| Atlantic Cas. Ins. Co. v RJNJ Servs., Inc. |
| 2011 NY Slip Op 07786 [89 AD3d 649] |
| November 1, 2011 |
| Appellate Division, Second Department |
| Atlantic Casualty Insurance Company, Appellant, v RJNJServices, Inc., Doing Business as Classic Construction, et al., Defendants, and FairfieldRonkonkoma, LLC, et al., Respondents. |
—[*1] Rubin Fiorella & Friedman LLP, New York, N.Y. (James M. Haddad and Mandie R. Formanof counsel), for respondents.
In an action, inter alia, for a judgment declaring that the plaintiff is not obligated to defend orindemnify the defendant RJNJ Services, Inc., doing business as Classic Construction, as athird-party defendant in an underlying personal injury action entitled Lala v FairfieldRonkonkoma, LLC, pending in the Supreme Court, Bronx County, under index No.14880/05, the plaintiff appeals, as limited by its brief, from so much of an order of the SupremeCourt, Suffolk County (Pastoressa, J.), entered March 30, 2010, as denied its motion for leave toenter a default judgment against the defendant RJNJ Services, Inc., doing business as ClassicConstruction, declaring that it is not obligated to defend or indemnify that defendant as athird-party defendant in the underlying action, and to sever the action against that defendant.
Ordered that the order is affirmed insofar as appealed from, with costs.
On March 16, 2005, Jose Lala fell from a roof while performing his work as an employee ofPainting & Home Design, a subcontractor of the defendant RJNJ Services, Inc., doing businessas Classic Construction (hereinafter RJNJ). RJNJ had been hired by the defendants FairfieldRonkonkoma, LLC, Fairfield Properties, and Fairfield Brokerage, LLC (hereinafter collectivelyFairfield), to perform the roofing work at a building project in Ronkonkoma.
In April 2005 Lala commenced an underlying personal injury action against Fairfield torecover damages for personal injuries. In June 2006 American Claims, an authorizedrepresentative of the plaintiff Atlantic Casualty Insurance Company (hereinafter Atlantic),received a copy of the complaint in the underlying personal injury action from York Claims onbehalf of Fairfield. In August 2006 Fairfield commenced the underlying third-party action againstRJNJ. In 2007, the Supreme Court granted Fairfield's motion for a default judgment againstRJNJ in the underlying third-party action.
Atlantic had issued a commercial general liability policy to RJNJ for a coverage periodincluding the date of the occurrence. RJNJ did not give notice to Atlantic of the occurrence, theunderlying personal injury action, or the underlying third-party action. RJNJ also did not give[*2]Atlantic notice of the default judgment against it in theunderlying third-party action.
On September 29, 2006, after it had completed an investigation, Atlantic sent a written noticeof disclaimer of coverage to RJNJ. The disclaimer was based on the grounds that RJNJ had nevernotified Atlantic about the accident or the default judgment entered against RJNJ, and that thepolicy precluded coverage since Lala was an employee of RJNJ's subcontractor.
In July 2008 Atlantic commenced the instant declaratory judgment action against, amongothers, RJNJ and Fairfield. RJNJ failed to appear or answer the complaint in the instant action.Atlantic moved for leave to enter a default judgment against RJNJ, declaring that it is notobligated to defend or indemnify RJNJ as a third-party defendant in the underlying action, and tosever the action against RJNJ. Fairfield opposed Atlantic's motion and cross-moved, in effect, forsummary judgment declaring that Atlantic is obligated to defend and indemnify RJNJ as athird-party defendant in the underlying action. The Supreme Court denied the motion and thecross motion, determining that there were triable issues of fact as to the timeliness of Atlantic'sdisclaimer.
On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant isrequired to submit proof of service of the summons and complaint, proof of the facts constitutingits claim, and proof of the defaulting party's default in answering or appearing (see CPLR3215 [f]; Allstate Ins. Co. v Austin,48 AD3d 720, 720 [2008]). To avoid the entry of a default judgment, the defaulting party isrequired to demonstrate a reasonable excuse for its default and a potentially meritorious defenseto the action (see Allstate Ins. Co. v Austin, 48 AD3d at 720; Matone v Sycamore Realty Corp., 50AD3d 978 [2008]; Juseinoski vBoard of Educ. of City of N.Y., 15 AD3d 353, 355-356 [2005]; Ennis v Lema,305 AD2d 632, 633 [2003]).
Here, Atlantic established that RJNJ defaulted and that RJNJ failed to provide timely noticeof the occurrence. Atlantic also submitted proof that coverage for Lala's injuries was specificallyexcluded under the Atlantic policy. However, in order to be entitled to a default judgmentdeclaring that it had no obligation to defend or indemnify RJNJ, Atlantic also had to prove that ittimely disclaimed, since this element is among the "facts constituting [its] claim" (CPLR 3215[f]; see Insurance Law § 3420 [d]; see also Hartford Ins. Co. v County ofNassau, 46 NY2d 1028 [1979]; Hunter Roberts Constr. Group, LLC v Arch Ins. Co., 75 AD3d 404[2010]). Indeed, "[t]he failure of an insured to timely notify the insurer of a claim does notexcuse the insurer's failure to timely disclaim coverage" (Delphi Restoration Corp. v Sunshine Restoration Corp., 43 AD3d851, 852 [2007]). Under the circumstances of this case, the Supreme Court correctlyconcluded that Atlantic failed to establish that its disclaimer was timely and that it was, therefore,entitled to a default judgment (see e.g.Continental Cas. Co. v Stradford, 11 NY3d 443 [2008]; Felice v Chubb & Son, Inc., 67 AD3d861 [2009]; see also Matter of Colonial Penn Ins. Co. v Pevzner, 266 AD2d 391[1999]).
Accordingly, the Supreme Court properly denied Atlantic's motion for leave to enter a defaultjudgment against RJNJ.
In light of our determination, we need not reach the parties' remaining contentions. Mastro,J.P., Belen, Sgroi and Miller, JJ., concur.