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1
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OPINION
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EXTRACTED KEY WORDS
INSURANCE SECURITY FUND PETITIONER INSURANCE LAW COVERAGE RISKS SUPERINTENDENT VALVES INSUREDS DELIVERY STATUTORY MSIVS NY2D POSSESSION CONTROL NIAGARA MOHAWK DETERMINATION COMMON CARRIER POWER PHYSICAL POSSESSION RESIDENT INTEGRITY COURT APPELLATE DIVISION DESTINATION NUCLEAR PLANT FOB REASON |
PARAMOUNT COMMUNICATIONS, INC., PLAINTIFF, v. GIBRALTAR CAS. CO., ET AL.,
DEFENDANTS.
PARAMOUNT COMMUNICATIONS, INC., RESPONDENT, v. SALVATORE CURIALE, AS THE
SUPERINTENDENT OF INS. OF THE STATE OF NEW YORK, &C., APPELLANT.
90 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133 (1997).
June 27, 1997
1 No. 137 (1997 NY Int. 120)
Decided June 27, 1997
_________________________________________________________________
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Charles J. Moxley, Jr., for appellant.
Stuart M. Cobert, for respondent.
SMITH, J.:
This case concerns a determination by the Superintendent of Insurance
to deny coverage of petitioner's claim under the New York
Property/Casualty Insurance Security Fund (Security Fund). Under its
broad powers to interpret the Insurance Law and administer the fund
established to provide coverage for insureds of insolvent insurance
companies, the Superintendent has determined that the insured must
relinquish physical possession and control of the subject property in
New York for property claims to qualify for coverage under the
Security Fund. Here, the Superintendent denied coverage upon a
determination that petitioner relinquished physical possession of the
defective products in Rhode Island when it placed the goods in the
hands of a common carrier for delivery to the buyer's plant in New
York.
However, the Insurance Law provides that Security Fund coverage
attaches to "a claim based upon a policy insuring property or risks
located or resident in this state" (Insurance Law § 7602(g)). Since it
is undisputed that New York was the final destination of the delivered
property and the claim arose from the property's physical presence in
this state, the requirement contained in the plain language of the
statute -- that "property ... (be) located ... in this state" -- is
satisfied under the facts presented. The Superintendent's resort to a
locus test based upon the relinquishment of physical possession and
control is manifestly inconsistent with the statutory mandate.
Accordingly, the Superintendent's determination should be annulled as
arbitrary and capricious and the order of the Appellate Division
SNIPPETS:
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