Opinion
26090.
Decided April 4, 2011.
The court notes that pursuant to a so ordered stipulation dated August 5, 2010, the underlying action entitled MPJ Enterprises, Inc. v 16449 CBB, LLC and East Coast Construction Group, Inc., (Index No. 16366/2008) was consolidated for all purposes under Index No. 16644/2009, so that the underlying action was entitled MPJ Enterprises, Inc. d/b/a Surfside Motel v 16449 CBB, LLC and East Coast Construction Group, Inc. and DiSano Construction Co., Inc.
Furthermore, the court in an order dated February 9, 2011 consolidated Action No. 2 bearing Index No. 28712/09 with the Action No. 1 for all purposes under Index No. 16644/09, so that the underlying action is now entitled MPJ Enterprises, Inc. d/b/a Surfside Motel v 16449 CBB, LLC and East Coast Construction Group, Inc., DiSano Construction Co., Inc., FSR LLC, Intercoastal Foundations, Inc., JB Masonry, Liberty Mechanical Water Sewer, Moretrench Services, Potential Engineering Inc., JT Consulting Services, Inc., JMB Architecture, IMA Enginering, Genor Inc. and Erlandsen-Crowell Shaw.
Plaintiff 16449 CBB, LLC, (CBB) is the owner of the real property known as 164-49 Cross Bay Boulevard, Howard Beach, New York. MJP Enterprises, Inc., d/b/a Surfside Motel (Surfside) is the owner of the real property adjacent to CBB's property. Frank Russo Jr., is a member of CCB, and describes himself as its "owner." Mr. Russo has stated that Vincent Luccisano is Surfside's "owner."
On June 23, 2006, Mr. Russo on behalf of CBB entered into a contract with East Coast Construction Group, Inc. (East Coast), whereby East Coast agreed to be the construction manager for the construction of a new catering facility at the premises owned by CBB. In October 2006, East Coast and its contractors or subcontractors commenced excavation work at CBB's property. Shortly thereafter Surfside's motel building allegedly suffered structural damages, including cracks in its exterior and interior walls, as well as alleged damage to the stability of the foundation of the motel building, and water infiltration which allegedly damaged its parking lot. In an effort to resolve the matter amicably, Mr. Russo, Vincent Lucciano, and East Coast's representatives, agreed that Russo, at his own expense, would address these problems and make repairs. An outside engineering firm, Potential Engineering PC, was hired to inspect the nature and severity of damage, or potential damage, to Surfside, and recommend solutions; JT Consulting Services designed helical brackets or piers which would provide support to the motel's structure; and FSR, LLC was engaged to install ten helical brackets, pursuant to JT Consulting Services designs. These entities were engaged by East Coast or Mr. Russo, in November and December 2006.
Mr. Russo also agreed to have JB Masonry, a contractor that had previously worked for Mr. Luccisano, make repairs to Surfside's building. Apparently JB Masonry did not obtain a proper work permit, a stop work order was issued, and the cracks in Surfside's building remain unrepaired. Eventually, Mr. Luccisano found the engineering monitoring company and the repairs to be unsatisfactory.
Zurich American Insurance Company (Zurich) issued a commercial general liability policy to CBB (number GLO 5842275-02) for the period of September 9, 2007 to September 9, 2008. Zurich also issued a prior policy to CBB, (number GLO 5842275-01) for the period of September 9, 2006 to September 9, 2007. The New York endorsement to the subject policy provides, in pertinent part, that: "d. Bodily injury' or property damage' will be deemed to have known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II-Who Is An Insured or any employee' authorized by you to give or receive notice of and occurrence' or claim: (1) Reports all, or any part, of the bodily injury' or property damage' to us or any other insurer; (2) Receives a written or verbal demand or claim for damages because of the bodily injury' or property damage'; or (3) Becomes aware by any other means that bodily injury' or property damage' has occurred or begun to occur."
Said insurance policy defines an "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions". Property damage is defined, in pertinent part, as: "a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it."
