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U.S. Underwriters Insurance Co. v. Tauber

March 27, 2009


The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge


Plaintiff U.S Underwriters Insurance Company brought this action pursuant 28 U.S.C. § 2201(a) for a declaration that it has no duty to defend or indemnify defendants Chaya Tauber d/b/a Gan Simcha (the "Tauber Defendants") in a personal injury suit pending before the Supreme Court of the State of New York, Kings County.*fn1 The plaintiffs in that action are defendants Yitzchok Jacobowitz and David Jacobowitz (the "Jacobowitz Defendants"). Plaintiff has moved for summary judgment, arguing that it properly disclaimed coverage for the injury because neither the Tauber nor the Jacobowitz Defendants provided timely notice of the accident or of the personal injury suit as required by the policy. Additionally, plaintiff contends that the policy does not cover the injury at issue. The Jacobowitz Defendants have cross-moved for summary judgment, requesting the court to declare that the policy covers the injury. The Jacobowitz Defendants argue that: (1) they provided timely notice of occurrence; (2) they were not obligated to provide notice of the suit; (3) the policy covers the injury; and (4) plaintiff should be estopped from denying coverage. For the reasons set forth below, the court denies both motions in their entirety.


On September 15, 2002, David Jacobowitz, a five-year-old infant, was injured while on the premises of the Gan Simcha day care center, which was owed and operated by defendant Chaya Tauber. In addition to being a day care center, Gan Simcha was also Chaya Tauber's residence. The day care center was not operating at the time of the injury, and David Jacobowitz was not enrolled at Gan Simcha. David Jacobowitz had been invited to the Taubers' apartment that day to play with the Tauber children.

While at the Tauber residence, David Jacobowitz broke his leg. The parties dispute how he was hurt. According to the Jacobowitz Defendants, while climbing the stairs in the Gan Simcha playroom, David Jacobowitz bumped his head against a wall-mounted shelf that ran along the side of the stairs. The impact caused David Jacobowitz to lose his balance, step on a toy on the stairs, and fall down the stairs, thus breaking his leg. Plaintiff contends that the wall-mounted shelf did not cause David Jacobowitz's injury. The shelf was used in the day care center's operations.

At the time of the accident, the Tauber Defendants held an insurance policy issued by plaintiff that covered "liability arising out of any negligent act, error or omission in rendering or failure to render professional services" relating to the "Day Care Center." (Foreman Aff. at Ex. A.) That policy did not apply to the conduct of any business enterprise owned by you or which is controlled, operated or managed by you either individually or in a fiduciary capacity, including the ownership, maintenance or use of any property in connection therewith other than in connection with the normal and usual professional services issued hereunder....

(Id.) (emphasis added). The policy required the insured to provide notice of an occurrence or suit "as soon as practicable." (Id.) Although Chaya Tauber was aware of the injury immediately after it occurred, she did not report it to plaintiff.

Six months after the injury, plaintiff learned of the incident through a letter, dated March 3, 2003, from the attorney for the Jacobowitzes advising that David Jacobowitz was "seriously injured due to [Chaya Tauber's] negligence while at [the Gan Simcha] premises." (Id. at Ex. C.) The letter was sent by certified mail to Chaya Tauber and plaintiff. Upon receipt, Chaya Tauber immediately forwarded the letter by facsimile to plaintiff, and shortly afterwards, on March 6, 2003, plaintiff received a paper copy of the letter. The letter did not indicate whether the accident occurred during Gan Simcha's business hours or whether David Jacobowitz was enrolled at Gan Simcha.

Within a few days of receiving the letter, plaintiff interviewed Chaya Tauber about the incident. On March 11, 2003, plaintiff hired an investigative company to explore the circumstances surrounding the incident. The investigative company provided a report of their findings to plaintiff on March 21, 2003. On March 31, 2003, plaintiff hired prior coverage counsel to provide them with a coverage opinion letter. On April 22, 2003, plaintiff received the coverage opinion, which concluded that the policy did not cover the incident. The next day, plaintiff sent a disclaimer letter to Chaya Tauber. In that letter, plaintiff asserted that the Tauber Defendants failed to provide timely notice of the injury, and the policy did not cover the accident. That same day, plaintiff sent a letter to the Jacobowitz Defendants disclaiming coverage on the same grounds.

The Jacobowitz Defendants commenced a personal injury suit against the Tauber Defendants on June 15, 2005. Plaintiff did not learn of the suit until August 17, 2006, when it received a "Notice for Motion of Default Judgment" from the Jacobowitzes' attorney. That day, plaintiff issued a second disclaimer letter to Chaya Tauber and the Jacobowitzes claiming that they failed to provide timely notice of the lawsuit.(Id. at Ex. M.) On February 28, 2007, plaintiff filed the instant declaratory judgment action.


I. Summary Judgment Standard

Summary judgment is appropriate "where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view all facts in the light most favorable to the non-moving party but "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970)). In order to defeat a summary judgment motion, the non-movant carries only "a limited burden of production," but "must 'demonstrate more than some metaphysical doubt as to the material facts,' and come forward with 'specific facts showing that there is a genuine issue for trial.'" Powell v. Nat'l Bd. of Med. Exam'rs, 364 F.3d 79, 84 (2d Cir. 2004) (internal citations omitted). Those specific facts must be more than "conclusory statements, conjecture, or speculation." Opals on Ice Lingerie v. Body Lines, Inc., 320 F.3d 362, 370 n.3 (2d Cir. 2003) (quoting Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996)).

The Supreme Court has recently revised the summary judgment standard by requiring the court essentially to weigh the evidence presented by the non-moving party before allowing that evidence to be used to defeat a motion for summary judgment. Under the new standard, evidence presented by the non-moving party that is "blatantly contradicted by the record" should not be accepted by the court ...

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