Opinion
No. 31812/09.
2013-01-3
Marlon MARENCO, Plaintiffs, v. DELIGHT CONSTRUCTION CORP., et al., Defendants.
Steven G. Fauth, LLC, New York, for Plaintiff. Shein & Associates, P.C., Syosset, for Defendant.
Steven G. Fauth, LLC, New York, for Plaintiff. Shein & Associates, P.C., Syosset, for Defendant.
DAVID SCHMIDT, J.
The following papers numbered 1 to 13 read on this motion:
+-----------------------------------------------------------------------------+ ¦Papers Numbered ¦ ¦ +-------------------------------------------------------------------+---------¦ ¦Notice of Motion/Order to Show Cause/ Petition/Cross Motion and ¦1–9 ¦ ¦Affidavits (Affirmations) Annexed ¦ ¦ +-------------------------------------------------------------------+---------¦ ¦Opposing Affidavits (Affirmations) ¦10 ¦ +-------------------------------------------------------------------+---------¦ ¦Reply Affidavits (Affirmations) ¦11–12 ¦ +-------------------------------------------------------------------+---------¦ ¦Other Papers Transcript dated July 24, 2012 ¦13 ¦ +-----------------------------------------------------------------------------+
Upon the foregoing papers, motion sequence numbers 4 and 7 are consolidated for disposition. Defendant/third-party plaintiff/second third-party plaintiff Delight Construction Corp. (Delight) and defendants/second third-party plaintiffs Tompkins Park North Homes Housing Development Fund Corporation (Tompkins) and Northeast Brooklyn Housing Development Corporation (Northeast) (hereinafter collectively referred to as movants) seek to obtain an order, pursuant to CPLR 3212, granting them summary judgment on their causes of action in the second third-party action (the Declaratory Judgment Action) for: (1) a declaration as to their insured status with the second third-party defendant, Hermitage Insurance Company (Hermitage), with respect to claims made in the underlying bodily injury action brought by plaintiff, Marlon Marenco (the Personal Injury Action); (2) for a declaration as to the obligations of Hermitage to provide a defense and indemnification to movants, based upon their status as additional insureds with respect to the claims made against them by plaintiff in the Personal Injury Action; and (3) for reimbursement of defense costs, attorneys' fees, disbursements and expenses incurred (motion sequence number 4). Hermitage cross-moves for an order, pursuant to CPLR 3212, granting it summary judgment dismissing the second third-party complaint and declaring that it is not obligated to defend or indemnify second third-party plaintiffs for the claims made against them in the Personal Injury Action (motion sequence number 7).
Facts and Procedural Background
Plaintiff commenced the Personal Injury Action on December 14, 2009 against Delight, Tompkins and Northeast, seeking to recover damages for injuries allegedly sustained on January 28, 2008, when he fell from a scaffold at a construction site located at 875 Herkimer Street and Buffalo Avenue in Brooklyn. At that time, the subject residential property was owned by Tompkins and Northeast. Prior to the accident, Tompkins contracted with Delight to perform construction work at the property. Delight was insured by Mt. Hawley Insurance Company (Mt.Hawley); Mt. Hawley is a part of RLI. Delight subcontracted with Thomas Home Remodeling (Thomas) to perform carpentry work at the property. Plaintiff was employed by Thomas. At the time that plaintiff was injured, Thomas was insured by Hermitage pursuant to a commercial general liability policy that was issued with coverage effective December 27, 2007 (the Thomas Policy). Thomas obtained that policy from the Leo Agency and Brokerage, Inc. (the Leo Agency), which was a broker for Hermitage. The Leo Agency procured the policy from the Simon Agency NY, Inc. (Simon Agency), an agent for Hermitage.
By third-party summons dated June 11, 2010, Delight impleaded Thomas in the first third-party action. To date, Thomas has not appeared and is accordingly in default. By second third-party summons dated June 27, 2011, movants commenced the Declaratory Judgment Action against Hermitage.
To address Hermitage's contentions that the motion for summary judgment could not be decided because discovery demands were outstanding and depositions had not been taken, the court issued an order on May 17, 2012, on consent, that provided that Hermitage could conduct a deposition of the Leo Agency and Grace O'Connor, a Claims Examiner from Mt. Hawley. Additionally, files regarding the Thomas Policy were produced by Mt. Hawley, the Leo Agency, the Simon Agency and RLI.
