The Second Department determined the insurer (Southwest) was entitled to summary judgment declaring it was not obligated to defend or indemnify the insured (Ralex). Ralex had settled the matter without Southwest’s consent:
Here, the subject insurance policy Southwest issued to Ralex provided that “[n]o insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without [Southwest’s] consent.” Contrary to Ralex’s contention, this provision is not ambiguous. “Contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous the terms are to be taken and understood in their plain, ordinary and proper sense” … .
Moreover, “New York law views an insurer’s right to consent to any settlement as a condition precedent to coverage” … . Here, the Supreme Court properly granted that branch of Southwest’s motion which was pursuant to CPLR 3211(a)(1), since the documentary evidence it submitted showed that Ralex undertook its own defense in the underlying action, agreed to settle the underlying action, and incurred defense costs without first obtaining Southwest’s consent. By doing so, Ralex breached the insurance contract and is not entitled to coverage … . Ralex Servs., Inc. v Southwest Mar. & Gen. Ins. Co., 2017 NY Slip Op 07763, Second Dept 11-8-17
INSURANCE LAW (INSURED SETTLED THE MATTER WITHOUT INSURER’S CONSENT, INSURER NOT OBLIGATED TO DEFEND OR INDEMNIFY INSURED (SECOND DEPT))