Saturday, April 13, 2013

Public Service Mutual Insurance Co. v. Goldfarb case brief

Public Service Mutual Insurance Co. v. Goldfarb case brief summary
53 N.Y.2d 392, 425 N.E.2d 810, 442 N.Y.S.2d 422 (1981)

SYNOPSIS:
Plaintiff appealed from an order of the Appellate Division of the Supreme Court in the First Judicial Department (New York), which held that plaintiff was obligated to defend its insured under a professional liability policy.

OVERVIEW: Plaintiff provided professional liability insurance to a dentist who was civilly sued by defendant for sexual abuse. The appellate court reversed a trial court ruling finding no obligation to defend, and plaintiff appealed.

HOLDING:
The court modified the order and affirmed. The court held that determination of whether plaintiff was obligated to defend the insured depended on whether notice of the claim was given and whether the claim fell within the policy.

ANALYSIS:
The court found that notice was given and that the claim could be covered. The mere fact that the insured's conduct was criminal did not preclude coverage under the policy. However, it was important to look at whether harm was intended; if injury was intended then plaintiff was not obligated to indemnify. Furthermore, it was important to determine whether the injury occurred in the course of treatment. Plaintiff was not obligated to indemnify for any punitive damages.

OUTCOME: The court modified and affirmed the judgment on the grounds that criminal consequences of insured's conduct did not preclude coverage under the policy, provided that injury was not intended and the conduct occurred in the course of dental treatment.

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