On February 8, 2008, Zurich received correspondence from Mr. Russo's broker, The Rickles Agency(Rickles), via Joanne Sirico, concerning Surfside's claim, who indicated on the fax cover sheet that it was the "1st Report." The correspondence consists of a copy of a letter from Mr. Russo to Rickles dated June 1, 2007 which stated "per our phone conversation and the enclosed incident report, this letter serves to inform you of an incident which occurred adjacent to my property at 164-49 Cross Bay Boulevard in Howard Beach, NY"; and a copy of a letter from Mr. Russo to Rickles, dated November 12, 2007, stating that it was a follow up to the previous phone conversation reports regarding said property, and requested information regarding the status of the matter. Mr. Russo stated in said letter that he had "heard from the claimant and he has informed me that no one has contacted him. As you are aware, I have not heard from the insurance company either. Please advise."
Roy Corson, a Zurich claim case manager, in a Tele-fax/e-mail message, dated February 11, 2008 informed Mr. Russo that Zurich had "received the report of this loss today. I sent Mr. Rickles the enclosed email and called his office yet he is currently on Jury Duty. Please forward all information pertaining to this claim to my attention and please call me to discuss this matter." The enclosed email to Mr. Rickles stated that "We received the knew[sic] loss report to Zurich on 2-8-2008. There is no accord or information supplied advising what the claim is in regarding and no information was supplied regarding the claimant. Please contact me to discuss this matter."
Mr. Corson, in a letter dated February 20, 2008, and addressed to Mr. Russo and 16449 CBB, LLC, requested that the insured provide him with "the date of this loss, when did the damage first occur to Surfside Motel also please advise me who sent the tender letter to East Coast Construction?."
Zurich, in a letter dated May 30, 2008, and addressed to Mr. Russo, stated that it had completed its review of the claim for coverage, respect to the claim for property damage arising from construction activity at the insured's premises, and that it was disclaiming coverage and that it has no duty to defend or indemnify the insured in connection with the underlying matter. Zurich gave the following reasons for its disclaimer:
"It is Zurich's understanding that on or about June 23, 2006, 16449 CBB entered into a contract with East Coast Construction Group, Inc. ("East Coast") (the "Contract") for construction of a new catering facility at Russo's On The Bay," located at 164-49 Cross Bay Boulevard, Howard Beach, New York, 11414 (the "Premises"). The Surfside Motel ("Surfside") is adjacent to the Premises. Surfside claims that East Coast drove steel sheets during construction that impacted the water table and cause water infiltration at Surfside's premises. Surfside claims that its parking lot and a portion of its building were compromised because of the water infiltration, and that it was forced to close the parking lot for four months during the Summer of 2006, resulting in lost business."
"Zurich's first notice of this matter was not until February 8, 2008. On that date, Zurich received a fax from Joanne Sirico of the Rickles Agency which enclosed correspondence you sent to the Rickles Agency concerning this matter on June 1, 2007 and November 17, 2007. Ms. Sirico's February 8, 2008 fax referenced that this was Zurich's 1st Report of the matter.'"
"Zurich issued policy number GLO 5842275-02 to 16449 CBB LLC for the period of September 9, 2007 to September 9, 2008 (the Zurich Policy'). An endorsement entitled Limitation of Coverage To Designated Premises or Project limits coverage under the Zurich Policy in pertinent part to property damage . . . arising out of the ownership, maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises. The premises listed in the Schedule is 164-49 Cross Bay Boulevard, Howard Beach, New York 11414."
The Zurich letter contains many open quotations marks and the improper use of single and double quotation marks, which are not corrected here.
Zurich cited to specific provisions of the insured's policy which sets forth the scope of coverage for property damage, as well as certain definitions. Zurich stated that as no "suit" had been filed against the insured as defined by the policy, there was no duty to defend in the absence of a suit. The insurer also stated that "[m]oreover, to the extent that this matter does not involve property damage arising out of the ownership, maintenance or use of the premises at 164-49 Cross Bay Boulevard, Howard Beach, New NY 11414 cause by an occurrence, there is no coverage under the Zurich Policy. Further, to the extent the alleged property damage did not take place during the period of the Zurich Policy or the alleged property damage was known before the inception date of the Zurich Policy, there is no coverage for this matter. Zurich reserves its rights accordingly." Zurich also cited in its disclaimer letter the policy's timely notice provisions, as follows:
" 2. Duties In the Event of Occurrence, Offense, Claim or Suit
a. You must see to it that we are notified as soon as practicable of an occurrence or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the occurrence or offense took place;
(2) The names and addresses of any injured persons and witnesses; and
(3) The nature and location of any injury or damage arising out of the "occurrence or offense.
b. If a claim is made or "suit is brought against any insured, you must:
(1) Immediately record the specifics of the claim or "suit and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or "suit as soon as practicable.
c. You and other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit; and
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the inured [sic] because of injury or damage to which this insurance may also apply.
d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.
e. Notice given by or behalf of the insured, or written notice by or on behalf of the injured person or any other claimant, to any agent of ours in New York State, with particulars sufficient to identify the insured, shall be considered notice to us."
