Tower Ins. Co. of N.Y. v DYBO Realty Corp.

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Tower Ins. Co. of N.Y. v DYBO Realty Corp. 2012 NY Slip Op 30366(U) February 15, 2012 Supreme Court, New York County Docket Number: 100470/11 Judge: Judith J. Gische Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] I [* 2] SUPREME COURT OF THE STATE OF N I W YORK C o u m OF NEW YORK: IAS PART .to ---- X DECIWONI ORDER AND I - JUDGMENT Index No.: Seq. No.: Tower Insurance Company o New Y O ~ , f 100470/11 003 Plaintiff (s), PRESENT: -agalnsP Hen. Judith J. Glsch~ J.S.C. DYBO Realty Corp. and Cary Peck, Defendant (8). ---A --- -- X Recitation, as required by CPLR 9 2219 [a] of the papers considered in the review of this (these) motion(s): CI(1,X DYBO OSC (RR) wlRAS, exhs .............................. Tower ODD wlJSW affirm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DYBO further support w/RAS, exh . . . . . . . . . . . . . . . . . . . . . . . . . . . . Peck opp wlLBS afnrm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Order, Gische J., 2/9/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ ~ ~~ I . 1 2 3 4 5 Upon the foregoing papers, the declsion and oder of the court is as follows: GISCHE J.: Tower Insurance Company of New York'e ("Tower) brought a prlor rnotlon for a declaratory judgment and defendant DYBO Realty Corp. ("DYBO") brought a prior motion for leave to amend Is answer and r e v m e summary judgment. Those motions t were decided in accordance. with the court's prior decision, order and judgment dated December 21,201 I("prior order"). DYBO now seeks reargument o the motions f underiying the court's grant of daclaratoryfudgment, on the basis that the court overlooked an Appellate Division decision DYBO contends is directly on point. DYBO's -Page 1 of 8- .... .... .... -. . . . - 8 d l 3 8 5% u ,5 [* 3] motlon for a stay pending the court's decision on this reargument motion was granted, over the opposition by Caw Peck ('Peck), plaintiff in the underling paraonai injury action pending in Supreme Court, Kings County [Caw Peck v. DYBO Realtv Cow .I Supreme Court, Kings Go. Index No. 34687/08) ("personal injury action"). Peck is also a nominal defendant in thia actlon. Tower Insurance Company of New York ("Tower") does not oppme a stay of the Kings County action, but argues that the "new"law cited by DY80 does not command a change in the court's prior order. The court has stayed Peck from proceeding with the trial in Kings County, pending its decision on this motion (Order, Gische J., 1/18/2012 extended 2/8/2012). A motion for leave to reargue pursuant to CPLR 5 2221 is addressed to the court's diereretion m,oche,68A.D.2d 558 [I" Dept. 19791). It may be granted R only upon a showing that the court overlooked or misapprehended the facts or the law or for some reason mistakenly arrived at its earlier decision (William P. Pahl EauiDment Corr). v. Kasais, 182 A.D.2d 22 Dept Ig921). The decision that DYBO now relies on, Tower Ins. Co. of New York v. NHT Owners LLG, 90 A.D.3d 532 [l"' 201 I]) Dept. ("Tower v. NHT) was released on December 20,201 I one day before this court's prior order. Since then, another , decision was issued by the Appellate Division, First Department (George Carnobell . . m n r r v. National Union Fire In$, Co. of P i u h . PA -ADSd-, 2012 N.Y. Slip Op. 00254 [IMJan 17,2012J)-a Dept. (" 2012 WL 118461, e CamDber), further addressing issues about timely disclaimers by insurers based upon late notice. Given the similarities of the issues in this case and the recently issued decisions by the First Department, the court grants reargument. The facts of this case are set forth in the -Page 2 of 8- [* 4] court s prior order and will not be repeated herein, unless necessary. Background Peck claims she fell and was injured on the sidewalk immediately abutting the building owned by DYBO, located at 936 St. Marks Avenue, Brooklyn, New York, 11213 ( building ). Anne Boyd ( Boyd ) is one of the principals of DYBO, a domestic corporation. Boyd does not reside at the building which is a multiple dwelling. On the underlying motion, Tower established that although the accident i s alleged to have occurred on August 28, 2008, Tower was not notified o the, incldent f until June 10,2009. Tower disclaimed coverage on July 10,2009. This court found that the 3 M a y delay in notdying DYBO of ita disclaimer was not unreasonable because Tower had to assign the claim to an investigator and wait for the investigator s report before deckling what to do. in making its decision, he court