Title: State Farm Mutual Automobile Insurance Company v. John Robert Langan

State: new-york

Issuer: New York Appellate Court

Document:

=================================================================
This opinion is uncorrected and subject to revision before
publication in the New York Reports.
-----------------------------------------------------------------
No. 40  
State Farm Mutual Automobile 
Insurance Company, 
            Respondent-Appellant,
        v.
John Robert Langan, &c.,
            Appellant-Respondent.
Jennine DiSomma, for appellant-respondent. 
Evan H. Krinick, for respondent-appellant.
LIPPMAN, Chief Judge:
At issue in this appeal is whether the insured
decedent, the victim of an intentional crime, was injured as the
result of an accident within the meaning of the uninsured
- 1 -
- 2 -
No. 40
motorist endorsement and certain other provisions of the
insured's policy.  Since the occurrence must be viewed from the
insured's perspective, we conclude that it was indeed an accident
and that the insured is entitled to benefits under the policy
provisions at issue.
Decedent, Neil Conrad Spicehandler, was struck by a
vehicle at 7th Avenue and 32nd Street in Manhattan on February
12, 2002.  He sustained a compound fracture of his left lower
leg, requiring surgery, and died from complications shortly after
the operation.  Decedent was one of many who were injured when
the driver, Ronald Popadich, intentionally drove his vehicle into
pedestrians.  Popadich later pleaded guilty to second degree
murder and admitted that he intended to cause Spicehandler's
death.
Decedent was an insured under an automobile liability
policy purchased by defendant Langan through plaintiff State
Farm.  As the administrator of decedent's estate, Langan made a
claim seeking to recover benefits under the policy's
uninsured/underinsured motorist (UM) endorsement, mandatory
personal injury protection endorsement (PIP endorsement) and
death, dismemberment and loss of sight endorsement (Coverage S).* 
The policy's UM endorsement provides that it "will pay all sums
that the insured or the insured's legal representative shall be
* This action solely concerns claims made under Langan's own
policy -- not the policy of either the driver or the vehicle.
- 2 -
- 3 -
No. 40
legally entitled to recover as damages from the owner or operator
of an uninsured motor vehicle because of bodily injury sustained
by the insured, caused by an accident arising out of such
uninsured motor vehicle's ownership, maintenance or use" subject
to relevant policy exclusions.  The PIP endorsement and Coverage
S likewise state that they will pay benefits for injuries
sustained as the result of "an accident."  These endorsements
exclude coverage on several bases, but none specifically excludes
coverage for an injury that results from intentional conduct. 
State Farm denied and disclaimed liability because it determined,
as relevant here, that decedent's death was caused not by an
accident, but by the intentional conduct of the operator of the
vehicle.
State Farm commenced this declaratory judgment action
seeking a declaration that it was not obligated to provide
benefits in connection with decedent's death.  Defendant answered
and counterclaimed, requesting a declaration that State Farm was
required to provide coverage under the policy.  Plaintiff's
motion and defendant's cross motion for summary judgment were
denied because the parties had not, at that point, provided the
court with information regarding the outcome of the criminal
action against Popadich, which the court deemed "essential" to
determining whether decedent's injuries were caused by an
intentional act.  The Appellate Division upheld the portion of
the Supreme Court order that denied summary judgment on the issue
- 3 -
- 4 -
No. 40
of whether the incident was covered by the policy, finding that
there was insufficient proof to determine whether decedent had
been the victim of an intentional crime, but that, if he had, the
incident would not be covered (18 AD3d 860, 862 [2d Dept 2005]).
After Popadich was convicted of second degree murder,
State Farm renewed its motion for summary judgment, again seeking
a declaration that it was not required to provide benefits under
the policy.  Langan opposed the motion and cross-moved for
summary judgment, urging that whether the incident was an
accident within the meaning of the policy must be determined from
the perspective of the insured.  Supreme Court granted State
Farm's motion and denied Langan's cross motion on the basis of
Popadich's conviction.
