| Scott McLaughlin Truck & Equip. Sales, Inc. v Selective Ins. Co. ofAm. |
| 2009 NY Slip Op 10030 [68 AD3d 1619] |
| December 31, 2009 |
| Appellate Division, Third Department |
| Scott McLaughlin Truck & Equipment Sales, Inc., et al.,Respondents, v Selective Insurance Company of America, Appellant, and William W. WinchellSr., as Parent and Guardian of William W. Winchell Jr., an Infant,Respondent. |
—[*1] Stafford, Carr & McNally, P.C., Lake George (Robert P. McNally of counsel), for ScottMcLaughlin Truck & Equipment Sales, Inc. and another, respondents. Martin, Harding & Mazzotti, L.L.P., Albany (Keith J. Starlin of counsel), for William W.Winchell Sr., respondent.
Mercure, J. Appeal from an order of the Supreme Court (Hall Jr., J.), entered October 21,2008 in Washington County, which, among other things, granted plaintiffs' motion for summaryjudgment.
William W. Winchell Jr. was injured in 2001 when plaintiff Jeff Paris, an employee ofplaintiff Scott McLaughlin Truck & Equipment Sales, Inc., mistakenly lowered a trailer onto[*2]Winchell's right foot. McLaughlin's liability insurancecarrier, defendant Selective Insurance Company of America, was not notified of the accidentuntil 2005. Selective disclaimed coverage, asserting that McLaughlin had not provided timelynotice of the incident.
Not long after, Winchell's father, defendant William W. Winchell Sr. (hereinafter the father),commenced a personal injury action against plaintiffs. Plaintiffs then commenced this actionagainst defendants, seeking a declaration that Selective must indemnify and defend them in thefather's action. Following joinder of issue and discovery, plaintiffs and the father separatelymoved, and Selective cross-moved, for summary judgment. Supreme Court granted plaintiffs'and the father's motions, determining that McLaughlin provided timely notice of the claim andthat Selective's disclaimer of coverage was untimely, and Selective now appeals.
We affirm. It is well settled that, "if an insurer does not disclaim coverage in writing to theinsured as soon as is reasonably possible, it is precluded from disclaiming coverage based uponlate notice" (One Beacon Ins. v Travelers Prop. Cas. Co. of Am., 51 AD3d 1198, 1200[2008]; see Insurance Law § 3420 [former (d)]; First Fin. Ins. Co. v JetcoContr. Corp., 1 NY3d 64, 67 [2003]; Hartford Ins. Co. v County of Nassau, 46NY2d 1028, 1029 [1979]). This is true even if, as Selective claims, McLaughlin's notice of theclaim was, in fact, untimely (see Matter 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 at 67; TexDev. Co., LLC v Greenwich Ins. Co., 51 AD3d 775, 778 [2008]). The timeliness ofSelective's disclaimer is measured from the moment when it first learned of the grounds fordisclaimer—i.e., that McLaughlin's notice of claim was arguably late (see ContinentalCas. Co. v Stradford, 11 NY3d 443, 449 [2008]; Matter of New York Cent. Mut. FireIns. Co. v Aguirre, 7 NY3d at 774).
Here, Selective was first made aware of the claim in a May 26, 2005 fax which set out thefacts of the claim and included a note from McLaughlin's insurance agent that, to his knowledge,the claim had not been previously reported. Selective did not disclaim on the ground of latenotice, however, until July 26, 2005. The burden of justifying that two-month delay indisclaiming rests with Selective and, while the timeliness of such a disclaimer generally presentsa question of fact, "an insurer's explanation is insufficient as a matter of law where the basis fordenying coverage was or should have been readily apparent before the onset of the delay"(First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 69; see Continental Cas. Co. vStradford, 11 NY3d at 449; Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre,7 NY3d at 774). Selective asserts that difficulties in its investigation of the claim caused thedelay, but does not explain why—given the facts made known to it in the May 26, 2005fax—anything beyond a cursory investigation was necessary to determine whetherMcLaughlin had timely notified it of the claim. As Selective failed to show "that the delay. . . was reasonably related to its completion of a thorough and diligentinvestigation," its explanation for the delay was legally insufficient and Supreme Court properlygranted plaintiffs' and the father's motions for summary judgment (Schulman v Indian HarborIns. Co., 40 AD3d 957, 958 [2007]; see Hartford Ins. Co. v County of Nassau, 46NY2d at 1029-1030; Saitta v New York City Tr. Auth., 55 AD3d 422, 423 [2008];Uptown Whole Foods v Liberty Mut. Fire Ins. Co., 302 AD2d 592, 593 [2003];Mohawk Minden Ins. Co. v Ferry, 251 AD2d 846, 848 [1998]).
Cardona, P.J., Spain, Lahtinen and Kane, JJ., concur. Ordered that the order is affirmed, withone bill of costs.