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Manuel German v. Geico General Insurance Company

SUPREME COURT OF THE STATE OF NEW YORK APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS


December 16, 2010

MANUEL GERMAN,
APPELLANT,
v.
GEICO GENERAL INSURANCE COMPANY,
RESPONDENT.

Appeal from an order of the Civil Court of the City of New York, Queens County (Rudolph E. Greco, Jr., J.), entered December 17, 2009.

German v. Geico Gen. Ins. Co.

Appellate Term, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 16, 2010

PRESENT: STEINHARDT, J.P., PESCE and WESTON, JJ.

The order denied plaintiff's motion for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint.

ORDERED that the order is modified by deleting the provision thereof granting defendant's cross motion for summary judgment dismissing the complaint and by providing that defendant's cross motion is denied; as so modified, the order is affirmed, without costs.

In this action pursuant to Insurance Law § 3420 (a) (2) to recover from defendant the amount of an unsatisfied default judgment against defendant's insured, the Civil Court denied plaintiff's motion for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint. The instant appeal by plaintiff ensued.

Plaintiff met his prima facie burden of establishing that he had served defendant with notice of entry of the default judgment in the underlying personal injury action by submitting an affidavit of service attesting that a copy of the judgment, with notice of entry, had been mailed to defendant on June 29, 2009 (see Jimenez v New York Cent. Mut. Fire Ins. Co., 71 AD3d 637 [2010]; Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d 343 [2003]). The affidavit of defendant's claims examiner, which denied that defendant had received notice of the underlying judgment until after the commencement of the instant action, was insufficient to rebut the presumption of service (see Kihl v Pfeffer, 94 NY2d 118, 122 [1999] ["a properly executed affidavit of service raises a presumption that a proper mailing occurred, and a mere denial of receipt is not enough to rebut this presumption"], citing Engel v Lichterman, 62 NY2d 943, 944-945 [1984]; see Morales v Yaghoobian, 13 AD3d 424 [2004]).

Pursuant to the notice provision of plaintiff's insurance policy, defendant was entitled to disclaim coverage on the ground that neither its insured nor plaintiff had notified it of the commencement of the underlying action (see American Tr. Ins. Co. v Sartor, 3 NY3d 71 [2004]; see also American Tr. Ins. Co. v Rechev of Brooklyn, 57 AD3d 257 [2008]). Contrary to plaintiff's contention, defendant's answer constituted a sufficient disclaimer of its liability to plaintiff (see Key Bank U.S.A., N.A. v Interboro Ins. Co., 65 AD3d 521 [2009]). However, Insurance Law § 3420 (d) (2) requires written notice of a disclaimer to be given "as soon as is reasonably possible" after the insurer learns of the grounds for disclaimer of liability (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69 [2003]), and defendant's disclaimer based on late notice of the underlying lawsuit could have been made anytime after receipt on June 29, 2009 of notice of the default judgment (see Uptown Whole Foods, Inc. v Liberty Mut. Fire Ins. Co., 302 AD2d 592 [2003]). Therefore, defendant's disclaimer, which was first made in its October 5, 2009 answer in the instant action, was untimely as a matter of law (see Guzman v Nationwide Mut. Fire Ins. Co., 62 AD3d 946 [2009] [finding a 51-day delay in disclaiming coverage unreasonable as a matter of law]; Uptown Whole Foods, Inc., 302 AD2d at 593 [finding a 57-day delay in disclaiming coverage unreasonable as a matter of law]).

Defendant further opposes plaintiff's motion on the ground that it is premature, as defendant was entitled to receive responses to its outstanding discovery demands and conduct additional appropriate discovery relating to the extent of plaintiff's injuries (see CPLR 3212 [f]; Jimenez, 71 AD3d 637). Since defendant did not receive notice of the commencement of the underlying action until the entry of judgment against its insured, it is not collaterally estopped from litigating the merits of that action (see id., citing Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 199 [2008], quoting Buechel v Bain, 97 NY2d 295, 304, cert denied 535 US 1096 [2001]).

Lastly, defendant's contention that plaintiff's attorney lacked standing to represent plaintiff in this action is without merit. When plaintiff's original attorney was disbarred prior to the entry of judgment in the underlying action, plaintiff's present counsel properly filed a notice of appearance with the court, effecting her substitution as plaintiff's attorney of record in that action. Contrary to defendant's claim, CPLR 321 (b) did not govern the substitution of counsel in the underlying action, because plaintiff's attorney did not voluntarily withdraw, and was not discharged by plaintiff; he was disbarred, thus CPLR 321 (c) applied (see Hendry v Hilton, 283 App Div 168, 171 [1953] [discussing section 240 of the Civil Practice Act, the predecessor of CPLR 321]). Furthermore, the instant action is a separate lawsuit, bearing a different index number, from the underlying action. Thus, even if plaintiff's current counsel had not been properly substituted in the underlying action, that would not affect her standing to represent plaintiff now.

Steinhardt, J.P., Pesce and Weston, JJ., concur. Decision Date: December 16, 2010

20101216

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