Summary
finding a conflict when the complaint in the underlying action "embodie[d] claims sounding both in negligence and intentional tort" and under the policy, the carrier would be liable "only for the insured's negligence and thus would benefit from a finding of an intentional tort"
Summary of this case from Great Am. Ins. Co. v. Houlihan Lawrence, Inc.Opinion
December 11, 1981
Appeal from the Erie Supreme Court, Marshall, J.
Present — Simons, J.P., Hancock, Jr., Callahan, Denman and Schnepp, JJ.
Order unanimously modified and, as modified, affirmed, without costs, in accordance with the following memorandum: Special Term properly determined that the carrier has a duty to defend its insured in the pending lawsuit (see Utica Mut. Ins. Co. v Cherry, 38 N.Y.2d 735, affg 45 A.D.2d 350; United States Fid. Guar. Co. v Copfer, 63 A.D.2d 847, affd 48 N.Y.2d 871) and awarded the insured attorney's fees for defending against the carrier's action for declaratory judgment ( Johnson v General Mut. Ins. Co., 24 N.Y.2d 42, 50, Glens Falls Ins. Co. v United States Fire Ins. Co., 41 A.D.2d 869, affd on mem below 34 N.Y.2d 778; Hurney v Mattson, 59 A.D.2d 934). However, Special Term should have granted the insured's request for an order permitting him to retain counsel of his own choosing at the carrier's expense. "[Where] the insurer's interest in defending the lawsuit is in conflict with the defendant's interest — the insurer being liable only upon some of the grounds for recovery asserted and not upon others — defendant * * * is entitled to defense by an attorney of his own choosing, whose reasonable fee is to be paid by the insurer" ( Public Serv. Mut. Ins. Co. v Goldfarb, 53 N.Y.2d 392, 401; see, also, Prashker v United States Guar. Co., 1 N.Y.2d 584, 593; Utica Mut. Ins. Co. v Cherry, 45 A.D.2d 350, 354-355, supra; Penn Aluminum v Aetna Cas. Sur. Co., 61 A.D.2d 1119; Rimar v Continental Cas. Co., 50 A.D.2d 169, 173-174). Here, the complaint against the insured embodies claims sounding both in negligence and intentional tort. Under the terms of the policy, the carrier would be liable only for the insured's negligence and thus would benefit from a finding of an intentional tort.