United States Court of Appeals for the Second Circuit


      Insurance; Duty to Notify; Whether it is the Location of the Accident or the Negligence that Caused the Accident that Controls the Applicability of Policy’s Exclusion Clause; Whether Delay in Giving Notice of Claim was Justified.  The minor son of Pendleton and Daphne King, who live at One Deer Park Court in a private  development in Greenwich, was using the family's all-terrain vehicle (ATV) to tow his friend, Conor McEntee, on a skateboard.  Conor fell on the street in front of 63 Midwood Road and was injured.  Over a year after the accident, the Kings received a letter from an attorney for Conor and his parents, indicating their intent to sue, and the Kings notified their insurers of the accident.  Their homeowner’s policy excludes coverage for bodily injury claims arising out of the entrustment of a vehicle other than an ATV owned by an insured and on an "insured location,” which is defined as "the residence premises" or any premises used "in connection with" the residence premises.  Two of their insurers filed this declaratory judgment action in the United States District Court for the District of Connecticut, seeking a determination that they did not have a duty to defend or indemnify the Kings.  Those plaintiffs, along with a third insurer, who was the subject of a third party complaint by the Kings, filed motions for summary judgment, which the district court granted.  Among other things, the district court found that the homeowner’s policy did not cover any liability to the McEntees because the ATV accident had not occurred on an "insured location."  The court determined that 63 Midwood Road was not part of the Kings' "residence premises" at One Deer Park Court and that the location of the accident did not qualify as premises used "in connection with" the residence premises.  Moreover, the court concluded that the coverage inquiry turned on the location of the accident instead of the location where the actual entrustment of the ATV had occurred.   On appeal to the Second Circuit Court of Appeals, the Second Circuit certified, and this court accepted, the following three questions: "(1) With respect to a claim of negligent entrustment under a liability policy that excludes coverage for [bodily injury] `[a]rising out of  . . . [t]he entrustment by an insured,' `to any person,' `of a motor vehicle' other than `[a] motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and . . . [o]wned by an insured and on an insured location,' is the insured location (a) the place where the entrustment of the vehicle took place, or (b) the place where the vehicle is garaged, or (c) the place where the accident occurred?  (2) In the absence of a policy definition of `premises,' should a private road located within a residential development owned by the insured's homeowners association be considered `premises used . . . in connection with a [residence] premises' under the terms of a homeowner's insurance policy if the portion of the road where the liability arose is not regularly used by the insured, although other portions of the road are so used?  and  (3) Under Connecticut law, where a liability insurance policy requires an insured to give notice of a covered claim `as soon as practical,' do social interactions between the insured and the claimant making no reference to an accident claim justify a delay in giving notice of a potential claim to the insurer?"