained after the underlying plaintiff charged him and he bent down in self-defense, which caused the plaintiff to flip over the policyholder’s shoulder and land on the pavement. The policyholder acknowledged that he punched the injured party while on the ground, and stated that this was the only conduct to fall within the scope of the assault charge. The policyholder argued that the punch was not forceful enough to cause the injuries purportedly sustained by the underlying plaintiff.
The Court began its analysis by noting that the underlying complaint alleged that the policyholder negligently caused the subject injuries. The Court further noted that under New York law, an “accident” not only referred to an unintentional or unexpected event, but also concerned intentional conduct that had an unintentional or unexpected result. The Court therefore concluded that if the policyholder negligently or accidentally caused the injuries at issue, this would constitute an “occurrence” for which coverage would be owed.
The Court recognized that given the evidence of intentional behavior, the fact-finder in the underlying lawsuit may “ultimately reject the notion” that the policyholder negligently caused the injuries. However, the Court noted that this potential outcome was irrelevant to the question of whether the insurer had a duty to defend the policyholder against allegations of negligence. For the reasons set forth above, the Court concluded that the insurer had such a duty, while stating that the insurer’s potential duty to indemnify was dependent upon the facts as they developed in the underlying action.
This decision reflects that given New York’s broad definition of the term “accident,” it may often prove challenging to establish that actions alleged in a complaint do not constitute an “accident” and are therefore not an “occurrence” triggering coverage under standard liability policies. In light of this definition, a duty to defend may often be found when intentional acts are alleged to have had unintentional consequences.
