In New York, an insured's good-faith belief in its non-liability, when reasonable, may excuse a delay in notifying an insurer of a potential claim. See Marinello v. Dryden Mut. Ins. Co., Inc., 237 A.D.2d 795, 796, 655 N.Y.S.2d 156, 156 (3rd Dep't 1997). Generally, the reasonableness of the insured's belief is a question of fact for the jury. See id. at 797, 655 N.Y.S.2d at 156.

Plaintiffs cite Nalea Realty Co. v. Public Serv. Mut. Ins. Co. ( 238 A.D.2d 252, appeal dismissed 90 N.Y.2d 927), which held that a landlord's belief of non-liability for the intentional criminal acts of a third person may be reasonable and can excuse a delay in notifying an insurer of the occurrence. While other cases similar to Nalea stand for the same proposition (see, e.g., Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795; D'Aloia v. Travelers Ins. Co., 85 N.Y.2d 825, recons. denied 85 N.Y.2d 968), none of these cases, including Nalea, granted summary judgement to an insured on similar facts.

"Indeed 'when the facts of an occurrence are such that an insured acting in good faith would not reasonably believe that liability on his [or her] part will result, notice of the occurrence given by the insured to the insurer is given 'as soon as practicable' if given promptly after the insured receives notice that a claim against him [or her] will in fact be made.'" Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 655 N.Y.S.2d 156, 158 (N.Y.App.Div. 1997) (emphasis in original) (quoting Merchants Mut. Ins. Co. v. Hoffman, 56 N.Y.2d 799, 801, 452 N.Y.S.2d 398, 437 N.E.2d 1155 (N.Y. 1982)); see also SSBSS Realty Corp. v. Pub. Serv. Mut. Ins. Co., 253 A.D.2d 583, 677 N.Y.S.2d 136, 137-38 (N.Y.App.Div. 1998) ("At issue is not whether the insured believes he will ultimately be found liable for the injury, but whether he has a reasonable basis for a belief that no claim will be asserted against him.").

While defendant's president maintains that he did not "believe" that Inspecta-Shield was involved in the accident or that a claim would be made against it, the reasonableness of his belief and his credibility on this critical point is best reserved for resolution by a jury ( see Morehouse v Lagas, 274 AD2d at 794). In short, we find that Supreme Court erroneously decided the question of reasonableness as a matter of law and "that this case should be governed by the general rule that the reasonableness of [defendant's] alleged good-faith belief of nonliability is a question of fact to be resolved by a jury" ( Marinello v Dryden Mut. Ins. Co., 237 AD2d 795, 798). As a final matter, we note that the relief requested by Aversa in its motion to dismiss the third-party complaint was expressly contingent on a finding by Supreme Court that defendant provided late notice.

Plaintiff concedes that defendant's first notice of the March 1995 incident came when plaintiff forwarded defendant the third-party summons and complaint in March 1997, but argues that it had a reasonable good-faith belief of nonliability which excused this late notice to defendant. Initially, we note that an insured must comply with the notice provisions of an insurance policy as a condition precedent to coverage by timely informing the insurer of a potential claim or occurrence (see, American Home Assur. Co. v. International Ins. Co., 90 N.Y.2d 433, 442-443; Reynolds Metal Co. v. Aetna Cas. Sur. Co., 259 A.D.2d 195, 199; Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796). However, "an insured's good-faith belief in nonliability, when reasonable under the circumstances, may excuse a delay in notifying the insurer" (Hudson City School Dist. v. Utica Mut. Ins. Co., 241 A.D.2d 641, 642). While the insured bears the burden of proving an excuse for the delay (see, id., at 642), the focus of such an inquiry is its reasonableness under the circumstances, not whether the insured should have anticipated the possibility of a lawsuit (see, Vradenburg v. Prudential Prop. Cas. Ins. Co., 212 A.D.2d 913, 915; Briggs v. Nationwide Mut. Ins. Co., 176 A.D.2d 1113).

A second action alleging Dram Shop liability in relation to defendants' alcohol consumption was also commenced. Supreme Court joined all of the actions for purposes of discovery but severed the third-party action for purposes of trial. Under New York law, an insured's compliance with notice provisions of an insurance policy constitutes a condition precedent to coverage (see, American Home Assur. Co. v. International Ins. Co., 90 N.Y.2d 433, 442-443; Reynolds Metal Co. v. Aetna Cas. Sur. Co., 259 A.D.2d 195, 199; G.L.G. Contr. Corp. v. Aetna Cas. Sur. Co., 215 A.D.2d 821, 821). Yet, "an insured's good-faith belief in nonliability, when reasonable under the circumstances, may excuse a delay in notifying an insurer of an occurrence or potential claim" (Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796; see, D'Aloia v. Travelers Ins. Co., 85 N.Y.2d 825;Reynolds Metal Co. v. Aetna Cas. Sur. Co., supra; Seemann v. Sterling Ins. Co., 234 A.D.2d 672). The reasonableness of the insured's belief, as well as a failure to conduct further inquiry, generally remains a question of fact for the jury (see, Hudson City School Dist. v. Utica Mut. Ins. Co., 241 A.D.2d 641, 642;Marinello v. Dryden Mut. Ins. Co., supra, at 798; Seals v. Powell, 236 A.D.2d 700, 701; G.L.G. Constr. Corp. v. Aetna Cas. Sur. Co.,supra, at 822). While it is undisputed that timely notice was given to Excelsior after defendant received actual notice that a claim was to be made against him, we must focus upon the reasonableness of defendant's belief prior to such time to assess whether his delay in notification should preclude coverage.

