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Mark Dzielski and Colleen Dzielski v. Essex Insurance Company

December 23, 2011

MARK DZIELSKI AND COLLEEN DZIELSKI,
PLAINTIFFS-RESPONDENTS,
v.
ESSEX INSURANCE COMPANY, ET AL.,
DEFENDANT-APPELLANT, DEFENDANT.



Appeal from a judgment (denominated order and judgment) of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered November 17, 2010.

Dzielski v Essex Ins. Co.

Decided on December 23, 2011

Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

PRESENT: SCUDDER, P.J., CENTRA, FAHEY, PERADOTTO, AND LINDLEY, JJ.

The judgment, among other things, awarded plaintiffs the sum of $950,000 against defendant Essex Insurance Company.

It is hereby ORDERED that the judgment so appealed from is modified on the law by reducing the award of $950,000 to $499,500, plus interest, and as modified the judgment is affirmed without costs.

Memorandum:

Plaintiffs commenced this action seeking judgment declaring that defendant is obligated to indemnify its insured in the underlying personal injury action commenced by plaintiffs, in which defendant's insured had defaulted. The underlying action arose from injuries sustained by Mark Dzielski (plaintiff) when he fell from the loading dock after exiting the rear door of a nightclub owned and operated by defendant's insured. On the evening in question, plaintiff had provided sound equipment for a band that performed at the nightclub, and the accident occurred while plaintiff was carrying equipment from the nightclub to his truck after the concert had concluded. According to plaintiffs, the accident was caused by defects in the loading dock. In this action, Supreme Court granted plaintiffs' motion for summary judgment and denied defendant's cross motion for summary judgment, awarding judgment to plaintiffs in the amount of the default judgment entered against defendant's insured in the underlying action, i.e., $950,000, together with interest and costs.

Defendant disclaimed coverage to its insured based on a "stage hand" exclusion in the policy's "Restaurant, Bar, Tavern, Night Clubs, Fraternal and Social Clubs Endorsement." That exclusion provides in relevant part that "[t]he coverage under this policy does not apply to bodily injury,' . . . or any injury, loss or damage arising out of . . . [i]njury to any entertainer, stage hand, crew, independent contractor, or spectator, patron or customer who participates in or is a part of any athletic event, demonstration, show, competition or contest . . . ." It is axiomatic that, "to negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case' " (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). We agree with plaintiffs that the language "participates in or is a part of any . . . show" is ambiguous, and that the court properly resolved that ambiguity against the insurer, "particularly [because it is] an exclusionary clause" (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398). Although, as defendant suggests, the policy language may be read broadly to encompass all persons who performed any tasks in connection with the show, including loading and unloading sound equipment, it may also reasonably be read narrowly to encompass only those persons who actually performed in the show or were injured as a result of activities occurring during the show. It is undisputed that the accident occurred after the show had ended, and we note in particular that the accident was caused by a defect in the premises that was wholly unrelated to the show itself. We thus conclude that the court properly determined that the exclusion does not apply in this case.

We reject defendant's contention that the inclusion of the phrase "arising out of" in the exclusion mandates the broader interpretation espoused by defendant. Even assuming, arguendo, that the phrase "arising out of" is interpreted as "originating from, incident to, or having connection with" (Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 470 [internal quotation marks omitted]), we note that coverage is excluded only if an accident originates from, is incident to or has connection with a person's "participat[ion]" in a "show." Here, it cannot be said that there is no ambiguity concerning whether the accident arose out of plaintiff's participation in a show, which in fact had ended before the accident occurred.

We further conclude, however, that, pursuant to the insurance policy in question, coverage for plaintiff's accident is limited to $500,000 per occurrence, with a $500 deductible. We therefore modify the judgment by reducing the award from $950,000 to $499,500, plus interest and costs.

All concur except Fahey and Peradotto, JJ., who dissent and vote to reverse in accordance with the following Memorandum: We respectfully dissent because, in our view, the exclusionary language in the applicable insurance policy is " clear and unmistakable . . ., is subject to no other reasonable interpretation, and applies in th[is] particular case' " (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). We would therefore deny plaintiffs' motion for summary judgment, grant defendant's cross motion for summary judgment, ...


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