ERNST YOUNG v. NAT. UNION FIRE INS

The motion court properly determined that defendant's disclaimer of plaintiff's claim for fees, costs and lost interest occasioned by plaintiff's employee's theft of client funds, was appropriate under the subject fidelity bond. Endorsement 9 to the governing policies unambiguously limits the coverage afforded to indemnification for loss of client property, as defined by the endorsement, sustained as a "direct result" of employee dishonesty. Plaintiff's suggested interpretation of the endorsement would, as the motion court found, impermissibly transform indemnity policies into liability policies (see Aetna Cas. Sur., Co. v. Kidder, Peabody Co., 246 A.D.2d 202, 212-213, lv denied 93 N.Y.2d 805).

We modify only to declare in defendant's favor (see Lanza v. Wagner, 11 N.Y.2d 317, 334, appeal dismissed 371 U.S. 74, cert denied 371 U.S. 901).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.