Case ID: ad2d_261/html/0146-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Franklin Holding Corporation (Delaware), Appellant, v National Union Fire Insurance Company of Pittsburgh, Pa., Respondent.
    [689 NYS2d 492]
   —Judgment, Supreme Court, New York County (Barry Cozier, J.), entered November 25, 1998, dismissing the complaint, and bringing up for review an order, same court and Justice, entered November 24, 1998, which, in an action by plaintiff insured against defendant insurer arising out of defendant’s disclaimer of coverage under a directors and officers policy, granted defendant’s motion to dismiss the complaint on the basis of documentary evidence, unanimously affirmed, with costs. Appeal from the order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

The exclusionary language on which defendant relies defines the term “Insured(s)” to include “any past * * * Directors or Officers of the Company”, and provides “The Insurer shall not be liable to make any payment for Loss in connection with any claim or claims made against the Directors or Officers * * * (i) which are brought by any Insured or the Company; or which are brought by any security holder of the Company, whether directly or derivatively, unless such claim(s) is instigated and continued totally independent of, and totally without the solicitation of, or assistance of, or active participation of, or intervention of, any Insured or the Company; provided, however, this exclusion shall not apply to wrongful termination of employment claims brought by a former employee other than a former employee who is or was a Director of the Company.” Such language clearly and unambiguously excludes coverage of the derivative and class action claims that were brought against plaintiff by its former director (see, Levy v National Union Fire Ins. Co., 889 F2d 433 [2d Cir]; accord, Kiewit Diversified Group v Federal Ins. Co., 999 F Supp 1169 [ND 111]; Voluntary Hosps. v National Union Fire Ins. Co., 859 F Supp 260 [ND Tex], affd 24 F3d 239 [5th Cir]; Parker v Watts, 1987 US Dist LEXIS 6862, 1987 WL 7450 [ED La, Feb. 27, 1987, Schwartz, J.]). Concur — Sullivan, J. P., Rosenberger, Tom and Wallach, JJ.