        SUPREME COURT OF THE STATE OF NEW YORK
          Appellate Division, Fourth Judicial Department

1119
CA 11-00887
PRESENT: SCUDDER, P.J., CENTRA, FAHEY, PERADOTTO, AND LINDLEY, JJ.


MARK DZIELSKI AND COLLEEN DZIELSKI,
PLAINTIFFS-RESPONDENTS,

                    V                             MEMORANDUM AND ORDER

ESSEX INSURANCE COMPANY, DEFENDANT-APPELLANT,
ET AL., DEFENDANT.


HURWITZ & FINE, P.C., BUFFALO (DAN D. KOHANE OF COUNSEL), FOR
DEFENDANT-APPELLANT.

DAMON MOREY LLP, BUFFALO (KATHLEEN M. REILLY OF COUNSEL), FOR
PLAINTIFFS-RESPONDENTS.


     Appeal from a judgment (denominated order and judgment) of the
Supreme Court, Erie County (Diane Y. Devlin, J.), entered November 17,
2010. The judgment, among other things, awarded plaintiffs the sum of
$950,000 against defendant Essex Insurance Company.

     It is hereby ORDERED that the judgment so appealed from is
modified on the law by reducing the award of $950,000 to $499,500,
plus interest, and as modified the judgment is affirmed without costs.

     Memorandum: Plaintiffs commenced this action seeking judgment
declaring that defendant is obligated to indemnify its insured in the
underlying personal injury action commenced by plaintiffs, in which
defendant’s insured had defaulted. The underlying action arose from
injuries sustained by Mark Dzielski (plaintiff) when he fell from the
loading dock after exiting the rear door of a nightclub owned and
operated by defendant’s insured. On the evening in question,
plaintiff had provided sound equipment for a band that performed at
the nightclub, and the accident occurred while plaintiff was carrying
equipment from the nightclub to his truck after the concert had
concluded. According to plaintiffs, the accident was caused by
defects in the loading dock. In this action, Supreme Court granted
plaintiffs’ motion for summary judgment and denied defendant’s cross
motion for summary judgment, awarding judgment to plaintiffs in the
amount of the default judgment entered against defendant’s insured in
the underlying action, i.e., $950,000, together with interest and
costs.

     Defendant disclaimed coverage to its insured based on a “stage
hand” exclusion in the policy’s “Restaurant, Bar, Tavern, Night Clubs,
Fraternal and Social Clubs Endorsement.” That exclusion provides in
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                                                             CA 11-00887

relevant part that “[t]he coverage under this policy does not apply to
‘bodily injury,’ . . . or any injury, loss or damage arising out of .
. . [i]njury to any entertainer, stage hand, crew, independent
contractor, or spectator, patron or customer who participates in or is
a part of any athletic event, demonstration, show, competition or
contest . . . .” It is axiomatic that, “to ‘negate coverage by virtue
of an exclusion, an insurer must establish that the exclusion is
stated in clear and unmistakable language, is subject to no other
reasonable interpretation, and applies in the particular case’ ” (Belt
Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). We agree with
plaintiffs that the language “participates in or is a part of any . .
. show” is ambiguous, and that the court properly resolved that
ambiguity against the insurer, “particularly [because it is] an
exclusionary clause” (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60
NY2d 390, 398). Although, as defendant suggests, the policy language
may be read broadly to encompass all persons who performed any tasks
in connection with the show, including loading and unloading sound
equipment, it may also reasonably be read narrowly to encompass only
those persons who actually performed in the show or were injured as a
result of activities occurring during the show. It is undisputed that
the accident occurred after the show had ended, and we note in
particular that the accident was caused by a defect in the premises
that was wholly unrelated to the show itself. We thus conclude that
the court properly determined that the exclusion does not apply in
this case.

     We reject defendant’s contention that the inclusion of the phrase
“arising out of” in the exclusion mandates the broader interpretation
espoused by defendant. Even assuming, arguendo, that the phrase
“arising out of” is interpreted as “originating from, incident to, or
having connection with” (Maroney v New York Cent. Mut. Fire Ins. Co.,
5 NY3d 467, 470 [internal quotation marks omitted]), we note that
coverage is excluded only if an accident originates from, is incident
to or has connection with a person’s “participat[ion]” in a “show.”
Here, it cannot be said that there is no ambiguity concerning whether
the accident arose out of plaintiff’s participation in a show, which
in fact had ended before the accident occurred.

     We further conclude, however, that, pursuant to the insurance
policy in question, coverage for plaintiff’s accident is limited to
$500,000 per occurrence, with a $500 deductible. We therefore modify
the judgment by reducing the award from $950,000 to $499,500, plus
interest and costs.