Zurich stated that the insured had failed to comply with these conditions to coverage, as its "first notice of this matter was not until February 8, 2008, over one year and seven months after the alleged property damage first took place. As such notice was late under the Zurich Policy and Zurich disclaims coverage." The letter also contained a further reservation of rights.
Surfside commenced the initial underlying action against CBB and East Coast (Index No. 16366/2008) on July 1, 2008, and alleges in its complaint, among other things, that the defendants commenced excavation of the adjoining premises without shoring up plaintiff's property or taking any or adequate precautions to prevent the settling or lowering or the south wall and/or driveway of its premises. It is alleged that defendants negligence caused plaintiff's adjacent wall to settle and/or lower causing cracking in the exterior and interior walls; that the construction caused the rear exterior roof overhang of plaintiff's building to break free and fall; and that the construction caused extensive damage to multiple interior rooms in the building, including water damage in its premises. Surfside also alleges that the defendants performed underpinning without its consent, causing damage to its property.
Plaintiff CBB commenced the within action for declaratory judgment on October 24, 2008, and alleges in its complaint that in October 2006, it hired East Coast to perform construction work at the 164-49 Cross Bay Boulevard, Howard Beach, New York; that in May 2007 it learned of a potential claim by Surfside's owner alleging property damage as a result of work performed at 164-49 Cross Bay Boulevard; that CBB instantly notified Michael Rickles and others at The Rickles Agency, Inc. of the alleged property damage and requested that they notify Zurich; that The Rickles Agency notified Zurich of a possible claim in a letter dated June 4, 2007, which included a separate letter and incident report from the insured dated June 1, 2007; that Zurich was again notified of a potential claim by fax on November 26, 2007, which included letters from the insured dated November 12, 2007 and November 15, 2007; and that the insurer was notified for a third time by fax on February 8, 2008. Plaintiff alleges that it received Zurich's letter denying coverage on May 30, 2008, and that was notified of the underlying action on July 1, 2008. Plaintiff alleges that after it notified Zurich of the underlying action, it received another letter on July 24, 2008, denying coverage.
CBB, in its first cause of action, alleges a breach of the insurance contract and seeks to recover attorneys' fees and costs. The second cause of action seeks a declaration to the effect that Zurich is required to defend and indemnify CBB in the underlying action and any counterclaim or cross claim therein, and to pay all sums incurred by plaintiff by reason of said litigation, including attorneys' fees and interest, prior to taking over the defense. The third cause of action alleges a tortious breach of duty and seeks a declaration to that effect and a judgment for monetary damages, including attorneys' fees, costs and disbursements incurred in this action.
Defendant Zurich served an answer and interposed nine affirmative defenses, stating in effect that the insured failed to comply with the terms and conditions of the policy, including the failure to provide timely notice of the claim or occurrence.
Defendant Zurich now seeks an order granting summary judgment and declaring that it has no obligation to defend or indemnify plaintiff in the underlying action. Defendant asserts that the documentary evidence, as well as Mr. Russo's deposition testimony, establishes that plaintiff was aware that the construction activities at CBB caused property damage to Surfside's building in November 2006, one year and four months prior to the first report of the claim received by Zurich on February 8, 2008. Defendant asserts that CBB's delay in providing it with notice of said occurrence, vitiates coverage under the insurance contract. Zurich further asserts that even assuming that notice was provided to the insurer in June 2007, this still constitutes an unreasonable delay of eight months. Finally, it is asserted that plaintiff cannot demonstrate a reasonable belief in its non-liability, given the nature of the property damage, the measures taken to remedy the damage, Russo's acceptance of liability and his agreement to repair the damage at this own cost, and his belief that he could resolve the matter amicably.