The Motion
Movants' Contentions
In support of their motion, movants claim that pursuant to the terms of its subcontract with Delight, Thomas was obligated to indemnify and hold harmless Delight, Tompkins and its agents and employees from all suits and actions; to secure a general liability policy of insurance, including coverage for contractual indemnity, with a limit of $1,000,000 per occurrence; and to include Tompkins, Northeast and Delight as additional insureds on the policy. Movants contend that Thomas complied with these provisions and provided a certificate of insurance from Hermitage for the requisite coverage and that the policy was in effect on the date of the alleged accident. Movants further contend that plaintiff's injury arose out of the operations of Thomas, thereby triggering the additional insured coverage owed to them under the policy. Movants accordingly seek indemnification for the moneys expended in defending the Personal Injury Action and for prosecuting this Declaratory Judgment Action.
Hermitage's Contentions
In opposition to the motion and in support of its cross motion, Hermitage contends that movants are not insureds or additional insureds under the Thomas Policy. More specifically, Hermitage contends that the policy required that Thomas receive prior written consent from Hermitage to add an additional insured and insured location to the policy and that it did not consent to adding movants. Hermitage further contends that even if movants were insured, the company properly disclaimed coverage because it was not given notice of the claim as soon as was practicable, as required by the terms of the policy.
Movants' Opposition to Hermitage's Motion
In opposition to the cross motion, movants argue that Hermitage is now seeking to disclaim coverage on grounds that were never before raised, i.e., that movants are not covered under the Hermitage Policy, and that this contention is therefore deemed waived. Movants further argue that Hermitage's assertion that it must give prior written consent for a party to be covered as an additional insurer is not supported by the language of the policy.
Movants' Claim of Waiver
The court first finds that movants' contention that Hermitage waived the right to now argue that they are not covered under the Thomas Policy is without merit. In this regard, it is well settled that “an insurer who fails to issue a timely disclaimer is not prohibited from later raising the defense because the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed' “ (Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007], quoting Matter of Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188 [2000] ). As is of particular relevance herein, the court explained that:
“[T]he denial of coverage under the additional insured endorsement constituted a denial based upon a lack of inclusion' rather than by reason of exclusion' and, thus, the defendant insurer was not required to deny coverage where none existed (Zappone v. Home Ins. Co., 55 N.Y.2d 131, 137 [1982] ). Therefore, to the extent that the defendant insurer's denial of coverage was based upon lack of coverage as an additional insured pursuant to the additional insured endorsement, a timely disclaimer was unnecessary ( see Markevics v. Liberty Mut. Ins. Co., 97 N.Y.2d 646, 648 [2001];Matter of Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188 [2000];see e.g. KMAPS Corp. v. Nova Cas. Co., 53 AD3d 1043 [2008];Perkins v. Allstate Ins. Co., 51 AD3d 647 [2008];cf. Rael Automatic Sprinkler Co., Inc. v. Schaefer Agency, 52 AD3d 670 [2008] ).”
(Hargob Realty Assoc. v. Fireman's Fund Ins. Co., 73 AD3d 856, 858 [2010] ).
Hermitage's Claim that Movants are not Covered the Hermitage Policy
Hermitage's Contentions
In support of its claim, Hermitage argues that the policy covers those sums that the insured becomes legally obligated to pay as damages resulting from bodily injury caused by an occurrence, which it alleges that the policy defines as an accident (Additional Insured Endorsement). Further, the policy has an endorsement that provides that “[t]his insurance does not provide coverage for an additional insured unless the Company gives their express written consent to add coverage for a specified entity to this policy” (Additional Insured Limitation Endorsement). Hermitage avers that the this interpretation is supported by the Additional Insureds Endorsement, which provides for unlimited approved additional insureds listed with Hermitage Insurance Company for the policy term. Hermitage contends that it never gave written consent to add movants as additional insureds. Thus, applying the provisions of the policy, movants are not covered under the Thomas Policy as additional insureds.
