Opinion
July 5, 1988
Appeal from the Supreme Court, Orange County (Green, J.).
Ordered that the order and judgment is affirmed, with one bill of costs payable to the respondents appearing separately and filing separate briefs.
On May 26, 1985, Harry Huffnagle was killed when his car ran off a road. In a letter dated March 12, 1986, the attorneys for Jason and Deborah Huffnagle, the son and wife, respectively, of the deceased, advised Carl Brighton, doing business as Rivers Edge Tavern, of their claim for damages arising out of the death of Harry Huffnagle. The letter alleged that the death was caused directly by the deceased's severe intoxication, resulting from a violation of the Dram Shop Act (General Obligations Law § 11-101 Gen. Oblig.) in that the deceased was illegally served intoxicating beverages by the defendant Brighton when he was obviously intoxicated. Farmers admits that it received this letter on March 20, 1986, and referred it to its adjuster. On May 13, 1986, Farmers received a summons and complaint in the action commenced by the Huffnagles against Brighton. On or about May 22, 1986, Farmers commenced the instant action against Brighton and the Huffnagles, seeking a declaratory judgment that it had no obligation to defend or indemnify the defendant Brighton. On May 23, 1986, Farmers sent a disclaimer letter to the defendant Brighton based on the clause in its insurance contract with Brighton which excluded liability for bodily injury or property damage "(a) by or because of the violation of any statute, ordinance or regulation pertaining to the sale, gift, distribution or use of any alcoholic beverage; or (b) by reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person".
The Supreme Court denied Farmers' motion for summary judgment and, upon searching the record, granted judgment in favor of the defendants. It held that the two-month delay was unreasonable within the context of the requirements of Insurance Law § 3420 (d), which requires a notice of disclaimer to be served "as soon as is reasonably possible". We agree.
It is well settled that an insurance company will be estopped from disclaiming coverage based on an exclusion in a policy where it has delayed unreasonably in doing so (Zappone v. Home Ins. Co., 55 N.Y.2d 131; Employers Ins. v. County of Nassau, 141 A.D.2d 496). The plaintiff insurer argues that it was not guilty of unreasonable delay in disclaiming in the case at bar, since it needed time to investigate the claim. We disagree with the plaintiff's argument. The reasonableness of any delay in disclaiming must be judged from that point in time that the insurer is aware of sufficient facts to issue a disclaimer (Allstate Ins. Co. v. Gross, 27 N.Y.2d 263; Hartford Ins. Co. v County of Nassau, 46 N.Y.2d 1028, rearg denied 47 N.Y.2d 951). The letter dated March 12, 1986, sent by the defendants Huffnagle to the defendant Brighton and received by Farmers on March 20, 1986, clearly alerted the latter of all the facts that it needed in order to disclaim based on the particular exclusion in the policy. Under the circumstances, Farmers' delay of over two months in disclaiming was unreasonable as a matter of law (see, Hartford Ins. Co. v. County of Nassau, supra, at 1028; Foremost Ins. Co. v. Rios, 85 A.D.2d 677, lv denied 55 N.Y.2d 607). Mangano, J.P., Bracken, Brown and Kunzeman, JJ., concur.