NGM Ins. Co. v CHB Constr., Inc.

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NGM Ins. Co. v CHB Constr., Inc. 2012 NY Slip Op 30454(U) February 8, 2012 Sup Ct, Nassau County Docket Number: 15060/10 Judge: Karen V. Murphy 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] Short Form Order SUPREME COURT - STATE OF NEW YORK TRIAL TERM. PART 11 NASSAU COUNTY PRESENT: Murphv Justice of the Supreme Court Honorable Karen J/ NGM INSURCE COMPANY, Index No. 15060/10 Plaintiff(s), -against- Motion Submitted: 11/711 Motion Sequence: 003 004 CBB CONSTRUCTION, INC., JOSEPHIE CARI, FRAK A. MEAK, HORACIO A. CONDE and CLAUDIA GLADYS FERNANEZ, Defendant(s). The following papers read on this motion: Notice of Motion/Order to Show Cause........................ Answering Papers...................... ...... Reply. ...... ...... ... ... ...... Defendants , Horacio A. Conde and Claudia Gladys Fernandez (collectively referred to herein as the " Conde Defendants ), move pursuant to CPLR 3212 , for an Order granting them summar judgment and determining that the plaintiff, NGM Insurance Company, is obligated to defend and indemnify the defendant, CHB Constrction , Inc. (" CHB" Plaintiff, NGM Insurance Company ("NGM" ), in turn , cross moves , pursuant to 3212 , granting it summary judgment on it' s declaratory judgment action and determining that it is not obligated to defend and indemnify CHB in connection with the underlying lawsuit entitled Horacio A. Conde v. Josephine Carini , et. al. pending in this Court under Index No. 7745/08. CPLR The motion and cross motion are determined as herein set forth below. At the heart of this action is a construction accident that took place on February 19 2008 as a result of which Horacio A. Conde (and his wife , Claudia Gladys Fernandez) [* 2] brought suit supra alleging violations of Labor Law and negligence to recover damages he sustained as a result of a fall through a " temporary staircase " that he was descending in defendant Josephine Carini' s home. As best as can be determined from the papers submitted herein , Carini , the owner of a single family home in Huntington , New York hired defendant Frank A. Meak ("Meak" ), who has defaulted in this and the underlying action, to do extensive renovation and construction work. Meak, in turn , subcontracted with defendant CHB Construction , Inc. (" CHB" ) to do carpentry and framing work at the home. Meak also subcontracted with the plaintiff, Horacio A. Conde , a tile contractor to install tile as par of the renovation work at Carini' s home. Pursuant to an Order of this Court dated March 31 2011 the underlying plaintiffs complaint against defendant Carini has been dismissed. In addition , as a result of the outstanding issues of fact , the Conde Defendants ' motion in the underlying action for summar judgment on the issue of liabilty against CHB was denied. Inasmuch as is pertinent for the determination of this action, it is noted that plaintiff NGM Insurance Company provided a policy of insurance to its insured , the defendant CHB Construction , Inc. The policy was in effect on February 19 , 2008. On October 7 2009 , counsel for the Conde Defendants sent a letter to CHB (NGM' insured) advising it of plaintiffs ' claims and asking it (COO) to put it' s carier (NGM) on notice of same. CHB did , in fact , forward the letter to NGM and NOM acknowledged receipt of this letter by October 15, 2009 (Cross motion , Ex. E (Aff. of Julio Celerio , Senior Claims Manager at NGM 3D. Subsequently, on December 10, 2009, NGM issued a disclaimer letter addressed to CHB Construction , Inc. and copied to counsel for the Conde Defendants (plaintiffs in the underlying action) disclaiming coverage based upon CHB' s failure to comply with the policy s notice provisions. The affidavit submitted herein by NGM' s Senior Claims Manager , Julio Celerio confirms that following his receipt of the Conde Defendants ' counsel' s letter , NGM conducted an investigation and ascertained that the owner of CHB had been notified through his employee , Juan Malagon , that an accident had occurred on a staircase that CHB had performed work on , within a few days of its occurrence. Thus , according to NGM , CHB had knowledge of the underlying accident shortly after it occurred and failed to provide it with timely notice of same. This , NGM maintains , was a breach of the notice provision of the policy by CHB. Subsequently, by letter dated January 27 , 2010 , the Conde Defendants , by counsel [* 3] sent a letter , enclosing a copy of the pleadings in the lawsuit, to The Main Street America Group, the parent of NGM (hereinafter NGM). It does not appear that an additional disclaimer was sent in response to the January letter. Upon the instant motion , the Conde Defendants seek summary judgment determining that NGM is obligated to defend it's insured CHB. The Conde Defendants assert two basis for their claim to summary judgment. First , t at NGM has not validly disclaimed coverage with respect to the notice that they (the Conde Defendants) provided. And second , the Conde Defendants provided timely notice of the loss and underlying lawsuit to the plaintiff. Plaintiff, in turn , seeks summary judgment on it's