Movants' Contentions
In opposition, movants contends that although the insurer argues that it must give prior written consent for a party to be covered as an additional insured, the endorsement relied upon in so arguing pertains to “products and/or completed operations,” which endorsement is not relevant to this personal injury claim. Instead, the coverage of an additional insured is controlled by the Schedule of Additional Insureds, which provides for “unlimited approval ... [i]n the performance of ongoing operations.” Movants thus conclude that no written consent was required for them to be covered as additional insureds.
Movants also rely upon the deposition testimony of Colin Leo, the president of the Leo Agency, who testified that Mr. Thomas came into his office in 2007 seeking to obtain an insurance policy naming Delight as an additional insured to cover work that it intended to do for that company. Mr. Leo accordingly submitted an application to the Simon Agency, who he believed was an agent for Hermitage; the application was submitted on paper bearing the letterhead “Hermitage Insurance Company” and indicated that Delight was to be named as an additional insured. Hermitage accepted the application and issued a price quote, also on paper bearing its letterhead. The quote stated that “Blanket Additional Insured's Is Included in Pricing.” Hermitage subsequently issued the subject policy. Mr. Leo also testified that the inclusion of Delight, Tompkins and Northeast as additional insureds did not alter or amend that the policy, but reflected the coverage that was issued by Hermitage. Mr. Leo further identified the Certificate of Insurance, dated December 27, 2007, which listed Delight, Tompkins and Northeast as additional insureds and included 875 Herkimer Street as one of the job locations.
Mr. Leo also identified the Additional Insured Endorsement, which states “unlimited approved additional insureds listed with Hermitage Insurance Company for the policy term” and noted that it applied to “various locations.” Mr. Leo also referred to a copy of the file received from the Simon Agency, which included the application requesting coverage for Delight as an additional insured. Mr. Leo stated that Hermitage charged Thomas $500 for the additional insured coverage. Finally, Mr. Leo testified that since Thomas had requested additional insured coverage for Delight, he would not have placed the policy with Hermitage if such coverage was not provided.
Movants thus conclude that since Hermitage issued the Thomas Policy with them named as additional insureds, Hermitage consented in writing to the inclusion, assuming that the court finds that such consent is necessary.
Hermitage's Reply
Hermitage argues that the application submitted by the Leo Agency establishes that the application did not request that either Tompkins or Northeast be added as additional insureds. With regard to Delight, Hermitage avers that the application did not list 875 Herkimer Street as a location where Delight was insured. Hermitage therefore contends that it did not give its written consent for movants to be added as additional insureds at the accident site, as is required pursuant to the terms of the Thomas Policy.
Discussion
“While it is true that policies of insurance are to be construed liberally in favor of the insured and strictly against the insurer, where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement” (Government Employees Ins. Co. v. Kligler, 42 N.Y.2d 863, 864 [1977], citing State Farm Mut. Auto. Ins. Co. v. Westlake, 35 N.Y.2d 587 [1974];Johnson v. Travelers Ins. Co., 269 N.Y. 401 [1936] ). Further, “the question of whether an insurance policy is ambiguous is a matter of law to be determined by the court” (140 Broadway Prop. v. Schindler El. Co., 73 AD3d 717, 719 [2010], citing Breed v. Insurance Co., 46 N.Y.2d 351, 355 [1978] ). In making such determination, under circumstances where neither party suggests that extrinsic evidence will aid in ascertaining the intended meaning, the question is one of law for the court to determine, and courts have consistently construed ambiguous policy provisions in favor of coverage and against the insurer who drafted the policy (City of New York v. Evanston Ins. Co., 39 AD3d 153, 156 [2007], quoting Primavera v. Rose & Kiernan, 248 A.D.2d 842, 843 [1998] ).
Turning to the specific issue of whether movants are covered under the Thomas Policy as additional insureds, “[i]t is well settled that whether a third party is an additional insured under a policy is determined from the intention of the parties to the policy, as determined from the four corners of the policy itself' “ ( 140 Broadway Prop., 73 AD3d 718, quoting I.S.A. In N.J. v. Effective Sec. Sys., 138 A.D.2d 681, 682 [1988] ). It is also well established that the party claiming insurance coverage bears the burden of proving entitlement ( see e.g. Moleon v. Kreisler Borg Florman Gen. Constr. Co., 304 A.D.2d 337 [2003] ). Thus, “[a] party not named as an insured or additional insured on the face of the policy is not entitled to coverage” (Tower Ins. v. Amsterdam Apts ., 82 AD3d 465, 467 [2011], citing Sixty Sutton v. Illinois Union Ins. Co., 34 AD3d 386, 388 [2006];Moleon, 304 A.D.2d at 339).
