Court Finds Exclusionary Language is Ambiguous
The plaintiff commenced an action seeking a judgment declaring that the insurer of a night club was obligated to indemnify its insured in an action for personal injuries sustained in a fall from a loading dock. This case is Dszielski v. Essex Insurance Company, 90 A.D.3d 1493 (2011).
The plaintiff, Dzielski, fell from the loading dock after exiting the rear door of a night club owned and operated by the insured. On the evening of the accident, Dzielski provided sound equipment for a band that performed at the club, and was carrying equipment from the club to his truck after the performance had ended when the accident occurred. Dzielski charged that the fall was caused by defects in the loading dock. He sued the insured and the trial court granted summary judgment to him. Essex Insurance, the insurer of the night club, appealed.
The Supreme Court, Appellate Division, noted that the insurer disclaimed coverage based on an exclusion that stated there was no coverage for bodily injury arising out of any injury to “any entertainer, stage hand, crew, independent contractor, spectator, patron or customer who participates in or is a part of any athletic event, demonstration, show, competition, or contest”. The court said that 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.
Based on this reasoning, the court found that the exclusionary language “participates in or is a part of any show” is ambiguous. The insurer argued that 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. The court said that the language can 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. Therefore, since there are different reasonable interpretations of the exclusionary language, the language is ambiguous and the insurer loses.
The court also rejected the insurer's contention that the inclusion of the phrase “arising out of” in the exclusion mandates the broader interpretation. Even assuming, arguendo, that the phrase is interpreted as “originating from, incident to, or having connection with”, the court said that the coverage is excluded only if the accident originates from, is incident to, or has connection with a person's participation in a show. In this instance, it cannot be said that there is no ambiguity concerning whether the accident arose out of Dzielski's participation in a show, especially since the accident and injuries occurred after the show had ended.
The ruling of the trial court was affirmed.
Editor's Note: It is interesting that in this case, the insurer argued for a broad interpretation of an exclusion as opposed to a strict interpretation; usually, insurers prefer a strict interpretation. However, can it be said, without stretching the point, that a person removing sound equipment after a performance is participating in or is a part of the show or event? The New York appeals court could not find the connection and the judgment against the insurer was upheld.