Court Opinion

ID: 5710297
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:53:04.143239+00
Date Added: 2024-06-11T08:40:30.164467
License: Public Domain

*764In an action for a judgment declaring that the defendant must defend and indemnify the plaintiff in an underlying action entitled Cabrera v Abatement Asbestos & Lead Specialists Corp., pending in the Supreme Court, Kings County, under index No. 29034/02, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Kramer, J.), dated March 8, 2005, as denied its motion for summary judgment dismissing the complaint, and the plaintiff cross-appeals from so much of the same order as denied its cross motion for summary judgment declaring that the defendant is obligated to provide excess insurance coverage to it in the underlying action.
Ordered that the order is affirmed, without costs or disbursements.
Contractual obligations of an insured to provide notice of a claim to its liability insurer as soon as practicable and to promptly forward legal papers to the carrier serve as conditions precedent to coverage (see White v City of New York, 81 NY2d 955, 957 [1993]; Steinberg v Hermitage Ins. Co., 26 AD3d 426, 427 [2006]; New York Mut. Underwriters v Baumgartner, 19 AD 3d 1137, 1139 [2005]; Steadfast Ins. Co. v Sentinel Real Estate Corp., 283 AD2d 44, 54 [2001]). Such provisions have been construed to require compliance within a reasonable time under all of the attendant circumstances (see Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 19 [1979]; Security Mut. Ins. Co. of NY. v Acker-Fitzsimons Corp., 31 NY2d 436, 441 [1972]; Power Auth. of State of N.Y. v Westinghouse Elec. Corp., 117 AD2d 336, 339 [1986]; Olin Corp. v Insurance Co. of N. Am., 743 F Supp 1044, 1053 [1990], affd 929 F2d 62 [1991]). Furthermore, notice requirements are to be liberally construed in favor of the insured (see Greenburgh Eleven Union Free School Dist. v National Union Fire Ins. Co. of Pittsburgh, PA, 304 AD2d 334, 335-336 [2003]; General Elec. Capital Corp. v Royal Ins. Co. of Am., 205 AD2d 396 [1994]; Yaccarino v St. Paul Fire & Mar. Ins. Co., 150 AD2d 771, 772 [1989]; D. C. G. Trucking Corp. v Zurich Ins. Co., 81 AD2d 990, 991 [1981]), and “ ‘[w]here an excuse or explanation is offered for delay in furnishing notice, the reasonableness of the delay and the sufficiency of the excuse are matters to be determined at trial’ ” (Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 42 [2002], quoting Hartford Acc. & Indem. Co. v CNA Ins. Cos., 99 AD2d 310, 313 [1984]; see Deso v London & Lancashire Indem. Co. of *765Am., 3 NY2d 127, 129 [1957] [“the reasonableness of a delay ... is usually for the jury”]; C.C.R. Realty of Dutchess v New York Cent. Mut. Fire Ins. Co., 1 AD3d 304, 305 [2003] [“a failure to give notice may be excused when an insured has a reasonable belief of nonliability. The burden is on the insured to show the reasonableness of its belief, and whether that belief is reasonable is ordinarily a question for the trier of fact”] [citations omitted]; City of Utica, N.Y. v Genesee Mgt., Inc., 934 F Supp 510, 520 [1996] [“the question of whether notice has been given within a reasonable time is ordinarily for the jury”]). Where, as in this case, notice to an excess liability carrier is in issue, the focus is on when the insured reasonably should have known that the claim against it would likely exhaust its primary insurance coverage and trigger its excess coverage, and whether any delay between acquiring that knowledge and giving notice to the excess carrier was reasonable under the circumstances (see Reynolds Metal Co. v Aetna Cas. & Sur. Co., 259 AD2d 195, 201-203 [1999]; Paramount Communications v Gibraltar Cas. Co., 204 AD2d 241, 241-242 [1994]; Olin Corp. v Insurance Co. of N. Am., 743 F Supp 1044, 1054 [1990]). The resolution of such questions of reasonableness is “heavily dependent on the factual contexts in which they arise” (Mighty Midgets v Centennial Ins. Co., supra at 19).
