Opinion
18235/04.
Decided March 17, 2006.
This proceeding was initiated by a motion for a declaratory judgment by plaintiff Kambousi Restaurant Inc. Kambousi makes application that the court declare that its insurer, Burlington Insurance Company is obligated to defend and indemnify Kambousi under its liability policy in the pending action Racquel Recard v. Greentree Properties LLC. Burlington responds that Kambousi's five month delay in notifying Burlington of the occurrence relieves Burlington of its obligations under the policy.
In addition Burlington "asserts" ( sic "requests" would be a more apt word) that the Court "should" search the record pursuant to CPLR 3212(b) and grant summary judgment in its favor. The law of New York is quite strict with respect to the duty of the insured to notify the insurer with respect to potential claims under the policy. This court is compelled under these circumstances to grant defendant's application for summary judgment.
I. Facts
The undisputed facts of the case are set forth in the affidavit of Laurence K. Randazzo, manager of the Royal Coach Diner. On October 25, 2003 he was on duty as manager when a person unknown to him came into the diner and told him that a woman had fallen in the parking lot.
Mr. Randazzo went out to investigate. He saw a woman sitting on the ground with a man he assumed was her husband. The man informed him that the woman had tripped over her shoelaces, that there was nothing to worry about and that he had called an ambulance.
The woman then apologized and said she was clumsy and had fallen. Mr. Randazzo told them he needed to make a report and went in to the diner. When he returned all were gone and he was unable to write a report.
For the purposes of this motion this statement of facts can be assumed to be accurate. In April of 2004 Kambousi became aware of a possible lawsuit against it brought by Racquel Recard based on the October 25, 2003 incident. Kambousi then notified Burlington.
While Mr. Randazzo's actions after the incident were understandable the law of New York requires that he and plaintiff should have done more. Specifically his legal obligation was to notify his employer of the incident and his employer should have then notified Burlington. The failure to do so in a timely manner relieved Burlington of its duty to defend and indemnify.
II. The Duty to Notify
The policy which Burlington issued to Kambousi contained the standard requirement that the insured notify the insurer as soon "as practicable" of an "occurrence". This notice requirement has consistently been interpreted strictly against the insured by the New York Court of Appeals. Specifically the notice provision of an insurance policy is deemed to be a condition precedent to coverage under the policy even when no other prejudice can be shown. Argo Corp. v. Greater NY Mutual Ins. Co., NY 3rd 332 (2005). St. Charles Hospital v. Royal Globe Ins. Co. et al 18 AD3d 735. Security Mut. Ins. Co. v. Acker-Fitzsimmons Corp., 31 NY2d 436.
There may be circumstances such as lack of knowledge that an accident has occurred or a reasonable belief in non liability that will excuse or explain delay in giving notice but the insured has the burden of showing reasonableness of such excuse. Security Mut. Ins. Supra. White v. NYC v. All City Ins. Co., 81 NY2d 955. (1993). The reason cited by the courts for this strict rule is that absent timely notice, an insurer may be deprived of the opportunity to investigate a claim. Late notification may also prevent the insurer from providing a sufficient reserve fund. Power Authority v. Westinghouse Elec. Corp., 117 AD2d 336.
Kambousi notified Burlington five months after the occurrence. This does not constitute timely notification in New York. A delay of 21 days was held to be untimely, Rushing v. Commercial Casualty Ins. Co., 25 NY 302 (Cardozo, J.) and a ten day delay was ruled not to be timely notice under the circumstances therein. Haas Tobacco Co. v. American Fidelity 226 NY 343.
When applied to the facts of this case New York precedent requires Kambousi to have responded more expeditiously. Mr. Randazzo was aware that an incident had occurred. He was also informed that an ambulance had been called. In order for Kambousi to claim indemnification under its policy with Burlington, Mr. Randazzo was required to immediately notify his employer and the employer then had an obligation to notify the insurer. The employees initial failure is attributable to the employer.
III. Conclusion
Plaintiffs motion for a declaratory judgment is denied. Since denial of declaratory relief effectively resolves all issues between the parties in favor of defendant, defendants request for summary judgment is granted.
This constitutes the decision of this Court.
Settle order on notice.