Summary
In Powers Chemco, however, a policyholder sought coverage from its comprehensive general liability carrier for environmental cleanup costs, and the insurer responded by issuing a reservation of rights letter enumerating a variety of defenses to coverage.
Summary of this case from Securities Exchange Commission v. Credit BancorpOpinion
July 21, 1986
Appeal from the Supreme Court, Nassau County (Harwood, J.).
Order affirmed insofar as appealed from, with costs.
The plaintiff seeks to strike certain of the defendant's affirmative defenses because they were not raised in the defendant's letter of disclaimer, and the plaintiff argues that they were therefore waived. It is by now well established that any defenses which relate to the issues of coverage or noncoverage are not waivable, because the courts will not create coverage where none otherwise exists (Schiff Assoc. v Flacke, 51 N.Y.2d 692). Of the affirmative defenses challenged on appeal, the third, tenth, eleventh, fifteenth and eighteenth concern the scope of coverage, and Special Term properly refused to dismiss them.
As to the remaining affirmative defenses in issue, while those defenses are possibly subject to waiver, dismissal is not warranted. Generally, a court can find a waiver where there is direct or circumstantial proof that the insurer intended to abandon the defense (Schiff Assoc. v Flacke, supra). Furthermore, whether or not the relinquishment of a right was intentional and with full knowledge of the facts upon which the existence of the right depended is a question of fact which should ordinarily be left for trial (Amrep Corp. v American Home Assur. Co., 81 A.D.2d 325). In view of the defendant's letter of December 19, 1984, in which it stated that it was not addressing any question other than the scope of coverage, and its disclaimer letter which reserved the right to reevaluate as new facts became available, there are questions of fact as to whether the challenged affirmative defenses have been waived. Accordingly, Special Term properly denied so much of the plaintiff's cross motion as was to dismiss them. Mangano, J.P., Gibbons, Bracken and Spatt, JJ., concur.