This opinion is uncorrected and subject to revision before
publication in the New York Reports.
-----------------------------------------------------------------
No. 47
Michael J. Carlson, Sr., &c.,
            Appellant,
        v.
American International Group,
Inc., et al.,
            Respondents.



          Edward J. Markarian, for appellant.
          Kevin D. Szczepanski, for respondents American
International Group, Inc., et al.
          Paul Kovner, for respondent American Alternative
Insurance Co.
          Patrick J. Lawless, for respondent DHL Express (USA),
Inc.
          New York State Trial Lawyers Association; American
Insurance Association et al.; New York State Academy of Trial
Lawyers, amici curiae.




WILSON, J.:
          Plaintiff Michael Carlson, individually and in his
capacity as Administrator of his deceased wife's estate and as
assignee of William Porter, commenced this action pursuant to
Insurance Law § 3420 (a) (2) to collect on certain insurance
policies issued to DHL Worldwide Express, Inc. (DHL) by National

                                - 1 -
                                 - 2 -                          No. 47

Union Fire Insurance Co. (National Union) and American
Alternative Insurance Co. (AAIC).      Mr. Carlson previously had
obtained a judgment against MVP Delivery and Logistics, Inc.
(MVP) and William Porter (see Carlson v Porter, 53 AD3d 1129 [4th
Dept 2008], lv denied 11 NY3d 708 [2008]).      On appeal, we
consider whether Mr. Carlson has sufficiently pleaded that MVP is
an "insured" under DHL's policies, and whether the policies fall
within the purview of Insurance Law § 3420 as policies "issued or
delivered" in New York.   We hold that dismissal of the first
cause of action pursuant to Insurance Law § 3420 (a) (2) and (b)
was improper as to National Union and AAIC.      Whether MVP was an
"insured" under DHL's policies presents a question of fact to be
resolved by the trier of fact.    Additionally, the meaning of
"issued or delivered" is informed by our decision in Preserver
Ins. Co. v Ryba (10 NY3d 365 [2008]), and thus, section 3420
encompasses situations where both insureds and risks are located
in this state.
                                  I.
          Claudia Carlson was killed when a truck painted with
DHL's logo, owned by MVP and driven by William Porter, an
employee of MVP, crossed the double-yellow divider and hit her
car head-on.   Prior to the accident, Mr. Porter had driven the
truck home on a scheduled break, when he learned that his son had
been in an accident.   Mr. Porter drove the truck to the accident
site, and while driving the truck to retrieve a tool to repair


                                 - 2 -
                                - 3 -                           No. 47

his son's vehicle, Mr. Porter veered into Mrs. Carlson's car,
killing her.    A jury awarded her husband, individually and as
administrator of her estate, $20 million against MVP, Mr. Porter
and DHL.    The Appellate Division set aside the verdict against
DHL and dismissed the complaint against it, concluding that DHL
was not vicariously liable under the doctrine of respondeat
superior.    The court also found damages to be excessive, and Mr.
Carlson stipulated to a reduced judgment of $7.3 million.    MVP's
insurer paid Mr. Carlson approximately $1.1 million, and Mr.
Porter assigned to Mr. Carlson whatever rights Mr. Porter had to
any other insurance coverage.
            At the time of the accident, DHL and MVP were parties
to a cartage agreement, pursuant to which MVP used its fleet of
trucks and employees to perform DHL's package delivery services
in Western New York.    DHL had three insurance policies relevant
here: (1) a $3 million primary policy issued by National Union,
which included "hired auto" coverage insuring DHL, its employees,
and "[a]nyone else while using with your permission a covered
'auto' you own, hire, or borrow"; (2) a $2 million excess
insurance policy with AAIC, with the exact same coverage as the
National Union policy; and (3) a $23 million umbrella policy with
National Union, which covered vehicles "hired by [DHL] or on
[DHL's] behalf and used with [DHL's] permission."    American
International Group, Inc. and AIG Domestic Claims, Inc.
(collectively, AIG) did not issue any relevant policy to DHL.


                                - 3 -
                                - 4 -                          No. 47

            Mr. Carlson commenced this action against National
Union, AAIC, AIG, and DHL, alleging five causes of action.     The
first asserted a claim under Insurance Law § 3420 (a) (2) and
(b), against National Union, AAIC and AIG, to satisfy the
outstanding judgment.    The second, third, and fourth causes of
action asserted damages against National Union, AAIC and AIG for
misrepresentations, bad faith refusal to settle, and violations
of General Business Law § 349, respectively.    The fifth cause of
action sought damages against DHL and AIG for conspiracy.
            Defendants moved to dismiss the complaint in its
entirety.    As to the first cause of action, AAIC moved to dismiss
on the ground that section 3420 did not permit a claim against it
because its policy, initially issued by it to DHL's predecessor,
Airborne Inc. (headquartered in Washington), and later assumed by
DHL (headquartered in Florida), was not "issued or delivered" in
New York.    Supreme Court denied that motion, and allowed
discovery to proceed on the issue of coverage.    After limited
discovery had occurred, Supreme Court granted the motions and
cross motion to the extent of dismissing causes of action 2, 3
and 5 of the complaint, but refused to dismiss the first and
fourth causes of action.
            The Appellate Division dismissed Mr. Carlson's General
Business Law § 349 claim as to all remaining defendants (see
Carlson v Am. Int'l Grp., Inc., 130 AD3d 1479, 1482 [4th Dept
2015]).   The Appellate Division also dismissed the first cause of


                                - 4 -
                               - 5 -                           No. 47

action.   As to AIG, the Appellate Division concluded that because
the two AIG entities established that they are not insurers, no
section 3420 claim lay against them (see id. at 1480).   The
Appellate Division held that Mr. Carlson could not state a claim
against National Union because (a) the MVP vehicle was not a
"hired automobile" and (b) DHL could not grant MVP permission to
use it (see id. at 1481).   In a companion appeal, the Appellate
Division determined that the AAIC policy was not issued or
delivered in New York and dismissed the first cause of action
against AAIC (see Carlson v Am. Int'l Grp., Inc., 130 AD3d 1477,
1477-1478 [4th Dept 2015] [concluding that the parties and
Supreme Court had "improperly conflated the phrase 'issued or
delivered' with 'issued for delivery'"]).


                                II.
          On a motion to dismiss for failure to state a cause of
action, the complaint must be liberally construed, and courts
must provide a plaintiff with every favorable inference (see 511
W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152
[2002]; Leon v Martinez, 84 NY2d 83, 87 [1994]; CPLR 3026; see
also Held v Kaufman, 91 NY2d 425, 432 [1998] ["every favorable
inference must be afforded the facts alleged in the complaint and
in the various motion papers submitted by (the plaintiff)"]).
"Whether a plaintiff can ultimately establish its allegations is
not part of the calculus in determining a motion to dismiss" (EBC


                               - 5 -
                              - 6 -                            No. 47

I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]).
          "Under CPLR 3211 (a) (1), a dismissal is warranted only
if the documentary evidence submitted conclusively establishes a
defense to the asserted claims as a matter of law. In assessing a
motion under CPLR 3211 (a) (7), however, a court may freely
consider affidavits submitted by the plaintiff to remedy any
defects in the complaint and the criterion is whether the
proponent of the pleading has a cause of action, not whether he
has stated one" (Leon v Martinez, 84 NY2d 83, 88 [1994] [internal
quotation marks and citations omitted]).   Here, Mr. Carlson
submitted an expert affidavit providing support for the
propositions that, under industry custom and practice, MVP's
trucks were hired autos used with DHL's permission.   Defendants
offered no contrary expert opinion, and challenged the expert's
opinions neither here nor below.    Although they remain free to do
so at a later stage of the proceedings, at this stage the
expert's opinions concerning insurance industry custom and
practice as to the comprehensive coverage of hired fleets, even
when trucks within a fleet are at times not used for business
purposes, are sufficient to defeat a motion to dismiss.
                               A.
          As to the hired auto issue, dismissal on that ground
was erroneous, for two additional reasons.   First, defendants and
the Appellate Division rely on the contract of insurance, without
reference to extrinsic evidence, to conclude that the truck


                              - 6 -
                                - 7 -                         No. 47

driven by Mr. Porter was not a hired auto, thus entitling them to
dismissal.    However, as Mr. Carlson argues, and defendants admit,
a portion of the insurance contract, the Schedule of Hire, has
not been produced.    According to the expert, the Schedule of Hire
would show that DHL's insurance policies cover all of MVP's
vehicles.    Mr. Carlson also points to evidence concerning the
underwriting of the policies, which demonstrates that DHL's
policies were priced to cover MVP's trucks as hired autos.1    If
the Schedule of Hire exists, its production is essential to
determination of the full content of the contract; it would be
error to dismiss the coverage claim based on only part of a
contract, particularly where a highly germane portion is
missing.2    If the Schedule of Hire has been lost or destroyed, it
would likewise be error to dismiss the coverage claim, because
Mr. Carlson would be entitled to attempt to prove the missing
portion by parol evidence (see Belknap v Witter & Co., 92 AD2d
515, 517 [1st Dept 1983] ["an incomplete contract falls within

     1
       For example, he asserts that DHL purchased additional
coverage for independent contractor vehicles under the hired auto
provisions of its business automobile policies and that National
Union contemplated the exposure of the so-called independent
contractors driving their own vehicles in hauling goods on behalf
of DHL in the pricing of the insurance policy and calculated the
premiums to cover the MVP vehicles as hired automobiles.
Notably, DHL's coverage for the hired automobiles was for amounts
in excess of $1 million, where DHL required MVP to carry $1
million coverage.
     2
       Because the Schedule of Hire is missing, the dissent's
contention that the agreement is "complete and clear and
unambiguous upon its face" is puzzling.

