Hofstra University, et al., Plaintiffs-Appellants-Respondents, v United Educators, Defendant-Respondent-Appellant.

Holding The term ‘funds’ in the insurance policy exclusion includes tuition and fees, but dismissal of the complaint is premature because the underlying class actions seek damages beyond the return of money paid. The insurer’s duty to pay defense costs is triggered because the underlying claims raise the possibility of coverage for other damages.

The court’s words

the plain meaning of the term 'funds' is sufficiently clear on its face to include the sums paid by students in the form of tuition and fees

2026 NY Slip Op 06384, at the official text

the record does not establish that the only available damages consist of a return of money paid

2026 NY Slip Op 06384, at the official text

The duty to provide defense costs must be construed broadly in favor of the policyholder, and exists whenever a complaint against the insured alleges claims that maybe covered under the insurer's policy

2026 NY Slip Op 06384, at the official text