Defendant in support of the within motion has submitted documentary evidence, Mr. Russo's deposition testimony, and an affidavit from Christine Harding, a Senior Claims Specialist for Zurich. Ms. Harding states that CBB, through its broker, first tendered a claim to Zurich on February 8, 2008; that she was assigned to this matter as Mr. Corson is no longer employed by the insurer; that Zurich's records indicate that Corson sent a fax and a letter to Mr. Russo, dated February 11, 2008 and February 20, 2008, respectively, and also made inquires to The Rickles Agency, with respect to CBB's claim that notice was given to the insurer in June 2007; that Zurich has no record of receiving any notice with respect to Surfside's claim of property damage from either the insurance broker, The Rickles Agency, or the insured, prior to February 8, 2008; and that Zurich issued a disclaimer letter on May 30, 2008, denying coverage on various grounds, including the failure to provide timely notice of the claim.
Plaintiff, in opposition, asserts that it was not and could not have been reasonably aware of any possible claim because the problem with Surfside's building structure seemed to be minor and plaintiff undertook measures to control and monitor the problem; that CBB provided timely notice to its insurance broker, The Rickles Agency, on June 1, 2007, when it realized that a claim might be brought it, and that the broker in turn notified Zurich; and that defendant's motion is premature as plaintiff did not have an opportunity to depose Ms. Harding and Mr. Corson. Plaintiff further asserts that Mr. Russo first realized that an intractable problem had developed in November 2007, and that CBB had no reason to believe that there was a possible claim in November 2006. It is asserted that the November 2006 communications relied upon by the insurer do not indicate plaintiff's liability for the settlement occurrence, and that plaintiff justifiably believed that the cracks were multiplying due to the age of the Surfside's building and its improper construction.
At the outset, plaintiff's contention that the within motion for summary judgment is premature, is rejected. Plaintiff filed its note of issue and statement of readiness on April 8, 2010, in compliance with the compliance conference order of October 13, 2009. Said order also required plaintiff to appear for a deposition on January 20, 2010, and for the defendant to appear for a deposition on January 27, 2010. However, plaintiff's witness, Frank Russo Jr., was not deposed until April 20, 2010. The failure to comply with the court ordered discovery schedule does not warrant the denial of the within motion.
Plaintiff's claim that it was not given an opportunity to depose Zurich's claims specialists, Mr. Corson, who is no longer employed by Zurich, and Ms. Harding, and that these witnesses are integral to its case and its ability to provide a complete reply to Zurich's motion, is without merit. CBB has failed to offer any evidentiary basis to suggest that such discovery may lead to relevant evidence. The hope and speculation that evidence sufficient to defeat the motion might be uncovered during discovery is an insufficient basis to deny the motion ( see CPLR 3212[f]; Hanover Ins. Co. v Prakin, 2011 NY Slip Op 1239; 916 NYS2d 615; 2011 NY App Div LEXIS 1163; Essex Ins. Co. v Michael Cunningham Carpentry , 74 AD3d 733 ; Peerless Ins. Co. v Micro Fibertek, Inc. , 67 AD3d 978 , 979).
Where as here, a policy of liability insurance requires that the insured provide notice of an occurrence "as soon as practicable," such notice must be given within a reasonable time under all the circumstances ( see Great Canal Realty Corp. v Seneca Insurance Co., Inc. , 5 NY3d 742 , 743). This requirement operates as a condition precedent to coverage and the failure to satisfy the notice requirement vitiates the insurance contract as a matter of law, and the insurer is not required to show prejudice before it can assert the defense of noncompliance( see Arco Corp. v Greater New York Mutual Insurance Co., 4 NY3d 332, 339; White by White v City of New York, 81 NY2d 955, 957; American Home Assur. Co. v International Ins. Co., 90 NY2d 433, 440; Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d 436, 440).
Under certain circumstances, a delay in giving timely notice may be excused, such as where the insured can show that it lacked knowledge or had a good faith belief in non-liability ( see White by White v City of New York, supra; Security Mutual Insurance Co. v Acker-Fitzsimons Corp., 31 NY2d 436, supra; St. James Mechanical, Inc. v Royal Sunalliance , 44 AD3d 1030 ).
The documentary evidence submitted herein establishes that shortly after excavation work commenced on CBB's property, East Coast informed Mr. Russo of the existence of settlement problems regarding the adjacent Surfside building. East Coast's contract administrator, Thom Vinzi, in a letter dated November 6, 2006, and addressed to Mr. Russo and CBB, stated that "As you know, the Foundation Work, has been stopped to allow Potential Engineering PC to inspect the conditions being caused to the adjacent, motel building. . . . DiSano Construction, has been directed to stop all foundation work until the alternative designs were received from Potential." East Coast included in its letter a copy of a memo from Sam Ghaida, Potential Engineering PC's president and principal engineer, dated November 3, 2006, stating that he had inspected plaintiff's property on November 2, 2006 and "concur that the cracks had propagated into the block walls. Apparently, settlement is occurring and condition should be stabilized." Mr. Ghaida stated that alternative design measures were being prepared.
