Neither the plaintiff nor an insured defendant may be eager to ask the trial court to submit special questions to the jury: If the jury returns a plaintiff’s verdict, both parties may prefer to leave the basis uncertain, placing the burden on the insurer to bring a declaratory judgment action or defend an indemnity action to establish that the basis for the liability judgment is not covered or excluded from the coverage of the policy. In First State Ins. Co. v. J & S United Amusement, 67 N.Y.2d 1044 (1986), the appellate division dismissed a declaratory judgment action as premature because the insured’s liability had not been determined, noting that inconsistent findings could be avoided by requiring the jury to return a special verdict. Reversing on other grounds, the Court of Appeals suggested that because it was not a party to the underlying action, the insurer did not have standing to request a special verdict. 67 N.Y.2d at 1045-46. A motion to intervene can remedy that situation.1
However, despite the risk discussed in part one of this article (see “Special Interrogatories in Coverage Disputes: the Hidden Risk,” NYLJ Feb. 24, 2017), and the obvious utility of special interrogatories, insurers rarely move to intervene and courts in New York often refuse to permit intervention. Courts in other jurisdictions have been more open. Although the results are mixed, the cases offer guidance.
