HAUBER-MALOTA, MICHELLE T. v. PHILADELPHIA INSURANCE CO. ( 2014 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
259
CA 13-01535
PRESENT: CENTRA, J.P., PERADOTTO, CARNI, VALENTINO, AND WHALEN, JJ.
MICHELLE T. HAUBER-MALOTA, PLAINTIFF-RESPONDENT,
V OPINION AND ORDER
PHILADELPHIA INSURANCE COMPANIES, TOKIO MARINE
GROUP AND PHILADELPHIA CONSOLIDATED HOLDING CORP.,
DEFENDANTS-APPELLANTS.
DAMON MOREY LLP, BUFFALO (VINCENT G. SACCOMANDO OF COUNSEL), FOR
DEFENDANTS-APPELLANTS.
SHAW & SHAW, P.C., HAMBURG (JACOB A. PIORKOWSKI OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.
Appeal from an order of the Supreme Court, Erie County (Timothy J.
Drury, J.), entered May 23, 2013. The order denied the motion of
defendants for summary judgment dismissing the complaint.
It is hereby ORDERED that the order so appealed from is unanimously
reversed on the law without costs, the motion is granted and the complaint
is dismissed.
Opinion by CARNI, J.:
On May 4, 2006, plaintiff was a passenger in a vehicle operated by
her coemployee, Brenda Wilcox, and owned by their common employer, Joan
A. Male Family Support Center (JMFSC), when the vehicle was rear-ended
by another vehicle operated by Cathlyn M. Haggerty, and owned by Michael
Haggerty. Cathlyn Haggerty was also employed by JMFSC, and there is no
dispute that she, plaintiff and Wilcox, although in two different vehicles,
were all within the course of their employment at the time of the accident.
Plaintiff commenced a personal injury action against the Haggertys, but
that action was dismissed on the ground, inter alia, that plaintiff=s remedy
against her coemployee was limited to the recovery of workers= compensation
benefits (see Workers= Compensation Law ' 29 [6]). In that action, the
exclusivity provisions of the Workers= Compensation Law also barred
plaintiff=s derivative claim against Michael Haggerty as the owner of the
other vehicle under Vehicle and Traffic Law ' 388 (see Naso v Lafata,
4 NY2d 585, 589-591, rearg denied 5 NY2d 861; Rauch v Jones, 4 NY2d 592,
596; see also Isabella v Hallock, 22 NY3d 788, 794).
Plaintiff subsequently commenced this action seeking supplementary
uninsured/underinsured motorist (SUM) benefits from defendants as
insurers of the vehicle owned by her employer, JMFSC. Defendants moved
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CA 13-01535
for summary judgment seeking dismissal of the complaint on the ground,
inter alia, that plaintiff=s exclusive remedy was the recovery of workers=
compensation benefits. Supreme Court denied the motion on the ground,
inter alia, that the Workers= Compensation Law was not a bar to plaintiff=s
recovery of SUM benefits under the automobile liability insurance policy
issued to her employer, JMFSC. We agree with defendants that the court
erred in denying the motion on that ground.
Thus, in what is a matter of first impression in this State, we are
presented with the following question:
Whether an employee, injured in a motor vehicle
accident while in the course of her employment, who
is barred by the exclusive remedy provisions in the
Workers= Compensation Law from suing a coemployee
based on negligence, is entitled to SUM benefits under
her employer=s automobile liability insurance policy?
We first observe that plaintiff correctly contends that the exclusive
remedy provision in Workers= Compensation Law ' 29 (6) does not bar all
actions by injured employees against an employer=s insurer for SUM
benefits. Although workers= compensation benefits generally are
Aexclusive and in place of any other liability whatsoever@ (' 11), the
statute Acannot be read to bar all suits to enforce contractual liabilities@
(Matter of Elrac, Inc. v Exum, 18 NY3d 325, 328). Because an action to
recover uninsured motorist benefits Ais predicated on [the] insurer=s
contractual obligation to assume the risk of loss associated with an
uninsured motorist@ (Matter of Shutter v Philips Display Components Co.,
90 NY2d 703, 709), the Workers= Compensation Law does not categorically
bar such an action against an employer=s insurer (see generally Elrac,
Inc., 18 NY3d at 328). However, the critical distinction in this case
is that the motor vehicle accident involved vehicles operated by
coemployees.
