Opinion
July 6, 1970
In an action by a liability insurer with respect to the operation by the insured of automobiles of patrons of the insured's beach club against two other automobile liability insurers for contribution for moneys expended with respect to certain casualty claims, defendant Sun Insurance Office, Limited appeals from an order of the Supreme Court, Queens County, dated January 28, 1970, which modified a prior order and granted plaintiff summary judgment against said defendant for $7,500, with interest, and directed an assessment of additional damages. Order modified by striking therefrom the first and second ordering paragraphs and substituting therefor provisions (1) granting plaintiff summary judgment against defendant Sun Insurance Office, Limited in the amount of $5,625, with interest thereon from May 27, 1965, (2) directing an assessment to determine the amount of expenses reasonably and necessarily incurred by plaintiff subsequent to October 5, 1964 in the defense of the action by Weinberg and (3) directing that plaintiff have judgment against said defendant for 25% of the sum so assessed. As so modified, order affirmed, without costs. We agree with defendant Sun's contention that, under their respective policies, liability between plaintiff, Allstate, and itself for the costs and expenses of settling the actions against their common insured should have been apportioned in the ratio of 3 to 1. The limits of Allstate's and Sun's liability for the entire loss to their insured were $300,000 and $100,000, respectively; these were their policy limits for "each accident" involving their insured. By their policies Allstate and Sun also limited their liability for "each person" injured to $100,000 and $50,000, respectively. In this action, Allstate sought, inter alia, to recover from Sun a pro rata share of the sum it had expended on the common insured's behalf in settling several claims arising out of a single accident. That all of this sum except the portion representing expenses incurred in connection with the single settlement of the claim of one Bernard Weinberg is barred by the Statute of Limitations does not alter the limits of parties' liability to the insured; nor does it alter the proportion of the parties' ultimate liability. The Statute of Limitations does not destroy the obligation; it merely bars the remedy. Accordingly, despite Sun's successful interposition of the Statute of Limitations as to part of Allstate's claim, the ratio of the parties' liability for the loss to their insured remained fixed at 3 to 1. Thus, Sun need only reimburse Allstate for one quarter of the settlement made to Weinberg. As to the expenses incurred in connection with the Weinberg settlement, Sun need only pay one quarter of those expenses incurred after October 5, 1964. From the papers before us, it appears that the first request that Sun undertake the defense of the Weinberg action was made on October 1, 1964 and that this request was denied on October 5, 1964. While Sun's duty to defend arose at the time of the accident, its liability for the breach of that duty arose only after it refused the request to provide a defense (see Grand Union Co. v. General Acc. Fire Life Assur. Corp., 254 App. Div. 274, 281). Christ, P.J., Munder, Martuscello, Latham and Kleinfeld, JJ., concur.