Becker v. Colonial Cooperative Insurance

In an action pursuant to Insurance Law § 3420 (a) (2) to recover the amount of an unsatisfied judgment against the defendant’s insured, the plaintiff appeals from an order of the Supreme Court, Kings County (Kramer, J.), dated December 15, 2004, which granted the defendant’s motion for summary judgment dismissing the complaint and denied his cross motion for summary judgment. Ordered that the order is modified, on the law, by deleting the provision thereof granting the defendant’s motion for summary judgment dismissing the complaint, and substituting therefor a provision denying the defendant’s motion; as so modified, the order is affirmed, without costs or disbursements. [703] On December 20, 2000, the plaintiff allegedly sustained personal injuries when he slipped and fell on premises occupied by Weiss Kosher Bakery (hereinafter the Bakery) on 13th Avenue in Brooklyn. At the time of the incident, the Bakery was insured by a policy of liability insurance issued by the defendant Colonial Cooperative Insurance Company (hereinafter Colonial). Notwithstanding that counsel notified the bakery of the plaintiffs injuries within days after his fall, the Bakery failed to notify Colonial. The plaintiff sued the Bakery and, on or about December 10, 2002, obtained a default judgment in the total sum of $261,575.50. On or about January 14, 2003, the Bakery faxed a copy of the default judgment to Colonial’s agent, KRL Enterprises (hereinafter KRL), which immediately forwarded the judgment to Colonial. On or about January 17, 2003, Colonial disclaimed coverage due to late notice. The plaintiff commenced this action in June 2003, against Colonial, seeking to compel payment of the Bakery’s default judgment pursuant to Insurance Law § 3420 (a) (2). Following joinder of issue, Colonial moved for summary judgment, arguing that the first notice it received of the plaintiffs claim was more than two years after the accident, and that the Bakery had defaulted in its contractual notice obligations. Therefore, Colonial contended, it was justified in disclaiming coverage and was entitled to summary judgment dismissing the complaint. The plaintiff cross-moved for summary judgment arguing, inter alia, that he was unable to ascertain the identity of the Bakery’s liability carrier. The plaintiff did not dispute that the Bakery had failed to provide notice of the occurrence as required by the Colonial policy. However, the plaintiff argued that pursuant to the rule of Lauritano v American Fid. Fire Ins. Co. (3 AD2d 564 [1957], affd 4 NY2d 1028 [1958]), the Bakery’s notice failure did not preclude the plaintiffs action against Colonial. Rather, insofar as the plaintiff was concerned, he could provide notice of his claim to Colonial within a reasonable time after learning the identity of the Bakery’s carrier. Accordingly, he argued that the Bakery’s notice failure did not warrant dismissal of the complaint, but that it was the plaintiff who deserved summary judgment. In opposition to the cross motion, Colonial argued that the plaintiffs reliance upon Lauritano was misplaced because, while that case may permit an injured claimant to notify an insurer within a reasonable time after discovering the insurer’s identity, here the plaintiff never even alleged that it ever notified Colonial. Rather, Colonial’s first notice came from the Bakery when [704] it submitted the default judgment to KRL. Moreover, Colonial averred, it provided the plaintiff notice of its identity as the Bakery’s insurer by sending the plaintiff a copy of its January 17, 2003, disclaimer letter, but the plaintiff still failed to send any notice to Colonial until five months later when it served Colonial with the pleadings commencing this action. Accordingly, Colonial argued, the plaintiff failed to exercise the due diligence required of him under Lauritano, thereby precluding relief. In reply, the plaintiff argued that it first notified Colonial of this matter on January 16, 2003, when it mailed Colonial a copy of the default judgment, and thus had not delayed sending notice for five months as alleged by Colonial. The Supreme Court granted Colonial’s motion and denied the plaintiffs cross motion. The court held that unlike the plaintiff in Lauritano, the instant plaintiff failed to demonstrate that he exercised due diligence in attempting to ascertain Colonial’s identity as the Bakery’s carrier. Therefore, the court concluded, as a matter of law, that the plaintiff had not provided notice to Colonial as soon as practicable. We modify by denying Colonial’s motion. There is no question that the Bakery wholly and inexcusably failed to give Colonial notice of the plaintiffs claim in violation of the express requirements of the Colonial policy. However, while an insured’s failure to provide notice may justify a disclaimer vis-a-vis the insurer and the insured, it does not serve to cut off the right of an injured claimant to make a claim as against the insurer. Insurance Law § 3420 (a) (2) expressly permits an injured party to recover any unsatisfied judgment against an insured, directly from the insurer. Insurance Law § 3420 (a) (3), in effect, requires insurance companies to accept notice of claims from injured parties. As was made clear more than 40 years ago, “[t]he statute having granted the injured person an independent right to give notice and to recover thereafter, he is not to be charged vicariously with the insured’s delay” (Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, 568 [1957], affd 4 NY2d 1028 [1958]). “The injured person’s rights must be judged by the prospects for giving notice that were afforded him, not by those available to the insured. What is reasonably possible for the insured may not be reasonably possible for the person he has injured. The passage of time does not of itself make delay unreasonable” (id.). “When the injured party has pursued his rights with as much diligence ‘as was reasonably possible’ the statute shifts the risk of the insured’s delay to the compensated risk-taker”(id.). Thus, the pertinent inquiry is whether the plaintiff pursued his rights with “as much diligence as was reasonably possible” (id.). [705] In determining the reasonableness of an injured party’s notice, the notice required is measured less rigidly than that required of the insureds (see GA Ins. Co. of N.Y. v Simmes, 270 AD2d 664 [2000]). “The sufficiency of notice by an injured party is governed not by mere passage of time but by the means available for such notice” (Appel v Allstate Ins. Co., 20 AD3d 367, 369 [2005] [internal quotation marks omitted] ; see National Grange Mut. Ins. Co. v Diaz, 111 AD2d 700, 701 [1985]). In support of its motion, Colonial wholly failed to even address the issue of the plaintiffs independent right to give notice, so clearly Colonial did not prove its prima facie entitlement to summary judgment dismissing the complaint. Likewise, in his cross motion, the plaintiff focused almost exclusively on his argument that unlike an automobile insurer, Colonial’s identity as the bakery’s carrier could not be ascertained independently. But he failed to offer any proof as to when he first provided notice to Colonial (cf. Potter v North Country Ins. Co., 8 AD3d 1002 [2004]) or as to his alleged due diligence in attempting to ascertain Colonial’s identity as the Bakery’s insurer. Indeed, these issues were only addressed, and superficially at that, in the parties’ respective reply papers. In short, numerous issues of fact remain to be resolved, thereby precluding judgment to either party at this juncture. S. Miller, J.P., Ritter and Skelos, JJ., concur.