                                - 7 -
                               - 8 -                           No. 47

one of the limited exceptions to the parol evidence rule"], affd
61 NY2d 802 [1984]) or, perhaps, would be entitled to an adverse
inference based on defendants' duty to maintain the Schedule (see
Pegasus Aviation I, Inc. v Varig Logistica S.A., 26 NY3d 543, 551
[2015]; CPLR 3126).
           Defendants' argument that the Schedule of Hire would
have been unlikely to list MVP's vehicles individually, and
therefore defendants should prevail as a matter of law, is in any
event foreclosed by our decision in Jefferson Ins. Co. of New
York v Travelers Indemnity Co. (92 NY2d 363, 370 [1998]), in
which we held: "that the van is not specifically listed [in the
Schedule of Hired and Non-Owned Coverage] is not determinative"
of coverage, because the policy "listed 'N.Y.' as the State in
which such coverage would apply, and also listed a 'Rate per each
$100 cost of hire' and a premium amount."
           Second, the insurance policies do not define "hired
auto," and neither the Appellate Division nor defendants point to
any industry-standard definition.   Defendants argue, and we
agree, that the degree of control exercised by DHL over MVP's
trucks is pivotal to the determination of whether they are hired
autos.   However, the issue of control is fact-specific.   The
cartage agreement contains some terms militating against a
finding of control; for example, Section 3.3 of the cartage
agreement gives MVP control over the manner of performance,
including the number of vehicles and routing of the vehicles, and


                               - 8 -
                                - 9 -                         No. 47

Section 3.5.2 makes MVP responsible for the maintenance of the
vehicles.    The cartage agreement also contains terms that
militate in favor of finding that DHL exercised substantial
control over MVP's trucks.    For example, DHL required all MVP
trucks used for DHL's business to have DHL's paint scheme and
identifying marks; DHL imposed maintenance requirements for the
vehicles, and required that any necessary repairs to the vehicles
be made and documented in accordance with procedures established
by DHL; DHL specified the types of vehicles to be used for
different types of deliveries; and DHL required MVP to use DHL's
routing software.    MVP was prohibited from making deliveries for
a DHL competitor; even if MVP wanted to use its trucks to make a
delivery for a non-competitor, it had to obtain DHL's permission
and remove DHL's marks from the truck; and MVP could not retain
any third parties to perform its work without DHL's prior written
authorization.    Those substantial restrictions on MVP's ownership
and ability to use its trucks go well beyond simply controlling
DHL's intellectual property and brand.
            Most significantly for the purpose of this appeal,
determining the extent of control is not limited to the face of
the contract, but concerns the actual degree of control exercised
by DHL over MVP.    Mr. Carlson, who obtained some limited
discovery, has pointed to evidence supporting the proposition
that DHL actually exercised substantial control over MVP's




                                - 9 -
                              - 10 -                          No. 47

trucks.3   For example, MVP's entire fleet was used exclusively
for DHL deliveries; DHL prescribed the make and model of the
vehicles to be used by MVP; MVP's vehicles were garaged in DHL's
facility; DHL had keys to MVP's offices, which were located
inside the DHL facility; DHL dispatched MVP drivers and owned the
equipment used to do so; DHL sent MVP drivers instructions via
text message; DHL provided routing specifications for express
shipments and required MVP to follow them; DHL required MVP to
collect money on COD (collect on delivery) shipments and remit
those monies to DHL; and if a customer had a problem, MVP was
required to contact DHL or tell the customer to do so.   All MVP
employees were required to wear DHL uniforms, DHL audited MVP's
safe driving practices, and DHL regularly examined MVP's routes
and adjusted them.
           Contrary to the Appellate Division's holding, the fact
that the cartage agreement labels MVP an "independent contractor"
is not dispositive of the issue of control, but is a factor to be
weighed with others.   In Matter of Rivera (State Line Delivery
Serv.-Roberts) (69 NY2d 679, 682 [1986]), we noted that "whether
the relationships of the operators-deliverers with the delivery


     3
       Mr. Carlson pleaded as much: "[A]t the time of the
accident, MVP was delivering goods and hauling freight for DHL
pursuant to a Cartage Agreement that was drafted by DHL, and
contained a very detailed set of directives through which DHL
created a relationship wherein MVP's discretion was all but
completely eliminated, and DHL retained virtually complete
control with respect to the means and manner by which MVP's
services were to be delivered."

                              - 10 -
                              - 11 -                          No. 47

companies is that of employees or independent contractors
involves a question of fact as to whether there is evidence of
either control over the results produced or over the means used
to achieve the results."   In various other contexts, we and other
courts have held that the determination of whether someone is an
independent contractor is a fact-specific question (see e.g.
Matter of Empire State Towing & Recovery Assn., Inc.
[Commissioner of Labor], 15 NY3d 433, 437 [2010]; Herman v RSR
Sec. Services Ltd., 172 F3d 132, 139 [2d Cir 1999]; Brock v
Superior Care, Inc., 840 F2d 1054, 1059 [2d Cir 1988]); Cross v
Supersonic Motor Message Courier, Inc., 140 AD3d 503, 504 [1st
Dept 2016][concluding that whether delivery driver was employee
or independent contractor was a question of fact where, although
the contract labeled the driver an independent contractor, "he
was required to maintain insurance in an amount dictated by
Continental, his delivery process was controlled by the
Continental dispatcher, he used Continental's forms, was required
to wear a Continental shirt, and the truck he drove bore the
Continental logo"]).
          Although we express no opinion as to whether Mr.
Carlson will ultimately succeed in demonstrating that the MVP
vehicle constituted a "hired auto," defendants have not shown
that, as a matter of law, Mr. Carlson failed to "manifest any
cause of action cognizable at law" (Guggenheimer v Ginzburg, 43
NY2d 268, 275 [1977]) or that defendants submitted "'documentary


                              - 11 -
                              - 12 -                          No. 47

evidence [to] conclusively establish[] a defense to the asserted
claims as a matter of law'" (98 NY2d at 152).4


                                    B.
          As to the issue of whether DHL granted "permission" to
MVP to use the vehicle in question, dismissal on that ground was
also erroneous.5   "Permission" is not defined in the insurance
agreement.   "While the rights and obligations of parties under
insurance contracts should be determined by the specific language
of the policies, if the language of the policy is susceptible of
two reasonable meanings, the parties may submit extrinsic
evidence of their intent at the time of contracting" (Newin Corp.
v Hartford Acc. & Indem. Co., 62 NY2d 916, 919 [1984]).   There is
a well-understood meaning of permission in the context of motor
vehicle liability insurance, which turns not on whether the


     4
       The dissent claims that in order to obtain coverage,
"plaintiff has the burden of establishing" that the MVP vehicle
was hired by DHL and used with DHL's permission. However, we
must remain mindful of the procedural posture of this case. A
plaintiff opposing a motion to dismiss pursuant to CPLR 3211 (a)
(1) and (7) does not have the burden of conclusively
demonstrating his or her entitlement to recovery.
     5
       The Appellate Division's rationale relied on dicta from
our decision in Dairylea Co-op., Inc. v Rossal (64 NY2d 1, 9-10
[1984]). Dairylea is inapposite on several counts. First, the
policy at issue there specifically excluded from coverage "the
owner of a non-owned automobile," and there was "no question that
the tanker was not owned by Dairylea" (id.). The policies here
contain no such exclusion. Second, the various facts suggesting
that DHL could and did exercise substantial control over MVP were
not present in Dairylea.

