Not all losses are covered by insurance. In fact, most policies are typically filled with pages of events or circumstances which are excluded from coverage. And, for the most part, courts will usually enforce those exclusions in accordance with the agreement's terms and conditions.
When a policy's terms are ambiguous, disputed or undefined, courts are often asked to interpret the particular language.
In Korson v. Preferred Mutual Insurance Company , homeowners Steven and Dean Korson were sued by a relative for bodily injuries incurred as a result of lead-poisoning. The Korsons's' policy excluded coverage for "bodily injury to you, and if residents of your household, your relatives, and persons under the age of 21 in your care or in the care of your resident relative."
Of course, once the insurance company refused to defend the claim alleging that it was an excluded event, litigation seeking a judge to determine the parties' rights and obligations ensued in the Orange County Supreme Court.
When Steve Korson moved for summary judgment -- a determination on the merits based solely on the papers submitted, without the need for a hearing or trial -- the court denied the request and directed that the parties proceed with discovery. On appeal, the Appellate Division, Second Department, affirmed.
The AD2 was of the opinion that there were unresolved questions as to whether Dean resided with Steven or whether the relative in question had been subject to Dean's care; that is, whether Dean had "assumed any responsibility for her."
Unfortunately, the decision doesn't give us a lot to work with. However, if the injured youngster had been permitted to reside in the Korsons's' building wouldn't that have been an indication that one or more of the owners had assumed responsibility for the child's care, thus triggering the exclusion?
While Steven Korson may not have come forth with sufficient proof to justify relief in his favor, we don't understand why his case wasn't dismissed. Wasn't it Steven's burden to show that the exclusions were inapplicable? Failing that, the case should have met its relative end.
For a copy of the Appellate Division's decision, please use this link: Korson v. Preferred Mutual Insurance Company