Herein, an examination of the application submitted by the Leo Agency to the Simon Agency and the acord issued by the Simon Agency indicates that Delight was named as an additional insured. This evidence, when interpreted in conjunction with the above discussed deposition testimony of Mr. Leo, establishes that Delight was intended to be covered under
Thomas Policy, since Hermitage was advised and agreed to include Delight as an additional insured when it quoted a price to the Leo Agency and issued the Thomas Policy. Thus, this coverage is in compliance with the requirement of the Additional Insured Limitation Endorsement that Hermitage give its written consent to add coverage for an additional insured. As argued by Hermitage, however, there is no mention of either Tompkins or Northeast in the application or in the papers returned to the Leo Agency by the Simon Agency. Thus, the court concludes that only Delight is covered under the Thomas Policy as an additional insured.
The remainder of this decision will nonetheless continue to address the arguments raised by movants, collectively, as the findings will serve to further support the holding that none of the movants are entitled to coverage as additional insureds under the Thomas Policy for the additional reasons discussed hereinafter.
Having so held, the language in the Hermitage correspondence stating that “Blanket Additional Insured's Is Included in pricing” does not alter this conclusion, since there is no support offered by movants that would allow the court to find that the price of the additional insureds' coverage demonstrates that all three of the movants were intended to be covered. Also implicit in this holding is the finding that the failure to identify the premises at which Delight was performing work is not sufficient to preclude coverage because Hermitage did not give written consent with regard to coverage for the 875 Herkimer Street property. As noted above, the Additional Insured Endorsement designated the locations of covered operations as “various locations.” The Additional Insured Limitation Endorsement requires that written consent be obtained from Hermitage to add coverage for “a specified entity;” it does not provide that Hermitage must provide written consent with regard to specific location. “When an exclusion clause is relied upon to deny coverage, the burden rests upon the insurance company to demonstrate that the allegations of the complaint can be interpreted only to exclude coverage” (Town of Massena v. Healthcare Underwriters Mut. Ins. Co., 98 N.Y.2d 435, 444 [2002], citing International Paper Co. v. Continental Cas. Co., 35 N.Y.2d 322, 325 [1974];Technicon Electronics v. American Home Assurance Co., 74 N.Y.2d 66, 73–74 [1989] ). Thus, since the Additional Insured Limitation does not specifically provide that coverage will not be provided for locations where a named additional insured performs work unless Hermitage approved the location in writing, it will not be so interpreted.
In so holding, the court also rejects movants' contention that the Additional Insured Limitation Endorsement does not apply to the commercial general liability coverage policy issued to Thomas. In this regard, the Endorsement states clearly that:
“THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING:
“COMMERCIAL GENERAL LIABILITY COVERAGE FORM PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM”
Thus, since the Endorsement clearly references both the general liability coverage form and products completed coverage form, the court finds that the limitation applies to both forms of insurance coverage.
The certificate of insurance relied upon by movants to establish additional insureds coverage for Tompkins and Northeast is similarly insufficient to do so. The certificate states on its face that it was prepared by the Leo Agency. The certificate also states that “THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.” The law is clear that an insurance broker is the agent of its insured ( see e.g. Inman Constr. v. Cathedral Marble & Granite Co., 307 A.D.2d 955, 956 [2003];Progressive Cas. Ins. Co. v. Yodice, 276 A.D.2d 540 [2000] ). It is equally clear that a certificate of insurance issued by a broker listing a party as an additional insured is insufficient to alter the language of the policy itself, especially where the certificate recites that it is for informational purposes only; that it confers no rights upon the holder; and that it did not amend, alter, or extend the coverage afforded by the policy ( see generally School Constr. Consultants v. ARA Plumbing & Heating, 63 AD3d 1029, 1030 [2009];Home Depot v. National Fire & Mar. Ins. Co., 55 AD3d 671 [2008];Cendant Car Rental Group v. Liberty Mut. Ins. Co., 48 AD3d 397, 398 [2008] ). Accordingly, reliance upon the certificate to establish that movants were named as additional insureds under the Thomas Policy must fail.
