Summary
holding that insurer's two-month delay is untimely as a matter of law
Summary of this case from Palanquet v. Weeks Marine, Inc.Opinion
August 1, 1994
Appeal from the Supreme Court, Dutchess County (Donovan, J.).
Ordered that the order and judgment is reversed, on the law, with one bill of costs to the plaintiff and to the defendant Corbally, Gartland Rappleyea, the cross motion of Prudential Property and Casualty Insurance Co. is denied, the motion of the defendant Corbally, Gartland Rappleyea and the cross motion of the plaintiff are granted, and it is declared that the disclaimer of underinsurance coverage by Prudential Property and Casualty Insurance Co. is untimely.
On November 7, 1985, the plaintiff Joanne B. Ward was seriously injured in a two-car automobile accident. She retained the defendant Corbally, Gartland Rappleyea (hereinafter Corbally), which commenced a suit against the other driver. The other driver settled for the limits of his policy. Ward's insurance carrier became aware of the settlement on or about March 9, 1987. In 1988, Ward discovered that she had underinsurance coverage at the time of the accident and immediately filed a claim with her insurance carrier the defendant Prudential Property and Casualty Insurance Co. (hereinafter Prudential). A little more than two months later, Prudential disclaimed underinsurance coverage on the following expressly stated grounds: (1) that Ward's notice of claim was untimely, (2) that Ward never gave Prudential notice that she was commencing an action against the other driver, (3) that Ward settled the matter without Prudential's consent, and (4) that Ward failed to forward copies of the pleadings to Prudential, as well as other grounds, apparently related to Prudential's subrogation rights.
A notice of disclaimer must "promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated" (General Acc. Ins. Group v Cirucci, 46 N.Y.2d 862, 864). Moreover, it is well-settled that an insurance carrier must give the insured timely notice of the disclaimer "as soon as is reasonably possible after it first learns of the accident or of grounds for disclaimer of liability or denial of coverage" (Hartford Ins. Co. v. County of Nassau, 46 N.Y.2d 1028, 1029; see also, Insurance Law § 3420 [d]). This rule is applicable even if the insured, in the first instance, had failed to provide the carrier with timely notice of its claim (see, Kramer v. Interboro Mut. Indem. Ins. Co., 176 A.D.2d 308; New York Cent Mut. Fire Ins. Co. v. Markowitz, 147 A.D.2d 461). It was therefore the insurer's burden to explain the delay in notifying the insured of its disclaimer (see, Hartford Ins. Co. v. County of Nassau, 46 N.Y.2d 1028, supra), and the reasonableness of any such delay must be determined from the time the insurer was aware of sufficient facts to disclaim (see, Matter of Allcity Ins. Co. [Jimenez], 78 N.Y.2d 1054, 1056; Farmers Fire Ins. Co. v. Brighton, 142 A.D.2d 547). Here, Prudential was fully aware of the facts underlying its disclaimer on August 25, 1988, the day it received the letter apprising it of Ward's underinsured motorist claim (see, Matter of Allcity Ins. Co. [Jimenez], supra, at 1054). However, Prudential did not disclaim until over two months later. Prudential's own records indicate that within a few days of receiving the claim, it determined that it would disclaim based upon information which Prudential had been in possession of since March 1987. Accordingly, Prudential's two-month delay is untimely as matter of law (see, Consolidated Edison Co. v. Hartford Ins. Co., 203 A.D.2d 83; Farmers Fire Ins. Co. v. Brighton, 142 A.D.2d 547, supra). Miller, J.P., Ritter, Santucci and Altman, JJ., concur.