                              - 12 -
                              - 13 -                          No. 47

driver had permission to use the vehicle for the particular
activity at issue, but on whether the driver had permission to
use the vehicle at all (i.e. the distinction between a permissive
user and a thief)(see Motor Vehicle Accident Indemnification
Corp. v Continental Nat'l Am. Group Co., 35 NY2d 260, 263-265
[1974]; Murdza v Zimmerman, 99 NY2d 375, 381 [2003]; State Farm
Mut. Auto. Ins. Co. v Taveras, 71 AD3d 606, 606 [1st Dept 2010];
Lancer Ins. Co. v Republic Franklin Ins. Co., 304 AD2d 794, 797
[2nd Dept 2003]).   That established meaning is consistent with
industry practice, public policy and DHL's insurance agreement
itself.
           In Motor Vehicle Accident Indemnification Corp.,
Continental Insurance attempted to deny coverage after an
accident on the ground that the driver of a rental car was
forbidden, by the terms of the rental agreement, from driving the
car.   We held that the driver nevertheless drove the car with
constructive "permission" of the owner, as that term is used in
section 388 of the Vehicle and Traffic Law, overcoming the
restrictions on use provided by Continental in the lease.     We
wrote:
           "The restrictions sought to be imposed by
           Continental violate the public policy of this
           State . . . . The lessor (and Continental)
           . . . knew or should have known that the
           probabilities of the car coming into the
           hands of another person were exceedingly
           great and in these circumstances they are to
           be charged with constructive consent . . .
           Any other interpretation would be placing an
           unreasonable limitation on the 'permission'

                              - 13 -
                              - 14 -                          No. 47

          contemplated by [section 388] . . . [section
          388] expresses the policy that one injured by
          the negligent operation of a motor vehicle
          should have recourse to a financially
          responsible defendant . . . To put it another
          way, these considerations of sound public
          policy will prevent the evasion of the
          liability of one leasing cars for profit (and
          in turn, his insurer) via the attempted
          device of restrictions on or conditions of
          use which run counter to the recognized
          realities and, in a measure, disguise the
          transaction"
(35 NY2d at 264-265).   Subsequently, in Murdza, we explained that
"our finding of constructive consent [in Motor Vehicle Accident
Indemnification Corp.] -- despite the owner's restrictions --
rested, in part, on the public policy concerns surrounding the
large number of vehicles placed on the road by businesses that
rent cars to others for profit, and the inevitability that these
vehicles will 'become involved in their fair share of accidents'"
(99 NY2d at 380, quoting Motor Vehicle Accident Indemnification
Corp., 35 NY2d at 263).   The Vehicle and Traffic Law's
understanding of "permission" is echoed in Insurance Law § 3420
(e), which requires an insurer (regardless of location) issuing a
policy "covering liability arising from the ownership,
maintenance or operation of any motor vehicle" if the vehicle is
"principally garaged or principally used in this state" to insure
the named insured from any liability "as a result of negligence
in the operation or use of such vehicle . . . by any person
operating or using the same with the permission, express or
implied, of the named insured" (emphasis added).


                              - 14 -
                              - 15 -                         No. 47

           Those same public policy concerns are at issue here.
DHL contracted with MVP for the operation of fleets of thousands
of vehicles with DHL's logos, for the purpose of the exclusive
delivery of DHL's packages nationwide, including Western New
York.   Mr. Carlson pointed to evidence showing that MVP's trucks
were used exclusively for DHL's business.   Some of those trucks
will inevitably become involved in their fair share of accidents,
and some of those accidents will inevitably occur when a driver
departs from the specified routes or driving restrictions.   The
record, though incomplete at this point, indicates that DHL, as
the "financially responsible defendant," has procured coverage
that is priced and intended to provide excess coverage for those
fleets of trucks when driven by an authorized user (see 35 NY2d
at 264).
           Mr. Carlson's expert, who claims forty years of
experience in the insurance industry, opined that, as a matter of
common industry usage, "the term 'permission' in an insurance
policy is broad and simply means that the operator was legally
allowed to use that vehicle at the time of an accident.   To put
in simpler terms, in an insurance context an operator is either a
permissive user or a thief who stole the vehicle" (cf. Murdza, 99
NY2d at 381 ["because the lessee gave his consent to (the
third-party driver) to operate the rental vehicle () we (found)
that he was operating it with the constructive consent of (the
lessor) and, perforce, with the permission envisioned by the


                              - 15 -
                               - 16 -                         No. 47

provisions of section 388 . . . Absent the lessee's consent, the
third party's operation would have been that of a thief -- the
antithesis of a permissive user"][internal quotation marks and
citations omitted]).   That opinion comports with our decisions in
Motor Vehicle Accident Indemnification Corp. and Murdza, as well
as the public policies of the State, because if "permission"
could be read to limit coverage for failure to adhere to certain
specifications -- such as avoiding detours or following the rules
of the road -- automobile insurance companies could successfully
disclaim coverage for almost any accident when the driver is not
the owner of the vehicle.   That kind of "unreasonable limitation"
on coverage was rejected by this court in Motor Vehicle Accident
Indemnification Corp., as it did not comport with the public
policy that "one injured by the negligent operation of a motor
vehicle should have recourse to a financially responsible
defendant" (35 NY2d at 264).
          DHL argues that the interpretation of "permission" is
controlled by the Appellate Division's decision in Carlson v
Porter (53 AD3d 1129 [4th Dept 2008]).   There, the Appellate
Division concluded as a matter of law that "neither the DHL
defendants nor MVP may be held vicariously liable under the
theory of respondeat superior" because Porter was on a personal
errand at the time of the accident and that "his employment did
not create the necessity for the travel" (id. at 1132).   However,
the doctrine of respondeat superior is not relevant to the issue


                               - 16 -
                              - 17 -                          No. 47

of permission here.   The doctrine of respondeat superior is used
to determine when an employer may be held responsible for acts of
an employee, not when an insurance company must provide coverage
under the terms of its own policy.6
          Under the terms of the insurance contract, coverage is
not limited to circumstances where DHL is held directly liable or
liable by way of the doctrine of respondeat superior.   The
contract contemplates coverage in circumstances where the driver
may not be an employee, or where the driver may not be acting
within the scope of employment, so long as the other requirements
for coverage are met.


                               III.
          AAIC adopts the Appellate Division's rationale that
because AAIC's policy was issued in New Jersey and delivered in
Washington and then in Florida, it was neither issued nor
delivered in New York, and therefore plaintiff cannot recover
from AAIC pursuant to Insurance Law § 3420.   Our decision in


     6
       "Under the doctrine of respondeat superior, an employer
will be liable for the negligence of an employee committed while
the employee is acting in the scope of his employment" (Lundberg
v State, 25 NY2d 467, 470 [1969]). The doctrine is limited: "An
employee acts in the scope of his employment when he is doing
something in furtherance of the duties he owes to his employer
and where the employer is, or could be, exercising some control,
directly or indirectly, over the employee's activities" (id.).
Where travel is part of the employment, "the crucial test is
whether the employment created the necessity for the travel"
(Swartzlander v Forms-Rite Bus. Forms & Printing Serv., Inc., 174
AD2d 971, 972 [4th Dept 1991]).

                              - 17 -
                               - 18 -                         No. 47

Preserver resolves that question, and we now reiterate that
section 3420 applies to policies that cover insureds and risks
located in the State.
          Insurance Law § 3420 allows a limited cause of action
on behalf of injured parties directly against insurers.   Section
3420 applies to policies and contracts "issued or delivered in
this state" (see Insurance Law § 3420 [a]).   Insurance Law § 3420
does not define the term "issued or delivered in this state," but
other provisions of the Insurance Law are instructive: "[T]he
proper interpretation of the term 'issued or delivered in this
state' refers both to a policy issued for delivery in New York,
and a policy issued for delivery outside of New York" (General
Counsel Opinion 09-06-2008).   In Preserver, we interpreted
section 3420 (d), which then required insurers to provide written
notice when disclaiming coverage under policies "issued for
delivery" in New York.   We held that "[a] policy is 'issued for
delivery' in New York if it covers both insureds and risks
located in this state" (10 NY3d at 642).   Thus, under Preserver,
"issued for delivery" was interpreted to mean where the risk to
be insured was located -- not where the policy document itself
was actually handed over or mailed to the insured.   We
interpreted section 3420 to provide a benefit -- deliberately in
derogation of the common law -- to New Yorkers whenever a policy




                               - 18 -
                              - 19 -                         No. 47

covers "insureds and risks located in this state" (id.).7
Applying the Preserver standard to the facts of this case, it is
clear that DHL is "located in" New York because it has a
substantial business presence and creates risks in New York.   It
is even clearer that DHL purchased liability insurance covering
vehicle-related risks arising from vehicles delivering its
packages in New York, because its insurance agreements say so.
          This interpretation of "issued or delivered" is
consistent with the reasoning behind the legislature's enactment
of Insurance Law § 3420.   In 1917, the legislature created this
statutory cause of action to remedy the inequity of the common


     7
       Although the dissent claims that the Preserver court
"relied on" the distinction between "issued or delivered" and
"issued for delivery," the basis for that claim is unsound. The
dissent points out that the Appellate Division in American Ref-
Fuel Co. of Hempstead v Employers Ins. Co. of Wausau (265 AD2d 49
[2d Dept 2000]), cited in Preserver, notes that the phrase
"issued for delivery" is different from "issued or delivered."
However, the court in American Ref-Fuel did only that -- noted
the distinction -- but did not rely on it in making its
determination regarding section 3420(d). Indeed, American Ref-
Fuel explains that the statute, both as originally enacted using
the words "issued or delivered," and as later amended to "issued
for delivery," at all times covered "accidents occurring in this
State" (265 AD2d at 52). American Continental Props. v National
Union Fire Ins. Co. of Pittsburgh (200 AD2d 443, 446-447 [1st
Dept 1994]), which the dissent claims "construed the 'issued or
delivered' language as limited to where the policy had been
physically executed," held only that there was a question of fact
as to whether the policy was issued or delivered in New York
where the policy contained a New York address, was signed in New
York, countersigned in Pennsylvania, and "where a substantial
portion of the risk associated with the policy" was located in
New York. Thus, prior to Preserver, there was no clear
distinction between the two phrases in the context of section
3420.

