Case Name: Annie L. McCarthy, Respondent, v. Motor Vehicle Accident Indemnification Corporation, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1962-02-22
Citations: 16 A.D.2d 35
Docket Number: 
Parties: Annie L. McCarthy, Respondent, v. Motor Vehicle Accident Indemnification Corporation, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 16
Pages: 35–50

Head Matter:
Annie L. McCarthy, Respondent, v. Motor Vehicle Accident Indemnification Corporation, Appellant.
Fourth Department,
February 22, 1962.
Bond, Schoeneclc & King (John G. Kinney and Leslie E. Doming of counsel), for appellant.
Costello, Cooney & Fearon (Vincent A. O’Neil of counsel), for respondent.

Opinion:
Halpbbít, J.
The question here presented is this: May the Motor Vehicle Accident Indemnification Corporation be held liable, under its uninsured motorist indorsement, for injuries caused by an assault and battery committed by an insured motorist, where the insurance company covering the automobile was absolved from liability upon the ground that the assault and battery was not an accident within the meaning of the liability insurance policy?
It is undisputed that the plaintiff's injuries were caused by an assault and battery committed by her brother-in-law, David Branch. On October 18, 1959, the plaintiff was driving her automobile in the City of Syracuse, New York, with her sister as a passenger in the automobile. The plaintiff's sister had had a violent argument with her husband and the plaintiff was assisting her in escaping from him. Branch suddenly appeared in his own automobile and deliberately drove into the plaintiff's automobile for the purpose of stopping it. As a result of the intentional collision, the plaintiff suffered bodily injury. Branch was subsequently convicted of the crime of assault because- of his action.
Branch's automobile was covered by a standard automobile liability policy issued by the United Services Automobile Association. The insurance carrier denied liability to the plaintiff upon the ground that the injuries were not " caused by accident " within the terms of the policy. The plaintiff recovered a default judgment against Branch in the Onondaga County Court in the amount of $3,000 and costs and thereafter commenced an action against Branch's insurance company under-section 167 of the Insurance Law. The court granted summary judgment in favor of the defendant dismissing the complaint upon the ground that the insurance company was not liable for the plaintiff's injuries because they were not caused by accident. The correctness of the result reached in that action is not now questioned.
The plaintiff's automobile was also covered by a standard policy to which there was attached a MVAIC indorsement, which all liability insurance companies are required to add to their policies under subdivision 2-a of section 167 of the Insurance •Law. Under this indorsement, the MVAIC agreed to pay the plaintiff for all injuries for which she was legally entitled to recover, " caused by accident ", arising from the operation of an uninsured automobile.
After losing her action against Branch's insurance company, the plaintiff commenced the present action against the MVAIC, seeking a declaratory judgment that the MVAIC was liable for the plaintiff's injury under the MVAIC indorsement attached to the plaintiff's policy.
The court below granted the plaintiff's motion for summary judgment, leaving only the question of the amount of the damages to be assessed. From that order, this appeal was taken.
The order of the court below cannot be permitted to stand. The MVAIC was set up in 1958 (Motor Vehicle Accident Indemnification Corporation Law, Insurance Law, art. 17-A; L. 1958, eh. 759) to fill the gaps in the compulsory automobile insurance plan which had been adopted by the State in 1956 (Motor Vehicle Financial Security Act, Motor Vehicle and Traffic Law, art, 6-A; L. 1956, ch. 655), arising from the fact that, notwithstanding the statute, some accidents might be caused by automobiles which had no insurance applicable to the accident or by " hit-and-run " motorists who could not be identified. The MVAIC Law was designed to afford a person injured in such an accident the same protection as he would have had if he had been injured in an accident caused by an identifiable automobile covered by a standard automobile liability insurance policy in effect at the time of, and applicable to, the accident. In the declaration of purpose in .section 600 of the statute, it is explicitly stated, that " The legislature determines that the public interest can best be served by closing such gaps in the motor vehicle financial security act [by creating the MVAIC] ", The MVAIC Law was not designed to supplement the insurance coverage of insured automobiles or to protect injured persons against risks which were not covered by the standard automobile liability policies.