examined the requirements of Insurance Law 5 3420 [d] which provides that an insurer shall disclaim liability or deny coverage for death or bodily lnjury...as soon as is reasonably possible... as well as the applicable case law, and compared the requirements to the actions taken by Tower after It received the ACORO on June 10,2009. First Tower assigned the claim to an examiner (June I then the examher assigned the claim to an outslde la), investigator (June 12 )). investigator met with Boyd on June leth The and he gave the claims examiner a verbal report on June 25 . Tower disclaimed coverage July 10, 2009. On the underlying motion, DYBO argued that Tower could have immediately disclaimed coverage when it received the ACORD, because all the necessary fa& were known at that time: 1) the date of the accident (August 28,2008) and 2) a letter -Page 3 of 8- [* 5] from Pack s lawyer, notifying DY80 s prlnclpal to notify her insurance company and 3) the RJI for the underlylng persons1 injury action. The court noted, however, that although older cases in the First Department had found a delay of as few as 30 days in disclaiming coverage based on late notice was unreasonable as a matter of law (West enants Cow. v. P&lic Service M 1 Insurance Co,, 290 AD2d 278 [Yt Dept 20021 app den 98 NY2d 605 [2002]), more recently the Appellate Division, Flrst Department had found it was draconian to expect an insurer to immediately dlsclaim coverage because an insurer should be able to investigate a claim by, among other things, conducting interviews about the clrcumstance surrounding the incident ( & Packinn Co.. Inc v. Campbell Sobera Ass&, 41 AD3d 12 [ I Dept 20071). In particular, the Appellate Division noted that the disclaim now and investigate later practice advocated by many insureds who are late in notifying their Insurance providers erodes an insurer s right to a reasonable investigation into other possible grounds for disclaimer (Admiral Ins. Co.v. m Farm Firel 88 A.D.3d 486,490 [l Dept 201 11 t r s citing Ace PacMna C0 . . Inc. v. Campbell Solham Assm., IIX., 41 A.D.3d 12, 15-16, 835 N.Y.S.2d 32 [20073). The declsfon in the 201 Idecision in Admiral lnsuran= CQ.v. State Farm Fire 1 supra ( Admiral Insurance ),however, draws upon the so-called DiGugllelmo rule, established by the Appellate Division, First Department in the case of PiGuallelmo v, Travelers Prop, C a. I 6 AD3d 344 [la 20041 Iv den 3 NY3d 608 [2004]). The Dept DiGuglielmo rule, however,was expressly overruled by the recent 2012 decision in Georae CnmPbell. Thus, even if, a8 Tower argues, the decision In Tower v. NHT, Is not a change in the law, the more recent decision in George Carnpbell is an unmistakable -Page 4 of 8- [* 6] shift in the law of the First Department, clearly setting forth the, law: an insurer may and must- disclaim "as soon as reasonably possible" based solely on the receipt of information from its insured, if it is readily apparent that the insured's notice is late Gsome Campbell Painunn v. onal Union Fire Ins. Co. of Pittsburgh. PA, 4 0 3 d - , 2012 WL 118401,2012 N.Y. Slip Op. 00254 at 3 [1* Dept. Jan 17, 20121) Examining the fax Tower received on June 10,2009, it is apparent that DYBO's notice was late. The fax included: 1) the liability ACORD from the insurance broker, 2) a copy of the letter Peck's lawyer's sent on February 27,2009 notifying DYBO that it had DYBO through the Secretary of State, but DYBO had not answered the complaint and with further instructions that DYBO notify 'ks insurance carrier so as to avoid antry of a defautt judgment against it, 2) the RJI in the personal injury action and 3) a specific notation by the insurance broker itself that this was the "first notification of this incident" highlighting the date of the claim as W28/08."Tower did not, however, notify DYBO that it was disclaiming coverage based upon late notice until July 10,2009,30 days later and the disclaimer was solely on the basla of late notice. Applying the legal principles of Geowe Camnbel (and to a lesser extent, Tower v. NHT), Tower should not have delayed in issuing a disclaimer based on late notice because all the facts necessary to disclaim coverage on that basis were obvDoua from the notice materials it received on June I O , 2009. By deciding George Campbell as it has, the Appellate Division has underscored that an expedited disclaimer by an insurer is required. Therefore, DYBO's motion to reargue is granted. Upon reargument, fhe court modiks its prior order granting Tower's motion for summary judgment, declaring that Ct has no