| Waldron v New York Cent. Mut. Fire Ins. Co. |
| 2011 NY Slip Op 03704 [84 AD3d 1480] |
| May 5, 2011 |
| Appellate Division, Third Department |
| William Waldron et al., Appellants, v New York Central MutualFire Insurance Company et al., Respondents. |
—[*1] Boeggeman, George & Corde, P.C., Albany (Cynthia Dolan of counsel), for New YorkCentral Mutual Fire Insurance Company, respondent. Keidel, Weldon & Cunningham, White Plains (Stephen C. Cunningham of counsel), forKnox Insurance Agency, Inc. and another, respondents.
Lahtinen, J. Appeal from an amended order and judgment of the Supreme Court (O'Connor,J.), entered November 30, 2009 in Albany County, which, among other things, granteddefendants' motions for summary judgment dismissing the complaint.
This case involves a dispute as to whether plaintiff Alexandra Waldron is entitled tocoverage under the $300,000 supplementary uninsured/underinsured motorists (hereinafter SUM)provision of the insurance contract that her father, plaintiff William Waldron, purchased fromdefendant New York Central Mutual Fire Insurance Company (hereinafter NYCM) throughdefendant Knox Insurance Agency, Inc. On February 24, 2003, Alexandra Waldron, a22-year-old college student who had not been listed as a member of the household on theinsurance policy, sustained serious injuries while in Florida when the motorcycle on which shewas a passenger was struck by an automobile that crossed into the motorcycle's lane. Twomonths later, in late April 2003, William Waldron first advised Knox of the accident, but heindicated to Knox that he did not want to file a claim with NYCM at that time. In mid-July 2004,William [*2]Waldron told Knox to file a claim with NYCM.Shortly thereafter, NYCM denied coverage on various grounds, including that notice of the claimwas untimely and that Alexandra Waldron was not an insured under the policy. Plaintiffscommenced this action seeking a declaratory judgment that Alexandra Waldron was entitled toSUM coverage, as well as asserting, among other things, negligence and breach of contractcauses of action against defendants. Following discovery, all parties moved for summaryjudgment. Supreme Court denied plaintiffs' motion, granted defendants' motions, dismissed thecomplaint and declared that NYCM was not obligated to provide SUM coverage for the accident.Plaintiffs appeal.
Historically, New York adhered to the position that "an insurer that does not receive timelynotice in accordance with a policy provision may disclaim coverage, whether it is prejudiced bythe delay or not" (Briggs Ave. LLC vInsurance Corp. of Hannover, 11 NY3d 377, 381-382 [2008]; see Argo Corp. v Greater N.Y. Mut. Ins.Co., 4 NY3d 332, 339 [2005]). Recent legislation amended the Insurance Law, whichnow requires an insurer to show prejudice (see Insurance Law § 3420 [a] [5], asadded by L 2008, ch 388, § 2 [eff Jan. 17, 2009]). The new statutory language does not,however, apply in the current case as the pertinent policy was issued before the effective date ofthe statute (see Board of Mgrs. of the1235 Park Condominium v Clermont Specialty Mgrs., Ltd., 68 AD3d 496, 497 [2009]).Nonetheless, even prior to the statutory amendment, when an insurer received notice of anaccident in a timely fashion, the insurer could not properly disclaim a late SUM claim absent ashowing of prejudice (see Rekemeyer vState Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476 [2005]; see also Matter ofBrandon [Nationwide Mut. Ins. Co.], 97 NY2d 491, 498 [2002]; Bhatt v Nationwide Mut. Ins. Co., 61AD3d 1406, 1406-1407 [2009]).
