The opinion of the court was delivered by: SHIRA A. SCHEINDLIN
Plaintiff, Mount Vernon Fire Insurance Company ("Mt. Vernon"), seeks a declaratory judgment that it is not obligated to defend or indemnify its insured East Side Renaissance, Ltd. ("East Side") in a personal injury action brought against East Side by Juana, David and Charles Pichardo (the "Pichardos"). Mt. Vernon contends it has no obligation to defend or indemnify East Side because East Side failed to give Mt. Vernon notice of an "occurrence" as soon as practicable as required by its insurance policy. East Side asserts that the notice it gave to Mt. Vernon almost eight (8) years after the occurrence was timely because commencement of the Pichardos' action was the first time it was aware of any claim against it.
A one day bench trial was held on May 12, 1995. At the close of the evidence, the Court found in favor of Mt. Vernon with respect to any claim regarding injury to David Pichardo.
The Court reserved decision with respect to the claims made by Juana and Charles Pichardo.
The following facts are undisputed. East Side Renaissance Associates, a New York limited partnership, owned the premises located at 42 Rivington Street (the "Premises") during the period May 1984 through May 1986. See Joint Pre-Trial Order at 4. Edward Keneys Goethe ("Goethe"), a general partner in East Side, managed the Premises from May 1984 until August 9, 1985, when he and individual defendants Howard J. Buck ("Buck"), Frank Moretti ("Moretti"), and K.N. Realty Development Corp. ("K.N.") sold their interests in East Side to a group of individuals which included defendants Paul Balme ("Balme"), Achilles Perry ("Perry") and Steve Satterwhite ("Satterwhite").
Id. at pp. 4 - 5.
Mt. Vernon issued two insurance policies which provided comprehensive general liability insurance for the Premises. The first policy was issued to "East Side Renaissance, Ltd. c/o Michael Kane" and covered the period May 2, 1984 to May 2, 1985. Id. at pp. 3 - 4. The second policy was issued to "East Side Renaissance, a limited partnership c/o NoHo Properties" and covered the period May 2, 1985 to May 2, 1986. Id. at 4.
Both policies were "occurrence-based" policies requiring that East Side notify Mt. Vernon of an occurrence "as soon as practicable."
See Plaintiff's Exhibits 5 and 6. The policies defined "occurrence" to mean an "accident, including continuous or repeated exposure to conditions which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Id. The provision requiring notice stated:
Insured's Duties in the Event of Occurrence, Claim or Suit:
(a) In the event of an occurrence, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place, and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable.
(b) If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.
At trial, Astor Manderson ("Manderson"), a Public Health sanitarian employed by the New York City Health Department, Bureau of Lead Poisoning, testified that on June 27, 1984, he first inspected the Pichardos' apartment (the "Apartment") at 42 Rivington Street.
See Trial Transcript ("TR.") at pp. 17 - 19; see also Joint Pre-Trial Order at 6; Plaintiff's Exhibit 3. An "Order to Landlord/Agent" dated July 2, 1984 (the "Order"), was subsequently mailed to Goethe advising him that a person residing in the Pichardo apartment was found to have a "blood-lead level of thirty (30) micrograms per deciliter, or higher." Id.; see also Plaintiff's Exhibit 3A. The Order additionally stated that as a result of the June 27 inspection, it was found that there was paint on the interior surfaces of the Apartment which contained at least 0.7 milligrams of lead per square centimeter of surface "and/or more than 0.5% of metallic lead based paint in the non-volatile content of the paint resulting in violation of the New York City Health Code Section 173.13:(d) (2)." See Plaintiff's Exhibit 3A; see also Joint Pre-Trial Order at 6. The parties agree that neither Goethe, who was the managing agent of the premises at the time, nor East Side notified Mt. Vernon of the Order.
Apparently as a result of receiving the Order, Goethe caused certain repairs to be done on the Apartment. The Apartment was re-inspected on July 26, 1984, at which time the repairs were still in progress. See TR. at p. 20. On September 4, 1984, the date of the next inspection, repair work appeared to be continuing but the tenant stated that no work had been done in the Apartment since August 3, 1984. Id. at 21. At this point, the case was referred to the New York City Emergency Repair Program because approximately six (6) weeks had passed since the initial inspection of June 27 and the repairs had not been completed. Id. Because total compliance had still not been achieved by October 25, 1984, Goethe was requested to appear for a tribunal hearing. Id. at pp. 26 - 27. Following the hearing, another re-inspection was performed on December 21, 1984, which showed that no additional repair work had been done in the Apartment. Id. at 33. This caused the matter to be referred, once again, to the Emergency Repair Program. Id. at pp. 33 -34. The next re-inspection took place on January 8, 1985, at which time repair work was being performed. Id. at 36. Two more inspections took place, the first on January 25, 1985 and the second on April 8, 1985. During the April 8 inspection it was determined that all the violations had been removed. Id. at 37.
On or about April 29, 1992, the Pichardos commenced a personal injury action against East Side and others in New York County Supreme Court for damages resulting from David and Charles Pichardo's prolonged exposure to lead dust particles and lead-based paint.
See Joint Pre-Trial Order at 7; Plaintiff's Exhibit E. East Side notified Mt. Vernon of the Pichardos' claims by forwarding both the summons and complaint on the very day it was served. See Joint Pre-Trial Order at 7. By letter dated October 7, 1992, Mt. Vernon disclaimed coverage for the Pichardos' claims asserting that East Side violated the insurance contract by failing to provide notice of the occurrence "as soon as practicable." See Plaintiff's Exhibit 8. Specifically, Mt. Vernon ...