Opinion
November 22, 1993
Appeal from the Supreme Court, Suffolk County (Doyle, J.).
Ordered that the judgment is reversed, on the law, with costs, the petition is denied, and the parties are directed to proceed to arbitration.
On September 15, 1988, Michael King was injured while a passenger in a taxi owned by AB Transportation. At the time of the accident, Prudential Property and Casualty Insurance Company (hereinafter Prudential) was the insurer of King's sister, Katherine King, under an automobile insurance policy which provided protection for Katherine King and any relatives living in her household against, inter alia, bodily injuries arising from accidents with underinsured motorists. King brought a claim against Prudential under the underinsured motorist coverage provision in his sister's policy, asserting that he was a relative living in her household; however, Prudential did not make any payments. When AB Transportation offered to settle with King for $10,000 (the full amount of its coverage), Prudential would not consent to the settlement. As a result, King sought to arbitrate the claim, and Prudential in turn brought the instant proceeding to stay arbitration.
The Supreme Court found that King, although a member of his sister's household, was not covered by the underinsurance provisions in his sister's policy based on an interpretation of a clause in the policy describing "what cars are covered".
We conclude that pursuant to the terms of the insurance policy, King was a covered person as provided for in the clause describing "who is insured", which is to be construed together with the entire insurance policy "as an integrated whole" (Bretton v Mutual of Omaha Ins. Co., 110 A.D.2d 46, 48, affd 66 N.Y.2d 1020). If an insurer wishes to "exclude certain coverage from its policy obligations, it must do so `in clear and unmistakable' language" (Seaboard Sur. Co. v Gillette Co., 64 N.Y.2d 304, 311, quoting Kratzenstein v Western Assur. Co., 116 N.Y. 54, 59). Here, no such clear exclusion is present.
Further, we conclude that King satisfied the conditions precedent to arbitration by advising Prudential of the settlement offer, by requiring Prudential's right of subrogation be preserved, and by requesting Prudential's consent to settle the claim on numerous occasions. Prudential cannot arbitrarily withhold consent and at the same time argue that a condition precedent has not been complied with (see, Matter of Blee v State Farm Mut. Auto. Ins. Co., 168 A.D.2d 615; Matter of Nationwide Mut. Ins. Co. [Taylor], 177 A.D.2d 929; Huth v Nationwide Ins. Co., 148 Misc.2d 1003; Insurance Law § 3420 [d]). Under principles of equity, Prudential is estopped from asserting failure to meet conditions precedent as a defense. Eiber, J.P., O'Brien, Santucci and Joy, JJ., concur.