Timeliness of Movants' Claim
Correspondence Regarding the Claim
The correspondence exchanged between the parties establishes the dates that plaintiff contacted movants, when movants submitted a claim to Hermitage and when Hermitage disclaimed coverage. More specifically, by letter dated September 5, 2008, plaintiff's counsel, Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C., informed Delight that the office had been retained to pursue a personal injury action on behalf of plaintiff for injuries sustained on January 28, 2008. The letter further stated “[p]lease refer this letter to your insurance carrier immediately for further attention. Return the enclosed postcard with the name of the insurance company applicable to this claim, your policy number and policy limits.”
By letter dated January 16, 2009, Mt. Hawley demanded that Hermitage defend, indemnify and reimburse movants, as additional insureds under the Thomas Policy, for the loss sustained by plaintiff in the Personal Injury Action. As is also relevant herein, the letter stated “Please contact attorney Belinda Boone at Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C., at 516–741–5252.”
By letter dated January 26, 2009, addressed to Thomas, Hermitage disclaimed coverage for plaintiff's injury under the policy, stating that:
“Please be advised that no coverage will be provided to Thomas Home Remodeling Co., and all other named insureds under the policy.”
“This claim occurred on January 28, 2008, yet our first report of this loss was received on January 23, 2009. We find this to be late notice and in violation of your policy conditions. We also find notice from the plaintiff attorney and all other parties associated with this claim to be late as well and in violation of the following policy condition:
...
“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.”
Copies of this letter were mailed to the Simon Agency and to Mt. Hawley; a copy was faxed to plaintiff's attorney.
By letter dated September 9, 2009, Ms. O'Connor of Mt. Hawley again wrote to Hermitage, explaining that the matter had been reassigned to her and stating that “I acknowledge receipt of your January 26, 2009 letter wherein you find all parties associated with this claim to be late in providing notice to Hermitage Insurance and in violation of policy conditions.” Ms. O'Connor went on to dispute Hermitage's determination that Delight submitted a late notice of claim, arguing that Hermitage was notified of the accident as soon as Delight was able to identify plaintiff's employer. A copy of the letter was faxed to plaintiff's attorney. Hermitage did not reply to this letter.
Following the commencement of the Declaratory Judgment Action, Michael Shvartsbart investigated the claim on behalf of Hermitage. On July 20, 2010 and August 4, 2010, Mr. Shvartsbart obtained a written statement from Dean Thomas, principal of Thomas, and Ronald Thomas, the foreman, who confirmed that plaintiff had been injured on the day of the accident and that they took plaintiff to th hospital. By letter dated August 24, 2010 from the Liability Claims Supervisor at Tower Group Companies, as the liability insurer under the Thomas Policy, Thomas was notified that:
“As you are aware, by letter dated January 26, 2009 ... we previously disclaimed coverage of this matter. Please be advised that we reviewed this matter and determined that it is not covered under your policy for the reasons set forth in our letter dated January 26, 2009, which is incorporated by reference herein and as set forth below. Accordingly, we reiterate our disclaimer of coverage of this mater and will not defend or indemnify you with respect thereto.”
The letter went on to disclaim coverage on numerous other grounds.
Copies this letter were mailed to the Simon Agency, movants' attorney, plaintiff's attorney, Tompkins and Northeast.
Since Hermitage does not argue that disclaimer is appropriate based upon any of the other grounds asserted in that letter in the papers now before the court, the court similarly will not consider these grounds.
Movants' Contentions
In support of their motion, movants rely upon the testimony of plaintiff at his deposition, held on October 18, 2010, to establish that he did not know the name of the company that he was working for on the day that he was injured, although he knew the foreman and had worked for him before. Movants further allege that plaintiff explained that he was injured while he was cutting and installing wooden beams in the ceiling, which would become part of the floor above. In order to do this, he was standing on a scaffold that had been erected by him and the foreman. More specifically, plaintiff testified that he was caused to fall when something sticking out of the scaffold cut him. He also alleged that immediately after the accident, the boss came over and told him not to tell anyone who he was working for at the time.
