Opinion
15375-2006.
Decided May 23, 2008.
ORDERED that this motion by counsel for the Plaintiff Hanover Insurance Company for summary judgment in this action declaring that Hanover Insurance Company is not obligated to provide insurance coverage, a defense or indemnification to Richard Straus or Maureen Straus for the accident or injuries claimed by Brian O'Neil and/or Terry O'Neil and declaring that the Plaintiff does not provide coverage or indemnification for the judgment entered against Richard Straus or Maureen Straus is denied; and it is further
ORDERED that a note of issue has been filed in this matter and this case is remanded for trial; and it is further
ORDERED that the parties are directed to file a note of issue for the related case, O'Neil et. al. v. Hanover Insurance Company, Index No. 14993-2006, which has been joined but not consolidated with Index No. 15375-2006, within thirty days of service of this order.
HUENKE RODRIGUEZ, ESQS., Melville, New York 11747 MORICI MORICI, LLP, Attorney for Defendants O'Neil, Garden City, New York, Attorney for Plaintiff.
KLEIN VIZZI, LLP, Former Attorney for Defendants Straus, West Babylon, New York, RICHARD STRAUS, Patchogue, New York, Centereach, New York, MAUREEN STRAUS, Centereach, New York.
Brian O'Neil was allegedly injured by a dog owned by Richard Straus and Maureen Straus on December 5, 2002. Brian O'Neil and his wife, Terry O'Neil commenced a law suit against Richard Straus and Maureen Straus and a judgment on default was entered against the Strauses on December 20, 2005, in the amount of $250,000.00 plus interest, costs and disbursements pursuant to an order issued by Justice Burke. On the date of the alleged incident involving Brian O'Neil, Hanover Insurance Company had issued a homeowners policy to Richard Straus and Maureen Straus covering the premises where they were living. The first notice that Hanover Insurance Company received of this incident was on or about February 12, 2006, approximately 2 ½ months after the default judgment was entered when Maureen Straus faxed a copy of the judgment to Hanover Insurance Company. By letter dated March 6, 2006, Hanover Insurance Company disclaimed coverage because it received late notice of the claim (see Plaintiff's Exhibit "K").
Brian Straus testified at his deposition that on the date of the alleged incident in 2002, he resided at 67 Tree Road, Centereach, New York with his wife and five children but he was not at home when Brian O'Neil, while allegedly delivering a package, was injured. He further testified that his daughter Alicia told him that there was an incident, that the individual fell in the street after the O'Neil's dog barked and that this individual "ran out to his truck in the street, and fell down and got up and took off and hit the pole." (see, Plaintiff's Exhibit "L"). He said that his daughter told him that Brian O'Neil fell in the street and not on his property. Richard Straus stated that he never discussed this matter with his wife. He further testified that the first time he was aware that an action had been commenced was when he received a copy of the default judgment at home. He states that he does not remember when he received the judgment but the other testimony and evidence in this case indicates that it was received early in 2006.
The police were never called to the house and the injured Defendant Brian O'Neil allegedly drove off in his truck. Some of Richard Straus' statements are at odds with statements made to an investigator of the Insurance Company but he did tell the investigator that he never received a summons and complaint. Further, he was consistent with his testimony to the extent that he stated that he was not at the house when the incident occurred and that the dog never touched the delivery man.
Maureen Straus, who is now divorced from Richard Straus, testified that she was not aware of the action until the judgment came in the mail (see Exhibit "N"). Her testimony at the deposition is generally consistent with her testimony to the insurance investigator.
Insurance Law § 3420(d) requires an insurance carrier to give its insured and the injured party written notice of a disclaimer of coverage as soon as is reasonably possible. "An insurer's failure to provide notice as soon as is reasonably possible precludes effective disclaimer, even [where] the policy holder's own notice of the incident to its insurer is untimely' ( First Fin. Ins. Co. v. Jetco Contr. Corp. , 1 NY3d 64 , 67, 769 NYS2d 459, 801 NE2d 835)" ( Matter of New York Cent. Mut. Fire Ins. Co. v. Aguirre , 7 NY3d 772, 774, 820 NYS2d 848, 854 NE2d 146). Here, it is not alleged that there was an unreasonable delay in disclaiming coverage and it appears that the notice to disclaim was sent as soon are reasonably possible by Hanover Insurance Company (see, Delphi Restoration Corp. v. Sunshine Restoration Corp. , 43 AD3d 851 , 841 NYS2d 684, lv to app'l dism'd 9 NY3d 1002, 879 NE2d 170, 849 NYS2d 29 rearg'mt den'd 10 NY3d 789, — — NE2d —, 2008 WL 723531, NY Mar 18, 2008).
