Summary
In Fidelity General Insurance Co. v. Aetna Insurance Co., 27 A.D.2d 932, 278 N.Y.S.2d 787 (1967), the New York court affirmed the continuing validity of the Kaste decision.
Summary of this case from Cathay Mortuary (Wah Sang) Inc. v. United Pacific Ins. Co.Opinion
April 3, 1967
Judgment of the Supreme Court, Nassau County, entered March 18, 1966, affirmed, with costs. In our opinion, under the circumstances of this case, there were reasonable grounds for appeal, thereby initially obligating defendant, under its covenant to defend, to prosecute an appeal on the insured's behalf ( Kaste v. Hartford Acc. Ind. Co., 5 A.D.2d 203). Moreover, the excess insurance policy issued by plaintiff did not contain any covenant to defend and we do not construe the clause under "conditions" as incorporating such covenant. In any event, even if the clause is susceptible of such construction, it is our opinion that the ensuing liability, from the very nature of the excess policy, is secondary and not equal to defendant's primary obligation to defend and appeal. Accordingly, plaintiff, as excess insurer, in discharging defendant's obligation, was entitled to be reimbursed for the reasonable expenses thereof as equitable subrogee to the rights of the insured (see, e.g., Fidelity Cas. Co. v. Secured Cas. Co., 180 N.E.2d 297 [Ohio]; Standard Sur. Cas. Co. v. Metropolitan Cas. Co., 67 N.E.2d 634 [Ohio App.]; Fireman's Fund Ind. Co. v. Freeport Ins. Co., 30 Ill. App.2d 69; American Sur. Co. v. Canal Ins. Co., 258 F.2d 934). Beldock, P.J., Ughetta, Christ, Brennan and Hopkins, JJ., concur.