Movants also rely upon the deposition testimony of Mohammed Aziz, who testified on behalf of Delight, and stated that he passed by the job only once or twice a week to check on the progress and quality of the work. Significantly, he only became aware of the accident months after it occurred, since no one had reported it to him at the time that it occurred. In this regard, movants further point out that the September 5, 2008 letter that Delight received from plaintiff's counsel advising it that plaintiff had been injured on January 28, 2008 did not indicate where the accident occurred, how it occurred or who employed plaintiff at the time.
Movants further rely upon an affidavit from Ms. O'Connor, in which she explains that when Delight received notice of plaintiff's claim for personal injury in the September 5, 2008 letter, it provided no details with regard to the alleged injury. At that time, Delight was involved in construction projects at seven sites in Brooklyn. Although some of the projects involved subcontractors, no subcontractor had reported an injury to Delight. Further, as noted above, at his deposition, plaintiff testified that he did not recall the address of the construction site where he was injured or who he was employed by at the time. In fact, it was not until December 2008 that plaintiff's counsel identified the site of the accident as 875 Herkimer Street. Delight was then able to identify the two subcontractors who were working at that site, Mesnaz Construction Corp., a masonry subcontractor, and Thomas. Immediately upon ascertaining the names of these subcontractors, Mt. Hawley sent letters to the insurance companies of both demanding that each defend and indemnify Delight, Tompkins and Northeast pursuant to the terms of the subcontracts and insurance policies. It was not until May 2009 that it was learned that plaintiff was performing carpentry work for Thomas at the time that he was injured.
Movants also argue that the file turned over by Mt. Hawley indicates that on November 12, 2008, the adjuster handling the claim, Michael Lucia, suggested that plaintiff may have been injured while he was working at 875 Herkimer Street. A notation dated November 21, 2008 indicates that the adjuster called plaintiff's attorney, who believed that the location of the accident could have been 874 Herkimer Street. A December 5, 2008 notation indicates that plaintiff's attorney told the adjuster that plaintiff may have been self employed. Movants argue that these notes indicate that as late as December 5, 2008, it was not known where plaintiff was injured; whether he was employed; and if so, by whom.
Movants go on to argue that the file from RLI indicates that plaintiff's counsel advised RLI on November 12, 2008 that the accident occurred at 874 Buffalo Avenue; Mr. Lucia speculated that the accident occurred at 875 Herkimer Avenue, since 874 Buffalo Avenue is not an address, but Herkimer Street does intersect with Buffalo Avenue. As of December 5, 2008, plaintiff's counsel had yet to confirm that the accident could have occurred at 875 Herkimer Street and had not determined whether plaintiff was self employed. On December 15, 2008, plaintiff's counsel advised RLI that plaintiff was injured when he feel off a scaffold; Delight's files did not indicate that any subcontractors were supposed to be performing work on a scaffold. The file further indicates that as late as December 22, 2008, RLI was not aware of the place of plaintiff's injury or if he was employed. Finally, movants note that Mr. Leo testified that he was first notified of plaintiff's accident on January 22, 2009, since Thomas had not notified Leo Agency of plaintiff's claim. Nonetheless, movants sent a notice of claim to Hermitage and the insurer of the other subcontractor working at 875 Herkimer Street on January 16, 2009.
Movants accordingly conclude that inasmuch as Hermitage was notified of the claim as soon as was practicable after it was able to identity plaintiff's employer, Hermitage did not receive a late notice of claim, since any delay in notification to Hermitage was not the fault of movants, but was due to plaintiff's deliberate attempt to withhold information concerning the details of his accident.
Hermitage's Contentions
Hermitage argues that movants' delay in notifying it of the claim by letter dated January 16, 2009 is not “as soon as is practicable” as a matter of law. Hermitage further notes that it was not until nine months later that it received a second letter from Mt. Hawley asserting that movants' late reporting should be excused because movants were not aware that plaintiff was employed by Thomas, since plaintiff's counsel would not provide the name of plaintiff's employer.