We affirm. In our view, plaintiff's sworn statements that she first learned of the fuel oil discharge on March 31, 1986 and promptly notified defendant's local agent of the same by telephone, but was told that there was nothing defendant could do because "contamination" was not covered by her policy, made out a prima facie showing on the issues of prompt notice to defendant or its agent and plaintiff's good-faith belief in noncoverage excusing her subsequent failure to provide defendant with the legal papers received in the DEC action (see, Reynolds Metal Co. v. Aetna Cas. Sur. Co., 259 A.D.2d 195, 199-200; Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796 [citations omitted]). Further, deposition testimony of DEC employee Olufemi Falade that his investigation revealed oil on the side of plaintiff's tank "where it all had flown over" provides adequate evidentiary support for a finding that the oil spill was caused by an inadvertent overfilling of the tank and that the occurrence therefore involved a "sudden and accidental" discharge, expressly falling outside the policy exclusion.

Thus, "`[a]bsent a valid excuse, a failure to satisfy the notice requirement vitiates the policy * * * and the insurer need not show prejudice before it can assert the defense of noncompliance'" (American Home Assur. Co. v. International Ins. Co., supra, at 440, quoting Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., supra, at 440). However, "an insured's good-faith belief in nonliability, when reasonable under the circumstances, may excuse a delay in notifying an insurer of an occurrence or potential claim" (Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796; see, D'Aloia v. Travelers Ins. Co., 85 N.Y.2d 825, 826; Empire City Subway Co. v. Greater N.Y. Mut. Ins. Co., 35 N.Y.2d 8, 13; Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., supra, at 441; Vradenburg v. Prudential Prop. Cas. Ins. Co., 212 A.D.2d 913). The same holds true for a reasonably held belief of noncoverage (see, Deso v. London Lancashire Indem. Co. of Am., 3 N.Y.2d 127, 130-131 [discussingGluck v. London Lancashire Indem. Co. of Am., 2 A.D.2d 751, affd 2 N.Y.2d 953]; Sparacino v. Pawtucket Mut. Ins. Co., 50 F.3d 141, 143;cf., Empire City Subway Co. v. Greater N.Y. Mut. Ins. Co., supra, at 13-14). Addressing noncoverage first, we note that in his deposition testimony, plaintiff's risk management manager, Bill Murphy, maintained that based upon his reading of the "owned property" exclusions contained in plaintiff's insurance policies, he did not believe there was any insurance coverage for clean-up of any plant sites owned by plaintiff.

The cases cited by plaintiff are inapposite because they either involve acts performed by insureds or their agents ( see, e.g., Board of Educ. v. Continental Ins. Co., 198 A.D.2d 816) or policies that contain a specific exclusion for injuries resulting from assault and battery by a patron ( see, e.g., Sphere Drake Ins. Co. v. 72 Centre Ave. Corp., 238 A.D.2d 574, 575-576). The court erred, however, in granting Thompson's cross motion because there is a triable issue of fact whether the insureds provided a reasonable excuse for the delay in giving notice of the occurrence to plaintiff ( see, Argentina v. Otsego Mut. Fire Ins. Co., 86 N.Y.2d 748, 749-750; Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796-797) and whether plaintiff provided timely notice of disclaimer to its insureds ( see, Aetna Cas. Sur. Co. v. Gigante, 229 A.D.2d 975, 976-977; Utica Fire Ins. Co. v. Spagnolo, 221 A.D.2d 921, 922). We conclude that plaintiff is not estopped from disclaiming coverage with respect to Thompson as a result of its failure to disclaim based upon Thompson's failure to give timely notice.

The cases cited by plaintiff are inapposite because they either involve acts performed by insureds or their agents ( see, e.g., Board of Educ. v. Continental Ins. Co., 198 A.D.2d 816) or policies that contain a specific exclusion for injuries resulting from assault and battery by a patron ( see, e.g., Sphere Drake Ins. Co. v. 72 Centre Ave. Corp., 238 A.D.2d 574, 575-576). The court erred, however, in granting Thompson's cross motion because there is a triable issue of fact whether the insureds provided a reasonable excuse for the delay in giving notice of the occurrence to plaintiff ( see, Argentina v. Otsego Mut. Fire Ins. Co., 86 N.Y.2d 748 749-750; Marinello v. Dryden Mut. Ins. Co., 237 A.D.2d 795, 796-797) and whether plaintiff provided timely notice of disclaimer to its insureds ( see, Aetna Cas. Sur. Co. v. Gigante, 229 A.D.2d 975, 976-977; Utica Fire Ins. Co. v. Spagnolo, 221 A.D.2d 921, 922). We conclude that plaintiff is not estopped from disclaiming coverage with respect to Thompson as a result of its failure to disclaim based upon Thompson's failure to give timely notice.