Court Opinion

ID: 9929967
Source: CourtListenerOpinion
Date Created: 2024-02-05 20:07:37.635934+00
Date Added: 2024-06-11T11:01:53.699842
License: Public Domain

Adirondack Ins. Exch. v Sejour
               2024 NY Slip Op 30354(U)
                    January 30, 2024
           Supreme Court, New York County
        Docket Number: Index No. 655462/2020
                 Judge: Suzanne Adams
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
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                       publication.
                                                                                                   INDEX NO. 655462/2020
  NYSCEF DOC. NO. 67                                                                         RECEIVED NYSCEF: 01/30/2024

                             SUPREME COURT OF THE STATE OF NEW YORK
                                       NEW YORK COUNTY
            PRESENT:        HON. SUZANNE ADAMS                                   PART                            39
                                                                       Justice
            -------------------X                                                 INDEX NO.         655462/2020
             ADIRONDACK INSURANCE EXCHANGE,
                                                                                 MOTION DATE           N/A
                                                Plaintiff,
                                                                                 MOTION SEQ. NO.        001
                                        - V -

             MELISSA SEJOUR, PETERSON ROUSSE, MOHAMMED
                                                                                   DECISION + ORDER ON
             RAHMAN
                                                                                         MOTION
                                                Defendants.
            -------------------X
            The following e-filed documents, listed by NYSCEF document number (Motion 001) 10, 11, 12, ·13, 14,
            15, 16, 17, 18, 19,20,21,22,23,24,25,27,28,29,30,31, 32,33,34,35,36, 37,38,39,40,41,42,43,
            44,45,46,47,48,49,50, 51,52,53, 54,55,56,57,58,59,60,61,62,63,64,65,66
            were read on this motion to/for                                  JUDGMENT-SUMMARY
                   Upon the foregoing documents, it is ordered that plaintiffs motion and the cross-motion

            of defendants Melissa Sejour and Peterson Rousse are denied. Plaintiff is a domestic insurance

            corporation which issued a homeowner's insurance policy to defendant Sejour as the named

            insured for the policy period March 15, 2016-2017 for the premises located at 933 East 86 Street,

            Brooklyn. Defendant Rousse is also a named insured under the policy. Defendant Mohammed

            Rahman alleges he was injured while working at the premises on November 24, 2016, and

            commenced a personal injury action against defendant Rousse which is currently pending in Kings

            County. Plaintiff commenced this action in October 2020 seeking a declaratory judgment that it

            has no duty to defend or indemnify defendants Sejour and Rousse in the underlying action.

                   Plaintiff now moves pursuant to CPLR 3212 for summary judgment declaring that it has

            no duty to defend or indemnify Sejour or Rousse in the underlying action. Plaintiff maintains that

            (1) there was no coverage in the first instance; (2) its disclaimer was timely; and (3) defendants

            cannot invoke equitable estoppel. Defendant Rahman opposes the motion. Defendants Sejour and

             655462/2020 ADIRONDACK INSURANCE EXCHANGE vs. SEJOUR, MELISSA ET AL                    Page 1 of4
             Motion No. 001

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                                                                                                  INDEX NO. 655462/2020
  NYSCEF DOC. NO. 67                                                                      RECEIVED NYSCEF: 01/30/2024

            Rousse cross-move pursuant to CPLR 3212 for an order declaring the insurance policy at issue to

            be enforceable and that any loss in the underlying personal injury action is covered under the

            policy. Plaintiff opposes the cross-motion.

                   It is well-settled that "the proponent of a summary judgment motion must make a prima

            facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to

            demonstrate the absence of any material issues of fact." Alvarez v. ProspectHospital, 68 N.Y.2d

            320,324 (1986) (citing Winegradv. New York University Medical Center, 64 N.Y.2d 851 (1985)).

            Summary judgment will only be granted if there are no genuine, triable issues of fact. Assaf v.

            Ropog Cab Corp., 544 N.Y.S.2d 834, 835 (1st Dep't 1989). Further, whether an insurer is required

            to disclaim coverage depends on the circumstances of the contractual relationship with the insured.

            If an insurance applicant fails to disclose material facts, such that the application is misleading or

            incorrect, they cannot recover from the insurer. See Klapholtz v. New York Life Ins. Co., 219 N.Y.S.

