Merchants Mutual Insurance v. Falisi

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a supplementary uninsured motorist claim, the appeal is from a judgment of the Supreme Court, Suffolk County (Underwood, J.), entered October 31, 2001, which granted the petition. Ordered that the judgment is affirmed, with costs. The appellant insureds correctly argue that their supplementary uninsured motorist (hereinafter SUM) arbitration claim cannot be stayed because they violated a policy provision requiring prompt notice of the legal action they commenced against the driver of the allegedly offending vehicle. Their insurer, the petitioner Merchants Mutual Insurance Co. (here [679] inafter Merchants), did not include that ground in its letter of disclaimer. Thus, it waived any right to assert that ground in its petition to stay arbitration as a basis for denying coverage (see General Acc. Ins. Group v Cirucci, 46 NY2d 862; Benjamin Shapiro Realty Co. v Agricultural Ins. Co., 287 AD2d 389; Matter of Fireman’s Fund Ins. Co. v Freda, 156 AD2d 364, 365-366). Nevertheless, affirmance of the judgment staying arbitration is warranted. Merchants properly disclaimed coverage due to the appellants’ demonstrated failure to provide notice and proof of their SUM claim as soon as practicable, as required by the policy (see Matter of Allstate Ins. Co. [Earl], 284 AD2d 1002; Witterschein v State Farm Ins. Co., 278 AD2d 317; Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490; Matter of Eagle Ins. Co. v Bernardine, 266 AD2d 543; State Farm Mut. Auto. Ins. Co. v Romero, 109 AD2d 786). The appellants’ remaining contentions are meritless. S. Miller, J.P., Krausman, H. Miller and Adams, JJ., concur.