Upon our consideration of the foregoing principles and all of the relevant circumstances presented, we conclude that, in response to the motion of the defendant excess insurer National Union Fire Insurance Company of Pittsburgh, Pa. (hereinafter National Union), for summary judgment, the plaintiff insured, Morris Park Contracting Corp. (hereinafter Morris Park), succeeded in raising triable questions of fact with regard to the timeliness of the notice it provided to National Union. The record demonstrates that Morris Park was served in the underlying personal injury action with a complaint dated July 22, 2002. As National Union and our dissenting colleague accurately observe, that complaint contained an ad damnum clause seeking $10,000,000 in damages, a figure far in excess of Morris Park’s $1,000,000 in primary coverage. However, the complaint contained only vague and generalized allegations of injury without any particularity or substantiation. In view of the commonplace practice of exaggerating damages requests in personal injury actions, the ad damnum clause alone was not sufficient to require the giving of notice to National Union. Rather, it is the combination of the ad damnum figure and evidence regarding the seriousness of the injuries which triggers that obligation (see e.g. Rekemeyer v State Farm Mut. Auto. Ins. Co., 7 AD3d 955, 957 [2004], mod on other grounds 4 NY3d 468 [2005]; *766United States Liab. Ins. Co. v Winchester Fine Arts Servs., Inc., 337 F Supp 2d 435, 444-445 [2004]).
Following receipt of the complaint, Morris Park served an answer and discovery demands dated October 11, 2002. Morris Park avers that it thereafter actively investigated the claim by requesting information regarding the occurrence of the injured party’s accident (of which Morris Park had no previous knowledge) and the nature and extent of his injuries. This ongoing investigation led to the service of a bill of particulars dated January 22, 2003 upon Morris Park, setting forth a lengthy list of serious injuries for which the injured party for the first time claimed Morris Park was legally responsible. It is undisputed that Morris Park notified National Union of the claim eight days later on January 30, 2003.
Notwithstanding the foregoing, both National Union and our dissenting colleague maintain that Morris Park was fully aware of the extent of the claimed injuries, and of the probability that its excess coverage policy with National Union would be implicated in the action by November 27, 2002, at the latest. On that date, Morris Park’s counsel sent a report to the primary insurer listing various injuries and damages claimed by the injured party in a second supplemental bill of particulars served in a related action against several municipal defendants. However, while that report constitutes some evidence that Morris Park may have had sufficient information at that time to alert National Union to a possible excess coverage claim, we are unable to reach such a conclusion as a matter of law on this record. Indeed, the second supplemental bill of particulars upon which the report is based was served in a separate action and did not purport to attribute any fault or assert any claims for the specified injuries against Morris Park. Moreover, as previously noted, Morris Park presented evidence that it was actively engaged in a good faith investigation into the happening of the accident, the injuries that resulted therefrom, Morris Park’s potential liability (if any) therefor, and even the injured worker’s eligibility to recover some elements of the damages sought. Morris Park further averred that only when it was served with the bill of particulars dated January 22, 2003, asserting 42 additional injuries over and above those claimed against the municipal defendants in the related action, did it become reasonably clear that the excess coverage might be implicated in the action. Accordingly, Morris Park succeeded in raising issues of fact and credibility regarding whether any period of delay in notifying National Union of the claim was based on its initial reasonable, good faith belief that the excess insurance would *767not be triggered in this case (see generally Nails 21st Century Corp. v Colonial Coop. Ins. Co., 21 AD3d 1069 [2005]; Reynolds Metal Co. v Aetna Cas. & Sur. Co., supra; Seemann v Sterling Ins. Co., 234 AD2d 672 [1996]; G.L.G. Contr. Corp. v Aetna Cas. & Sur. Co., 215 AD2d 821 [1995]; E.T. Nutrition v Central Mut. Ins. Co., 201 AD2d 451 [1994]).
In view of the foregoing, and upon consideration of all of the evidence presented, we find that a question also exists with regard to whether National Union’s disclaimer, which was premised on the alleged late notice of the claim, was itself untimely (see generally First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 70 [2003]; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1030 [1979]; see e.g. Pawley Interior Contr., Inc. v Harleysville Ins. Cos., 11 AD3d 595, 596 [2004]; M&N Mgt. Corp. v Nationwide Mut. Ins. Co., 307 AD2d 257, 258 [2003]; Colonial Coop. Ins. Co. v Desert Storm Constr. Corp., 305 AD2d 363, 363-364 [2003]). Prudenti, EJ., Mastro and Spolzino, JJ., concur.