Opinion
111778/07.
Decided on September 10, 2008.
Jennifer Kotlyarsky, Esq., Law Office of Max W. Gershweir, for plaintiff.
Sheila Weinstein, Esq., Edelman and Edelman PC, for defendant Galati.
Tower Insurance Company of New York (Tower) brings a declaratory action arising from a question of its duty to defend an action brought by Denise Galati, Individually and as the Mother and Natural Guardian of Salvatore Galati, Jr.(" Galati") in Richmond County(Index no. 101953/07, "the underlying action"). Tower alleges that defendants Alexandre Kravtchouk ("Kravtchouk") and Modern Construction of New York ("Modern") failed to appear in this New York County action, and Tower seeks a default judgment as against them pursuant to CPLR 3215(a). Additionally, Tower moves for summary judgment as against the answering defendants, seeking the declaration of this court that Tower has no duty to defend and/or indemnify defendant the City of New York ("City") or Galati. Galati is the only party who opposes the motion. Kravtchouk, Modern and City do not submit papers.
Galati alleges that Salvatore Galati was riding his bike on the sidewalk in front of the premises known as 231 Bionia Avenue, Staten Island (the premises)on May 4, 2006 when he came into contact with rocks and gravel and was caused to fall off the bike. The adjoining premises were undergoing construction at the time of the accident, and alleged to have been owned by Kravtchouk. It is further alleged that Kravtchouk hired Modern to perform work at the premises. Galati alleges that City owned the subject sidewalk where Salvatore Galati fell.
Tower issued a homeowners insurance policy to Kravtchouk (the policy) through a broker, Yelena Ruzin, covering the premises. The policy was to have been in effect from April 10, 2006 to April 10, 2007. The underlying action was commenced on May 9, 2007 and Tower was notified of the Galati's accident on June 4, 2007, when it received a letter and the summons and complaint from Kravtchouk's attorney. On June 11, 2007, Eric Chappe, an investigator with Daniel J. Hannon Assocaites, took Kravtchouk's statement. Based on that statement, Tower disclaimed coverage to Kravtchouk by letter dated July 6, 2007.
Tower filed the instant action in New York County seeking declaratory relief. It requests that the Court declare that Tower is not obligated to defend or indemnify Kravtchouk because: (1)Kravtchouk made material misrepresentations in his insurance application, (2) the premises was not an Insured location,' since Kravtchouk never resided at the premises, and that (3) Kravtchouk did not timely notify Tower of the occurrence of the accident in the underlying suit. Additionally, Tower asserts that it is entitled to the above as against the defaulting defendants, whose failure to answer amounts to an admission of the facts Tower claims. Finally, Tower seeks summary judgment as against the remaining answering defendants.
In support of its motion, Tower provides the underlying complaint in the Richmond County action; the pleadings in this action;; the affidavits of service along with notices of default; the affidavit of Edward Blomquist along with Tower's homeowner selection rules; an "Amended Declaration" and the policy itself; the affidavit of Lowell D. Aptman, Vice President of Liability Claims for Tower; a letter of disclaimer from Tower to Kravtchouk dated July 6, 2007; the application for the instant policy; and the affidavit of Eric Chappe, along with a statement signed by Kravtchouk.
Initially, Tower's motion for a default judgment can not be granted solely on the basis of Kravtchouk and Modern's failure to appear. "Declaratory relief should not issue merely on the basis of a default by one side to the controversy. The plaintiff stills bears the burden of affirmatively proving its right to the declaratory relief it seeks." ( Mount Vernon Fire Ins. Co. v. NIBA Const. Inc., 195 AD2d 425 [1st Dept. 1993], Sullivan, J. concurring).
Tower seeks to confirm that its policy disclaimer is valid, and that based on Kravtchouk's misrepresentations, the policy is void ab initio. Tower asserts that the application Kravtchouk filled out for the subject policy is inconsistent with the statement that he later gave to the interviewing investigator. Further, those misrepresentations are material to a decision to provide coverage.
Specifically, Tower argues that Kravtchouk represented on his April 5, 2006 homeowner application that the premises were a primary dwelling, owner occupied. Tower contrasts the application with Kravtchouk's statement, taken on June 11, 2007, which reads:
I state that my name is Alexandre Kravtchouk. I currently reside at 1445 Shore Parkway, Apt. No. 6T, Brooklyn NY 11214 . . . I am presently in the process of building a residential home at 231 Bionia Avenue, Staten Island NY 10505. For this work, I hired a General Contractor . . . the basis of the job is to construct a detached, 3-Story, residential house at 231 Bionia Avenue, Staten Island, NY — in which I will be eventually residing . . . Regarding this issue of the construction . . . I could state that my General Contractor was then in the process of building a front extension to the older house that previously existed on this lot . . .
In order to establish that a fact is material so as to void ab initio an insurance contract, an insurer must show that it would not have issued the policy had that fact been revealed at the time that the policy was issued. ( Interested Underwriters at Lloyd's v. H.D.I. III Assoc., 213 AD2d 246 [1st Dept. 1995]). Tower claims that it learned that Kravtchouk "never lived at the premises" and that "there is no dispute that Kravtchouk did not reside at the insured premises when Galati was allegedly injured."
However, the inconsistencies are not as stark as Tower urges. Tower represents that owner-occupied primary residences generally pose a lesser degree of risk than non owner-occupied or non-primary residences. At the time that Kravtchouk gave his statement to the investigator on June 11, 2007, he states that he was currently living in Brooklyn, while building a residential home at the subject property. Kravtchouk refers to the date of the accident and states that the General Contractor "was in the process of building a front extension to the older house that previously existed on this lot." The statement fails to demonstrate that the premises were non-owner occupied or non-primary residences. Thus, this court cannot confirm that Tower's disclaimer was valid on the basis of misrepresentations, rendering the policy void ab initio.
