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Insurance Corporation of New York v. United States Fire Insurance Co.

June 9, 2009

THE INSURANCE CORPORATION OF NEW YORK, PLAINTIFF-RESPONDENT,
v.
UNITED STATES FIRE INSURANCE COMPANY, DEFENDANT-APPELLANT, BFC CONSTRUCTION CORP., DEFENDANT.



Order, Supreme Court, New York County (Carol R. Edmead, J.), entered February 7, 2008, which, insofar as appealed from, denied the cross motion of defendant United States Fire Insurance Company (US Fire) for summary judgment dismissing the complaint as against it, reversed, on the law, without costs, and the cross motion granted. The Clerk is directed to enter judgment dismissing the complaint as against US Fire. Appeal from order, same court and Justice, entered June 24, 2008, which, inter alia, denied US Fire's request to rescind an insurance policy, unanimously dismissed, without costs, as abandoned.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Gonzalez, P.J., Nardelli, Catterson, Moskowitz, Renwick, JJ.

600469/07

While the motion court found that the insured, defendant BFC Construction Corp., gave late notice of two claims to US Fire, its excess insurer, the court also deemed US Fire's disclaimer untimely. US Fire issued its disclaimers on April 28, 2006, and the court determined that US Fire had notice on March 16, 2006.

However, the record establishes that US Fire actually received proper notice on April 20 rather than March 16. Pursuant to the terms of its excess policy with US Fire, BFC was required to provide US Fire "prompt written notice of an occurrence, which might result in a claim." Notice was to include how, when and where the occurrence took place; the names and addresses of injured parties and witnesses; and the nature and location of any injury or damage. "An insurer's obligation to cover its insured's loss is not triggered unless the insured gives timely notice of loss in accordance with the terms of the insurance contract" (Power Auth. of State of N.Y. v Westinghouse Elec. Corp., 117 AD2d 336, 339 [1986], citing Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436 [1972]; see also Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40 [2002]). Accordingly, US Fire's disclaimers, issued eight days after receiving notice, were timely as a matter of law (see e.g. Public Serv. Mut. Ins. Co. v Harlen Hous. Assoc., 7 AD3d 421, 423 [2004]).

All concur except Nardelli and Catterson, JJ. who concur in a separate memorandum by Catterson, J. as follows:

CATTERSON, J. (concurring)

I concur with the result reached by the majority but write separately because I believe that the issue of notice obligations under the primary policy of insurance and under an excess policy of insurance requires greater explication.

This is a dispute between a primary insurer (plaintiff) and an excess insurer (hereinafter referred to as "U.S. Fire"). The plaintiff issued a commercial general liability policy to the defendant BFC Construction Corp. (hereinafter referred to as "BFC") for the period January 1, 2001 to January 1, 2002. U.S. Fire, through Crum & Forster, issued an excess insurance policy to BFC for the same period. BFC has primary coverage from other insurers in addition to plaintiff.

The primary policy issued by plaintiff has a $2 million general aggregate limit (except for products-completed operations, which are not at issue). The excess insurance policy issued by U.S. Fire states: "1.YOU must see to it that WE receive prompt written notice of an occurrence, which may result in a claim. Notice should include:a.How, when and where the occurrence took place;b.The nature and addresses of any injured persons and witnesses.c.The nature and location of any injury or damage arising out of the occurrence."2.If a claim is made or suit is brought against YOU, YOU must see to it that WE receive prompt written notice of the claim or suit."3.YOU and any other involved insured must:a.Immediately send US copies of any demands, notices, summons, or legal papers received in connection with the claim or suit [...]"

The policy also says, "A notice given by, or on behalf of, the insured, or written notice by, or on behalf of, the injured person or any other claimant, to any licensed agent of ours in New York State with particulars sufficient to identify you, shall be deemed notice to us."

On March 9, 2006, Tom Ward of Ward North America, LP -- plaintiff's third-party claims administrator, sent an e-mail to Jill Pompeii of Crum & Forster. He wrote: "As we discussed, this matter [Dagati v. BFC Constr.] is scheduled for trial on March 16, 2006. As I advised you, the Inscorp [i.e., plaintiff's] policy issued to BFC Construction had $1 million per occurrence and $2 million aggregate coverage. To date, $1.2 million has been paid as indemnity, leaving $800,000 as the remainder of the aggregate."I am issuing the attached letter today to our insured. You should receive a hard copy shortly."Inscorp currently has two other claims open on this policy: Daniel Torres [...] and Regolodo [...]" The attached letter stated, "the General Aggregate Limit is likely to be used up in the payment of judgments or settlements."

Pompeii replied, "it is my tentative plan to attend this trial [...] [P]lease provide details regarding where and when pretrial ...


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