| Donovan v Empire Ins. Group |
| 2008 NY Slip Op 02100 [49 AD3d 589] |
| March 11, 2008 |
| Appellate Division, Second Department |
| Gloria Donovan, Respondent, v Empire Insurance Group etal., Appellants. |
—[*1] Zuntag & Zuntag, Staten Island, N.Y. (Steven F. Zuntag of counsel), forrespondent.
In an action for a judgment declaring that the defendants are obligated to defend andindemnify the plaintiff as a third-party defendant in a personal injury action entitled Kearneyv City of New York, pending in the Supreme Court, Richmond County under index No.10827/02, the defendants appeal from an order of the Supreme Court, Richmond County (Mega,J.), dated November 27, 2006, which confirmed the report of a referee dated October 30, 2006finding that the plaintiff had a reasonable belief in her nonliability in the underlying action,denied their cross motion for summary judgment and, in effect, granted the plaintiff's motion forsummary judgment.
Ordered that the order is reversed, on the law, with costs, the plaintiff's motion for summaryjudgment is denied, the defendants' cross motion for summary judgment is granted, and thematter is remitted to the Supreme Court, Richmond County, for the entry of a judgment declaringthat the defendants are not obligated to defend and indemnify the plaintiff as a third-partydefendant in the underlying action.
The defendants issued a commercial general liability insurance policy to the plaintiff for herproperty located at 7344 Amboy Road in Staten Island. The policy obligated the plaintiff tonotify the defendants "as soon as practicable of an 'occurrence' or an offense which may result ina claim."
During the policy period, on September 9, 2001, Barbara Kearney allegedly was injuredwhen she tripped and fell on the sidewalk which she described as located at 7336-7346 AmboyRoad. By letter dated October 10, 2001, Simonson & Cohen, P.C., Kearney's attorney, sentwritten [*2]notification of Kearney's claim to the plaintiff.Kearney commenced an action against the City of New York (hereinafter the City) on February26, 2002 and did not name the plaintiff as a party in that action. The City filed a third-partycomplaint dated March 5, 2003, against the plaintiff claiming that she was required to indemnifyit for the injuries Kearney sustained. On May 23, 2003 the plaintiff sent the third-party complaintand summons to the defendants, providing notification to the defendants of the occurrence for thefirst time. By letter dated June 25, 2003, the defendants disclaimed coverage based on late notice.
The plaintiff subsequently commenced the instant action for a judgment declaring that thedefendants are obligated to defend and indemnify her in the underlying action. The plaintiffmoved for summary judgment, contending that her delay in notification was excusable becauseshe had a reasonable belief in her nonliability. The defendants cross-moved for summaryjudgment. After a hearing on the issue before a referee, the Supreme Court confirmed thereferee's finding that the plaintiff's delay in notifying the defendants 19 months after receiving theOctober 2001 claim letter was based on a reasonable belief in her nonliability. We reverse.
Where an insurance policy requires an insured to provide notice "as soon as practicable" ofan occurrence, such notice must be provided within a reasonable time under all circumstances(see Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127, 129 [1957])."Providing the required notice is a condition to the insurance carrier's liability . . .and absent a valid excuse, a failure to satisfy the notice requirement vitiates the policy"(Lukralle v Durso Supermarkets, 238 AD2d 318, 319 [1997]; see Deso v London &Lancashire Indem. Co. of Am., 3 NY2d at 129). "An insured's good-faith belief that theinjured party would not seek to hold it liable, when reasonable under the circumstances, mayexcuse a delay in notifying an insurer of an occurrence or potential claim" (UnitedTalmudical Academy of Kiryas Joel v Cigna Prop. & Cas. Co., 253 AD2d 423, 424 [1998])."[T]he insured's belief must be reasonable under all the circumstances, and it may be relevant onthe issue of reasonableness, whether and to what extent, the insured has inquired into thecircumstances of the accident or occurrence" (Security Mut. Ins. Co. of N.Y. vAcker-Fitzsimons Corp., 31 NY2d 436, 441 [1972]).
In general, a court should enforce a referee's report if the referee's findings are supported bythe record (see Royal & Sun Alliance vNew York Cent. Mut. Ins. Co., 29 AD3d 886 [2006]; Capili v Ilagan, 26 AD3d 354[2006]). We conclude, however, that here the referee's findings are not supported by the record.The plaintiff's belief in nonliability after receiving the claim letter, which clearly stated thatKearney had retained attorneys for the purpose of pursuing a claim against the plaintiff, wasunreasonable. Additionally, the plaintiff's failure to investigate the facts surrounding the accidentto determine if Kearney did, in fact, fall on her property was unreasonable under thecircumstances (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at441; Felix v Pinewood Bldrs., Inc.,30 AD3d 459 [2006]). Therefore, the plaintiff's delay in notifying the defendants of theoccurrence for 19 months after receipt of the claim letter was in violation of the insurance policy,and the defendants are not obligated to defend and indemnify her in the underlying action (seeDeso v London & Lancashire Indem. Co. of Am., 3 NY2d at 129).
Accordingly, the defendants were entitled to summary judgment.
Since this is a declaratory judgment action, the matter must be remitted to the SupremeCourt, Richmond County, for the entry of a judgment declaring that the defendants are notobligated to defend and indemnify the plaintiff in the underlying action (see Lanza vWagner, 11 NY2d 317, 334 [1962], [*3]appealdismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Spolzino, J.P.,Angiolillo, Balkin and Leventhal, JJ., concur.