Trustees of Congregation Shearith Israel in City of NY v Admiral Ins. Co.
Annotate this CaseDecided on October 7, 2005
Supreme Court, New York County
Trustees of the Congregation Shearith Israel in the City of New York, BOVIS LEND LEASE LMB, INC., and NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, , Plaintiffs,
against
Admiral Insurance Company (pertaining to an underlying action entitled Khan Trustees of the Congregation of Shearith Israel, et al.), Defendant.
603515/03
Jane S. Solomon, J.
Plaintiffs move for summary judgment in this action for declaratory judgment regarding insurance coverage for a claim arising from a construction accident. The accident is the basis for a lawsuit in Supreme Court, Queens County (Khan v Trustees of the Congregation of Shearith Israel, hereinafter the "underlying action") in which an injured construction worker is suing plaintiffs Trustees of the Congregation of Shearith Israel in the City of New York ("Trustees") and Bovis Lend Lease LMB, Inc. ("Bovis") for negligence and violation of New York Labor Law §§ 200, 240(1) and 241(6). Plaintiff National Union Fire Insurance Company of Pittsburgh, PA ("National Union") is providing Trustees and Bovis with a defense and indemnification in the underlying action. Plaintiffs seek a declaration that Admiral covers that claim and must indemnify and defend Trustees and Bovis in the underlying action, and must reimburse National Union for attorneys fees and costs incurred in the underlying action. Defendant Admiral Insurance Company ("Admiral") opposes the motion on the grounds that it did not receive timely notice of plaintiffs' claim. Plaintiffs' motion is granted for the following reasons.
Munib Khan ("Khan") alleged that he was injured on November 23, 2001 when he fell from a ladder at a construction site owned by Trustees. Bovis was the general contractor. Bovis had a trade contract with Universal Services Group Ltd. ("USG") which provided in relevant part that USG would obtain a commercial general liability policy naming Trustees and Bovis as additional insureds, and that the coverage would be primary to that of the owner or construction manager (i.e., Trustees or Bovis). USG purchased an Admiral policy that provided the coverage. USG engaged Khan's employer under the trade contract, and there appears to be no dispute that the Admiral policy would cover Khan's claim if properly presented.
Khan's summons and complaint were served on Bovis in March 2002. Bovis forwarded the summons and complaint to its insurer's claims manager, AIG Claims Services, Inc. ("AIGCS"). In the meantime, Bovis appeared in the underlying action under its National Union policy. Khan also served the summons and complaint on USG, but it did not answer.
AIGCS investigated the claim, and ascertained that Khan's employer worked under USG's trade contract. AIGCS [*2]contacted USG's insurance broker, which gave it a certificate of insurance for USG that incorrectly listed the insurer as General Star Insurance Company. On May 14, 2002, AIGCS tendered Bovis's defense to General Star, but the tender was disclaimed on June 13, 2002 because General Star did not cover USG on the date of loss.
When AIGCS received the disclaimer, it contacted USG's broker and requested the correct information. On June 18, 2002, the broker provided the name of a different insurance company, and AIGCS tendered Bovis's defense to that company the same day. It too disclaimed, on July 9, 2002. AIGCS continued its investigation in an effort to find another party to provide coverage. When that effort failed, it again contacted USG's insurance broker repeatedly, leaving phone messages and sending letters, all of which went unanswered until April 23, 2003, when the broker forwarded a corrected certificate of insurance naming Admiral as the insurer. The broker also called Admiral and notified it of the claim, and he sent a facsimile to Admiral briefly describing the accident. Two days after it learned of the Admiral policy, AIGCS tendered to it the Trustees and Bovis defense, and demanded indemnification.
The Admiral insurance policy provides that the insured must see to it that Admiral is notified as soon as practicable of an occurrence giving rise to liability, and must immediately send copies of papers received in connection with a claim or lawsuit. Admiral sent a letter dated May 22, 2003 to its insured, USG, disclaiming coverage for the underlying action on the grounds that no insured party provided it with timely notice of the occurrence or lawsuit. A copy of the letter was sent to plaintiffs' lawyer in the underlying action (who also represents them here), but not to Trustees or Bovis.