There also is a requirement that the insured provide notice of any occurrence to the insurance company within reasonable time and this obligation is generally considered a condition precedent for an insurer to be required to defend or indemnify the insured. Absent a showing of legal justification, failure to comply with this notice condition voids insurance coverage (see, White v. City of New York , 81 NY2d 955, 957, 598 NYS2d 759, 615 NE2d 216; Pierre v. Providence Wash. Ins. Co. , 286 AD2d 139, 730 NYS2d 550, affd. 99 NY2d 222, 754 NYS2d 179, 784 NE2d 52).
Facts can exist that will justify the insured's failure to serve notice of the accident on the insurer. "There may be circumstances, such as lack of knowledge or a reasonable belief in non-liability, that will excuse or explain delay in giving notice, but the insured has the burden of showing the reasonableness of such excuse" ( White v. City of New York , supra at 957-958, 598 NYS2d 759, 615 NE2d 216; see United Talmudical Academy of Kiryas Joel v. Cigna Prop. Cas. Co. , 253 AD2d 423, 676 NYS2d 645).
The duty of an insurer to defend is broader than its duty to indemnify and arises whenever the allegations contained in the complaint against the insured, liberally construed, potentially fall within the scope of the risks which the insurer has undertaken (see, Frontier Insulation Contrs. v. Merchants Mut. Ins. Co. , 91 NY2d 169, 667 NYS2d 982, 690 NE2d 866; Deetjen v. Nationwide Mut. Fire Ins. Co. , 302 AD2d 350, 754 NYS2d 366). The insurer may have a duty to defend even though ultimately it may be determined that there is no duty to indemnify the insured. The duty to indemnify on the part of an insurer requires a determination that the insured is liable for a loss that is covered by the policy (see, Servidone Constr. Corp. v. Security Ins. Co. of Hartford , 64 NY2d 419, 488 NYS2d 139, 477 NE2d 441). The parties have not addressed this issue in this motion for summary judgment.
Summary judgment is a drastic remedy that should not be granted if there is any doubt as to the existence of a triable issue (see, Alvarez v Prospect Hospital , 68 NY2d 320, 508 NYS2d 923; Bennett v Knipfing , 262 AD2d 260, 692 NYS2d 403). The Court will not determine issues of credibility or the probability of success on the merits on a motion for summary judgment, and issue finding rather than issue determination is the key to summary judgment ( Grahm v Columbia-Presbyterian Medical Center , 185 AD2d 753, 588 NYS2d 2). If material facts are in dispute or if different inferences may reasonably be drawn from the facts or testimony, a motion for summary judgment must be denied (see, Gusek v Compass Transp. Corp. , 266 AD2d 923, 697 NYS2d 886; McShane v Foster , 235 AD2d 462, 652 NYS2d 1004; Morris v Lenox Hill Hosp. , 232 AD2d 184, 647 NYS2d 753, aff'd 90 NY2d 953, 665 NYS2d 399). The decision to grant or deny summary judgment is based on the facts in the entire record and not simply the pleadings (see, McIntyre v State , 142 AD2d 856, 530 NYS2d 898), and these facts must be analyzed in a light most favorable to a non-moving party, here the Defendants Richard Straus and Maureen Straus ( Jastrzebski v North Shore School District , 223 AD2d 677, 637 NYS2d 439).
In Gallante Properties, Inc. v. Allcity Ins. Co. ,( 24 AD3d 414, 805 NYS2d 113) the Appellate Division, Second Department stated:
Compliance with an insurance policy notice provision is a condition precedent to coverage, and the failure to comply vitiates the policy (see White v. City of New York , 81 NY2d 955, 957, 598 NYS2d 759, 615 NE2d 216; Security Mut. Ins. Co. of NY v. Acker-Fitzsimons Corp. , 31 NY2d 436, 440, 340 NYS2d 902, 293 NE2d 76; Lukralle v. Durso Supermarkets , 238 AD2d 318, 319, 656 NYS2d 292). The insured has the burden of demonstrating a reasonable excuse for the delay in providing notice (see White v. City of New York , supra at 957, 598 NYS2d 759, 615 NE2d 216; Security Mut. Ins. Co. of NY v. Acker-Fitzsimons Corp ., supra at 441, 340 NYS2d 902, 293 NE2d 76; Lukralle v. Durso Supermarkets , supra at 319, 656 NYS2d 292).