                              - 19 -
                              - 20 -                             No. 47

law rule that an injured person had no cause of action against
the insurer of a tortfeasor and to protect the tort victims of
New York (see Lang v Hanover Ins. Co., 3 NY3d 350, 353-354
[2004]).   "Generally, statutes designed to promote the public
good will receive a liberal construction and be expounded in such
a manner that they may, as far as possible, attain the end in
view" (McKinney's Statutes § 341).     The overall legislative
intent of Insurance Law § 3420 is to protect the tort victims of
New York State, and the subsequent amendments to section 3420
were designed to expand the remedy, not to contract it.
           In 2008, the legislature amended Insurance Law § 3420
to expand its reach in several respects.     The 2008 amendments
were made to "restore fairness to the process and protect
individuals who suffer personal injuries and families whose loved
ones have died as a result of the tortious conduct of another"
(DeFrancisco Letter, Bill Jacket, L 2008, ch 388 at 5; see
Introducer's Mem in Supp, id. at 8; see also Weinstein Letter,
id. at 6 ["(T)his progressive, forward thinking legislation will
benefit insureds, injured parties, and the administration of
justice"]; New York State Academy of Trial Lawyers Letter, id. at
18 ["This legislation advances the cause of justice and will
improve New Yorkers' access to the courts, and their ability to
seek relief for injuries and wrongful death"]).
           The 2008 amendments also changed the "issued for
delivery" language in subsection (d) to match the "issued or


                              - 20 -
                              - 21 -                         No. 47

delivered" language elsewhere in the statute.    Nothing in the
bill jacket or other legislative history mentions that change, so
that it appears to have been a stylistic change with no intended
import.   If anything, "issued or delivered" is facially broader
than "issued for delivery."   Moreover, there is certainly no
indication that the legislature's minor amendment to subsection
(d) was intended to overturn this Court's holding in Preserver.
           Interpreting "issued or delivered in this state" to
apply exclusively to policies issued by an insurer located in New
York or by an out-of-state insurer who mails a policy to a New
York address would undermine the legislative intent of Insurance
Law § 3420.   It would require an assumption that the legislature
intended to remove coverage benefitting injured New York
residents if the policy was mailed from another state, but to
increase coverage for foreign victims injured elsewhere so long
as the policy was mailed to New York or underwritten by a New
York-based insurer -- hardly plausible in light of the express
purposes of section 3420 and the 2008 Amendments.
           The dissent suggests that, "[g]iven the sharp change in
the meaning of 'issued or delivered,' and the frequency with
which that phrase is used," our holding today will "wreak havoc"
in unspecified ways.8   That is not the case.   Today's


     8
       The dissent's questions about the effects of our decision
fail to take into account two things: (1) an insurance company
will be subject to suit in New York only if a New York court has
personal jurisdiction over it; and (2) section 3420 applies to

                              - 21 -
                              - 22 -                           No. 47

interpretation of "issued or delivered" to include policies that
cover both insureds and risks located in the state is not a
"sharp change"; that interpretation is consistent with Preserver
and the legislative history of section 3420 and the 2008
Amendments.   The fact that the phrase "issued or delivered"
exists in other provisions of the Insurance Law does not affect
the analysis, for a few reasons.   First, although "issued or
delivered" appears in other parts of the Insurance Law, we have
yet to interpret the phrase in any of those other contexts.
Thus, decrying our interpretation of "issued or delivered"
because it might affect the interpretation of those same words in
other provisions would apply equally to the adoption of the
dissent's view: any interpretation would have that effect.
           Second, we do not here purport to judge the meaning of
the words "issued or delivered" in any context other than section
3420.   Identical words may be used in different contexts with
different meanings and different legislative histories, and we do
not foreclose any such interpretations by our decision here.
           Third, the dissent would restrict section 3420 (d) to
policies that were either issued in New York or delivered to New
York, and would exclude, for example, an insurance policy issued
by a national insurer located in Connecticut to a retailer
operating in all fifty states, if the policy was delivered to the
retailer's headquarters in Arkansas -- even if the policy was


policies that cover both insureds and risks located in New York.

                              - 22 -
                              - 23 -                          No. 47

specifically written to cover risks in New York created by the
insured's extensive operations in this state.   The same concerns
that animate our consideration of section 3420 are also relevant
to and consistent with the purpose of other provisions of the
Insurance Law, which has as its overriding purpose the protection
of New Yorkers and the coverage of injuries occurring in New York
(see e.g. Insurance Law § 1213 [declaring the legislature's
concern that out-of-state insurers present New York residents
"the often insuperable obstacle of resorting to distant forums
for the purpose of asserting legal rights under such policies,"
and therefore providing that any transaction of business or
solicitation thereof by a foreign insurer constitutes
authorization for the Superintendent of Insurance to accept
process for that insurer]).   The dissent's interpretation of
"issued or delivered" would allow an insurer to avoid compliance
with many of the provisions of the Insurance Law simply by
mailing the policy to the insured's secondary location, even
though the risks contemplated by the policy existed entirely
within New York.   It is simply not plausible that the legislature
intended the provisions of the Insurance Law to be so easily
evaded by companies doing business in New York and purporting to
cover risks in New York.
          In light of the above, we conclude that the term
"issued or delivered" does not alter our conclusion in Preserver,
and that section 3420 (a) encompasses situations where both


                              - 23 -
                              - 24 -                          No. 47

insureds and risks are located in this state. In so holding, we
further conclude that the policies here fall within the purview
of Insurance Law § 3420, and Mr. Carlson may maintain his
Insurance Law § 3420 cause of action against AAIC, subject, of
course, to his ability to prove coverage.
                                IV.
          Mr. Carlson's remaining claims are without merit, and
we review them briefly.
          General Business Law § 349 provides that "[d]eceptive
acts or practices in the conduct of any business, trade[,] or
commerce or the furnishing of any service in [New York] are . . .
unlawful" (General Business Law § 349 [a]).   We have held that
"[s]ection 349 does not grant a private remedy for every improper
or illegal business practice, but only for conduct that tends to
deceive consumers" (Schlessinger v Valspar Corp., 21 NY3d 166,
172 [2013]).   "As a threshold matter, in order to satisfy General
Business Law § 349 plaintiffs' claims must be predicated on a
deceptive act or practice that is 'consumer oriented'" (Gaidon v
Guardian Life Ins. Co. of Am., 94 NY2d 330, 344 [1999], quoting
Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85
NY2d 20, 24-25 [1995]).   Mr. Carlson's allegations demonstrate
that this action is merely a "'private' contract dispute over
[insurance] policy coverage," which does not "affect[] the
consuming public at large," and therefore falls outside the
purview of General Business Law § 349 (New York Univ. v


                              - 24 -
                              - 25 -                          No. 47

Continental Ins. Co., 87 NY2d 308, 321 [1995]; see Oswego
Laborers' Local 214 Pension Fund, 85 NY2d at 25).
          "The elements of a cause of action for fraud require a
material misrepresentation of a fact, knowledge of its falsity,
an intent to induce reliance, justifiable reliance by the
plaintiff[,] and damages" (Eurycleia Partners, LP v Seward &
Kissel, LLP, 12 NY3d 553, 559 [2009]; see Lama Holding Co. v
Smith Barney, 88 NY2d 413, 421 [1996]).   In an action for fraud,
"the circumstances constituting the wrong shall be stated in
detail" (CPLR 3016 [b]).   Here, Mr. Carlson does not allege, with
sufficient particularity, details demonstrating that the
defendants engaged in any fraud.   His allegations concerning
defendants' alleged misrepresentations and bad faith refusal to
settle the claim are purely conclusory in nature and duplicative
of his direct action pursuant to Insurance Law § 3420 and
therefore fail to state a cause of action (see New York Univ., 87
NY3d at 320).   Finally, New York does not recognize a
freestanding claim for conspiracy (see Alexander & Alexander of
N.Y. v Fritzen, 68 NY2d 968, 969 [1986] ["a mere conspiracy to
commit a (tort) is never of itself a cause of action"]).    In
light of the above, Mr. Carlson's remaining claims were properly
dismissed.
          Accordingly, the orders of the Appellate Division
should be modified, without costs, by denying defendants' motions
to dismiss the first cause of action and, as so modified,


                              - 25 -
            - 26 -   No. 47

affirmed.