This motion presents three issues. First, was plaintiffs' delay in notifying Admiral "reasonable" so that Admiral's disclaimer is improper? Second, was Admiral's disclaimer ineffective because it was made to its insured, and not directly to plaintiffs? If the answer to either question is yes, the motion must be granted and Admiral will cover the claim arising from the underlying action.
Finally, if Admiral covers the claim, it concedes that its coverage is primary to Bovis's policy, and that Bovis's policy would offer only excess coverage to the Admiral policy, but it argues that a question of fact remains as to whether a Trustees policy may offer co-insurance that is not merely excess.
Discussion: Late Notice
Where a policy of liability insurance requires that notice of an occurrence be given as soon as practicable, such notice must be given within a reasonable time. Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742 (2005). "The insured's failure to satisfy the notice requirement constitutes a failure to comply with a condition precedent which, as a matter [*3]of law, vitiates the contract." Id. at 743 (citations omitted). What is a reasonable amount of time for notice of an occurrence is determined in light of the facts and circumstances of the case at hand. Mighty Midgets, Inc. v Centennial Ins. Co., 47 NY2d 12 (1979).
Admiral argues that notice of Khan's claim and lawsuit was unreasonably late because it first received notice on April 24, 2003, approximately eighteen months after the occurrance and thirteen months after the summons and complaint were served on plaintiffs. Even though plaintiffs gave notice within two days of learning that Admiral was the insurer, Admiral contends that they did not take reasonable steps to ascertain the identity of USG's insurer. For example, plaintiffs simply could have contacted USG directly and asked it for the name of its insurance company.
Whether USG would have responded with the name of the correct insurance company is a matter of supposition. USG was served with a summons and complaint in the underlying action and yet failed to notify Admiral. However, AIGCS immediately contacted USG's insurance broker (which issued the certificates of insurance for the project) and was misinformed. It diligently sent notice to the wrong insurance company. It was again misinformed by the broker, and again notified the wrong insurer within days. After AIGCS engaged in further fruitless investigation and several attempts to obtain the correct information, the broker finally identified the correct insurer. The broker immediately sent notice to Admiral, and AIGCS sent notice two days later. Under the circumstances, AIGCS's efforts on plaintiffs' behalf to ascertain the identity of the correct insurer were reasonable, and the notice made within two days of learning of Admiral was timely as a matter of law.
Since the notice was timely, it is not necessary to discuss whether Admiral's disclaimer was ineffective as against Trustees and Bovis on the grounds that it was addressed only to USG, and was not sent to plaintiffs directly.
The Admiral Policy Must Provide Primary Coverage
Admiral contends that in the event its disclaimer is disallowed, a question of fact remains regarding the scope of its coverage. While conceding primary coverage both to Trustees and Bovis, it maintains that Trustees may have insurance that would offer co-insurance for Khan's claim, but Trustees did not respond to a demand made in this action for copies of insurance policies. Plaintiffs correctly argue, however, that USG agreed to provide primary coverage to defend and indemnify Trustees and Bovis, and the Admiral policy it procured provides such coverage, so the Admiral policy provides primary insurance coverage. Pecker Iron Works v Traveler's Ins. Co., 99 NY2d 391 (2003). Coverage afforded under a separate Trustees' policy is irrelevant to this action. Accordingly, it hereby is
ORDERED that the motion for summary judgment is granted, and it further is
ORDERED, ADJUDGED and DECLARED that defendant Admiral Insurance Company is required to defend and indemnify plaintiffs Trustees of the Congregation of Shearith Israel in the City of New York and Bovis Lend Lease LMB, Inc. with primary insurance coverage in the underlying action of Khan v Trustees of the Congregation of Shearith Israel, et al., filed in the Supreme Court, Queens County, index number 5362/02; and that Admiral Insurance Company is required to reimburse plaintiff National Union Fire Insurance Company of Pittsburgh, PA for all attorneys' fees and costs incurred in the defense of the Trustees and Bovis in the underlying action; and it further is
ORDERED that the issue of the amount of attorney's fees and costs incurred by National Union shall be determined by inquest; plaintiffs shall file a note of issue forthwith; and counsel shall appear for a pre-trial conference in Part 55 on November 21, 2005 at 2 PM.
[*4]
Dated: October 7, 2005
ENTER:
_______________________
J.S.C.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
