| Tex Dev. Co., LLC v Greenwich Ins. Co. |
| 2008 NY Slip Op 04504 [51 AD3d 775] |
| May 13, 2008 |
| Appellate Division, Second Department |
| Tex Development Co., LLC,Appellant-Respondent, v Greenwich Insurance Company, Respondent, Stern Agency,Inc., et al., Respondents-Appellants, and Abdellatif Benhalima et al., as Administrators of theEstate of Abdelaaziz Badaoui, Deceased, Appellants-Respondents. |
—[*1] Menagh & Falcone, P.C., New York, N.Y. (Joseph S. Hubicki of counsel), fordefendants-appellants-respondents. Mintzer, Sarowitz, Zeris, Ledva & Meyers, Hicksville, N.Y. (Leslie McHugh of counsel), forrespondents-appellants. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, New York, N.Y. (Richard E. Lerner,Patrick J. Lawless, and Glenn J. Fuerth of counsel), for respondent.
In an action, inter alia, for a judgment declaring that the defendant Greenwich InsuranceCompany is obligated to defend and indemnify the plaintiff in an underlying action entitledBenhalima v Tex Development Co., LLC, pending in the Supreme Court, QueensCounty, under index No. 7510/05, (1) the plaintiff appeals, as limited by its brief, from so muchof an order of the Supreme Court, Queens County (Taylor, J.), entered April 12, 2007, as deniedits cross motion for summary judgment on its first and second causes of action declaring that thedefendant Greenwich Insurance Company is obligated to defend and indemnify it in theunderlying action, (2) the defendants Abdellatif Benhalima and Mustapha Ben Ahmed Badaoui,as administrators of the estate [*2]of Abdelaaziz Badaoui,separately appeal, as limited by their brief, from so much of the same order as denied theirmotion, in effect, for summary judgment on their cross claim declaring that the defendantGreenwich Insurance Company is obligated to indemnify the plaintiff in the underlying action,and (3) the defendants Stern Agency, Inc., and Ken Stern cross-appeal, as limited by their brief,from so much of the same order as denied their cross motion for summary judgment declaringthat the defendant Greenwich Insurance Company is obligated to defend and indemnify theplaintiff in the underlying action, and dismissing the remainder of the complaint and all crossclaims insofar as asserted against them.
Ordered that the order is modified, on the law, by (1) deleting the provision thereof denyingthe plaintiff's cross motion for summary judgment on its first and second causes of actiondeclaring that the defendant Greenwich Insurance Company is obligated to defend and indemnifyit in the underlying action, and substituting therefor a provision granting the cross motion, (2)deleting the provision thereof denying the motion of the defendants Abdellatif Benhalima andMustapha Ben Ahmed Badaoui, as administrators of the estate of Abdelaaziz Badaoui, in effect,for summary judgment on their cross claim declaring that the defendant Greenwich InsuranceCompany is obligated to indemnify the plaintiff in the underlying action, and substitutingtherefor a provision granting the motion, and (3) deleting the provision thereof denying thatbranch of the cross motion of the defendants Stern Agency, Inc., and Ken Stern which was forsummary judgment declaring that the defendant Greenwich Insurance Company is obligated todefend and indemnify the plaintiff in the underlying action, and substituting therefor a provisiongranting that branch of the cross motion; as so modified, the order is affirmed insofar as appealedand cross-appealed from, with one bill of costs payable by the respondent to theplaintiff-appellant-respondent, the defendants-appellants-respondents, and therespondents-appellants appearing separately and filing separate briefs, and the matter is remittedto the Supreme Court, Queens County, for the entry of a judgment, inter alia, declaring that thedefendant Greenwich Insurance Company is obligated to defend and indemnify the plaintiff inthe underlying action entitled Benhalima v Tex Development Co., LLC, pending in theSupreme Court, Queens County, under index No. 7510/05.
On October 10, 2003, Abdelaaziz Badaoui (hereinafter the decedent) was killed in anaccident while performing construction work on property owned by the plaintiff TexDevelopment Co., LLC (hereinafter Tex Development). Tex Development was insured under acommercial general liability insurance policy issued by the defendant Greenwich InsuranceCompany (hereinafter Greenwich). Tex Development procured that policy through its insurancebroker, the defendant Stern Agency, Inc.
On October 13, 2003, Tex Development's representative notified the defendant Ken Stern,who was associated with Stern Agency, Inc., about the accident. Although Tex Development'srepresentative asked Stern to notify Greenwich about the accident, Stern failed to do so.
On or about April 5, 2005, the defendants Abdellatif Benhalima and Mustapha Ben AhmedBadaoui (hereinafter together the administrators), who were the administrators of the decedent'sestate, commenced an action (hereinafter the underlying action) against Tex Development.Alleging that Tex Development was responsible for the accident, the administrators sought torecover damages for wrongful death.
On April 18, 2005, Tex Development notified Greenwich about the accident and theunderlying action. Greenwich then conducted an investigation into "notice and liability issues."[*3]
On June 2, 2005, Greenwich disclaimed coverage on theground that it had not been provided with timely notice of the accident. Indeed, TexDevelopment's insurance policy required it to notify Greenwich "as soon as practicable of an'occurrence' or an offense which may result in a claim."
Tex Development then commenced this action against the defendants, seeking a judgmentdeclaring that Greenwich was obligated to defend and indemnify it in the underlying action. TexDevelopment also sought damages from Stern Agency, Inc., and Stern (hereinafter together theStern defendants) based on an allegedly negligent failure to provide notice of the accident toGreenwich.
Subsequently, Tex Development, the Stern defendants, and the administrators separatelymoved, inter alia, for summary judgment declaring that Greenwich was obligated to defend andindemnify the plaintiff in the underlying action. The Supreme Court denied the motions in theirentirety. We modify.
Insurance Law § 3420 (d) requires an insurer to provide a written disclaimer ofcoverage "as soon as is reasonably possible." An insurer's failure to provide notice of disclaimeras soon as is reasonably possible precludes effective disclaimer, even where the insured's ownnotice of the incident is untimely (seeMatter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d 772, 774 [2006]; First Fin. Ins. Co. v Jetco Contr. Corp.,1 NY3d 64, 67 [2003]). The timeliness of an insurer's disclaimer is measured from the pointin time when the insurer first learns of the grounds for disclaimer of liability or denial ofcoverage (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 68-69).
On their respective motions, Tex Development, the Stern defendants, and the administratorsdemonstrated their entitlement to summary judgment declaring that Greenwich was obligated todefend and/or indemnify Tex Development in the underlying action. Tex Development, the Sterndefendants, and the administrators established, prima facie, that under the circumstances,Greenwich failed to provide a written disclaimer of coverage as soon as reasonably possible (see Delphi Restoration Corp. v SunshineRestoration Corp., 43 AD3d 851, 852 [2007]). In response, Greenwich, which had theburden of explaining its delay in providing the written notice of disclaimer (see First Fin. Ins.Co. v Jetco Contr. Corp., 1 NY3d at 69), failed to raise a triable issue of fact.
The Stern defendants' remaining contentions are without merit.
Since this is, in part, a declaratory judgment action, we remit the matter to the SupremeCourt, Queens County, for the entry of a judgment, inter alia, declaring that Greenwich isobligated to defend and indemnify the plaintiff in the underlying action (see Lanza vWagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], certdenied 371 US 901 [1962]). Lifson, J.P., Covello, Angiolillo and Leventhal, JJ., concur.