            - 26 -
Carlson v American International Group, Inc. et al.
No. 47




GARCIA, J.(dissenting):
           The vehicle involved in the tragic accident underlying
this case was not a "hired auto" under settled principles of
insurance law (see Dairylea Coop. v Rossal, 64 NY2d 1, 9-10
[1984]; see also Toops v Gulf Coast Marine Inc., 72 F3d 483, 487-
488 [5th Cir 1996]; 8A Couch on Ins. § 118:49). I would therefore
affirm on that basis.
                               I.
          In April 2004, MVP Delivery and Logistics, Inc. (MVP)
entered into a cartage agreement with DHL Express (USA) Inc.
(DHL) to provide package delivery services in the Western New


                              - 1 -
                                - 2 -                          No. 47
York region.    The agreement expressly identified MVP as an
independent contractor.    As such, MVP owned and registered the
vehicles in its delivery fleet.    MVP also maintained control over
its employees and the manner and means of its performance under
the cartage agreement. Pursuant to the terms of the agreement,
MVP obtained a $1 million liability insurance policy to cover the
vehicles.
            On July 7, 2004, an MVP delivery van, driven by
employee William Porter, collided head-on with another vehicle.
The driver of that vehicle died thirteen days later as a result
of the injuries she sustained in the crash.    At the time of the
accident, William Porter was running a personal errand on a
scheduled break.
            In the underlying wrongful death litigation, a jury
awarded Michael Carlson, in both his individual capacity and as
administrator of his deceased wife's estate, $20 million against
William Porter, MVP, and DHL.    The Appellate Division reversed
the judgment against MVP and DHL, reasoning that MVP and DHL
could not be held vicariously liable on a theory of respondeat
superior because Porter's employment did not create the need for
the travel (Carlson v Porter, 53 AD3d 1129, 1132 [4th Dept
2008]).   In other words, Porter exceeded the scope of his
employment by running a personal errand at the time of the
accident. MVP was nonetheless still held statutorily liable as
owner of the vehicle (see Vehicle and Traffic Law § 388).      The


                                - 2 -
                               - 3 -                          No. 47
Appellate Division also set aside the damages award as excessive
and plaintiff stipulated to a reduced judgment of $7.3 million.
To date, plaintiff has received approximately $1.1 million from
MVP's insurance carrier.
          Seeking to satisfy the deficient judgment, plaintiff,
in his individual capacity and as administrator of his wife's
estate, commenced this action under Insurance Law § 3420 (b).1
Specifically, plaintiff seeks to recover from DHL's insurers on
the theory that the MVP vehicle was a "hired auto" within the
meaning of DHL's insurance policies.   As such, MVP would be an
"insured" under those policies.
           Three DHL insurance policies are relevant here.
First, National Union Fire Insurance Company of Pittsburgh
(National Union), a subsidiary of American International Group,
Inc. (AIG), issued DHL's primary insurance policy in the amount
of $3 million.   This liability policy contained a "hired auto"
provision defining an insured as anyone "using with your
permission a covered auto you own, hire or borrow . . . ."
Second, National Union issued a $23 million umbrella policy
defining an insured as "[a]ny person . . . or organization with
respect to any auto owned by you, loaned to you or hired by you


     1
       Subject to certain limitations, section 3420 (b) provides
that "an action may be maintained . . . against the insurer upon
any policy or contract of liability insurance . . . to recover
the amount of a judgment against the insured or his personal
representative" (Insurance Law § 3420 [b]; see section III,
infra).

                               - 3 -
                                - 4 -                        No. 47
on your behalf and used with your permission . . . ."    Under both
policies, "you" means a named insured, which explicitly includes
DHL but not MVP or any other independent contractor.    Third, DHL
purchased a $2 million excess policy from American Alternative
Insurance Company (AAIC), which followed the form of DHL's
primary insurance policy.
            These defendant insurance companies moved to dismiss
this action under CPLR 3211 (a) (1) and 3211 (a) (7).    Supreme
Court, Niagara County denied the motions insofar as the insurers
sought dismissal under Insurance Law § 3420.    The court rejected
AAIC's argument that the excess policy had not been "issued or
delivered" in New York, as required by Insurance Law § 3420 (a),
because the accident took place while the named insured was doing
business within the state.    After limited discovery, the same
court concluded that the pleadings were sufficient to allege that
the MVP vehicle constituted a "hired auto" under the relevant
policies.
            On appeal, the Appellate Division reversed and granted
the motion to dismiss, concluding that plaintiff could not state
a claim against National Union because DHL did not "hire" the
vehicle in question and could not have given MVP permission to
use MVP's own vehicle (130 AD3d 1479, 1481 [4th Dept 2015]).      As
a result, MVP was not an "insured" under the applicable policies.
In a companion appeal, the Appellate Division also dismissed the
first cause of action against AAIC (130 AD3d 1477, 1477-1478 [4th


                                - 4 -
                               - 5 -                          No. 47
Dept 2015]).   The court reasoned that the excess policy had not
been "issued or delivered in this state" as required by Insurance
Law § 3420 (a) (2).   This Court subsequently granted leave to
appeal.
                               II.
          The majority holds that whether MVP is an "insured"
under DHL's insurance policies presents a question of fact to be
resolved by a jury.   I disagree.    The cartage agreement on its
face establishes that MVP is an independent contractor
responsible for the purchase, operation, and maintenance of its
delivery fleet.   As such, MVP exercised meaningful control over
its vehicles, thereby precluding "hired auto" coverage, as a
matter of law, under the relevant insurance policies.
                                A.
          "The key inquiry regarding whether an automobile will
fall within the hired automobiles provision of [a] policy is
whether the insured exercised dominion, control, or the right to
direct the use of the vehicle" (8A Couch on Ins. § 118:49).2     In
other words, the issue is whether the underlying agreement is for
the services of the independent contractor or for the vehicle
used in providing those services (see id.; Dairylea Coop. v
Rossal, 64 NY2d 1, 9-10 [1984]; Transport Indem. Co. v Liberty


     2
       "Other factors in determining control may include control
over the driver of the vehicle, control of decisions affecting
the operations of the vehicle, responsibility for maintenance of
the vehicle, and responsibility for maintaining liability
insurance for the vehicle" (8A Couch on Ins. § 118:49).

                               - 5 -
                              - 6 -                         No. 47
Mut. Ins. Co., 620 F2d 1368, 1371 [9th Cir 1980]).   A business
should not be liable for its independent contractor's use of the
vehicles if the business cannot control the manner in which those
vehicles operate (see Chainani v Bd. of Educ. of City of N.Y., 87
NY2d 370, 380-381 [1995]; Kleeman v Rheingold, 81 NY2d 270, 274
[1993]). That was clearly the case here.
          MVP, not DHL, owned the delivery vehicle at issue.
Accordingly, to obtain coverage, plaintiff has the burden of
establishing that the MVP vehicle was (1) "hired" by DHL and (2)
used with DHL's permission at the time of the accident.   Here,
the fourteen-page cartage agreement, read in conjunction with the
insurance policies, conclusively defeats plaintiff's "hired auto"
claim.
          By its very terms, the cartage agreement referred to
MVP as an independent contractor.   As such, MVP maintained sole
control over the manner and means of its performance:
     "3.3 Manner of Performance. Subject to the terms and
     conditions of this agreement by which Contractor
     performs the Services shall be at Contractor's sole
     discretion and control and are Contractor's sole
     responsibility, including, with respect to (a) the
     hours and days worked by Contractor Workers, (b) the
     selection and supervision of Contractor Workers, and
     (c) the number of Contractor Vehicles used by
     Contractor in providing the Services. Contractors shall
     have the sole right to determine all aspects of its
     performance of its obligations under the Agreement,
     including the staffing, operation, and routing of the
     Contractor Vehicles in the Service Areas . . . ."
(Cartage Agreement at ¶ 3.3 [emphasis added]). This "manner of
performance" provision clearly establishes the parties' intent


