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This opinion is uncorrected and subject to revision before

publication in the New York Reports.

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No. 216 

Juan Sierra,

 Plaintiff,

 v.

4401 Sunset Park, LLC, et al.,

 Defendants.

---------------------------------

4401 Sunset Park, LLC, et al.,

 Third-Party Respondents,

 v.

LM Interiors Contracting, LLC,

 Third-Party Defendant,

Scottsdale Insurance Company,

 Third-Party Appellant.

(And A Second Third-Party 

Action.)

Matthew Lerner, for third-party appellant.

Corey Reichardt, for third-party respondents.

SMITH, J.:

Insurance Law § 3420 (d) (2) requires a liability

insurer that disclaims liability to give written notice of the

disclaimer "to the insured." This case involves parties who were

insureds under two different policies: they were named insureds

under their own policy, and additional insureds under a policy

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obtained by a contractor they had hired. The contractor's

insurer, seeking to disclaim liability, sent written notice to

the insureds' own carrier, but not to the insureds themselves. 

We hold that this did not meet the requirement of the statute.

I

4401 Sunset Park LLC and Sierra Realty Corp.,

defendants and third-party plaintiffs in this action, are

respectively the owner and managing agent of an apartment

building in Brooklyn. They contracted with third-party defendant

LM Interiors Contracting, LLC to do renovation work on the

building. The contract required LM to maintain liability

insurance that named the owner and managing agent as additional

insureds, and LM obtained such a policy from third-party

defendant Scottsdale Insurance Company. The owner and managing

agent also had their own liability insurance policy, issued by

Greater New York Mutual Insurance Company (GNY). 

On August 18, 2008, plaintiff, Juan Sierra, an LM

employee (unrelated to the managing agent, Sierra Realty Corp.),

lost a finger in an accident while working on the renovation

project. The managing agent learned of the accident that day,

but gave no notice of it to either GNY or Scottsdale. More than

three months later, on November 30, 2008, plaintiff brought this

action seeking damages for personal injuries against the owner

and the managing agent, and at this point they notified GNY of

the claim. GNY retained a lawyer for its insureds, but neither

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the insureds nor GNY informed Scottsdale of the injury or the

claim until January 6, 2009, when GNY sent the summons and

complaint to Scottsdale. In a letter that accompanied the

summons and complaint, GNY asked Scottsdale to "respond in

writing upon receipt of this letter whether you will defend,

indemnify and hold our insured harmless in connection with this

lawsuit." The letter included the name and address of the law

firm that GNY had retained to answer the complaint on the

insureds' behalf.

Scottsdale replied to GNY on February 2, 2009,

disclaiming liability on various grounds, including the insureds'

failure to comply with their obligation under the policy "to see

to it that we are notified as soon as practicable of an

'occurrence' which may result in a claim." Scottsdale did not

send its letter to the owner and managing agent (its additional

insureds and GNY's insureds) or to the lawyer representing the

insureds in this action.

The owner and managing agent brought third party claims 

against LM Interiors and Scottsdale asserting, among other

things, that Scottsdale was required to provide them with a

defense and indemnification. Supreme Court granted summary

judgment against Scottsdale on that claim, and the Appellate

Division affirmed that portion of Supreme Court's order (Sierra v

4401 Sunset Park, LLC, 101 AD3d 983 [2d Dept 2012]). The

Appellate Division concluded that Scottsdale had failed to comply

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with Insurance Law § 3420 (d) (2) because it had not sent its

disclaimer notice to its additional insureds. We granted leave

to appeal from a later judgment, bringing this part of the

Appellate Division order up for review (22 NY3d 854 [2013]), and

we now affirm.

II

Insurance Law § 3420 (d) (2) says:

"If under a liability policy issued or

delivered in this state, an insurer shall

disclaim liability or deny coverage . . . it

shall give written notice as soon as is

reasonably possible of such disclaimer of

liability or denial of coverage to the

insured and the injured person or any other

claimant"

 (emphasis added).

It is undisputed that Scottsdale did not give notice of

its disclaimer directly to its additional insureds or to the

lawyer who had been retained to represent them. Scottsdale

argues that the disclaimer notice it sent to GNY was sufficient

to satisfy the statute. We disagree.

GNY was not an insured under Scottsdale's policy; it

was another insurer. While GNY had acted on the insureds' behalf

in sending notice of the claim to Scottsdale, that did not make

GNY the insureds' agent for all purposes, or for the specific

purpose that is relevant here: receipt of a notice of disclaimer. 

GNY's interests were not necessarily the same as its insureds' in

this litigation. There might have been a coverage dispute

between GNY and the insureds, or plaintiff's claim might have

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exceeded GNY's policy limits. Because the insureds had their own

interests at stake, separate from that of GNY, they were entitled

to notice delivered to them, or at least to an agent -- perhaps

their attorney -- who owed a duty of loyalty in this matter to

them only. As the Appellate Division correctly held in Greater

N.Y. Mut. Ins. Co. v Chubb Indem. Ins. Co. (105 AD3d 523, 524

[1st Dept 2013]), the obligation imposed by the Insurance Law is

"to give timely notice of disclaimer to the mutual insureds . . .

not to . . . another insurer."

Scottsdale argues that it has "substantially complied"

with the statute, relying on Excelsior Ins. Co. v Antretter

Contr. Corp. (262 AD2d 124 [1st Dept 1999]) and Cincinnati Ins.

Co. v Sirius Am. Ins. Co. (51 AD3d 1365 [4th Dept 2008]). 

Excelsior, as the court in GNY v Chubb pointed out (105 AD3d at

525), may be distinguishable: in that case, as a result of a

settlement, the insured had no real interest in the litigation,

and the insurer to which the disclaimer was sent was the only

real party in interest (see Excelsior, 262 AD2d at 127). In any

event, if Excelsior and Cincinnati are read to stand for the

general proposition that notice to an additional insured's

liability carrier serves as notice to the additional insured

under section 3420 (d) (2), those cases should not be followed. 

Accordingly, the judgment appealed from, and the order

of the Appellate Division, insofar as reviewed, should be

affirmed with costs. 

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* * * * * * * * * * * * * * * * *

Judgment appealed from and order of the Appellate Division,

insofar as brought up for review, affirmed, with costs. Opinion

by Judge Smith. Chief Judge Lippman and Judges Graffeo, Read,

Pigott, Rivera and Abdus-Salaam concur.

Decided November 24, 2014

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