Hermitage further argues that nonetheless, the Mt. Hawley file unequivocally establishes that Delight was first notified of plaintiff's claim as early as November 12, 2008, or 74 days before it notified Hermitage of the claim, and not December of 2008, as previously represented. More specifically, the Mt. Hawley file reveals that Delight was advised by Mt. Hawley on November 12, 2008 that the loss occurred at 875 Herkimer Street, as is established by Ms. O'Connor's claim notes, which is further demonstrated by a fax dated the same day and sent by Mr. Lucia to “Alana” at Delight, telling her that he believed that the loss occurred at 875 Herkimer Street and requesting that she get the contracts for that project. Hermitage concludes that the 74–day delay between the date that Delight could have ascertained the identify of plaintiff's employer, using the information provided by Mr. Lucia on November 12, 2008, and January 23, 2009, when Hermitage received movants' letter advising it that a claim may be filed and demanding coverage, is “not as soon as practicable” as a matter of law.
Discussion
Where a liability insurance policy requires that notice of an occurrence be given “as soon as practicable,” such notice must be accorded the carrier within a reasonable period of time (Great Canal Realty Corp. v. Seneca Ins. Co., 5 NY3d 742, 743 [2005] ). “The duty to give notice arises when, from the information available relative to the accident, an insured could glean a reasonable possibility of the policy's involvement” (Paramount Ins. Co. v. Rosedale Gardens, 293 A.D.2d 235, 239–240 [2002] ). “The requirement that an insured comply with the notice provision of an insurance policy operates as a condition precedent to coverage” (Sputnik Realty v. United Natl. Ins. Co., 62 AD3d 689, 689 [2009] [citations omitted] ).
“Under the law as it existed at the time the subject insurance policy was issued, the plaintiffs had the burden of raising a triable issue of fact as to the existence of a reasonable excuse for the delay in opposition to the ... prima facie showing” (McGovern–Barbash Assoc. v. Everest Natl. Ins. Co., 79 AD3d 981, 983 [2010], citing Argentina v. Otsego Mut. Fire Ins. Co., 86 N.Y.2d 748, 750 [1995] ).
“In order to excuse a failure to give timely notice, the excuse must be reasonable under all circumstances, and it may be relevant on the issue of reasonableness, whether and to what extent, the insured has inquired into the circumstances of the accident or occurrence' “ ( Tower Ins. Co. v. Christopher Ct. Hous. Co., 71 AD3d 500, 501 [ 2010], citing Security Mut. Ins. Co. of N.Y. v. Acker–Fitzsimons, 31 N.Y.2d 436, 441). “[W]here there is no excuse or mitigating factor, the issue [of reasonableness] poses a legal question for the court, rather than an issue for the trier of fact' “ ( SSBSS Realty Corp. v. Public Serv. Mut. Ins. Co., 253 A.D.2d 583, 584 [1998], quoting Hartford Accident. & Indem. Co. v. CNA Ins. Cos., 99 A.D.2d 310, 313 [1984];accord Can–Am Roofing v. American States Ins. Co., 229 A.D.2d 973, 974 [1996] ).
The court notes that Delight was not required to demonstrate any prejudice resulting from the claimed untimely notice, since issuance of the Thomas Policy predated the effective date of the amendments to Insurance Law § 3420(a)(5), January 17, 2009, that now requires such showing ( see Board of Mgrs. of the 1235 Park Condominium v. Clermont Specialty Mgrs., 68 AD3d 496, 497 [2009] [fn 1] ).
In this case, Mr. Lucia provided Delight with sufficient information to allow Delight to identify the subcontractor for whom plaintiff worked on November 12, 2008, when he advised Delight that the accident had probably occurred at 875 Herkimer Street. At that time, Delight could have ascertained the name of the contractors employed at the site, even if plaintiff had been self employed, if it had checked its contracts. Thus, Delight's unexplained delay of 74 days thereafter to locate the contracts and to file a claim with Hermitage is found to be unreasonable as a matter of law ( see e.g. Tower Ins., 82 AD3d at 466 [76–day delay]; Juvenex v. Burlington Ins. Co., 63 AD3d 554 [2009] [two-month delay]; Young Israel Co–Op City v. Guideone Mut. Ins. Co., 52 AD3d 245 [2008] [40–days delay]; Gotham Constr. Co. v. United Natl. Ins. Co., 35 AD3d 289, 289–290 [2006] [50–day delay]; Pandora Indus. v. St. Paul Surplus Lines Ins. Co., 188 A.D.2d 277, 590 N.Y.S.2d 471 [1992] [31–day delay] ).
