Firemen's Insurance of Washington, D.C. v. Federal Insurance

Order and judgment (one paper) (denominated an order), Supreme Court, New York County (Harold Tompkins, J.), entered December 19, 1995, which granted defendant’s motion to dismiss the complaint, denied plaintiffs cross-motion for summary judgment, and declared that defendant was not obligated as a primary insurer to defend the underlying actions, unanimously affirmed, with costs. Certain allegations in the underlying action against the parties’ common insured are covered by plaintiffs general liability policy and others by defendants’ directors’ and officers’ liability policy. While plaintiffs "other insurance” clause provides it is primary unless another policy is also primary, defendant’s provides that it is excess where the loss is covered by another policy. It is settled that a primary insurer has the obligation to defend without any entitlement to contribution from an excess insurer (Fidelity Gen. Ins. Co. v Aetna Ins. Co., 27 AD2d 932) and that the duty to defend is greater than the duty to indemnify (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65). Construing the policies and their "other insurance” clauses according to the reasonable expectation of an ordinary businessperson making an ordinary business contract (Atlantic Cement Co. v Fidelity & Cas. Co., 91 AD2d 412, 418, affd 63 NY2d 798), the IAS Court properly determined defendant to be an excess insurer, where, as here, a loss, including defense costs, can be covered by another policy. Nor is plaintiff only required to pay the costs of defending the risks specified in its general liability policy, since an insurer’s obligation to defend encompasses the entire complaint where, as here, the insurer has any potential indemnity obligations (see, Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310-311; see also, Federal Ins. Co. v St. Paul Fire & Mar. Ins. Co./ St. Paul Mercury Ins. Co., 985 F2d 979). Concur—Murphy, P. J., Milonas, Wallach, Rubin and Mazzarelli, JJ.