                              - 6 -
                                - 7 -                         No. 47
that MVP would maintain control over the operation of its
vehicles.    DHL did not have authority to make decisions affecting
the day-to-day operations of MVP's vehicles.
            The cartage agreement further provides MVP with
exclusive control over the purchase and maintenance of its
delivery vehicles (see id. at ¶ 3.5.1 ["Contractor Vehicles.
Without limiting the generality of Section 3.3, Contractor, at is
sole cost and expense, shall obtain, furnish, operate, and
maintain in good working condition such Contractor Vehicles as
may be necessary for Contractor to perform the Services in
accordance with the provisions of this Agreement"][emphasis
added]).    Moreover, MVP was solely responsible for the licensing,
registration, and insurance of its delivery vehicles (see id. at
¶ 3.5.2; ¶ 12.1 ["(MVP) shall, at its sole cost and expense,
maintain in effect continual insurance coverage . . . . All such
insurance coverages . . . shall be primary to, and shall receive
no contribution from any other insurance maintained by, on behalf
of, or benefitting DHL"] [emphasis added]).    Finally, the
agreement specified that MVP was responsible for the hiring,
training, and firing of all its employees (see id. at ¶ 3.4).
Clearly, pursuant to the cartage agreement, MVP maintained direct
control over the purchase, operation, and maintenance of its
vehicles -- and more. MVP, among other things, selected
individual drivers, selected delivery routes, loaded and unloaded
the vehicles, and furnished the vehicles with gas and other


                                - 7 -
                                - 8 -                         No. 47
supplies.
            As the majority notes, the cartage agreement contained
strict regulations for, among other things, the vehicles'
operating and performance standards, the vehicles' markings,
employee uniforms, and employee standards of conduct.     DHL also
had the right to inspect MVP's records and audit its compliance
with the agreement. MVP even used DHL's facilities and housed its
vehicles on site.   The majority stresses these aspects of the
business relationship in holding that there is a cognizable
factual dispute here (see majority op at 9-10).   However, none of
these requirements in the cartage agreement -- with the limited
exception of vehicle performance standards -- affect the MVP
vehicles in their functional or operational capacities.    The
markings requirement, for instance, simply reflects DHL's control
over its own intellectual property and brand, not the vehicle
itself.   Accordingly, even assuming DHL exercised some
"supervisory powers," MVP was still an independent contractor
responsible for its own performance (see Chicago Ins. Co. v Farm
Bureau Mut. Ins. Co. of Arkansas, Inc., 929 F2d 372, 374 [8th Cir
1991]).
            Absent any indication that DHL specifically hired MVP's
vehicles for its own exclusive control, there can be no "hired
auto" coverage as a matter of law (see American Cas. Co. of
Reading, Pa. v Denmark Foods, 224 F2d 461, 463 [4th Cir 1955]).
I would therefore hold that MVP -- an independent contractor


                                - 8 -
                                - 9 -                           No. 47
solely responsible for the purchase, operation, and maintenance
of its vehicles -- exercised such exclusive control over the
vehicle so as to preclude "hired auto" coverage.


                                 B.
          That result is the same one we reached in Dairylea
Coop. v Rossal (64 NY2d 1 [1984]). There, R&H Hauling, an
independent contractor, entered into a hauling contract with
Dairylea Cooperative, Inc. and an accompanying lease agreement
for a tanker truck.    Several months later, R&H purchased the
tanker with Dairylea retaining a security interest. The truck,
which was still titled in Dairylea's name, was subsequently
involved in an accident with another vehicle while being driven
by a R&H employee.    After a jury returned a verdict for the
plaintiff in the underlying personal injury action, Dairylea and
R&H's insurers initiated a declaratory judgment action to
determine coverage.    Much like the insurance policies at issue
here, Dairylea's insurance policy defined an insured as "any
other person while using an owned automobile or a hired
automobile with the permission of the named insured" (id. at 9).
          We held in Dairylea that the truck did not constitute a
"hired auto" under Dairylea's insurance policy.    In doing so, we
emphasized the fact that the hauling contract between the parties
called for R&H to transport milk as an independent contractor,
and did not require the use of a particular tanker to perform


                                - 9 -
                               - 10 -                        No. 47
that service (see id. at 9-10).   Even though Dairylea still had
title to the truck and the truck still carried license plates
issued to Dairylea, we concluded that "it cannot be said in any
realistic sense that once the . . . agreements and note were
executed, Dairylea had any control over use of the tanker or
could grant R&H permission to use it" (id. at 10).   We further
observed that "as the owner of the tanker, R&H had the right to
use it without permission from Dairylea or anyone else" (id.).
          Similarly, here, the cartage agreement between DHL and
MVP explicitly refers to MVP as an independent contractor.   The
agreement makes no mention of specific vehicles to be used in the
performance of the contract.   The agreement is a contract for
MVP's services -- not its vehicles -- and, as owner of those
vehicles, MVP retained significant control over their operation.
In short, Dairylea is not meaningfully distinguishable from the
instant case, compelling the same result.3
          Our decision in Dairylea reflects the nationwide
consensus on "hired auto" coverage (see e.g. Toops v Gulf Coast



     3
       The majority suggests that Dairylea is distinguishable
because "the policy at issue there specifically excluded from
coverage 'the owner of a non-owned automobile,' and there was 'no
question that the tanker was not owned by Dairylea'" (majority op
at 11 n 3, quoting Dairylea, 64 NY2d at 9-10). But "the policy
definition of 'insured' included, in addition to Dairylea, 'any
other person while using an owned automobile or a hired
automobile with the permission of the named insured'" (id. at 9
[emphasis added]). We held that "the tank farm milk hauling
contract" between Dairylea and R&H did not "constitute the tanker
a hired automobile within the meaning of that provision" (id.).

                               - 10 -
                              - 11 -                          No. 47
Marine, Inc., 72 F3d 483, 487 [5th Cir 1996] ["(I)n order for a
vehicle to constitute a hired automobile it must be under the
named insured's exclusive use or control"]; Sprow v Hartford Ins.
Co., 594 F2d 418, 422 [5th Cir 1979] ["(F)or a vehicle to
constitute a hired automobile, there must be a separate contract
by which the vehicle is hired or leased to the named insured for
his exclusive use or control"]; Russom v Ins. Co. of North
America, 421 F2d 985, 993 [6th Cir 1970] ["Where there is a
separate contract for hiring or leasing a vehicle in addition to
an agreement to haul a particular load, courts have held that the
vehicle becomes a 'hired automobile'"]; Phillips v Enterprise
Transp. Serv. Co., 988 So2d 418, 422 [Miss Ct App 2008] [citing
Toops and Sprow for the proposition that the vehicle must be
hired or leased for the named insured's exclusive use or
control]).   Courts have also held that independent contractor
status cannot create "hired auto" coverage as a matter of law
(see e.g. Chicago Ins. Co., 929 F2d at 374; Transport Indem. Co.,
620 F2d at 1371; American Cas. Co., 224 F2d at 463).4


     4
       The majority asserts that MVP's status as an independent
contractor is just another "factor to be weighed with others" and
"is not dispositive of the issue of control" (majority op at 10).
But the cases cited from this Court address whether an employment
relationship exists within the meaning of the unemployment
insurance law (see Matter of Rivera [State Line Delivery
Serv.-Roberts], 69 NY2d 679, 682 [1986]; Matter of Empire State
Towing & Recovery Assn., Inc. [Commission of Labor], 15 NY3d 433,
437 [2010]). Employment is defined broadly within the meaning of
the unemployment insurance law to effectuate its remedial purpose
(see Labor Law §§ 501, 511 [a] [1]). Those policy concerns do not
apply here.