Tower next argues that it is entitled to summary judgment declaring that it need not defend or indemnify for late notice of the claim. The policy requires the insured to notify Tower of an insurable occurrence "as soon as practicable." Tower claims that, according to Kravtchouk's statement to its investigator, he was made aware of the incident on June 26, 2006 through an "attorney's letter" but did not report the incident directly to Tower. Rather, he contacted his attorney and relied on the attorney to inform Tower of the incident. Tower claims that Kravtchouk's attorney did not do so until almost one year later, June 4, 2007.
Galati also failed to notify Tower of the accident. Thus, Tower maintains that it need not defend or indemnify Galati. Galati states that Tower's motion should be denied because there is outstanding discovery.
Generally, where facts essential to justify opposition to a motion for summary judgment are within the exclusive knowledge and possession of the moving party, summary judgment should be denied. ( see CPLR 3212[f]). However, it is incumbent upon the party opposing a motion on CPLR 3212(f) grounds to provide a proper evidentiary basis supporting its request for further discovery.( Global Minerals Metal Corp. v Holmes, 35 AD3d 93 [1st Dept. 2006]). Galati merely states that she is not "in possession of knowledge as to the contractual arrangements between Tower and Alexandre Kravtchouk . . .nor . . . knowledge as to the validity of the disclaimer/denial of coverage . . ."
Galati disputes the admissibility of the statement by Tower's investigator because Kravtchouk's statement is unsworn. While generally, unsworn statements should not be considered in a motion for summary judgment, the statement by Kravtchouk is annexed to a sworn affidavit of Eric Chappe. That affidavit attests that at the end of his conversation with Kravtchouk, Mr Chappe accurately transcribed what Kravtchouk told him and Kravtchouk reviewed and signed the statement Chappe transcribed. Admissions by a party of any fact material to the issue are always competent evidence against that party. ( Reed v. McCord, 160 NY 330, 341).
The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. That party must produce sufficient evidence in admissible form to eliminate any material issue of fact from the case. Where the proponent makes such a showing, the burden shifts to the party opposing the motion to demonstrate by admissible evidence that a factual issue remains requiring the trier of fact to determine the issue. The affirmation of counsel alone is not sufficient to satisfy this requirement. ( Zuckerman v. City of New York, 49 NY2d 557). In addition, bald, conclusory allegations, even if believable, are not enough. ( Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 NY2d 255). ( Edison Stone Corp. v. 42nd Street Development Corp., 145 AD2d 249, 251-252 [1st Dept. 1989]).
Where a contract of primary insurance requires notice "as soon as practicable" after an occurrence, the absence of timely notice of an occurrence is a failure to comply with a condition precedent which, as a matter of law, vitiates the contract . . . No showing of prejudice is required." ( Argo v. Greater NY Mut. Ins. Co. , 4 NY3d 332). "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" ( Tower Ins. Co. Of New York v. Lin Hsin Long Co. , 50 AD3d 305[1st Dept. 2008]; quoting Paramount Ins. Co. v. Rosedale Gardens, 293 AD2d 235 [1st Dept. 2005]).
The applicable section of Tower's policy states:
3. Duties after Loss. In case of an accident or "occurrence," the "insured" will perform the following duties that apply. You will help us by seeing that these duties are performed:
a. Give written notice to us or our agent as soon as is practical, which sets forth:
(1) The identity of the policy and "insured";
(2) Reasonably available information on the time, place and circumstances of the accident or "occurrence; and
(3) Names and addressees of any claimants and witnesses . . .
Kravtchouk claims that he was not sure who his insurance carrier was and that he informed his attorney of the incident when he first received notice on June 26, 2006, asking him to provide notice of the incident to the correct company. That notice was not received by Tower until nearly a year later. Kravtchouk does not show that he followed up with his attorney or in any way attempted to ascertain if notice was indeed given to Tower. Nor does Kravtchouk appear in response to this action or motion.
Where there is no reasonable excuse or mitigating circumstances offered for the delay, "the issue of reasonableness poses a legal question for the court, rather than an issue for the trier of fact." ( Id. at 307). The nearly one year delay in notifying Tower of the claim is unreasonable as a matter of law. (see Holmes v. Morgan Guar. and Trust Co. of New York, 223 AD2d 441 [1st Dept. 1996]; where court found that a ten month delay was unreasonable; and see Hydt Contracting Corp. v. American Home Assur. Co., 146 AD2d 497 [1st Dept. 1989]; where court found a nearly four month delay unreasonable as a matter of law).
An injured party has an independent right to notify an insurance carrier of his or her accident. ( Id. at 308). In order to assert that right, the injured party must show that she diligently attempted to ascertain coverage and to promptly notify the carrier of the accident. If those steps are taken, the injured party is not charged with the delay of the insured. If the injured party fails to show that she asserted her own right to provide notice, but "rather, relied on the insured to do so, her rights are derivative of the insured's." Here, Galati failed to notify Tower of the accident, thus Kravtchouk's late notice is imputed to her.
Wherefore it is hereby
ORDERED that the motion for a default judgment as against Alexandre Kravtchouk and Modern Construction of New York is granted; and it is further
ORDERED that the motion for summary judgment is granted to the following extent; and it is further
ADJUDGED that Tower Insurance Company of New York's homeowner's has no duty to defend or indemnify Alexandre Kravtchouk, Modern Construction or New York, Inc., Denise Galati, Individually and as the Mother and Natural Guardian of Salvatore Galati, Jr. or the City of New York in the Richmond County Action, Index No. 101953/07.
This constitutes the Decision, Order and Judgment of the Court. All other relief requested is denied.