Opinion
8327N Index 260970/15
02-05-2019
In re U.S. SPECIALTY INSURANCE COMPANY, Petitioner–Respondent, v. C. Lee NAVARRO, Respondent–Appellant.
Shayne, Dachs, Sauer & Dachs, LLP, Mineola (Jonathan A. Dachs of counsel), for appellant. Sokoloff Stern, LLP, Carle Place (Kiera J. Meehan of counsel), for respondent.
Shayne, Dachs, Sauer & Dachs, LLP, Mineola (Jonathan A. Dachs of counsel), for appellant.
Sokoloff Stern, LLP, Carle Place (Kiera J. Meehan of counsel), for respondent.
Friedman, J.P., Mazzarelli, Webber, Kern, Oing, JJ.
Petitioner commenced this proceeding pursuant to CPLR article 75, seeking a permanent stay of an arbitration between petitioner and respondent involving respondent's claim for supplementary uninsured/underinsured motorist (hereinafter SUM) benefits under a policy issued by petitioner. Respondent does not challenge the court's determination that a police vehicle does not fall within the scope of SUM coverage under petitioner's policy (see Matter of State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 25 N.Y.3d 799, 801, 16 N.Y.S.3d 796, 38 N.E.3d 325 [2015] ). Instead, respondent contends that petitioner is estopped from denying coverage because, among other things, petitioner did not deny or disclaim coverage until approximately four years after it first received notice of the claim.
The court properly determined that equitable estoppel may not be invoked to create coverage in this case, since respondent was not insured under the policy in the first instance (see Matter of Progressive Ins. Co. v. Dillon, 68 A.D.3d 448, 448, 889 N.Y.S.2d 583 [1st Dept. 2009] ; Wausau Ins. Cos. v. Feldman, 213 A.D.2d 179, 180, 623 N.Y.S.2d 242 [1st Dept. 1995] ; Matter of U.S. Speciality Ins. Co. [Denardo], 151 A.D.3d 1520, 1523–1524, 57 N.Y.S.3d 743 [3d Dept. 2017], lv denied 30 N.Y.3d 904, 2017 WL 4782757 [2017] ; Ward v. County of Allegany, 34 A.D.3d 1288, 1290, 824 N.Y.S.2d 542 [4th Dept. 2006] ). Moreover, petitioner's denial or disclaimer of coverage was not untimely, since a disclaimer is unnecessary where, as here, the claim falls outside of the coverage terms rather than being subject to a policy exclusion (see Zappone v. Home Ins. Co., 55 N.Y.2d 131, 134, 447 N.Y.S.2d 911, 432 N.E.2d 783 [1982] ; Markevics v. Liberty Mut. Ins. Co., 97 N.Y.2d 646, 648–649, 735 N.Y.S.2d 865, 761 N.E.2d 557 [2001] ; Denardo, 151 A.D.3d at 1524, 57 N.Y.S.3d 743 ). Since the denial of coverage is based on noncoverage rather than an exclusion or defense, the denial was not untimely.
Finally, petitioner's minimal involvement in the arbitration process following service of the demand for arbitration was insufficient to constitute a waiver of its right to seek a judicial determination of the arbitrability of the SUM coverage dispute (see Matter of Arc Elec. & Mech. Contrs. Corp. v. Invensys Bldg. Sys., 2 A.D.3d 314, 317, 770 N.Y.S.2d 299 [1st Dept. 2003] ; Cybex Intl. v. Fuqua Enters., 246 A.D.2d 316, 317, 667 N.Y.S.2d 348 [1st Dept. 1998] ; Matter of County of Broome [Truesdell], 122 A.D.2d 314, 315, 503 N.Y.S.2d 919 [3d Dept. 1986] ).
We have considered respondent's other arguments and find them unavailing.