     All concur except FAHEY and PERADOTTO, JJ., who dissent and vote to
reverse in accordance with the following Memorandum: We respectfully
dissent because, in our view, the exclusionary language in the
applicable insurance policy is “ ‘clear and unmistakable . . ., is
subject to no other reasonable interpretation, and applies in th[is]
particular case’ ” (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377,
383). We would therefore deny plaintiffs’ motion for summary
judgment, grant defendant’s cross motion for summary judgment, and
declare that defendant has no obligation to indemnify its insured in
the underlying personal injury action commenced by plaintiffs.
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                                                           CA 11-00887

     As noted by the majority, the underlying personal injury action
arose from injuries sustained by Mark Dzielski (plaintiff) when he
fell from a loading dock after exiting the rear door of a nightclub
owned and operated by defendant’s insured. On the night in question,
plaintiff, an independent contractor, had provided sound reinforcement
services, which included setting up sound equipment, for a band that
had performed at the nightclub. The accident occurred while plaintiff
was in the process of removing his sound equipment from the nightclub
at the conclusion of the show. According to plaintiffs, the accident
was caused by the defective nature of the loading dock. Plaintiffs
commenced the underlying personal injury action against defendant’s
insured, and the insured defaulted. Thereafter, plaintiffs commenced
this action seeking judgment declaring that defendant is obligated to
indemnify its insured in the underlying action. Supreme Court granted
plaintiffs’ motion for summary judgment and denied defendant’s cross
motion for summary judgment, awarding judgment to plaintiffs in the
amount of the default judgment entered against defendant’s insured in
the underlying action, i.e., $950,000, together with interest and
costs.

     “Where the provisions of an insurance contract are clear and
unambiguous, the courts should not strain to superimpose an unnatural
or unreasonable construction” (Maurice Goldman & Sons v Hanover Ins.
Co., 80 NY2d 986, 987). Here, defendant disclaimed coverage to its
insured based on an exclusion in the policy’s “Restaurant, Bar,
Tavern, Night Clubs, Fraternal and Social Clubs Endorsement.” That
exclusion provides in relevant part that “[t]he coverage under this
policy does not apply to ‘bodily injury,’ . . . or any injury, loss or
damage arising out of . . . [i]njury to any entertainer, stage hand,
crew, independent contractor, or spectator, patron or customer who
participates in or is a part of any athletic event, demonstration,
show, competition or contest” (emphasis added). The exclusion thus
applies where two conditions are met: (1) the injured party is an
entertainer, stage hand, crew member, independent contractor,
spectator, patron or customer who “participates in or is a part of” an
athletic event, demonstration, show, competition or contest; and (2)
the injury “arises out of” such participation.

     Contrary to the conclusion of the majority, we conclude that the
language “participates in or is a part of any . . . show” is not
ambiguous, and that plaintiff falls squarely within that language. As
noted above, plaintiff was hired by the band to provide sound
reinforcement services for the show, and thus there is no question
that he “participate[d] in or [wa]s a part of” the show on the night
of his accident. The majority’s conclusion that such clause may
“reasonably be read narrowly to encompass only those persons who
actually performed in the show or were injured as a result of
activities occurring during the show” is not supported by the plain
language of the exclusion. First, if the exclusion was intended to
apply only to those persons who “actually performed” in a show, then
the language “spectator, patron or customer” in the exclusion would be
superfluous. Second, such an interpretation imposes a temporal
limitation on the exclusion where no such limitation appears therein.
Indeed, if defendant had intended to limit the exclusion in that
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                                                           CA 11-00887

manner, it could have done so explicitly as it did in other provisions
of the policy (see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d
467, 473). For example, the policy’s medical payments coverage
provision specifically excludes expenses for bodily injury “[t]o a
person injured while taking part in athletics” (emphasis added).
Similarly, the policy’s “combination endorsement” excludes expenses
for bodily injury or personal injury to any person “while practicing
for or participating in any event or function of a sporting or
athletic nature” (emphasis added). Here, by contrast, the absence of
such limiting language in the exclusion in question reflects an intent
to provide a broad exclusion for all injuries arising from
participation in shows or other special events (see Maroney, 5 NY3d at
473).

     We further conclude that plaintiff’s injury “ar[o]se[] out of”
his participation in the show within the meaning of the exclusion. In
the insurance context, the phrase “arising out of” has been broadly
interpreted to mean “originating from, incident to, or having
connection with” (Maroney, 5 NY3d at 472 [internal quotation marks
omitted]; see Regal Constr. Corp. v National Union Fire Ins. Co. of
Pittsburgh, PA, 15 NY3d 34, 38). Here, plaintiff’s accident occurred
while he was in the process of removing his sound equipment from the
nightclub. The process of packing up and removing sound equipment at
the conclusion of a show necessarily “originat[es] from, [is] incident
to, or ha[s] connection with” the show (Maroney, 5 NY3d at 472
[internal quotation marks omitted]). The fact that plaintiff’s
accident was allegedly caused by the defective nature of the loading
dock rather than any condition of the show itself does not remove
plaintiff’s injury from the policy exclusion. “[T]he focus of the
inquiry ‘is not on the precise cause of the accident but the general
nature of the operation in the course of which the injury was
sustained’ ” (Regal Constr. Corp., 15 NY3d at 38). Indeed, “the
phrase ‘arising out of’ . . . requires only that there be some causal
relationship between the injury and the risk for which coverage is
provided” (Maroney, 5 NY3d at 472), and such a causal relationship
clearly exists here.




Entered:   December 23, 2011                    Frances E. Cafarell
                                                Clerk of the Court