Here, the Defendants Richard Straus and Maureen Straus are alleging that they did not believe that anyone was injured in the occurrence. Their belief that only a "trivial incident" occurred is supported by the facts of this case because the police were not called to the scene of the accident, their dog allegedly was not vicious, it is alleged that the dog was on a leash, their children told them that no one was injured in the incident and Brian O'Neil drove away in his vehicle ( Liability insurance: clause with respect to notice of accident or claim, etc., or with respect to forwarding suit papers , 18 A.L.R.2d 443) .
In Kaliandasani v. Otsego Mut. Fire Ins. Co. , ( 256 AD2d 310, 681 NYS2d 323) the Appellate Division, Second Department stated:
There may be circumstances, such as lack of knowledge that an accident has occurred or a reasonable belief in the insured's nonliability, that will excuse or explain delay in giving notice, but the insured has the burden of showing the reasonableness of such excuse ( White v. City of New York , supra, at 957, 598 NYS2d 759, 615 NE2d 216; Security Mut. Ins. Co. of NY v. Acker-Fitzsimons Corp ., 31 NY2d 436, 441, 340 NYS2d 902, 293 NE2d 76; Mount Vernon Fire Ins. Co. v. East Side Renaissance Assocs ., supra, at 247). "Whether an insured is required to give notice to an insurer of an occurrence' depends on the particular facts and circumstances underlying the occurrence" ( Mount Vernon Fire Ins. Co. v. East Side Renaissance Assocs ., supra, at 247; see also, D'Aloia v. Travelers Ins. Co. , 85 NY2d 825, 826, 623 NYS2d 837, 647 NE2d 1345).
Here, as in Kaliandasani v. Otsego Mut. Fire Ins. Co. , (supra) triable issues of fact exist as to the reasonableness of the actions of Richard Straus and Maureen Straus in failing to notify Hanover Insurance Company as to the incident (see, Nails 21st Century Corp. v. Colonial Co-op. Ins. Co. , 21 AD3d 1069, 803 NYS2d 626; Kreger Truck Renting Co., Inc. v. American Guarantee Liability Ins. Co. , 213 AD2d 453, 623 NYS2d 623; Mount Vernon Fire Ins. Co. v. Abesol Realty Corp ., 288 F.Supp.2d 302; see also, Garfield Slope Housing Corp. v. Public Service Mut. Ins . Co., 973 F.Supp. 326).
While there may be strong factual basis supporting the reasonableness of the Strauses actions in not notifying the insurance company of the incident after the accident occurred in 2002, separate fact issues exist as to the reasonableness of their actions in not notifying the insurance company after the action was commenced by service of process by the attorneys for Brian O'Neil and Terry O'Neil.
The Court recognizes that there is evidence in this record that would support a finding that Richard Straus and/or Maureen Straus may have received notice of both this accident and the negligence litigation when the summons and complaint was served, the Court cannot make that factual determination on these papers. Both Maureen Straus and Richard Straus in this action have denied that they received any notice that they were served with a summons and complaint. If, eventually, there is a factual determination that either Maureen Straus or Richard Straus knew of the existence of the law suit, Hanover Insurance Company might be entitled to a declaratory judgment in its favor. However, if the trier of the facts determines that Maureen Straus and Richard Straus were reasonable in their belief that there was no incident that required them to notify Hanover Insurance Company of the accident in 2002, that neither Maureen Straus or Richard Straus were aware that an action was commenced against them in 2005 and that they did not get notice of that action until they were served with the default judgment in 2006 by mail, their delay in notifying the insurance company is explained.
The issue herein, whether notice to Hanover Insurance Company was timely, is a factual issue and therefore the motion for summary judgment by the Plaintiff Hanover Insurance Company against the Defendants is denied ( 70A NY Jur. 2d Insurance §§ 1860, 1861, 1863, 1864).