American Transit Insurance v. B.O. Astra Management Corp.

Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered May 2, 2006, which, inter alia, granted defendant Kuok Hang Leong’s motion for summary judgment dismissing the complaint, unanimously modified, on the law, to declare that plaintiff insurer is obligated to indemnify its insured in the underlying action, and otherwise affirmed, with costs in favor of defendants. Having received timely notice of claim, plaintiff insurer was not entitled to disclaim coverage based on untimely notice of the claimant’s commencement of litigation unless it was prejudiced by the late notice (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476 [2005]; Matter of Brandon 433 [Nationwide Mut. Ins. Co.], 97 NY2d 491, 498 [2002]), and such prejudice was not shown. The relief afforded defendant claimant Kuok Hang Leong was proper notwithstanding the default of plaintiffs insured. Indeed, in enacting Insurance Law § 3420, the Legislature has made it clear that the right of a claimant to seek recovery of insurance proceeds is not defeated by the insured’s failure to perform its claim-related obligations. We modify only to declare in defendant’s favor (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). We have considered plaintiffs remaining arguments and find them unavailing. Concur—Mazzarelli, J.P., Saxe, Sullivan, McGuire and Kavanagh, JJ. [See 12 Misc 3d 740 (2006).]