See E.B. Gen. Contracting v. Nationwide Ins. Co., 189 A.D.2d 796,
592 N.Y.S.2d 455, 456 (2d Dept. 1993) (claimant told
insured that he did not intend to sue anyone — late notice
disclaimer upheld); Platsky v. Government Employees Ins. Co.,
181 A.D.2d 764, 581 N.Y.S.2d 235 (2d Dept. 1992) (same); see
also Vradenburg v. Prudential Property & Casualty Ins. Co.,
212 A.D.2d 913, 622 N.Y.S.2d 623, 624 (3d Dept. 1995).
Further, the fact is that plaintiff finally notified CIC of a
potential claim before Mr. Miller asserted that a claim would be
made. Thus, plaintiff clearly understood the obligation to
provide notice of a potential claim where no claim overtures had
Because plaintiff has not asserted any cognizable excuse for
his notice delay, his motion must be denied and CIC's
crossmotion is granted.
CIC's Disclaimer Cannot Be Deemed Untimely
Plaintiffs final contention is that CIC's disclaimer was
untimely and should therefore be barred. That contention is
factually and legally flawed.
CIC's coverage denial was not untimely. The defense and
indemnity obligations are not governed by the notice of
occurrence rules. Rather, they are triggered only by the
bringing of a claim or suit against the insured. (See Cavaliere
Aff. Ex. A, at page 1 of 9 of policy jacket). Until there is an
actual claim or suit, there is no defense or indemnity
obligation to disclaim. And while there is no impediment to
holding an insured to the notice of occurrence provisions in his
contract, there is equally nothing wrong with permitting a
liability insurer to postpone denial of coverage until a claim
is actually filed. Early denial may prevent it from ever having
the opportunity to be notified of any actual claim or suit
against its insured and to reassess the coverage therefor.
Premature denial may also engender needless conflict between the
insured and its carrier, as well as litigation over something
that never may come to pass. Cf. Combustion Engineering, Inc.
v. Travelers Indem. Co., 53 N.Y.2d 875, 877, 440 N.Y.S.2d 617,
617, 423 N.E.2d 40 (1981) (court has no jurisdiction to render a
declaratory judgment where any actual controversy between the
parties "depend[s] upon a future event beyond the control of the
parties which may never occur. . . .").
Before plaintiffs receipt of the February 15, 2001 letter from
claimant's counsel, there was no claim or suit to be covered or
disclaimed. After providing a copy of that claim letter to CIC
on February 20, 2001, plaintiff forwarded to CIC the documents
from the underlying medical malpractice action in late February
2001. CIC then reviewed same and, after referring the matter to
and consulting with its coverage counsel (which CIC had every
right to do), it denied coverage by letter dated March 30, 2001,
just a month and a few days after having been provided with the
documents. Plaintiff has cited no cases barring an insurer from
denying coverage in circumstances even remotely resembling the
case at bar.
The cases that plaintiff does cite are inapposite, since they
all involve bodily injury or death claims as to which, under New
York Insurance Law § 3420(d) and decisions construing that
statute, an insurer is obligated to disclaim coverage within a
specified period or else be barred from doing so. By its terms,
does not apply to claims for legal malpractice. See
Vecchiarelli v. Continental Ins. Co., 277 A.D.2d 992,
716 N.Y.S.2d 524 (4th Dept. 2000); Incorporated Village of
Pleasantville v. Calvert Ins. Co., 204 A.D.2d 689, 612 N.Y.S.2d 441,
443 (2d Dept. 1994). Further, in each of plaintiffs cited
cases, the insurer was barred by section 3420(d) where it
delayed unreasonably in issuing a disclaimer with respect to an
asserted claim or suit. Here, no claim was tendered to CIC for
defense before February 20, 2001, and coverage was denied a mere
38 days later. That does not qualify as undue delay.
There is also no basis upon which to find that CIC waived its
right to deny coverage, as plaintiff suggests. Under the common
law, "waiver . . . is a voluntary and intentional relinquishment
of a known right. . . ." Albert J. Schiff Assocs., Inc. v.
Flack, 51 N.Y.2d 692, 698, 435 N.Y.S.2d 972, 975, 417 N.E.2d 84
(1980), and cannot be found unless there was "full knowledge of
the facts upon which the existence of the right depends. . . ."
Amrep Corp. v. American Home Assur. Co., 81 A.D.2d 325,
440 N.Y.S.2d 244, 247 (1st Dept. 1981). Waiver cannot be lightly
inferred and cannot be found unless the carrier made a conscious
choice to waive its rights. See Mooney v. City of New York,
219 F.3d 123, 131 (2d Cir. 2000), cert. den., 531 U.S. 1145,
121 S.Ct. 1083, 148 L.Ed.2d 958 (2001). "Negligence or oversight
is not enough to establish waiver," Metropolitan Life Ins. Co.
v. Blum, 7 A.D.2d 488, 184 N.Y.S.2d 455, 457-58 (1st Dept.
1959), aff'd, 9 N.Y.2d 954, 217 N.Y.S.2d 225, 176 N.E.2d 202
(1961), and, even after it undertakes an insured's defense, an
insurance company is entitled to a reasonable time to
investigate issues such as whether the insured timely complied
with policy notice requirements, see Commercial Union Ins. Co.
v. International Flavors & Fragrances, Inc., supra, 822 F.2d at
271. It serves no one's interests to force insurers to make rash
coverage decisions before they have all the information relevant
to those decisions for fear of otherwise waiving their rights.
Here, of course, CIC did not knowingly and voluntarily waive
any rights. Even if CIC had all the information concerning the
potential claim against plaintiff when Sirignano first reported
the possibility that a claim might be asserted on October 31,
2000 (which it did not), no waiver could have resulted from a
failure to disclaim coverage at that time, because no claim or
suit was pending against plaintiff at that time. When CIC was
presented with the relevant documents from the medical
malpractice action in late February 2001,*fn4 it acted
promptly to review that information, assign coverage counsel,
and issue the denial letter. Clearly, under those circumstances,
there was no intentional and voluntary relinquishment by CIC of
a known right sufficient to give rise to a waiver. Plaintiff
cites no cases to support a waiver finding in this context.
Finally, plaintiff makes reference to certain insurance
regulations to support his waiver claim. However, the
regulations cited by plaintiff, 11 N.Y.C.R.R. §§ 216.5(a),
216.6, do not create any private rights. See Aetna Casualty &
Sur. Co. v. ITT Hartford Ins. Co., 249 A.D.2d 241,
672 N.Y.S.2d 310 (1st Dept. 1998).*fn5
For all of the foregoing reasons, CIC's motion is granted and
plaintiffs motion is denied. The complaint is dismissed, and a
judgment declaring that CIC is not liable under the malpractice
policy shall be submitted for signature within ten days.
This constitutes the decision and order of the Court.