Fitzpatrick v. American Honda Motor Company, Inc.

575 N.E.2d 90 (1991)

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Nature of the Case

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Facts

Linda Fitzpatrick, sought recovery for the wrongful death of her husband, John who died while operating a three-wheel all-terrain vehicle. The vehicle in question was owned by P and P had given Fitzpatrick permission to use it in connection with the performance of certain yardwork and household chores. Cherrywood Property Owners Association (CPOA, the owner of the property on which the accident occurred, had retained P, and P, acting as CPOA's agent, had in turn hired Fitzpatrick as an 'independent contractor.' P was an officer, shareholder, and director of an independent concern called Cherrywood Landscaping, Inc. (CLI), which had been retained by CPOA to do landscaping work on CPOA's property. The vehicle involved had been purchased by P on behalf of CLI for use in its landscaping and gardening business. CLI had also purchased a liability insurance policy from D, which indemnified the corporation against having to pay damages for bodily injury and property damage arising out of its business. The policy was not an 'owner's policy' and P was not a specifically named insured. The terms of the policy included as 'insured persons' 'any executive officer, director or stockholder [of the named insured (i.e., CLIs)] while acting within the scope of his duties as such.' P notified D and requested that D provide him with a defense. D refused, stating that the policy it had issued to CLI did not appear to cover the claim against P. P informed D that the vehicle involved was 'owned for and * * * used exclusively for landscaping operations' and that the claims asserted against P arose out of activities he undertook for CLI the named insured. D's own agent informed D of the same facts. D maintained that it was not required to provide a defense because the complaint did not name CLI and P, the named defendant, was not insured as an individual. P commenced a third-party action against D seeking payment of his legal fees in the main action, as well as 'judgment over' for any judgment entered against him in the main action. D argued that it had no duty to defend or indemnify P under the terms of the policy. P submitted proof to show that, despite the complaint's inaccuracies, the Fitzpatrick claim actually did involve a covered event. The Supreme Court denied D's dismissal motion, holding that the question of whether its policy covered the Fitzpatrick accident 'must await a plenary trial.' The Appellate Division reversed and dismissed the third-party complaint. It held that the allegations in the complaint are the determinative factor in resolving whether the provisions of an insurance policy have been 'activated' in a particular action.