Thus, since Hermitage did not receive notice of the accident as soon as was practicable after its occurrence, Hermitage is not obligated to defend or indemnify movants under the Thomas Policy.
Movants' Contention that Hermitage did not Disclaim Coverage
Movants' Contentions
Movants go on to argue that although Hermitage admits that it received the letter dated January 16, 2009 from Mt. Hawley demanding a defense and indemnification on behalf of Delight, Tompkins and Northeast, Hermitage never responded to that demand, but for a letter sent to its insured, Thomas, with copies sent to Mt. Hawley and plaintiff's attorney. In this regard, movants further aver that it is significant that letter does not address movants' claim for coverage as additional insureds, nor does it mention its contention that movants provided late notice of claims. Movants also point out that it was not until seventeen months following notice of movants' claim and after the commencement of the Declaratory Judgment Action, by letter dated August 24, 2010, sent to Tompkins and Northeast, Hermitage disclaimed coverage. No disclaimer was ever sent to Delight. Further, Hermitage did not undertake an investigation into movant's claim. Movants thus conclude that Hermitage never denied coverage to any additional insureds under its policy, since it did not send a timely denial of coverage to them. They also argue that it is well settled that late notice by a named insured is not necessarily untimely notice by an additional insured.
Discussion
Insurance Law § 3420(d) (redesignated as § 3420[d][2] by L 2008, ch 388, § 5) requires a liability insurer to give the insured or the injured person written notice of disclaimer of a personal injury claim “as soon as is reasonably possible.” In interpreting this provision, it has been explained that:
“An insurer's failure to provide notice as soon as is reasonably possible precludes effective disclaimer, even [where] the policy holder's own notice of the incident to its insurer is untimely' (First Fin. Ins. Co. v. Jetco Contr. Corp., 1 NY3d 64, 67 [2003] )' (Matter of New York Cent. Mut. Fire Ins. Co. v. Aguirre, 7 NY3d 772, 774 [2006] ). Where there is a delay in providing the written notice of disclaimer, the burden rests on the insurance company to explain the delay ( see First Fin. Ins. Co. v. Jetco Contr. Corp., 1 NY3d 64 [2003];Matter of Allstate Ins. Co. v. Cruz, 30 AD3d 511 [2006];Pennsylvania Lumbermans Mut. Ins. Co. v. D & Sons Constr. Corp., 18 AD3d 843 [2005] ). When the explanation offered for the delay is an assertion that there was a need to investigate issues that will affect the decision on whether to disclaim, the burden is on the insurance company to establish that the delay was reasonably related to the completion of a necessary, thorough, and diligent investigation ( see Schulman v. Indian Harbor Ins. Co., 40 AD3d 957 [2007] ).”
(Quincy Mut. Fire Ins. Co. v. Uribe, 45 AD3d 661, 661–662 [2007] ).
The court finds that while movants' statement of the law is correct, the facts do not support its contention. In this regard, it is not disputed that Hermitage responded to Mt. Hawley's demand for coverage approximately a week after receiving the letter. Although the letter disclaiming coverage was addressed to Thomas, as Hermitage's insured, it unequivocally stated that no coverage would be provided to Thomas “and all other named insureds under the policy” and that “[w]e also find notice from the plaintiff attorney and all other parties associated with this claim to be late as well.” In this regard, it must also be noted that the letter requested that Hermitage contact plaintiff's attorney, which it did. Also significant is the fact that in her letter dated September 9, 2009, Ms. O'Connor stated that she “acknowledge[d] receipt of your January 26, 2009 letter wherein you find all parties associated with this claim to be late in providing notice to Hermitage Insurance and in violation of policy conditions.” Accordingly, movants will not now be permitted to argue that Hermitage never disclaimed coverage.
Conclusion
For the above stated reasons, the cross motion by Hermitage seeking a judgment declaring that it is not obligated to defend and indemnify Delight, Tompkins or Northeast in the underlying Personal Injury Action pursuant to the subject insurance policy is granted and the second third-party complaint is dismissed.
The foregoing constitutes the order, decision and judgment of this court.