This is plain upon a reading of the statute itself; the conclusion is strengthened by a reference to the explanatory statements issued by the interested State departments and the members of the Legislature in advocating the passage of the act and by the Governor in recommending and approving it. (N. Y. Legis. Annual, 1958, pp. 244, 299, 436, 473; see, also, Ward, New York's Motor Vehicle Accident Indemnification Oorp., 8 Buffalo L. Rev. 215, 230, 239.) There is not a shred of legislative history to support the view that the statute was designed to extend protection beyond that afforded by the standard-liability insurance policies issued in the form approved by the Superintendent of Insurance.
As will be seen below, an assault and battery committed by the named insured by means of the use of an insured automobile is not within the ambit of the risks covered by the standard liability insurance policy. There was no intention on the part of the Legislature to supplement the coverage of liability insurance policies by having the MYAIC cover the excluded risk.
The MYAIC is a corporation of which all the insurance companies authorized to write automobile liability insurance policies in New York State are required to be members (§ 602). Its funds are raised by assessment against the members (§ 607).
The statute adopted two devices to carry out its purpose. (1) Automobile owners who suffered personal injuries as the result of accidents caused by uninsured motorists were to be covered by an indorsement in the name of the MYAIC to be attached to their own insurance policies (Insurance Law, § 167, subd. 2-a); the indorsement was also to cover members of their families and others coming within the term "insured" as defined in the indorsement. (2) All others who were so injured and who came within the class of " qualified persons " defined in the statute were authorized to proceed against the MYAIC in the manner specified in the statute. (MYAIC Law, Insurance Law § 601, 608.)
We now turn to the language of the MYAIC indorsement upon which the plaintiff brought this action. The indorsement provides that the ' ' MYAIC will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile " (emphasis added). The indorsement was in the form approved by the Superintendent of Insurance pursuant to subdivision 2-a of section 167 of the Insurance Law.
In order to recover under this indorsement, the plaintiff had the burden of establishing (1) that the automobile which caused her injury was an uninsured one, and (2) that her injury was "caused by accident". The plaintiff's case was deficient in both respects.
(1) Branch's automobile was not an uninsured automobile. The term "uninsured automobile " is defined in the MYAIC indorsement, so far as here pertinent, as follows: "an automobile with respect to the ownership, maintenance or use of which there is, in the amounts specified in the New York Motor Yehicle Financial Security Act [no] bodily injury liability bond or insurance policy, applicable to the accident In this case, there was in effect, at the time of the occurrence in question, a bodily injury liability insurance policy in the amount specified in the Motor Vehicle Financial Security Act appli cable to any accident in which Branch's automobile might be involved. The plaintiff's claim against Branch's insurance carrier was defeated, not because the insurance policy was not in full force and effect, but because the court found that the plaintiff's injuries had not been caused by an accident within the meaning of the policy. This finding did not convert Branch into an uninsured motorist or convert his automobile into an uninsured automobile within the meaning of the indorsement. All that an automobile owner is required to carry under the Motor Vehicle Financial Security Act is a policy of liability insurance in specified amounts insuring against liability for bodily injury " caused by accident ", in the form specified by the ' ' Minimum Provisions for Automobile Liability Insurance Policies " promulgated by the Superintendent of Insurance (N. Y. Off. Comp, of Codes, Rules & Regulations [13th Supp.], regulation 35-A, pp. 868-870). The MVAIC indorsement does not come into play until it is established that the automobile involved in the occurrence was not covered by a valid and enforcible policy of the kind required by the statute and regulations. Branch's automobile was covered by such a policy.
There was no disclaimer by the insurance company of liability under the terms of the policy for any accident for which Branch might be responsible. Returning to the words of the MVAIC indorsement, there was an outstanding policy ' ' applicable to the accident ", if the plaintiff could establish that there was an accident.
A disclaimer or denial of liability by an insurance company may place the automobile in the position of an uninsured automobile, within the meaning of the MVAIC indorsement, if, but only if, the effect of the disclaimer or denial is to deprive the injured person of the protection afforded by a standard automobile liability insurance policy. As used in the MVAIC Law, the term " disclaimer or denial of liability " means a repudiation of liability " because of some act or omission of the person or persons liable or alleged to be liable " (MVAIC Law, § 608, subd. [c]). This refers to an act or omission by the insured automobile owner in his relationship to his insurance company, constituting a breach of the conditions of the policy (cf. MVAIC Law, § 620). There was no disclaimer or denial on any such ground here.
