Opinion ID: 6350797
Heading Depth: 2
Heading Rank: 1

Heading: Harleysville’s duties to defend and indemnify

Text: Harleysville argues that the district court erred in concluding that it had a duty to defend the Insured because the undisputed facts demonstrate that the underlying incident arises out of the use of an “auto,” which is excluded from coverage under the Harleysville policy. We agree. “The duty of a liability insurer to defend an action brought against an insured is determined by the allegations in the complaint. If the facts alleged raise a reasonable possibility that the insured may be held liable for some act or omission covered by the policy, then the insurer must defend.” A. Meyers & Sons Corp. v. Zurich Am. Ins. Grp., 74 N.Y.2d 298, 302 (1989) (citation omitted). Still, an “insurer’s duty to defend is . . . not an interminable one, and will end if and when it is shown unequivocally that the damages alleged would not be covered by the policy.” Sturges Mfg. Co. v. Utica Mut. Ins. Co., 37 N.Y.2d 69, 74 (1975); see also Allstate Ins. Co. v. Zuk, 78 N.Y.2d 41, 45 (1991) (“[A]n insurer can be relieved of its duty to defend if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision.”). The complaint and bill of particulars in the underlying case are conclusory and offer little insight into the facts that might give rise to the Insured’s liability. Discovery in the underlying case, however, has revealed that there is no possibility that Harleysville would be obligated to provide coverage. In his deposition, Kim explained that Kho was injured by a heavy dry-cleaning press that fell off of a trailer attached to (or recently detached from) Kim’s personal vehicle. The Harleysville policy excludes coverage for injuries “arising out of the . . . use or entrustment to others of any . . . ‘auto.’” Joint App’x at 330. The term “auto” includes a “trailer . . . designed for travel on public roads.” Id. at 337. In turn, “use” includes “loading or unloading,” meaning the “handling of property . . . [w]hile it is being moved from an . . . ‘auto’ to the place where it is finally delivered.” Id. at 338. Here, there is no dispute that the dry-cleaning press fell off the trailer either while or shortly after Kim detached it from his vehicle. That neither Kim nor Kho was physically touching the press at the time is of no moment. While the Harleysville policy does not itself define “handling,” exceptions to the auto exclusion in the policy itself make clear that “handling” need not require the touch of human hands. J. App’x at 338 (excluding “movement of property by means of a mechanical device . . . that is not attached to the . . . auto” from “loading and unloading,” thereby including movement via an attached mechanical device). Given that “unloading” continues until the property is “finally delivered,” we conclude that the accident in the underlying case arose out of the “use” of an “auto” as those words are defined in the Harleysville policy, and that Harleysville therefore has no duty to defend or indemnify the Insured.