Matter of United Servs. Auto. Assn. v Ogilvie

[*1] Matter of United Servs. Auto. Assn. v Ogilvie 2006 NY Slip Op 50940(U) [12 Misc 3d 1157(A)] Decided on April 11, 2006 Supreme Court, New York County Lehner, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 11, 2006
Supreme Court, New York County

In the Matter of the Application for an Order Staying Arbitration Between United Services Automobile Association, Petitioner,

against

Nicoli Ogilvie, Respondent.



104554/05

Edward H. Lehner, J.

The prime legal issue presented herein is whether, when the first notice of an accident given to an insurer is by an injured party, the failure of the insurer to specifically refer to that notice in its disclaimer letter results in the disclaimer being invalid.

Before the court is petitioner's motion to stay arbitration sought by respondent Ogilvie pursuant to the uninsured motorist provisions of the liability policy issued to her by petitioner. Ogilvie was involved in an automobile accident

on May 9, 2004 with a car owned by Luisa Roman and driven by her son Bobby Burgos. Asserting that the Roman vehicle was insured by Travelers Insurance Company ("Travelers"), petitioner moved to add Travelers and Roman as additional respondents. That application was granted by order dated June 10, 2005.

The basic facts at trial were undisputed. Travelers was first given notice of the accident by letter from Ogilvie's attorney sent on January 27, 2005 and received by Travelers on January 31, 2005. On February 1, 2005, petitioner also sent a letter to Travelers advising it of the May 9, 2004 accident. Travelers then [*2]interviewed Roman and her son, both of whom apparently acknowledged not having given Travelers any notice of the accident. Accordingly, on February 27, 2005, Travelers sent a letter addressed to Roman, with copies to Ogilvie and her attorney, disclaiming coverage to Roman "and to others" based on "your" failure to comply with the notice provisions of the policy

While at trial Roman denied ever having received the disclaimer letter, the court is satisfied that said letter was properly sent to her, Ogilvie and her attorney on February 22, 2005. Burgos testified that at the scene of the accident he orally gave Ogilvie his name and address and plate number, but that she did not ask for the name of his insurer and he did not provide that information (Tr. pp. 36-37). Neither Ogilvie nor her attorney appeared at the trial.

Discussion

Pursuant to Insurance Law §3420(a)(3), notice of an accident to satisfy the notice requirements of a policy may be given by the injured party. In National Grange Mutual Insurance Company v. Diaz, 111 AD2d 700 (1st Dept. 1985), the court stated that the timeliness of a notice given by an injured person to an insurer (p. 701): "is not to be measured by the same standard as notice by the insured, since [w]hat is reasonably possible for the insured may not be reasonably possible for the person he has injured.' (Lauritano v. American Fire Ins. Co. 3 AD2d 564, 568, aff'd. 4 NY2d 1028. The sufficiency of notice by an injured person is governed not by mere passage of time but by the means available for such notice. It must be shown that the injured person acted diligently in attempting to ascertain the existence of insurance coverage and, thereafter, expeditiously pursued his claim."

Here, as aforesaid, Roman gave no notice to her insurer of the accident and the injured party did not appear at trial. The true dispute was between the two insurers as to whether Ogilvie's claim would be heard in an uninsured motorist arbitration with her insurer or in a plenary action against Roman, with defense provided by Travelers.

Clearly, since Roman never gave notice to Travelers, it was entitled to disclaim coverage as to her at the time it received notice from Ogilvie's attorney almost nine months after the accident and, from the failure of Ogilvie to present at trial any evidence as to what steps she took to determine Roman's insurer, there is no basis to conclude that Travelers could not have also properly disclaimed against Ogilvie. [*3]

However, where the only notice to Travelers was given by Ogilvie, "the disclaimer must address with specificity the grounds for disclaiming coverage applicable to both the injured party as well as the insured" [Ringel v. Blue Ridge Insurance company, 293 AD2d 460, 462 (2nd Dept. 2002)]. In General Accident Insurance Group v. Cirucci, 46 NY2d 862 (1979), the court held that an insurer's notice of disclaimer, stated to be on the grounds that the insured failed to report the accident, was not effective against third-party claimants, concluding (p. 864): "Although, under the facts of this case a disclaimer might have been premised on the late notice furnished by the third parties themselves to the insurer, since this ground was not raised in the letter of disclaimer, it may not be asserted now."

In Massachusetts Bay Insurance Company v. Flood, 128 AD2d 683 (2nd Dept. 1987), it was stated that "the notice of disclaimer must address with specificity the grounds for disclaiming coverage applicable to both the injured party as well as the insured, because notice of the occurrence by the injured party constitutes prima facie compliance with the notice requirements of the policy and, if unchallenged, relieves the insured of its contractual duty to provide proper notice." See also, Hazen v. Bottiglieri, 286 AD2d 708 (2nd Dept. 2001); Legion Insurance Company v. Weiss, 282 AD2d 576 (2nd Dept. 2001); Hartford Insurance Company v. Mohammod, 7 AD3d 490 (2nd Dept. 2004).

Here the disclaimer letter makes no mention of the notice provided by Ogilvie's attorney, it only stating that Roman failed to comply with the notice requirements of her policy. While copies of the disclaimer letter addressed to Roman were sent to Ogilvie and her attorney, the failure of Travelers to in any manner refer to the notice given by Ogilvie's attorney results, under the above cited legal principles, in the notice of disclaimer being invalid as a basis to disclaim coverage under Roman's policy. Since valid insurance coverage for Roman therefore exists, petitioner's application to stay the uninsured motorist arbitration demanded by Ogilvie is granted.

This decision constitutes the judgment of the court.

Dated: April 11, 2006______________

J.S.C.