Opinion
2011-05-3
COURDUFF'S OAKWOOD ROAD GARDENS & LANDSCAPING COMPANY, INC., respondent, v. MERCHANTS MUTUAL INSURANCE COMPANY, appellant.
Milber Makris Plousadis & Seiden, LLP, Woodbury, N.Y. (Lorin A. Donnelly of counsel), for appellant. Curtis, Vasile P.C., Merrick, N.Y. (Roy W. Vasile of counsel), for respondent.
Milber Makris Plousadis & Seiden, LLP, Woodbury, N.Y. (Lorin A. Donnelly of counsel), for appellant. Curtis, Vasile P.C., Merrick, N.Y. (Roy W. Vasile of counsel), for respondent.
DANIEL D. ANGIOLILLO, J.P., ANITA R. FLORIO, PLUMMER E. LOTT, and LEONARD B. AUSTIN, JJ.
In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying action entitled Molion v. Courduff's Oakwood Road Gardens & Landscape Company, pending in the United States District Court for the Eastern District of New York under civil index number 07–01168, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Baisley Jr., J.), dated August 18, 2010, as denied its cross motion for summary judgment declaring that it is not obligated to defend or indemnify the plaintiff in the underlying action.
ORDERED that the order is affirmed insofar as appealed from, with costs.
Where an insurance policy requires that notice of an occurrence be given “as soon as practicable,” notice must be given within a reasonable time in view of all of the circumstances ( Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d 742, 743, 800 N.Y.S.2d 521, 833 N.E.2d 1196 [internal quotation marks omitted]; see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d 596, 597, 893 N.Y.S.2d 125;120 Whitehall Realty Assoc., LLC v. Hermitage Ins. Co., 40 A.D.3d 719, 721, 835 N.Y.S.2d 715;Genova v. Regal Mar. Indus., 309 A.D.2d 733, 734, 765 N.Y.S.2d 266). “The insured's failure to satisfy the notice requirementconstitutes ‘a failure to comply with a condition precedent which, as a matter of law, vitiates the contract’ ” ( Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d at 743, 800 N.Y.S.2d 521, 833 N.E.2d 1196, quoting Argo Corp. v. Greater N.Y. Mut. Ins. Co., 4 N.Y.3d 332, 339, 794 N.Y.S.2d 704, 827 N.E.2d 762;see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;Sputnik Rest. Corp. v. United Natl. Ins. Co., 62 A.D.3d 689, 878 N.Y.S.2d 428). “ [C]ircumstances may exist that will excuse or explain the insured's delay in giving notice, such as a reasonable belief in nonliability” ( Genova v. Regal Mar. Indus., 309 A.D.2d at 734, 765 N.Y.S.2d 266;see Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d at 743–744, 800 N.Y.S.2d 521, 833 N.E.2d 1196;Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;C.C.R. Realty of Dutchess v. New York Cent. Mut. Fire Ins. Co., 1 A.D.3d 304, 305, 766 N.Y.S.2d 856). The burden of demonstrating the reasonableness of the excuse lies with the insured ( see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;Genova v. Regal Mar. Indus., 309 A.D.2d at 734, 765 N.Y.S.2d 266).
In general, the existence of a good faith belief that the injured party would not seek to hold the insured liable, and the reasonableness of such belief, are questions of fact for the fact-finder ( see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;Genova v. Regal Mar. Indus., 309 A.D.2d at 734, 765 N.Y.S.2d 266;C.C.R. Realty of Dutchess v. New York Cent. Mut. Fire Ins. Co., 1 A.D.3d at 305, 766 N.Y.S.2d 856). Nevertheless, summary judgment may be awarded to the insurer if, construing all inferences in favor of the insured, the evidence establishes, as a matter of law, that the insured's belief in nonliability was unreasonable or in bad faith ( see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;120 Whitehall Realty Assoc., LLC v. Hermitage Ins. Co., 40 A.D.3d at 721, 835 N.Y.S.2d 715;Genova v. Regal Mar. Indus., 309 A.D.2d at 734, 765 N.Y.S.2d 266).
Here, the defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff had immediate notice of the accident and resulting injury that occurred on its premises but failed to notify the defendant of this occurrence until 19 months later ( see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125;St. James Mech., Inc. v. Royal & Sunalliance, 44 A.D.3d 1030, 845 N.Y.S.2d 83). Consequently, the burden shifted to the plaintiff to raise a triable issue of fact as to whether there existed a reasonable excuse for its delay in notifying the defendant ( see Ponok Realty Corp. v. United Natl. Specialty Ins. Co., 69 A.D.3d at 597, 893 N.Y.S.2d 125). Under the circumstances here, construing all inferences in favor of the plaintiff, the plaintiff raised a triable issue of fact as to whether its delay in giving notice of the occurrence to the defendant was reasonably founded upon a good faith belief that no lawsuit would be commenced against it ( see Klersy Bldg. Corp. v. Harleysville Worcester Ins. Co., 36 A.D.3d 1117, 828 N.Y.S.2d 661;Jordan Constr. Prods. Corp. v. Travelers Indem. Co. of Am., 14 A.D.3d 655, 789 N.Y.S.2d 298;see also Merchants Mut. Ins. Co. v. Hoffman, 56 N.Y.2d 799, 452 N.Y.S.2d 398, 437 N.E.2d 1155;Sphere Drake Ins. Co. v. Aspen Tree Specialists, 234 A.D.2d 358, 359, 651 N.Y.S.2d 881). Accordingly, the Supreme Court properly denied the defendant's cross motion for summary judgment declaring that it was not obligated to defend or indemnify the plaintiff in the underlying action.