obligation to provide DYBO with 8 defense in the personal injury action -Page 5 of 0- [* 7] and instead declares that there is an obligation to provide DYBO with SI defense In the personal injury action. The timeliness of DYBO's own notice to Tower is not the subject o this motion, f nor does the court have to decide whether i was timely. When the insurer's disclaimer t Is untimely, as a matter of law, the untirnelineas of the insured's own notice to the insurer of an occurrence is not an available defense to coverage (First Fin. Inn. Co,v Jetco Conk. Corn., IN.Y.3d 64 [2003]; George Camnbell v. National Union, supra; Tower v. NHT Owners, LLC, supra). In DYBO's underlying motion, DYBO moved to amend its answer and to have the court search the record to grant it summary judgment. Tower has only opposed that portion of DYBO's motlon for reargument based upon the decisions in Tower v. NHT and Georse CamDba. It does not address the issue of reverse summary judgment. - Pursuant to CPLR 3212 b], court has the discretion to render surnrnaryfudgmentfor the a nonmoving party on the issues raised in the motion for summary judgment (Dunham v. Hilco Const. Co.. Inq., 89 N.Y.2d 425 [1g96]). In any event, in a declaratoryjudgment action the court should declare the rights of the parties, even when the moving party does not prevail (Cannon Point North, Inc, v, m fNew York, 87 A.D.3d 861 [la o Dept 201 11). The only claims in the summons and complaint are that "DYBO failed to notify Tower of the occurrence as soon as practicable, thereby breaching the pollcy" and "Peck failed to notlfy Tower of the occurrence.' The proposed amended answer raises the same counterclaims and defenses which were fully addressed by the parties on the underlying motions. Both sides have laid bare thelr proof and Tower specifically -Page 6 of 0- [* 8] addressed the defenses raised in the proposed amended answer. Under these circumstanoes, DYBO is entitled to summary judgment in its favor. Although Peck did not oppose the prior motion or taken any positlon on reargument, except to oppose a stay on her underlying personal injury action, the dadalon a8 to Peck must be, and hereby is, harmonized with the court's decision as to Tower. Consequently, on reargument, Tower's motion for summary judgment is denied. DYBO's motion for permlasion to amend Its answer 1s granted as is its motion for mvewe summary judgment. Plaintiff Tower Insurance Company of New York has an obligation to defend and indemnify defendant DYBO Realty Corp In the personal injury action pending in the Supreme Court, Kings Co., under Index No. 34687108. All stays on the underlylng personal injury adon in Supreme Court, Kings County are hereby vacated forthwith since Tower must provlde DYBO with a defense in that action. Conclusion In accordance with the foregoing, It i hereby s ORDERED that the motion by DYBO for reargument of the court's prior order of December 21,201 1 is granted; and it I8 further ORDERED that upon reargument, the court denies plaintiff Tower Insurance Company of New York's motion for summary judgment against DYBO; and it is further ORDERED that the cross motion by defendant DYBO Realty Cow. for permission amend its answer is granted as i its motion for reverse summary judgment s and after searching the record; it I further s -Page 7 of 0- [* 9] ORDERED ADJUDGED AND DECLARED that plaintiff Tower Insurance Company of New York must defend and indemnify defendant DYBO Realty C o p in the personal injury action pending in the Supreme Court, Kings Co., under Index No. 34687/08; and it is further ORDERED that the motion by plaintiff Tower Insurance Company of New York for summary judgment against defendant Cary Peck is denied and the court's decision with respect to Peck is harmonlzed with the decision with respect to DYBO; and it is further ORDERED that all stays on the underlying personal injury action in Supreme, Court, Kings County are hereby vacated forthwith since Tower must provide DYBO with B defense In that action; and I is further t ORDERED any relief any relief requested but not specifically addressed is that hereby denied; and it is further ORDERED this constitutes the decision, order and Judgment of the court. that Dated: New York, New Yo& February 15,2012 So Ordered: UNFILED JUDGMENT This ludgmnt has not been entered by the Counw C l m and notim of enw cannot be sewed based hereon. TO obtain entry, counsel or authorized representative must 8 r in p m n at the Judgment Clerk's IMak (Room -page a of 8-

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