                              - 11 -
                              - 12 -                           No. 47
Accordingly, based on the face of the cartage agreement,
plaintiff cannot, as a matter of law, meet his burden of proving
coverage (see Cons. Ed. of N.Y. v Allstate Ins. Co., 98 NY2d 208,
218 [2002]).
                                C.
          Relying on the standard of review on a motion to
dismiss, the majority holds that "[w]hether MVP was an insured
under DHL's policies presents a question of fact to be resolved
by the trier of fact" (majority op at 2).   According to the
majority, "the insurance policies do not define 'hired auto,' and
neither the Appellate Division nor defendants point to any
industry-standard definition" (id. at 8).   The majority opinion
then relies heavily on an expert affidavit proffered by plaintiff
to conclude that a jury should determine whether the vehicle was
a "hired auto."   The majority even implies that a "missing"
Schedule of Hire, which is purportedly "essential to [the]
determination of the full content of the contract[,]" is
admissible through the parol evidence rule (id. at 7).
          But "a written agreement that is complete, clear and
unambiguous on its face must be enforced according to the plain
meaning of its terms" (Greenfield v Philles Records, Inc., 98
NY2d 562, 569 [2002]).   The rule's operation is no different in
the context of insurance contracts: "[w]here the terms of an
insurance policy are clear and unambiguous, interpretation of
those terms is a matter of law for the court" (Town of Harrison v


                              - 12 -
                              - 13 -                           No. 47
Nat'l Union Fire Ins. Co. of Pittsburgh, 89 NY2d 308, 316 [1996];
see also White v Continental Cas. Co., 9 NY3d 264, 267 [2007]
["(U)nambiguous provisions of an insurance contract must be given
their plain and ordinary meaning"]).   We have, in Dairylea,
defined the parameters of hired auto coverage, consistent with
the interpretations adopted by courts in a number of states, and
that definition should govern here.    Yet, instead, the majority
impermissibly uses extrinsic evidence "to create an ambiguity in
a written agreement which is complete and clear and unambiguous
upon its face" (W.W.W. Associates, Inc. v Giancontieri, 77 NY2d
157, 163 [1990]).5   Consequently, under the majority's holding, a
plaintiff may now use extrinsic evidence to alter the express
terms of an insurance policy whenever an insurer moves to dismiss
the action.
          Insurers rely on the established meaning of legal terms
to define the scope of coverage and the concomitant level of
risk; "the meaning of such provisions is not an issue of fact to
be litigated anew each time a dispute goes to court" (Unigard
Sec. Ins. Co. v N. River Ins. Co., 4 F3d 1049, 1071 [2d Cir
1993]).   Under the majority's interpretation, plaintiffs may now
point to information outside the four corners of the governing
insurance contract to generate ambiguity and manufacture a
"triable issue of fact."


     5
       Indeed, the majority fails to note that plaintiff
originally conceded that the terms of the policies were
unambiguous.

                              - 13 -
                              - 14 -                          No. 47
          The majority also appears to suggest that MVP and
William Porter had implied permission to operate the vehicle
under Vehicle & Traffic Law § 388 (1) (see majority op at 12-14).
That statute provides that "[e]very owner of a vehicle used or
operated in this state shall be liable and responsible for death
or injuries to person or property resulting from negligence in
the use or operation of such vehicle, in the business of such
owner or otherwise, by any person using or operating the same
with the permission, express or implied, of such owner" (Vehicle
& Traffic Law § 388 [1]).   By definition, however, section 388
only applies to an "owner of a vehicle used or operated in this
state" (id. § 128).   It is undisputed that MVP -- not DHL --
owned the van and, pursuant to section 388, MVP is the party that
must give permission.
          The majority also relies on the public policy
considerations underlying section 388.   In Motor Vehicle Accident
Indemnification Corp v Continental Nat'l Am. Group Co., for
example, we held that a driver of a rental car had the
constructive permission of the owner, overcoming the permissive-
use restrictions found in the lease agreement (35 NY2d 260, 264-
265 [1974]).   Later, in Murdza v Zimmerman, we explained that
"[o]ur finding of constructive consent -- despite the owner's
restrictions -- rested, in part, on the public policy concerns
surrounding the large number of vehicles placed on the road by
businesses that rent cars to others for profit, and the


                              - 14 -
                              - 15 -                           No. 47
inevitability that these vehicles will 'become involved in their
fair share of accidents'" (99 NY2d 375, 380 [2003], quoting Motor
Vehicle Accident Indemnification Corp., 35 NY2d at 263).   If
anything, these cases undermine the majority's position.
          The constructive permission theory applied in Motor
Vehicle Accident Indemnification Corp. and Murdza is intended to
ensure that a financially responsible defendant, as owner or
renter, cannot avoid liability by claiming an insolvent user did
not have actual permission (see Morris v Snappy Car Rental, Inc.,
84 NY2d 21, 27 [1994]).   But DHL is not a car rental company
leasing numerous cars for profit with restrictive use agreements
that limit its exposure to liability.   DHL contracted with MVP
for its services in a commercial, arms-length agreement -- not a
rental agreement.   DHL required MVP to keep, at a minimum, a $1
million liability insurance policy -- well above the minimum
automobile liability coverage required in New York State (see
Vehicle and Traffic Law § 345 [b] [3] [requiring motorists to
carry a minimum amount of liability insurance of $50,000 for
death of one person, $100,000 for death of two or more people,
and $10,000 for property damage in any one accident]).   The
public policy underlying these constructive permission decisions
-- involving owners placing "fleets of vehicles" on the road with
the risk that restrictive rental agreements will leave injured
plaintiffs without recourse to an insured motorist -- is simply
not implicated here.


                              - 15 -
                              - 16 -                           No. 47
          The case before us involves a straightforward
application of contract interpretation and settled insurance law.
Rather than apply those established principles, the majority's
approach permits litigants to introduce extrinsic evidence to
create ambiguity in contracts, upsetting not only our own
precedent but the settled expectations of parties to commercial
agreements.   I would instead apply our longstanding precedent and
affirm the Appellate Division's holding that the vehicle was not
a "hired auto."
                              III.
          Affirming on these grounds would dispose of the case
without consideration of the second issue -- the application of
Insurance Law § 3420 (a).   Reaching the issue, the majority
misinterprets section 3420 (a) in a manner that enacts sweeping
change across the Insurance Law, generating substantial
implications, both known and unknown.
          Section 3420 (a) of the Insurance Law mandates
specified provisions to be included in certain insurance policies
and contracts "issued or delivered in this state."   Section 3420
(b), in turn, provides a direct cause of action "against the
insurer upon any policy or contract of liability insurance that
is governed by such paragraph, to recover the amount of a
judgment against the insured or his personal representative."     In
other words, "Insurance Law § 3420 grants an injured plaintiff
the right to sue a tortfeasor's insurance company to satisfy a


                              - 16 -
                              - 17 -                           No. 47
judgment obtained against the insurer" (Lang v Hanover Ins. Co.,
3 NY3d 350, 352 [2004]).
           In order to recover under Insurance Law § 3420, a
plaintiff must first establish that the policy sued upon was
"issued or delivered" in New York (Insurance Law § 3420 [a];
American Continental Props. v National Union Fire Ins. Co. of
Pittsburgh, 200 AD2d 443, 446 [1st Dept 1994]).   This requirement
is a statutory prerequisite; failure to satisfy it will result in
dismissal for lack of capacity to sue (see Lang, 3 NY3d at 354-
355).   The right to sue a tortfeasor's insurance company to
satisfy a judgment obtained against that tortfeasor did not exist
at common law, and therefore section 3420 -- a statute in
derogation of the common law -- must be narrowly construed (see
Lang, 3 NY3d at 353; Allstate Ins. Co. v Rivera, 12 NY3d 602, 699
n 1 [2009]).
           The majority holds that dismissal of the cause of
action against AAIC was improper under the standard announced in
Preserver Ins. Co. v Ryba (10 NY3d 635 [2008]).   In Preserver, we
considered a different provision of section 3420 -- section 3420
(d) (2) -- which requires insurers to meet certain requirements
to "disclaim liability or deny coverage for death or bodily
injury arising out of a motor vehicle accident or any other type
of accident occurring within this state."   At the time, section
3420 (d) (2) applied to insurance policies "delivered or issued
for delivery in this state" (former Insurance Law § 3420 [d] [2]


                              - 17 -
                              - 18 -                          No. 47
[emphasis added]).6   Interpreting the first part of that phrase,
we observed that the policy was "actually delivered" outside of
New York and, turning to the second part of that phrase, we held
that "[a] policy is 'issued for delivery' in New York if it
covers both insureds and risks located in this state" (10 NY3d at
642). Specifically, we held that the policy at issue was not
"issued for delivery" in New York because the insured was "a New
Jersey company, with its only offices located in that state," and
therefore could not be considered an insured located in New York
(id.).
          "Issued for delivery" -- the phrase then used in
section 3420 (d) (2) -- is not the phrase used in section 3420
(a) -- the provision at issue here.    Instead, section 3420 (a)
provides that the policy must be "issued or delivered" in New
York (Insurance Law § 3420 [a] [emphasis added]).    Those phrases
-- "issued or delivered" (used in section 3240 [a]) and
"delivered or issued for delivery" (formerly used in section 3420
[d] [2]) -- are two distinct phrases in the Insurance Law that,
our cases make clear, have quite different meanings.
          In holding that an insurance policy is "issued for
delivery" if it covers both insureds and risks in New York, the
Preserver Court cited American Ref-Fuel Co. of Hempstead v
Employers Ins. Co. of Wausau (Preserver, 10 NY3d at 642, citing


     6
       This "issued for delivery" language was later amended to
"issued or delivered" (see Insurance Law § 3420 [d] [2], as
amended by L 2008, ch 388, § 5).