A sharp differentiation must be made between (a) a finding that the insurance company is not liable under a valid policy because the injuries were not caused by accident and hence were not within the risks covered by the policy and (b) a finding that the company is not liable because the policy was not in force, at the time in question or because there had been a breach of a condition of the policy by the insured rendering it unenforcible. In the latter case, the finding establishes that no enforcible insurance policy was in effect at the time of the injury; hence the automobile was an uninsured automobile within the meaning of the MVAIC indorsement. In the former ease, the finding recognizes that there was a standard insurance policy of the required type in force at the time which covered all the risks which were required to be covered; hence no uninsured automobile was involved and MVAIC could not be held liable.
(2) The plaintiff's injury was not ££ caused by accident". As has been stated, it was found by the court in the plaintiff's action against Branch's insurance carrier, and it is now undisputed, that her injury was caused by an assault and battery committed by the insured. The court correctly held in that action, that an injury caused by an assault and battery committed by the insured is not an accident within the meaning of a standard liability insurance policy (Morgan v. Greater N. Y. Taxpayers Mut. Ins. Assn., 305 N. Y. 243; De Luca v. Coal Merchants Mut. Ins. Co., 203 Misc. 261; Farm Bureau Mut. Automobile Ins. Co. v. Hammer, 177 F. 2d 793, cert. denied 339 U. S. 914).
This conclusion follows from the settled interpretation of the key words ££ caused by accident " in the principal insuring clause of the policy. It is further supported by the express provision required to be inserted in all New York automobile liability insurance policies that ££ Assault and Battery shall be deemed an accident unless committed by or at the direction of the insured". The necessary negative inference from this provision is that if an assault and battery is committed by or at the direction of the insured, it shall not be deemed an accident within the meaning of the policy.
The assault and battery clause is a clarification or restatement of the accepted judicial interpretation of the principal insuring clause of the policy. Even without the special clause, an assault and battery willfully committed by the named insured is obviously an intentional act and not an accident. Indeed, if the term£ £ caused by accident5 ' in the principal insuring clause of the policy were construed to include coverage for an assault by the named insured, it would be in conflict with the public policy of this State forbidding the coverage of the insured against his own criminal acts. (Morgan v. Greater N. Y. Taxpayers Mut. Ins. Assn., 305 N. Y. 243, 248; supra; Messersmith v. American Fid. Co., 232 N. Y. 161, 165.) On the other hand, it has been held that, even without the special clause, an assault committed without the insured's consent or direction by the insured's employee or by some other person for whose conduct the insured is responsible, is an uncontemplated and unintended event from the insured's point of view and is therefore an accident within the meaning of the coverage of the insured by the policy (Floralbell Amusement Corp. v. Standard Sur. & Cas. Co., 256 App. Div. 221). The special assault and battery clause confirms this holding by setting it forth explicitly in the policy.
It is thus the settled law of New York both by virtue of judicial interpretation of the term " caused by accident" and by virtue of the express assault and battery clause, that an injury caused by an assault and battery committed by the named insured himself is not an accident within the meaning of the policy.
The plaintiff does not dispute this conclusion but she argues that, even though the causing of injury to her by the assault and battery did not constitute an accident within the meaning of the liability insurance policy, it may be found to have been an accident within the meaning of the MVAIC indorsement. This cannot be so. As has been pointed out above, the purpose of the MVAIC statute is to give the same protection to a person injured by an uninsured motorist, as he would have had if he had been injured in an accident caused by an automobile covered by a standard liability insurance policy. The determination of the scope of the coverage of a standard policy is therefore controlling in determining the scope of the MVAIC coverage. They are, and under the scheme of the statute, they must be, coextensive.
The key words " Caused by accident " appear alike in the standard liability policy and in the MVAIC indorsement. The words must be given the same meaning in the policy and in the indorsement.
