Sea Insurance contends that this latter phrase is ambiguous, meaningless, and impossible to define under the terms of the Westchester Policy, because the policy, a homeowner's insurance policy, does not "apply" to vehicles. I disagree. The word "apply" appears in several places in the Westchester Policy, and typically means to cover or to include. For example, Section II(1) reads: "Personal Liability . . . do[es] not apply to bodily injury . . . which is expected or intended by the insured." Similarly, the defense provision of Section II also uses the term "applies," stating that Westchester will defend if suit is brought for damages for bodily injuries as "to which this coverage applies."
As for vehicles, the "Definitions" section, when read in conjunction with the "vehicle exclusion" in Section II, makes clear that bodily injury "arising out of" the ownership or use of certain motor vehicles is covered. For example, bodily injury resulting from a golf cart rented by an insured, and used by such individual while golfing, would not fall within the vehicle exclusion, because the golf cart would not be a "motor vehicle" under the Westchester Policy.
Consequently, I find the phrase "with respect to any vehicle as to which this policy applies," susceptible of two meanings, one rather strained given the parties' reasonable business expectations, the other less so. First, the phrase might refer to vehicles as to which the vehicle exclusion would not apply, such as the golf carts discussed above. That interpretation, however, is questionable, at best, since the vehicle exclusion would never apply to employees, and Westchester would be required to indemnify and defend employees of insured in cases where it would have no such obligation to the insureds themselves. Indeed, it would lead to the rather curious result that had the Greenes themselves instead of Townes hit Mergens, Westchester would not have been obligated to defend the Mergens Action.
The second reading of the phrase -- that it refers to vehicles as to which the vehicle exclusion applies -- is far more tenable, for it places insureds and their employees on an equal footing with respect to the vehicle exclusion -- a result more in line with the parties' reasonable business expectations. Indeed, when read in context, this is the only reasonable interpretation of this language since employees are considered insureds only under Section II, and the only part of that section which discusses vehicles and "insureds" is the vehicle exclusion.
The "meaning of particular language found in insurance policies should be examined 'in light of business purposes sought to be achieved by the parties and the plain meaning of the words chosen by them to effect those purposes.'" Newmont Mines Ltd. v. Hanover Ins. Co., 784 F.2d 127 (2d Cir. 1986) (citation omitted). Therefore, while I agree with Sea Insurance that the employee-as-insured definition is ambiguous, it must be read to place employees on par with insureds as to the vehicle exclusion. Though Sea Insurance wishes it were otherwise, the well-settled rule that ambiguities must be read against the insurer has no application here in this dispute between two insurers. United States Fire Ins. Co. v. General Reinsurance Corp., 949 F.2d 569, 573 (2d Cir. 1991); Standard Marine Ins. Co. v. Federal Ins. Co., 39 A.D.2d 444, 446, 336 N.Y.S.2d 692, 695 (1st Dep't 1972) (per curiam). Thus, there is no justification for giving the employee-as-insured definition a tortured interpretation, contrary to reasonable business expectations.
Moreover, reading the ambiguous clause out of the Westchester Policy altogether, as Sea Insurance advocates, would contravene the well-settled rule that "contract provisions should be read to give them meaning and not to deprive them of any purpose." Launois v. Midland-Ross Corp., 751 F. Supp. 452, 459 (S.D.N.Y. 1990), aff'd 935 F.2d 1277 (2d Cir. 1991); see also Galli v. Metz, 973 F.2d 145 (2d Cir. 1992) (New York law disfavors a contractual interpretation that has the "'effect of rendering at least one clause superfluous or meaningless'") (citations omitted).
Because I find that Townes is an insured under the vehicle exclusion, and that the Mergens action arose out of a motor vehicle operated by Townes, I conclude that the vehicle exclusion applies, and Westchester, accordingly, has no duty to defend the Mergens Action.
For the reasons stated above, Sea Insurance's motion for declaratory judgment that Westchester has a duty to defend the Greenes in the Mergens Action is DENIED, and the Clerk of the Court is directed to enter judgment dismissing the complaint against Westchester.
Dated: New York, New York
March 29, 1994