Under every policy of automobile liability insurance issued or
delivered in this State, an insurer must pay an insured person uninsured
motorist benefits in the amount that he or she Ashall be entitled to recover
as damages from an owner or operator of an uninsured motor vehicle@
(Insurance Law ' 3420 [f] [1] [emphasis added]). As is the case here,
every such policy shall, at the option of the insured, also provide SUM
coverage, in varying policy limits not relevant to our analysis (see '
3420 [f] [2] [A]). Insurance Department Regulation No. 35-D, Aimplements@
section 3420 (f) (2) of the Insurance Law (11 NYCRR 60-2.0 [a]), and it
Aestablish[es] a standard form for SUM coverage [i.e., the prescribed
SUM endorsement], in order to eliminate ambiguity, minimize confusion
and maximize its utility@ (11 NYCRR 60-2.0 [c]; see 11 NYCRR 60-2.3 [f]).
Pursuant to 11 NYCRR 60-2.3 (f), the SUM endorsement to the policy issued
by defendants to plaintiff=s employer in this case required payment of
Aall sums that the insured . . . shall be legally entitled to recover
as damages from the owner or operator of an uninsured motor vehicle because
of bodily injury sustained by the insured@ (emphasis added). Defendants=
contractual liability to provide SUM benefits is therefore Apremised in
part upon the contingency of a third party=s tort liability@ (Commissioners
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CA 13-01535
of State Ins. Fund v Miller, 4 AD2d 481, 482).
Thus, plaintiff may receive SUM benefits under the policy only if
she is Alegally entitled to recover damages@ from the owner or operator
(11 NYCRR 60-2.3 [f]). The prescribed SUM endorsement language at issue
is plain and unambiguous. Indeed, as noted above, the standard form for
SUM coverage was promulgated in order to Aeliminate ambiguity, minimize
confusion and maximize its utility@ (11 NYCRR 60-2.0 [c]; see also
Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 200-201). In
interpreting that language, we are guided by decisions of other
jurisdictions applying similar SUM endorsement language and the
exclusivity provisions of the Workers= Compensation Law to actions in which
an employee seeks uninsured motorist benefits for injuries sustained in
accidents with coemployees. In the overwhelming majority of those
decisions, all interpreting similar Alegally entitled to recover damages@
policy language, the courts have concluded that, because of workers=
compensation exclusive remedy provisions, a plaintiff is not entitled
to uninsured motorist benefits (see e.g. State Farm Mut. Auto. Ins. Co.
v Slusher, 325 SW3d 318, 323 [Ky]; Ex parte Carlton, 867 So2d 332, 338
[Ala]; Kough v New Jersey Auto. Full Ins. Underwriting Assn., 237 NJ Super
460, 469, cert denied 121 NJ 638; Allstate Ins. Co. v Boynton, 486 So2d
552, 558-559 [Fla]; see also John P. Ludington, Annotation, Automobile
Uninsured Motorist Coverage: ALegally Entitled to Recover@ Clause as
Barring Claim Compensable Under Workers= Compensation Statute, 82 ALR 4th
1096, ' 6 [a]).
Here, pursuant to the plain language of the SUM endorsement, plaintiff
is not Alegally entitled to recover damages@ from the owner and operator
of the offending vehicle because of the status of the operator, Cathlyn
Haggerty, as plaintiff=s coemployee (see Workers= Compensation Law ' 29
[6]; Naso, 4 NY2d at 589). Accordingly, we conclude that plaintiff is
not entitled to recover SUM benefits under the policy, and that the order
should be reversed, the motion should be granted, and the complaint should
be dismissed.
In light of the foregoing, we need not address defendants= contention
that the Haggerty vehicle was not an Auninsured motor vehicle@ under the
circumstances.
Entered: August 8, 2014 Frances E. Cafarell
Clerk of the Court