East Coast's representative Scott Scher, sent an e-mail dated November 16, 2006, to Mr. Ghaida, regarding Surfside, in which he stated, in pertinent part, that he "just met with Jim Tsaveras, JT Consulting Services they can provide the design for the Helical Piles [sic] necessary to support the existing grade beam. Jim believes that the grade beam is not built properly and strapped back to the opposite grade beam. He thinks that the beam may have rolled (or shifted) to the south and recommends that we not only support it from the bottom (with Helical Piles) [sic] but also pin it from moving side to side." A copy of this e-mail was also sent to Thom Virzi at East Coast, to Mr. Russo's secretary at his place of business, and to JT Consulting Services.
On December 6, 2006, Mr. Russo on behalf CCB, entered into a written agreement with FSR, LLC entered which provided, "Re: Surfside Motel," for the installation of ten Helical Piers, "per JT Consulting Services, Dated Nov. 25, 2006," at the direction of the property owner and JT Consulting Services.
Mr. Scher, in an e-mail dated March 22, 2007 which was sent to Mr. Russo, via his secretary, and to Mr. Virzi, regarding the Surfside Motel, stated that he had "spoke to Vincent Luccisano last night regarding recent settlement, I told him after our meeting I noticed that most of the soil under his footing had been washed away possibly caused by the space between the sheet pile in the north east corner of your property and or the pipe in he installed in his seawall directly in line with this area. I told him never less [sic] our team believes a slurry concrete grout mix should be installed under and around this footing in an effort to prevent further erosion and possible settlement, and explained Mr. Russo gave us the ok to do this work Thursday at 11:00 A.M. (this is the time the tide will be out going). Mr. Luccisano called back late last evening stating that he past [sic] on my information to his "architect" and he to [sic] agrees with our remedy and suggests that we set up crack monitors designed to monitor the cracks in the hallway to see if they do in fact get bigger or stay the same. We solicited a testing company that can provide this service to you, their fees are as follows . . . although I am confident that installing the grout mix and sealing all the openings in our sheeting will help prevent further settlement I strongly suggest that we hire the testing firm as a safety net and to show our neighbor our continued proactive involvement in this matter. . . ."
Mr. Russo stated at his deposition that he has been the owner of a catering establishment known as Russo's On The Bay, for twenty two years, and that CBB was formed and purchased the property known as 149-66 Cross Bay Boulevard approximately seven years ago. He stated that these are separate entities, located on Cross Bay Boulevard in Howard Beach, New York. Mr. Russo stated, alternatively, that Surfside was either twenty five or forty years old, and that he knew its current "owner," Vincent Luccisano, as well as Mr. Luccisano's parents for some time.
Mr. Russo, stated that after construction commenced at CBB's property, Mr. Luccisano expressed concerns regarding cracking on the walls of the motel, and the possibility of the building moving. Mr. Russo stated that in response, he met with Mr. Luccisano and either Mr. Virzi or Mr. Scher on three or four occasions; that he observed a crack near a window on the outer wall of the motel and a crack on an interior wall; that certain solutions were proposed; and that a firm was hired to conduct monitoring of the cracks and was present at the site for approximately six months. Mr. Russo stated that the last telephone conversation he had with Mr. Luccisano took place in November 2007, at which time Luccisano told him that he was going to sue him and East Coast. Mr. Russo stated that he was surprised, as it had not come up in the past, and there was "the past history of the family and friendship that was there." However, he told Mr. Luccisano that they should each contact their respective insurers. Mr. Russo, in response to plaintiff's first set of interrogatories, stated that he first became aware of the property damage occurrence in May 2007, after being notified by East Coast, and that timely notice was provided to Zurich via Rickles in June 2007. Mr. Russo also stated that he communicated with Mr. Rickles with respect to the claim in letters dated June 1, 2007, November 12, 2007, and November 15, 2007. Mr. Russo has repeated these statements in the affidavit submitted by in opposition to the within motion.