On appeal, a majority of the Appellate Division
modified to declare that State Farm was required to provide
benefits under the Mandatory PIP and Coverage S endorsements and,
as so modified, affirmed (55 AD3d 281 [2d Dept 2008]).  The Court
determined that State Farm was not required to provide UM
benefits because the purpose of statutorily required uninsured
motorist coverage is to provide an individual with the same level
of coverage he or she would be entitled to if injured in an
accident with an insured motorist covered by an applicable
policy.  Since a standard liability policy would not have covered
Popadich for his intentional criminal conduct, the Court found
that Langan's UM coverage was not applicable under the
- 4 -
- 5 -
No. 40
circumstances presented here.  However, the Court determined that
in other contexts it was appropriate to determine whether a
particular event was an accident from the insured's point of
view, that the incident was clearly unexpected from decedent's
perspective and that, as a result, State Farm was required to
provide coverage under the PIP and S Coverage endorsements.
Two Justices dissented in part and would have affirmed
Supreme Court's order declaring that State Farm was not required
to provide coverage.  The dissent agreed that Langan was not
entitled to UM benefits under current law based on Popadich's
intentional conduct, but observed that there had been a recent
national trend to allow for coverage in similar circumstances and
that strong public policy considerations weighed in favor of
coverage.  The dissent would have denied PIP and S Coverage
benefits based on the law of the case and, in any event,
disagreed that the same term should be interpreted differently
within the same policy.  Both parties appeal pursuant to leave
granted by the Appellate Division, which certified for our review
the question of whether its order was properly made.  We modify
and answer the certified question in the negative.
This appeal turns on whether decedent's injuries were
caused by an accident within the meaning of the policy.  Although
the endorsements at issue do not define the term "accident," we
have previously held that it is not to be "given a narrow,
technical definition," but should be interpreted according to how
- 5 -
- 6 -
No. 40
it would be understood by the average person (Miller v
Continental Ins. Co., 40 NY2d 675, 676 [1976]).  We have
determined that, for purposes of automobile insurance policies,
the term "accident" means an event typically involving violence
or the application of external force (see Michaels v City of
Buffalo, 85 NY2d 754, 758 [1995]).  In order to determine whether
a particular event was "accidental, 'it is customary to look at
the casualty from the point of view of the insured, to see
whether or not . . . it was unexpected, unusual and unforeseen'"
(Miller, 40 NY2d at 677 [citation omitted]).  Although we have
noted that the perspective of the injured victim should not be
used to determine whether an accident has occurred, "'[b]ecause
an injury is always fortuitous to a non-consenting victim'" 
(Michaels, 85 NY2d at 759 [citation omitted]), here we have the
situation where the victim is also the insured.
It is clear that, viewed from the insured's
perspective, the occurrence was an unexpected or unintended event
-- and therefore an "accident" -- even though Popadich admittedly
intended to strike decedent with the vehicle.  The language of
the policy also suggests that this type of situation would be
covered as it was an accident caused by the use of a motor
vehicle that did not have an applicable insurance policy. 
Significantly, Insurance Department regulations require that an
automobile owner's liability insurance policy contain a provision
specifying "that assault and battery shall be deemed an accident
- 6 -
- 7 -
No. 40
unless committed by or at the direction of the insured" (11 NYCRR
§ 60-1.1 [f]).  Although the provisions at issue here do not
involve liability coverage, the regulation is relevant to the
understanding of the extent of coverage provided by the
endorsements.
The argument against requiring coverage, advanced by
State Farm and relied upon by the Appellate Division, is based on
the general principle that mandatory uninsured motorist benefits
are meant to provide coverage that is coextensive with, and not
greater than, that afforded by a standard liability policy.  They
rely on our statement that the purpose of mandatory UM benefits
is "'to provide the insured with the same level of protection he
or she would provide to others were the insured a tortfeasor in a
bodily injury accident'" (Raffellini v State Farm Mut. Auto. Ins.