We address first whether William Waldron's communication with Knox in late April 2003constituted timely notice of the accident to NYCM. The relationships of a purchaser of insurance,an agent or broker, and an insurance company are not always easily categorized (see People v Wells Fargo Ins. Servs.,Inc., 16 NY3d 166, 171 [2011]). Generally, notice to an insurance broker is notnecessarily considered notice to the carrier (see Board of Hudson Riv.-Black Riv. Regulating Dist. v Praetorian Ins.Co., 56 AD3d 929, 930 [2008]; but cf. Travelers Ins. Co. v Raulli & Sons, Inc., 21 AD3d 1299,1300 [2005]), whereas notice to an agent of the insurer typically constitutes notice to the insurer(see Insurance Law § 3420 [a] [3]; D. C. G. Trucking Corp. v Zurich Ins.Co., 81 AD2d 990, 991 [1981], lv denied 54 NY2d 605 [1981]). The proof in therecord established that Knox was an agent of NYCM.
NYCM's policy required that notice of the accident be given as soon as reasonablypracticable, but in no event more than 30 days after the accident, absent proof providingjustification for the delay. William Waldron's first communication with Knox was two monthsafter the accident and, thus, beyond the 30-day limit in the policy. However, it is undisputed thathis daughter had sustained very serious injuries in the accident and that he had immediately leftNew York to be with his daughter in Florida. Even two months after the accident when henotified Knox, his daughter was still hospitalized and there was continuing concern that shemight lose a leg as a result of her injuries. Although William Waldron indicated toKnox—ostensibly because of concern of a premium increase—not to file a claimwith NYCM, the agency relationship between Knox and NYCM resulted in the notice to Knoxconstituting notice to NYCM. In addition to verbal communication with Knox about theaccident, William Waldron also provided a police accident report of the accident to Knox. Theevidence is sufficient to raise a factual issue as to whether the delay of about one month beyondthe 30-day notice requirement was sufficiently justified under the circumstances.[*3]
With regard to the SUM claim, the policy required noticeof a SUM claim "as soon as practicable," which in the SUM context means "with reasonablepromptness after the insured knew or should reasonably have known that the tortfeasor wasunderinsured [or uninsured]" (Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso,93 NY2d 487, 495 [1999]; see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d at474; Matter of State Farm Mut. Auto.Ins. Co. [Jackson], 6 AD3d 1029, 1030 [2004]). Here, the police accident reportprovided to Knox by William Waldron two months after the accident left blank the section fordriver's insurance. Even if this did not constitute notice of a potential SUM claim, NYCM failedto establish that the July 2004 notice of a SUM claim was untimely as a matter of law. NYCMdid not submit proof addressing whether it was prejudiced by the delay and, in the event thefactual issue about the timeliness of the initial notice of the accident is resolved favorably toplaintiffs, NYCM will be required to show prejudice (see Rekemeyer v State Farm Mut.Auto. Ins. Co., 4 NY3d at 476).
Lastly, we are unpersuaded by NYCM's argument that plaintiffs have failed to raise an issueof fact as to whether Alexandra Waldron was a resident of her parents' household at the time ofthe accident. Although she was renting an apartment off campus while attending college, therecord reflects that she maintained a bedroom in her parents' house, where she kept clothing,visited on weekends and lived on school holidays and semester breaks. Moreover, her collegeconsidered her parents' address to be her permanent one and she retained her parents' address forvoting and tax purposes (seeKonstantinou v Phoenix Ins. Co., 74 AD3d 1850, 1851 [2010], lv denied 15NY3d 712 [2010]; Dutkanych v United States Fid. & Guar. Co., 252 AD2d 537, 538[1998]).
Peters, J.P., Malone Jr., Kavanagh and Garry, JJ., concur. Ordered that the amended orderand judgment is modified, on the law, without costs, by reversing so much thereof as granteddefendants' motions for summary judgment dismissing the complaint and declared that defendantNew York Central Mutual Fire Insurance Company is not obligated to provide supplementaryuninsured/underinsured motorist coverage for the claim arising out of the February 24, 2003motor vehicle accident; said motions denied; and, as so modified, affirmed.
[Decision vacated and a new decision substituted at the direction of the Appellate Division, Third Department, See 88 AD3d 1053.]