Highland Avenue Baptist Church v. Liberty Mutual Insurance

In an action, inter alia, to declare that defendant is obligated to defend and indemnify plaintiffs in a lawsuit against them, pursuant to a policy of liability insurance, plaintiffs appeal from a judgment of the Supreme Court, Queens County (Linakis, J.), entered October 27, 1981, after a nonjury trial, which dismissed the complaint. Judgment modified, on the law, by deleting the provision dismissing the complaint and substituting a provision declaring that defendant is not obligated to defend and indemnify plaintiffs in the underlying personal injury action, and otherwise dismissing the complaint. As so modified, judgment affirmed, with costs to defendant. Following a nonjury trial, the court concluded that the insurance policy had been mutually rescinded by the parties and was not in effect at the time the injury, upon which the underlying litigation is based, was incurred. Although we agree with this determination, the court should not have dismissed the complaint in its entirety, but, rather, should have declared the rights of the parties (see Lanza v Wagner, 11 NY2d *496317, 334, app dsmd 371 US 74). Thompson, J. P., Bracken, Rubin and Boyers, JJ., concur.