the theory of liability is the strict liability of an owner under provisions of New York's Labor Law. The investigation established that Rabbi Silberman had in fact been aware of the accident shortly after it happened; only then, after receiving this information in the investigator's report, did U.S. Underwriters possess sufficient facts to disclaim on this ground.
Moreover, U.S. Underwriters had an independent reason to initiate an investigation: the potential applicability of the independent contractors exclusion. While the availability of this ground for disclaimer was arguably apparent from the face of Eskandar's pleading, the Congregation provides no reason to doubt the bona fides of U.S. Underwriters' stated desire to learn whether there was a written contract with Sais Construction and whether the Congregation "furnished any ladders, scaffolding, etc. to [Eskandar] or his employer." (Sklarin Reply Decl., Ex. A.) Moreover, I can conceive of no reason to discourage such investigations by insurers before they disclaim, particularly where, as here, the investigation is requested and completed promptly. Finally, the appropriateness of the late-notice investigation would forgive a tardy disclaimer based on the exclusion clause in any event, as "piecemeal denials of coverage would frustrate [the insurer's] right to investigate claims." Wilczak, 611 N.Y.S.2d at 73.
Finally, the Congregation contends that U.S. Underwriters failed to satisfy its obligation to provide written notice of disclaimer to the "insured," as required by Insurance Law § 3420(d), because it failed to serve all six of the entities who are collectively defined as the "insured" in the policy. Since only the Congregation has been sued by Eskandar, and only the Congregation seeks coverage, it is not clear what purpose would be served by notifying the other entities of the disclaimer, and the Congregation does not suggest any. In any event, for all purposes relevant to the subject policy, the undisputed facts establish conclusively that Rabbi Silberman acts for all of the named "insureds" who have any connection with 620 Bedford Avenue, Brooklyn, and that he was adequately served with the summons and complaint that constituted the notice.
I am aware that the reasonableness of an insurer's delay in disclaiming coverage is frequently a question of fact requiring trial. See, e.g., Wilczak, supra. However, I conclude, based on the affidavits, depositions and other submissions made in connection with these motions, that the Congregation has failed to establish that there are genuine issues of material fact requiring trial. The insurer in this case received a notice of claim and immediately requested an investigation, which was completed in less than a month. That investigation provided the predicate facts for the disclaimer. The insurer brought this declaratory judgment action approximately 10 days later (and only 13 days after the report was completed.) The Congregation was served exactly three weeks later, and those three weeks included the end-of-year holiday season.
Based on those facts, about which there is no genuine issue, I conclude that no rational juror could find the delay in disclaiming to be unreasonable. See Gallo v. Prudential Residential Services, 22 F.3d 1219, 1224 (2d Cir. 1994). Accordingly, I deny the Congregation's motion for summary judgment, and conclude that its late-notice-of-disclaimer contention is insufficient to defeat U.S. Underwriters' motion for summary judgment based on the exclusion clause.
The independent contractors exclusion applies to Eskandar's claim against the Congregation. U.S. Underwriters timely notified the Congregation of its intention to disclaim coverage. Accordingly, U.S. Underwriters' motion for summary judgment is granted, and judgment will be entered declaring that U.S. Underwriters is not obligated to defend or indemnify the Congregation with respect to Eskandar's action against the Congregation.
United States District Judge
Dated: October 5, 1995
Brooklyn, New York