                              - 18 -
                               - 19 -                         No. 47
American Ref-Fuel, 265 AD2d 49, 53 [2d Dept 2000]).   American
Ref-Fuel held that an insurance policy was "issued for delivery"
in New York where the policy expressly listed, as a named
insured, a New York corporation (265 AD2d at 53).   In so holding,
the court expressly noted that "the language in issue here,
'delivered or issued for delivery in this State' differs from the
language in . . . Insurance Law § 3420 (a), applicable to
policies 'issued or delivered in this State" (American Ref-Fuel,
265 AD2d at 52 [emphasis added]).   To highlight the distinction
between the two phrases, American Ref-Fuel contrasted another
case, American Continental Props. v National Union Fire Ins. Co.
of Pittsburgh, which construed the "issued or delivered" language
as limited to where the policy had been physically signed and
executed (American Continental Props., 200 AD2d 443, 446-447 [1st
Dept 1994]).    Evidently, the Preserver Court was not only aware
of the distinction between the two phrases -- "issued for
delivery" and "issued or delivered" -- but relied on that
distinction in defining "issued for delivery."
          The majority asserts that, "[i]f anything, "issued or
delivered" is facially broader than "issued for delivery"
(majority op at 20).   This misrepresents the former statutory
language in Insurance Law § 3420 (d), which covered policies
"delivered or issued for delivery" in the State (Preserver, 10
NY3d at 642).   The true crux of the dispute here is whether the
term "issued" (in this State) is facially broader than, or


                               - 19 -
                               - 20 -                         No. 47
identical to, the phrase "issued for delivery" (in this State)
and, when presented in that manner, the question must be plainly
be answered in the negative.
          Recognizing the distinction between the terms, the
Appellate Division in this case properly dismissed the cause of
action against AAIC:
     "The parties and the court have improperly conflated
     the phrase 'issued or delivered' with 'issued for
     delivery,' which was used in the former version of
     Insurance Law § 3420(d), and therefore the definition
     of 'issued for delivery' is not relevant here."
(Carlson, 130 AD3d at 1477-1478).   The excess policy was issued
by AAIC from New Jersey and delivered to the insured in
Washington and then in Florida.   Thus, the policy was not "issued
or delivered in this state" as that phrase is ordinarily
understood (id. at 1478; see also Taggert v Security Ins. Co. of
New Haven, Conn., 277 AD 1051, 1051 [2d Dept 1950] ["A policy of
insurance is issued when it is delivered and accepted, whereby it
comes into full effect and operation as a binding mutual
obligation, or when it is prepared and signed, as distinguished
from its delivery to the insured"]; cf. American Continental
Props., 200 AD2d at 446-447 [questioning where the endorsements
were signed and therefore finding a question of fact as to
whether a policy was "issued or delivered" in New York]).
           Rather than give "issued or delivered" the plain
meaning it has previously been assigned, the majority --
attempting to rectify a perceived injustice -- defines two


                               - 20 -
                                - 21 -                      No. 47
distinct terms to have identical meaning (McKinney's Statutes §
236 ["When . . . the Legislature uses unlike terms in different
parts of a statute, it is reasonable to infer that a dissimilar
meaning is intended."]; Albano v Kirby, 36 NY2d 526, 530 [1975]).
In doing so, the majority rewrites the Insurance Law to make
"issued or delivered" mean "issued for delivery" each and every
time it appears -- and it frequently appears (see Insurance Law §
1101 [b] [2] [C]; id. §§ 1213 [a], [d]; id. §§ 3102 [b] [1] [F],
[b] [3], [b] [c], [f] [1], [f] [2]; id. §§ 3221 [k] [6] [A], [k]
[6] [B], [I] [5] [B] [i], [p] [3] [E] [ii]; id. §§ 3407 [a], [b];
id. § 3446 [c]; id. § 3451 [a] [1]; id. § 3452 [a] [1]; id. §
4106; id. § 4207 [c]; id. § 4216 [c] [2] ; id. §§ 4231 [d], [g]
[1] [D], [g] [1] [E]; id. § 4306; id. § 4510 [c]; id. § 6409
[a]). Given the sharp change in the meaning of "issued or
delivered," and the frequency with which that phrase is used, the
majority's holding will surely wreak havoc well beyond this case.
The majority's assertion that its holding may be confined to
Insurance Law § 3420 is belied by our rules of statutory
construction, which will not allow us to disregard the plain
language of other Insurance Law provisions, identical to that
interpreted here, due to variances in context or legislative
history, as the plain language of the statute is paramount and we
can hardly ascribe differing meanings to like terms found
throughout the Insurance Law.
          Moreover, the majority's claim that a literal


                                - 21 -
                              - 22 -                          No. 47
interpretation of the phrase "issued or delivered" would permit
insurers to regularly insure risks located in New York while
simultaneously avoiding application of the Insurance Law is
exaggerated and unavailing.   The legislative intent of the
provisions at issue was to alter the common law rule that "'an
injured person possessed no cause of action against the insurer
of the tort feasor' . . . because there was no privity of
contract between plaintiff and the insurance carrier" (Lang, 3
NY3d at 353, quoting Jackson v Citizens Cas. Co., 277 NY 385, 389
[1938]).   This legislative intent is still effected by giving the
terms "issued or delivered" their plain meaning because New York
residents may, contrary to the common law rule, pursue actions
(in accordance with section 3420) directly against an insurer who
issues or delivers an automobile insurance policy in New York.
Significantly, New York residents will still benefit from an
insurance policy issued or delivered outside the State -- they
just may not be able to sue the insurer directly in New York.7
Indeed, the legislature has seen fit to ensure that policies that



     7
        States may explicitly provide for such actions under
appropriate circumstances (see e.g. Wis Stat § 803.04 [2] [a]
["If the policy of insurance was issued or delivered outside this
state, the insurer is . . . made a proper party defendant only if
the accident, injury or negligence occurred in this state"]
[emphasis added]; La Stat § 1269 [B] [2] ["This right of direct
action shall exist whether or not the policy of insurance sued
upon was written or delivered in the state of Louisiana and
whether or not such policy contains a provision forbidding such
direct action, provided the accident or injury occurred within
the state of Louisiana"] [emphasis added]).

                              - 22 -
                               - 23 -                          No. 47
may not be issued or delivered in the State, but which cover
automobiles that present a significant risk to the residents of
New York, must comply with specific provisions of the Insurance
Law (see e.g. Insurance Law § 3420 [e] [governing any insurance
policy issued or delivered by an authorized insurer "upon any
such vehicle or aircraft or vessel then principally garaged or
principally used in this state"]; Insurance Law §§ 3411, 3412
[governing insurance policies on vehicles "registered in this
state"]).    The majority's interpretation ignores these plain
language distinctions.
            While the majority claims that it is "simply not
plausible" to conclude that the legislature intended to exclude
policies issued or delivered outside the State because of the
potential burden on New York residents in pursuing insurers in
their home states, it is hardly plausible that the legislature
intended to require every automobile insurer throughout the
country -- regardless of where the policy was issued or delivered
-- to comply with New York insurance statutes on the chance that
the insured vehicle may be driven into New York.8   Given that


     8
       While the majority may take issue with this statement, its
opinion provides no basis for drawing a distinction between an
insured who drives a vehicle into New York and causes an accident
and the situation presented here, where the purported insured has
a business in New York. Indeed, the majority opinion raises many
questions regarding whether and when an insured and risk would be
located in New York. For example, what will occur when an out-
of-state resident owns property in New York, or works in New
York, or simply vacations regularly in New York, and drives a
vehicle into the State? Will the out-of-state insurers of an

                               - 23 -
                                 - 24 -                               No. 47
many of the provisions of section 3420 governing policies issued
or delivered in the state govern the relationship between the
insured and the insurer, it is also hardly plausible that the New
York legislature intended to dictate the relationship between
out-of-state insureds and out-of-state insurers.          It is
questionable whether the legislature would even have the
authority to do so (see 8 Couch on Ins. § 111:27 ["(a) state
legislature does not have the power to prescribe the contents of
insurance policies that are issued or delivered outside of that
respective state's borders"]).
            This unhappy result may be avoided -- the vehicle was
not a "hired auto" and we should leave it at that.          I
respectfully dissent.

*   *   *    *   *   *   *   *     *      *   *   *   *     *     *   *   *
Orders modified, without costs, by denying defendants' motions to
dismiss the first cause of action and, as so modified, affirmed.
Opinion by Judge Wilson. Judges Rivera, Feinman and Eng concur.
Judge Garcia dissents in an opinion, in which Chief Judge DiFiore
and Judge Stein concur. Judge Fahey took no part.

Decided November 20, 2017




insurance policy delivered out of state be subject to direct suit
in New York under such circumstances? It would appear so under
the majority's interpretation.

                                 - 24 -
