State Farm Fire & Casualty Co. v. Wolford

Judgment unanimously affirmed, without costs. Memorandum: This declaratory judgment action was instituted to determine whether plaintiff is obligated to defend and/or indemnify defendant Mark Flatten in an underlying negligence action in which Flatten is a defendant. Wolford, plaintiff in the underlying action, contends on appeal that the issue of liability should await a determination in the primary action. We disagree. A declaratory judgment action is an appropriate remedy where resolution of the matter in dispute is determinative of the insurer’s liability to defend and indemnify its insured for potential judgments (see, Prashker v United States Guar. Co., 1 NY2d 584 , 591; Hollander v Nationwide Mut. Ins. Co., 60 AD2d 380 , lv denied 44 NY2d 646 ).

In the underlying negligence action, Wolford alleged a cause of action against Mark Flatten for wrongful entrustment of his automobile to his brother John Flatten, for which Mark Flatten seeks to have his homeowner’s insurance carrier defend and indemnify. We find that the accident arose out of the operation of a motor vehicle by John Flatten, who, because he resided with his brother at the time of the accident, is within the policy’s definition of the term “insured”. Special Term properly declared that the plaintiff is not obligated to defend and indemnify Mark Flatten in the underlying action because a provision in his homeowner’s policy specifically excludes coverage for “bodily injury or property damage aris