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Matthews v. Continental Casualty Co.

Supreme Court, New York County

April 15, 2013

HARRY MATTHEWS, Plaintiff,
v.
CONTINENTAL CASUALTY COMPANY and WELSBACH ELECTRIC CORP., Defendants, Index No. 112975/2010

Unpublished Opinion

JUDGMENT & ORDER

DORIS LING-COHAN, J.

In this personal injury action, motions bearing sequence numbers 002, 003 and 004 are hereby consolidated for decision. Defendant Continental Casualty Company (Continental) moves, pursuant to CPLR 3212, for summary judgment dismissing the complaint as against it (Mot. Seq. 002). Plaintiff Harry Matthews moves, pursuant to CPLR 3212, for summary judgment in his favor on the complaint, seeking a declaratory judgment that defendants must proceed to arbitration (Mot. Seq. 003). Defendant Welsbach Electric Corp. (Welsbach) moves, pursuant to CPLR 3212 for summary judgment dismissing complain as against it (Mot. Seq.004).

Factual Background

Plaintiff, a Welsbach employee, was injured shortly before midnight on June 8, 2007, while standing on the shoulder of a highway. Plaintiff was standing with a co-worker, who was reaching for equipment in a Welsbach truck, when he was hit by a passing vehicle. The driver of the adverse vehicle was intoxicated at the time, and his insurer, Allstate Insurance Company (Allstate), tendered the $25, 000 policy limit to plaintiff, on or about April 12, 2010. On April 19, 2010, plaintiff advised Continental, insurer of Welsbach's vehicles, of Allstate's offer, stated his intention to pursue supplemental underinsured motorist (SUM) benefits, and requested permission to accept the tender. Mot. Seq. 002, Ex. G. On May 13, 2010, Continental disclaimed coverage of plaintiff s injuries, because of untimely notice and plaintiffs presence outside the insured vehicle.

The instant action commenced on October 1, 2010, when plaintiff filed a summons and complaint against Continental. On April 25, 2011, the court so-ordered a stipulation executed by the parties, in response to Welsbach's motion, to allow Welsbach to intervene in the action. On March 2, 2012, plaintiff served an amended complaint asserting causes of action for a declaratory judgment that Continental's coverage extended to plaintiffs injuries and, failing that, that Welsbach shall be responsible for compensating plaintiff up to $350, 000, the deductible limit of its policy with Continental. Id., Ex. A; Eisenman Affirm., Mot. Seq. 003, Ex. R, Deductible Endorsement.

Legal Standard for Summary Judgment

"The proponent of a motion for summary judgment must demonstrate that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law." Dallas-Stephenson v Waisman, 39 A.D.3d 303, 306 (1st Dept 2007), citing Winegrad v New York Univ. Med. Or., 64 N.Y.2d 851, 853 (1985). Upon proffer of evidence establishing a prima facie case by the movant, "the party opposing a motion for summary judgment bears the burden of 'producing] evidentiary proof in admissible form sufficient to require a trial of material questions of fact.'" People v Grasso, 50 A.D.3d 535, 545 (1st Dept 2008), quoting Zuckerman v City of New York, 49 N.Y.2d 557, 562 (1980). If there is any doubt as to the existence of a triable issue of fact, summary judgment must be denied. Rotuba Extruders v Ceppos, 46 N.Y.2d 223, 231 (1978); Grossman v Amalgamated Hous. Corp., 298 A.D.2d 224, 226 (1st Dept 2002).

Discussion

Continental's Summary Judgment Motion - Mot, Seq. 002

At the time of the accident, Continental insured Welsbach's vehicles under policy number 2079600087 (the Policy). Mot. Seq. 002, Ex. D. The Policy includes a supplemental underinsured motorist (SUM) provision, stating that "[a]s soon as practicable, the insured or other person making claim shall give us written notice of claim under this SUM coverage." Id., Conditions, ¶2. Further, SUM coverage is limited, under the circumstances at issue, to a "person while occupying a motor vehicle insured for SUM under this policy." Id., Insuring Agreements, ¶1 (a) (2) (a) (internal punctuation modified). According to the Policy, the "term 'occupying' means in, upon, entering into, or exiting from a motor vehicle." Id., Insuring Agreements, ¶3 (d).

Continental first contends that plaintiffs failure to give timely notice of the accident eliminated its duty to provide coverage for his injuries. "The requirement that an insured notify its liability carrier of a potential claim 'as soon as practicable' operates as a condition precedent to coverage." White v City of New York, 81 N.Y.2d 955, 957 (1993). "Where a policy of liability insurance requires that notice of an occurrence be given 'as soon as practicable, ' such notice must be accorded the carrier within a reasonable period of time." Great Canal Realty Corp. v Seneca Ins. Co., 5 N.Y.3d 742, 743 (2005). Continental maintains that the 34-month unexcused delay in notifying it is a breach of the insurance contract as a matter of law, as in Deso v London & Lancashire Indent. Co. of Am. (3 N.Y.2d 127 [1957]) (51 days); Safer v Government Empls. Ins. Co. (254 A.D.2d 344 [2nd Dept 1998]) (about six weeks); Power Auth. of State of N.Y.v Westinghouse Elec. Corp. (117 A.D.2d 336 [1st Dept 1986]) (53 days).

To further accentuate the gap in receiving plaintiffs notice, Continental notes that plaintiff notified Allstate by August 13, 2007, as reflected in Allstate's response to him, dated August 13, 2007. Mot. Seq. 002, Ex. K. Also, plaintiff engaged counsel in this matter on December 5, 2007 (id., Ex. I), who, in turn, wrote to Allstate on his behalf on December 17, 2007 (id., Ex. J). Yet, Continental only learned of the events in 2010, after Allstate tendered its $25, 000 offer, which plaintiff considered inadequate.

"In interpreting the phrase 'as soon as practicable' in the underinsurance context [courts have held] that the insured must give notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured." Matter of Metropolitan Prop. & Cas. Ins. Co. vMancuso, 93 N.Y.2d 487, 495 (1999). Timeliness for a SUM claim is not measured by the interval between the occurrence and notification to the primary insurer, but from the time when the need for SUM coverage becomes apparent. See id. Then, an unexcused delay must also be shown to have prejudiced the SUM insurer. Rekemeyer vState Farm Mut. Auto. Ins. Co., 4 N.Y.3d 468, 476 (2005) ("carriers [must] show prejudice before untimely notice of a SUM claim is held to be a material breach in the contract warranting disclaimer"). In Rekemeyer, supra., the Court of Appeals further stated that the "idea behind strict compliance with the notice provision in ...


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