            64, 67 (1st Dep't 1926). "Disclaimer pursuant to [Insurance Law] section 3420(d) is unnecessary

            when ... the insurance policy does not contemplate coverage in the first instance, and requiring

            payment of a claim upon failure to timely disclaim would create coverage where it never existed.

            By contrast, disclaimer ... is necessary when denial of coverage is based on a policy exclusion

            without which the claim would be covered ...." Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d

            185. 188-89 (2000). Insurance Law§ 3420 (d) requires an insurer to disclaim liability "as soon as

            is reasonably possible .... " This must be done "once the insurer has sufficient facts entitling it to

            disclaim ...." First Fin. Ins. Co. v. Jetco Contr. Corp., I N.Y.3d 64, 66 (2003). As such, the

            insurer bears the burden to establish that the delay in disclaiming was excusable because of the

            need and difficulty in completing a thorough and diligent investigation. Id. at 69. Finally, to invoke

            equitable estoppel, and thereby preclude an insurer's untimely disclaimer, the insured must show

             655462/2020 ADIRONDACK INSURANCE EXCHANGE vs. SEJOUR; MELISSA ET AL                    Page2of4
             Motion No. 001

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                                                                                                INDEX NO. 655462/2020
  NYSCEF DOC. NO. 67                                                                    RECEIVED NYSCEF: 01/30/2024

            that they have "been prejudiced in some significant way by the conduct of the [insurer]." Travelers

            Prop. Cas. v. Weiner, 666 N.Y.S.2d 392, 395 (Sup. Ct. Tompkins Co. 1997).

                Here, it is unclear from the record as to whether the subject premises was non-conforming at

            the onset of the insurance contract. A statement given by defendant Sejour identified tenants in the

            subject premises "back in 2016," but it is unclear whether this occurred before or after March 15,

            2016. (NYSCEF 23). Thus, it cannot be said as a matter oflaw that there was no coverage, which

            would trigger any duty to disclaim by the plaintiff.

                Moreover, even if there was no question that a disclaimer of coverage was warranted,

            plaintiff's denial of coverage was untimely. Plaintiff received its first notice of the claim and

            lawsuit on November 26, 2018. Plaintiff received statements from the insureds in December 2018

            and January 2019 that the subject premises was a three-family house, and thus, did not fall within

            the insurance policy's coverage. Yet plaintiff did not disclaim coverage until July 28, 2020.

            (NYSCEF 29). Where the insurer possessed sufficient facts to deny coverage and yet delayed the

            disclaimer for 30 days or longer, courts have found such a disclaimer untimely as a matter of law.

            See Bovis Lend Lease LMB, Inc. v. Royal Surplus Lines Ins. Co., 806 N.Y.S.2d 53, 58 (1st Dep't

            2005) (collecting cases). Thus, plaintiffs delay of a year and a half in disclaiming is untimely as

            a matter oflaw. However, whether defendants were in fact prejudiced by the delay in disclaiming

            coverage is itself a question of fact for the trier thereof.

                Accordingly, it is hereby

                    ORDERED that plaintiffs motion for summary judgment is denied without prejudice, with

            leave to renew.

             655462/2020 ADIRONDACK INSURANCE EXCHANGE vs. SEJOUR, MELISSA ET AL                  Page 3of4
             Motion No. 001

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                                                                                                    INDEX NO. 655462/2020
  NYSCEF DOC. NO. 67                                                                           RECEIVED NYSCEF: 01/30/2024

                   This constitutes the decision and order of the court.

                   01/30/2024
                     DATE
                                                                                      ~
                                                                                   SUZANNE ADAMS, J.S.C.

                                    ~
            CHECK ONE:                  CASE DISPOSED                      NON-FINAL DISPOSITION

                                        GRANTED         ~ DENIED           GRANTED IN PART          □ OTHER
            APPLICATION:                SETTLE ORDER                       SUBMIT ORDER

            CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN         FIDUCIARY APPOINTMENT    □ REFERENCE

            655462/2020 ADIRONDACK INSURANCE EXCHANGE vs. SEJOUR, MELISSA ET AL                      Page4of4
            Motion No. 001

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