The evidence submitted herein establishes in November and early December 2006, CBB was aware of that the excavation of its property was causing a problem to the adjacent Surfside property. Mr. Russo visited Surfside's property in either November or December 2006, at which time he observed the cracks in the motel's exterior and interior walls, and he executed the December 2006 agreement with FSR, LLC for the installation of ten Helical Piers or brackets, which were intended to provide support to Surfside's building. Furthermore, in late March 2007, Mr. Russo was aware that CBB's construction at the site may have caused or contributed to the soil being washed away under the footing of Surfside's building. Mr. Russo approved the installation of a slurry concrete grout mix under and around this footing in order to prevent further erosion and possible settlement, and an engineering company was engaged to monitor the situation.
Under the circumstances presented, the court finds that in November 2006, following the October 2006 excavation, CBB knew that Surfside's property had sustained some damage. Although the full extent of the actual damage, other than some cracks in the motel's walls, may not have been known at that time, CBB accepted responsibility for the situation and took measures to stabilize Surfside's property. In March 2007, CBB knew that there was possible additional damage to Surfside's property, accepted responsibility for the situation, and again took measures to stabilize and monitor Surfside's property. CBB also knew that Mr. Luccisano was not satisfied with these measures, and agreed to pay for work to be performed at Surfside's property by JB Masonry.
CBB, by its own admission did not take any steps to notify the insurer of a potential claim until June 1, 2007. To the extent CBB asserts that it notified The Rickles Agency of a potential claim on June 1, 2007, and that Rickles thereafter notified Zurich on June 4, 2007, there is no evidence that Zurich received any documents from the insurance agent at that time. In addition, there is no evidence which establishes that The Rickles Agency was the agent for the insurer. "In general an insurance broker is considered the agent of the insured, not the insurance company, and notice to the broker is not deemed notice to the insurance company" ( MTO Assoc., Ltd. Partnership v Republic-Franklin Ins. Co. , 21 AD3d 1008 ). However, "a broker will be held to have acted as the insurer's agent where there is some evidence of action on the insurer's part, or facts from which a general authority to represent the insurer may be inferred'" ( Rendeiro v State-Wide Ins. Co. , 8 AD3d 253 , 253, quoting Bennion v Allstate Ins. Co., 284 AD2d 924, 925). Here, The Rickles Agency is listed on the common policy declarations as the "producer" and is also listed as the agent on the policy's schedule of locations. These notations on the insurance policy are insufficient to establish that Rickles was an agent of the insurer, and thus was authorized to accepted notice on behalf of the insurer.
Moreover, the June 1, 2007 documents CBB sent to Rickles were insufficient to provide the insurer with notice of a potential claim. The June 1, 2007 letter stated "[a]s per our phone conversation and the enclosed incident report, this letter serves to inform you of an incident which occurred adjacent to my property at 164-49 Crossbay Boulevard in Howard Beach, NY." The "Incident Report" dated June 1, 2007, states that there is a "Potential claim-Property Damage to Surfside Motel adjacent to 164-49 Cross Bay Boulevard, Howard Beach, NY 11414" and lists the names and addresses of the contractor East Coast, the architect, and the engineer. Said "Incident Report" is devoid of any details as to how, when, and where the "occurrence" took place. The court therefore finds that, assuming arguendo, Zurich received CBB's letter and Incident Report of June 1, 2007 at that time, said notice was clearly insufficient to apprise the insurer of a potential claim.
To the extent that CBB asserts that its delay in giving timely notice may be excused, the court finds that the insured has failed to demonstrate that it lacked knowledge of the property damage and potential claim, or that it had a good faith belief in its non-liability. Mr. Russo, on behalf of CBB was aware of the damage to Surfside's property in November 2006, and again in March 2007, accepted responsibility for the damage, and agreed to remedy the damage to Surfside's property, at his own expense. These measures included the hiring of outside engineering, design, construction and monitoring firm, and were ongoing, until Mr. Luccisano advised Mr. Russo in November 2007 that they were unsatisfactory, and that he intended to file a suit. The fact that Mr. Russo believed that the could repair the damage to Mr. Luccisano's satisfaction, without involving Zurich, does not constitute a good faith belief in CBB's non-liability.
Accordingly, it is the declaration of the court that the notice provided to the insurer on February 8, 2008, as well as the purported notice of June 1, 2007, was untimely as a matter of law, and vitiates the contract of insurance, and that defendant Zurich has no duty to defend and indemnify plaintiff in the underlying action.