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

Heading: Allstate’s duties to defend and indemnify

Text: Although the complaint and bill of particulars make no mention of any vehicle, an “insurer must provide a defense if it has knowledge of facts which potentially bring the claim within the policy’s indemnity coverage” even if those facts are not alleged in the complaint. Fitzpatrick v. 3 Am. Honda Motor Co., 78 N.Y.2d 61, 66 (1991). The district court concluded that Allstate had no duty to defend because “at the time of the accident the insured vehicle and trailer were parked” and “the operation of the auto had ceased.” Harleysville Preferred Ins. Co. v. Allstate Prop. & Cas. Ins. Co., No. 18-cv-08306, 2021 WL 1092356, at  (S.D.N.Y. Mar. 22, 2021). But the Allstate policy covers the “loading or unloading of an insured auto.” Joint App’x at 391. The facts in the record demonstrate that the dry-cleaning press fell while Kim was detaching the trailer, or immediately thereafter. Allstate asserts that the trailer falls outside the policy’s definition of “insured auto” because it was detached from the insured vehicle when the accident occurred. Even if the trailer was not itself an “insured auto” under the Allstate policy, though, the underlying accident occurred while the trailer was being unloaded from Kim’s personal vehicle, which is indisputably an “insured auto.” Accordingly, we conclude that the incident fell within Kim’s personal auto insurance policy with Allstate, and Allstate has a duty to defend and to indemnify in the underlying action. III. Reimbursement of Harleysville’s expenditures Harleysville’s complaint also sought a declaration that Allstate must reimburse Harleysville for the costs it had already incurred in defending the Insured in the underlying action. See J. App’x 7-8. The district court denied such relief based on its conclusion that Harleysville was obligated to defend and indemnify the Insured. It follows from our conclusion that the district court’s ruling was in error that Allstate must reimburse Harleysville for costs expended thus far in defending the underlying action. See Valley Forge Ins. Co. v. ACE Am. Ins. Co., 74 N.Y.S.3d 596, 598 (2018); Bovis Lend Lease LMB, Inc. v. Royal Surplus Lines Ins. Co., 806 N.Y.S.2d 53, 61 (N.Y. App. Div. 2005).