Public Service Mutual Insurance Co. v. Goldfar

425 N.E.2d 810 (1981)

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Nature of the Case

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Facts

P issued a 'Dentist's Professional Liability Policy' to the Dental Society of the State of New York. Goldfarb (D), a member of the society, obtained coverage under that policy.

Schwartz is a former patient of D who claims that in the course of receiving such treatment, she was sexually abused by D. This claim, is the subject of a pending civil suit. It also resulted in a criminal conviction of the crime of sexual abuse in the third degree. P, in a declaratory judgment action, asked the court to determine whether its policy covers this civil claim seeking compensatory and punitive damages. Special Term found that the acts complained of by Schwartz were never intended to fall within the protective scope of the professional liability policy because they were undertaken for the personal satisfaction of D and not in the course of proper dental treatment. The Appellate Division, First Department, reversed, noting that the policy specifically provided coverage for 'assault' and 'undue familiarity' as well as for dental malpractice. It concluded that the broad language indicated an intent that a claim based upon sexual abuse in the course of treatment be covered and that the insurer would be liable for both compensatory and punitive damages. P appealed. P contends that its policy was not intended to provide coverage against a claim of sexual abuse. P also contends that the public policy of this State does not allow contractual indemnification for civil liability which arises out of the commission of a crime.