Co., 9 NY3d 196, 204 [2007], quoting Matter of Prudential Prop. &
Cas. Co. v Szeli, 83 NY2d 681, 687 [1994]).
In support of its position, State Farm relies on
McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [4th Dept
1962], affd 12 NY2d 922 [1963]), a case where the plaintiff-
victim was injured when the insured motorist committed an
intentional assault against her using his vehicle.  After the
insurer denied coverage because the occurrence was not an
accident within the meaning of the policy, plaintiff sought to
recover under the policy's MVAIC endorsement -- a statutorily
required endorsement intended to afford coverage to a person
- 7 -
- 8 -
No. 40
injured by an uninsured or unidentified motorist, equal to that
available to one injured by a motorist covered by an applicable
liability policy (see McCarthy, 16 AD2d at 38).  MVAIC is funded
by assessments levied against all of the insurance companies
licensed to conduct business in the state (see McCarthy, 16 AD2d
at 39).  McCarthy held that since an intentional assault
committed by an insured motorist was not an accident subject to
coverage under the standard liability policy, such an occurrence
would likewise be excluded from coverage under the MVAIC
endorsement (see McCarthy, 16 AD2d at 43).  The Court also
determined that allowing recovery under MVAIC would be
inconsistent with the purpose for which the special fund had been
established (see McCarthy, 16 AD2d at 44).
This case differs from McCarthy in two important
respects.  First, UM coverage, although required by statute, is
part of the insured's own policy -- a policy that the insured
selected and for which he pays premiums.  Benefits received
through coverage under the UM endorsement do not come out of a
State fund.  Second, the insured is the victim in this case, not
the tortfeasor, and the public policy against providing coverage
for an insured's criminal acts is not implicated.
We hold that, consistent with the reasonable
expectation of the insured under the policy and the stated
purpose of the UM endorsement (to provide coverage against damage
caused by uninsured motorists), the intentional assault of an
- 8 -
- 9 -
No. 40
innocent insured is an accident within the meaning of his or her
own policy.  The occurrence at issue was clearly an accident from
the insured's point of view and Langan is entitled to benefits
under the UM endorsement.
This result is also in keeping with the national trend
toward allowing innocent insureds to recover uninsured motorist
benefits under their own policies when they have been injured
through the intentional conduct of another (see e.g. American
Family Mut. Ins. Co. v Petersen, 679 NW2d 571 [Iowa 2004]; Shaw v
City of Jersey City, 174 NJ 567, 811 A2d 404 [2002]; Wendell v
State Farm Mut. Auto. Ins. Co., 293 Mont 140, 974 P2d 623
[1999]).  Although the above decisions are not binding on this
Court, we are persuaded that the view that has been adopted by
these jurisdictions is the better one.
For many of the same reasons, Langan is entitled to
coverage under the PIP endorsement and Coverage S.  The average
insured's understanding of the term "accident" is unlikely to
vary from endorsement to endorsement within the same policy.  The
occurrence, from the insured's perspective, was certainly
unexpected and unforeseen and should be considered an accident
subject to coverage.  Contrary to State Farm's argument, we
perceive no danger that this result will frustrate efforts to
fight fraud in the no-fault insurance system.  Significantly,
there is no allegation whatsoever of fraud in this case and it is
patent that benefits should continue to be denied to those who
- 9 -
- 10 -
No. 40
intentionally cause their own injuries.
The argument that Langan is entitled to attorneys' fees
was not addressed by the courts below and should be remitted to
Supreme Court for its determination in the first instance.
Accordingly, the order of the Appellate Division should
be modified, without costs, by granting defendant judgment
declaring in accordance with this opinion and remitting to
Supreme Court for further proceedings in accordance with this
opinion, and, as so modified, affirmed.  The certified question
should be answered in the negative. 
- 10 -
State Farm Mutual Automobile Insurance Company v John Robert
Langan, etc.
No. 40
SMITH, J. (dissenting):
I would affirm the order of the Appellate Division.
