Aibel v. Hartford Accident & Indemnity Company

Background

Richard Aibel sued Hartford Accident & Indemnity Company for alleged breach of contract. The dispute concerned Hartford’s denial of coverage under an insurance policy issued to Majestic Rayon Corporation. The policy included supplementary uninsured/underinsured motorist coverage, which could provide benefits for bodily injuries caused by another vehicle’s negligent owner or operator. For that coverage, the policy defined an insured as a person acting within the scope of that person’s duties for Majestic, except in circumstances not relevant to the court’s ruling.

On September 1, 2019, Aibel was struck by a car while taking a leisurely walk with his wife. He alleged that he discussed Majestic’s pending litigation during the walk. Aibel described himself as Majestic’s chief executive officer and alleged that he and other family members provided around-the-clock management and support for the business. He filed a claim with Hartford, which denied coverage on March 15, 2021.

Motion to dismiss

Hartford moved to dismiss under Rule 12(b)(6), the rule allowing dismissal when a complaint does not allege enough facts to state a legally sufficient claim. At this stage, the court treated the complaint’s factual allegations as true and drew reasonable inferences for Aibel.

Timeliness of Hartford’s denial

Aibel argued that Hartford should be prevented from contesting coverage because it did not comply with notice requirements in New York Insurance Law § 3420. The court did not decide whether those notice limitations applied to supplementary uninsured/underinsured motorist coverage. Instead, it held that Aibel’s coverage claim did not become ready until at least March 3, 2021, when he informed Hartford that the other driver’s insurance had been exhausted. Hartford denied coverage on March 15, 2021, and the court described that response as prompt. The court also rejected Aibel’s other waiver arguments.

Whether Aibel was an insured

The court applied New York law governing whether an employee acts within the scope of employment. That inquiry considers whether the employer exercised or could have exercised control over the employee’s activities and whether the employee was furthering duties owed to the employer. The court also identified factors concerning the time, place, and circumstances of the act; the parties’ actual work practices; whether the act was usual for the employee; how far the act departed from normal work methods; and whether the employer could reasonably have anticipated it.

The court rejected Aibel’s argument that being available around the clock or thinking about company affairs meant that every action was within the scope of employment. It distinguished cases involving employees who were returning from work obligations in vehicles paid for or subsidized by their employers. According to the court, Aibel was taking a personal walk with his wife, was not actually on call, and was not acting under Majestic’s control. Discussing pending litigation with his wife, rather than with Majestic’s counsel, did not show that he was furthering his duties to Majestic. The court also held that the family business’s practice of allowing flexible work at any time did not mean an employee could constantly be acting within the scope of employment.

Disposition

The court granted Hartford’s motion to dismiss. The clerk was directed to terminate the motion on the docket. The opinion states that the motion was granted but does not separately specify whether any dismissal was with or without prejudice.