Opinion
October 1, 1999
Appeal from Judgment of Supreme Court, Onondaga County, Elliott, J. — Arbitration.
Judgment insofar as appealed from unanimously reversed on the law without costs and petition granted.
Memorandum:
Supreme Court erred in denying petitioner's application for a permanent stay of arbitration. Respondent commenced an action seeking damages for injuries he sustained when he was struck by a car. He thereafter entered into a settlement of that action and executed a general release in favor of the driver of the car and the driver's insurance carrier. In doing so, respondent breached his contract with petitioner, his own insurance carrier, by failing to provide notice of the action or settlement and failing to protect petitioner's subrogation rights (see, Weinberg v. Transamerica Ins. Co., 62 N.Y.2d 379; Matter of Travelers Ins. Co. [Magyar], 217 A.D.2d 954). Petitioner properly disclaimed coverage under the supplemental uninsured motorists (SUM) endorsement based upon respondent's failure to provide notice of the action and the settlement thereof (see, Burke v. Liberty Mut. Ins. Co., 201 A.D.2d 773; Matter of Travelers Ins. Co. [Magyar], supra; Matter of Allstate Ins. Co. v. Bruzzano, 212 A.D.2d 528). The disclaimer is required to be made "as soon as is reasonably possible" (Insurance Law § 3420 [d]) after "the point in time when the insurer is possessed of sufficient facts upon which to base a denial or a disclaimer" (State Farm Mut. Auto. Ins. Co. v. Clift, 249 A.D.2d 800, 801). The letter of respondent advising petitioner that respondent was injured in an accident and might have a potential claim under the SUM endorsement to the policy was insufficient to apprise petitioner of the pendency and settlement of the action. Petitioner's disclaimer of coverage, made one day after petitioner learned of the action and settlement, was timely (cf., Hartford Ins. Co. v. County of Nassau, 46 N.Y.2d 1028, rearg denied 47 N.Y.2d 951).
PRESENT: LAWTON, J. P., HAYES, PIGOTT, JR., HURLBUTT AND SCUDDER, JJ.