run independent tests to determine the extent and possible sources of contamination at the Shopping Center. (See Mura Aff. Ex. C). According to the report, traces of PCE were detected in the soil around the dumpster behind the Laundromat. (Id. at 6). The report further indicated that the contamination in the soil was possibly the result of the disposal practices carried on by the Martinsons. (Id.). Because the Martinsons were made aware that they might be liable for a practice they knew they had carried on from 1981 to 1991, it was not reasonable at that point for the Martinsons to conclude that they were only required to notify the carrier that had issued the policy then in effect.
Finally, in January 1993, the Martinsons received the amended complaint in the Klein action (the "Klein complaint"). In his affidavit, Rolison states that the Klein complaint did not specify the years for which it was seeking damages and that the alleged damages occurred as a result of the release of "unspecified substances." This statement, however, is only half true. While the Klein complaint did not mention the years during which damages were sought, it did discuss the release of PCE. Specifically, the complaint alleged that Klein had been damaged as a result of the negligent "disposal of hazardous substances" including PCE. (Amd. Cplt. PP 77-78). Once again, the Martinsons had been put on notice that their alleged liability in this matter was directly related to their disposal of PCE into the dumpster from 1981 to 1991 -- a time period for at least part of which they were insured by MBIC.
Thus, before they even received the Klein complaint, the Martinsons and their attorneys received three separate notifications that they might be held liable for damages resulting from the improper disposal of PCE at the shopping center. Any one of these should have alerted the Martinsons that MBIC had to be notified. However, when these notifications are viewed along with the allegations in the Klein complaint, it becomes crystal clear that Klein was seeking damages for practices carried on by the Martinsons during the time period the MBIC policies were in effect.
Thus, while the Martinsons are correct in asserting that the Klein complaint did not explicitly allege the years for which it sought damages, that assertion is irrelevant. The standard applied in determining whether notice was given timely is an objective one and does not rely on the subjective knowledge of the Martinsons or their counsel. The Martinsons may not simply ignore the obvious and then plead ignorance. Instead, what must be determined is whether the letters from the EPA and Klein's attorney, the report from Hydrogeologic, and the Klein complaint, when viewed together, "would have suggested to a reasonable person the possibility of a claim" against MBIC. The answer, as a matter of law, is clearly yes.
Thus, the Martinsons' duty to "immediately" notify MBIC of a claim arose no later than December 1991 when they received the Klein complaint. Because the Martinsons did not notify MBIC of the Klein action until January 29, 1993 -- approximately fourteen months after it was commenced -- notice was not provided in a timely fashion. See American Ins. Co., 56 F.3d at 438 ("Under New York law, delays for one to two months are routinely held 'unreasonable.'"). Hence, MBIC has no duty to defend or indemnify the Martinsons in the Klein action.
For the foregoing reasons, plaintiffs' motion for partial summary judgment is denied. Additionally, because the undisputed facts in this case establish that, as a matter of law, the Martinsons failed to give timely notice of the Klein action to MBIC as required under the policy language, I hold that MBIC properly denied coverage. Accordingly, summary judgment is granted in favor of MBIC and the complaint is dismissed with prejudice and with costs.
Dated: New York, New York
December 6, 1996
United States District Judge