The words " caused by accident" or "motor vehicle accidents " appear throughout the Motor Vehicle Financial Responsibility Act, the MVAIC Law and subdivision (2-a) of section 167 of the Insurance Law. There is no provision in any of the statutes indicating a legislative intent to protect all victims of " motor vehicles ", regardless of how the vehicle may have been used as an instrument of injury. The legislative intent, as expressed in the MVAIC Law, is to protect the victims of " motor vehicle accidents " (§ 600 and passim, MVAIC Law).
The assault and battery clause discussed above must also be deemed to be applicable to the MVAIC indorsement. The assault and battery clause is a part of the minimum provisions prescribed for an " owner's policy of liability insurance " in this State (reg. 35-A, § 1, par. f, issued by the Superintendent of Insurance, cited supra). The same regulation requires that every policy contain the standard MVAIC indorsement. The two provisions of the regulation must be read together. Therefore, even though the assault and battery clause was not expressly repeated in the MVAIC indorsement, it must be read into it. However, for the reasons given above, even if the assault and battery clause were not read into the indorsement, the result would be the same in excluding assault and battery by an automobile owner from the scope of coverage, both because of the judicial interpretation of the word " accident " in the context of liability insurance policies and because of the legislative purpose to make the scope of the coverage by liability insurance policies and by the MVAIC coextensive.
An argument is made that an assault and battery by automobile should be looked at from the standpoint of the victim, and not of the wrongdoer and that, from that standpoint, it should be regarded as an accident and should be covered by the standard automobile liability insurance policy. This argument should be addressed to the Legislature and not to the courts since, as has been pointed out above, the standard policy is explicit in excluding coverage of assault and battery. In any event, the argument has no relevance in this case. The argument relates to the amendment of the primary liability insurance policies and to the resulting liability of the insurance carriers, not to the liability of the MVAIC. A broadening of the coverage afforded by the standard automobile liability insurance policy would not give rise to any additional liability on the part of the MVAIC with respect to automobiles which were covered by standard liability insurance policies. The extended coverage would be the responsibility of the insurance carriers, not of the MVAIC.
For these reasons, the cases from other States cited in the dissenting opinion are not in point. They are all cases dealing with the liability of the primary insurance carriers under various forms of policies and under various insurance statutes. As we have seen, with respect to the primary insurance carriers, the law of New York is settled to the contrary of the holding of the cases cited. In any event, none of the cases deals with the liability of a corporation like the MVAIC. So far as we have been able to find, there is no case anywhere which supports the view that, where an insured automobile (covered by a standard policy) was used to inflict an assault and battery and the insur anee carrier was held not to he liable because the risk was of a type not covered by the policy, the liability falls upon a corporation or special fund like the MVAIC set up for the protection of persons injured by accidents caused by uninsured motorists. Such a use of the assets of the corporation or the special fund would distort the purpose for which the corporation or fund was set up and would divert its assets to a wholly unintended use.
A word should be added about the arbitration provision in the MVAIC indorsement. It provides that all matters upon which the claimant and the MVAIC do not agree shall be settled by arbitration in accordance with the Buies of the American Arbitration Association, upon the written demand of either party. This provision applies to questions of liability as well as of damages (Motor Vehicle Acc. Ind. Corp. v. Veles, 14 A D 2d 276). However, neither party served a demand for arbitration in this case. Instead, the plaintiff sued for a declaratory judgment as to the liability of the MVAIC. The defendant made no motion to stay the action under section 1451 of the Civil Practice Act and made no request for arbitration. The defendant interposed an answer and thereafter both parties moved for summary judgment. It is true that, in the prayer for relief in the complaint, the plaintiff asked, in the alternative, for a direction that the defendant submit the issue of liability to arbitration but this is not a proper method of demanding arbitration under the arbitration provision of the indorsement, or under the Civil Practice Act (Civ. Prac. Act, § 1458). In this situation, the parties must be deemed to have waived arbitration (Matter of Zimmerman v. Cohen, 236 N. Y. 15,19; Matter of Travelers Ind. Co. [Sherwood], 13 A D 2d 507).
The court below undertook to pass upon the issue of liability and decided it in favor of the plaintiff. Upon review, we pass upon the same issue and decide it in favor of the defendant.
The order appealed from should accordingly be reversed and the plaintiff's motion for summary judgment denied and the defendant's motion for summary judgment granted, and judgment should he entered, adjudging that the defendant is not liable for the plaintiff's claim.