As a general matter, it is true that whether a
particular event is an "accident" should be viewed from the point
of view of the insured.  The insured here was Spicehandler, the
event was an accident from his point of view, and his estate was
therefore properly allowed to recover under the so-called PIP and
Coverage S endorsements.
But uninsured/underinsured motorists (UM) coverage is
different.  Its purpose is to protect an insured who is injured
by a tortfeasor without liability insurance -- a purpose
accomplished by putting the insured in the position that he would
have been in if the tortfeasor had been insured.  This requires a
determination of whether the tortfeasor could have made a claim
under a hypothetical policy of liability insurance -- and the
tortfeasor should thus be treated as the "insured" for purposes
of analysis.  Since Popadich drove his car into Spicehandler on
purpose, the event was not an accident from Popadich's point of
view; Popadich could not have obtained indemnification from a
liability insurer; and Spicehandler's estate should not be
permitted to recover under the UM endorsement.
- 1 -
- 2 -
No. 40
This is essentially what we held when we affirmed the
Appellate Division's decision in McCarthy v Motor Veh. Acc.
Indem. Corp. (16 AD2d 35 [4th Dept 1962], aff'd 12 NY2d 922
[1963]).  The majority tries to distinguish McCarthy on what it
calls two grounds, which seem really to be one -- that UM
coverage is "part of the insured's own policy" and that "the
insured is the victim in this case, not the tortfeasor" (majority
op at 8).  The distinction will not withstand analysis.  The
purpose of UM coverage is the same as the purpose of the MVAIC
endorsement at issue in McCarthy: "to afford coverage," as the
majority puts it, "to a person injured by an uninsured or
unidentified motorist, equal to that available to one injured by
a motorist covered by an applicable liability policy" (majority
op at 7-8).  The essential rationale for McCarthy is that the
victim of an uninsured motorist should not be in a better
position than the victim of an insured one.  That rationale was
sound in McCarthy, and is sound here.
I see no justification for departing from McCarthy.  A
more serious argument might be made -- though it is not made here
-- for a more significant change in the law: modifying, in cases
involving automobile liability policies required by statute, the
general rule that liability insurance cannot cover intentional
torts.  As McCarthy mentions, a standard automobile liability
policy provides coverage only for accidents, and thus would not
cover "an assault and battery committed by the insured" (16 AD2d
- 2 -
- 3 -
No. 40
at 41; see also, e.g., Matter of Travelers Indem. Co. v Richards-
Campbell, 73 AD3d 1076 [2d Dept 2010]; Matter of Aetna Cas. &
Sur. Co. v Perry, 220 AD2d 497 [2d Dept 1995]).  This limitation
seems to be derived from the long-established rule, based on
public policy, that insurance may not indemnify a tortfeasor for
intentional wrongdoing (Messersmith v American Fid. Co., 232 NY
161, 165 [1921]; Town of Massena v Healthcare Underwriters Mut.
Ins. Co., 98 NY2d 435, 445 [2002]).  Courts in some jurisdictions
have made compulsory liability insurance an exception to this
rule, reasoning that the purpose of liability insurance, to the
extent that it is required by law, is to protect injured victims,
not tortfeasors, and that victims should be protected no less
against intentional than against negligent torts (e.g., Speros v
Fricke, 98 P3d 28, 36-38 [Utah 2004]; Dotts v Taressa, 182 W Va
586, 390 SE 2d 568 [1990]; Wheeler v O'Connell, 297 Mass 549, 9
NE 2d 544 [1937]).  Whether such an exception is justified, and
if so whether it should be created by judges or by legislators,
are questions that we should not address until we have a case
that presents them.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order modified, without costs, by granting defendant judgment
declaring in accordance with the opinion and remitting to Supreme
Court, Nassau County, for further proceedings in accordance with
the opinion herein, and, as so modified, affirmed. Certified
question answered in the negative. Opinion by Chief Judge
Lippman. Judges Ciparick, Graffeo, Pigott and Jones concur. Judge
Smith dissents and votes to affirm in an opinion in which Judge
Read concurs. 
Decided March 29, 2011
- 3 -