declaratory judgment action on the grounds that it has no obligation to defend or indemnify CHB . NGM also asserts two basis for it's entitlement to summary judgment. First , NGM properly disclaimed coverage for the underlying action because CHB did not provide it with timely notice of the incident. And second , the Conde Defendants, as the underlying plaintiffs , ascertaining the identity of the named insured , and as such , dilgence to justify the lateness of any purported notice. Summar judgment is the procedural equivalent of a trial GlobeMfg. Corp. 34N. 2d 338 , 313 N. 2d 776 , 357 N. unreasonably delayed in did not exercise sufficient (S. J. Capelin Assoc. v. 2d 478 (1974)). !tis a drastic remedy that wil only be granted when the proponent establishes that there are no triable 2d 923 (Alvarez v. ProspectHosp. 68 N. 2d320 , 501 N. 2d 572 508 N. issues of fact (1986)). Once the par prima facie seeking summary judgment has made a entitlement to judgment as a matter oflaw , the showing of par opposing the motion must come forward with proof in evidentiar form establishing the existence of triable issues of fact , or (Alvarez v. Prospect Hosp., supra; Zuckerman v. City of New York 49 N. Y.2d 557, 562 404 N. E.2d 718 427 N. S.2d 595 demonstrate an acceptable excuse for its failure to do so (1980)). Mere conclusions, expressions of hope or insufficient unsubstantiated allegations are (Zuckerman v. City of New York, supra). In this case , NGM issued an insurance policy to CHB , which required the insured to give notice and fie proofs of loss or damage thereof as soon as practicable. The purpose of a provision for notice and proofs of loss such as in the case at hand , is to allow the insurer to form an intellgent estimate of it's rights and liabilties , to afford it an opportunity for an (Security Mut. Ins. Co. of New investigation Yorkv. Acker- Fitzsimons Corp. 31 N. 2d 436 293 N. 2d 76 340 N. S.2d 902 (1972); Wachtel v. Equitable Life Assur. Socy. 266 N. Y. 345 , 194 N. E. 850 (1935)). , and to prevent fraud and imposition upon it Notably, the policy in this case makes compliance with the requirement as to notice and proof of loss an express condition precedent; that is recovery under the policy must be [* 4] Mut. Ins. Co. Vanderbiltv. IndemnityIns. 2d 853 (2dDept. Farrauto 136A. 2d 598 , 523 N. 2d 808 (2d Dept. , 1943)). Further , in the Co. of North America 265 A. D. 495 , 39 N. absence of a valid excuse by the insured of a failure to satisfY the requirements of a policy provision relating to the furnishing of notice or proofs of loss , compels a finding that the (Greater N. denied in the case of noncompliance with such requirement I: , 1988); policy is vitiated (American Transit Ins. Co. v. Sartor 3 N. 3d 71 814 N. 2d 1189 , 781 2d 630 (2004)). Here , the evidence demonstrates that although NOM was first notified of the underlying accident on October 15 , 2009 , it's investigation confirmed that the insured , CHB was made aware ofthe loss by it' s employee Juan Malagon " shortly after it happened" , i.e. shortly after February 19 , 2008. It is clear , therefore , that CHB never reported the accident to NGM until more than a year after the occurrence. Thus , based upon the foregoing, this Court finds that NGM has satisfied it's prima entitlement to judgment as a matter of law. CHB clearly failed to comply with the condition precedent to coverage and as a result vitiated the contract of insurance. NGM has established that CHB cannot be found to be entitled to a defense and indemnity coverage in facie the personal injury action arising from the accident (Reg- Tru Equities, Inc. v. Valley Forge st Dept. , 2007), leave to appeal denied, 10 2d 84 (1 44 A. 3d 570 , 846 N. 3d 701 (2008)). In addition , CHB' s failure to present a reasonable excuse for failng Ins. Co. to provide notice to the insurer for nearly one and a half years after becoming aware of the incident at issue , and thus , CHB' s noncompliance with the policy s timely notice provision relieves the insurer , NGM of any duty to defend and/or indemnifY it in the underlying action 2d 113 (2d Dept. (Gallante Props., Inc. v. Allcity Ins. Co. 24 A. D.3d 414 , 805 N. 2d 305 (2d Dept. , 2011)). 2005); Lobosco v. Best Buy, Inc. 80 A. D.3d 728, 915 N. In opposition (and in support oftheir own motion), the Conde Defendants argue that they provided timely notice to the plaintiff and that NOM has not validly disclaimed coverage with respect to the notice that they provided. These arguments are unavailng. The law is clear that ifthe injured person provides independent notice ofthe claim to a notice of disclaimer solely based on the insured' s failure to provide timely (Hereford Ins. Co. v. Mohammod 2d 87 (2d Dept. , 2004)). That is when an insurer disclaims 7 A. 3d 490 , 776 N. coverage the notice of disclaimer must promptly apprise the claimant with a high degree the insurer , notice of the claim is invalid against the injured person of specificity of the ground or grounds on which the disclaimer is predicated' " (Hazen v. OtsegoMut. FireIns. Co. 286 A;D. 2d 708 709 , 730N. S.2d 156 (2dDept. , 2001)). Here contrary to plaintiff s contention , the above referenced disclaimer of coverage was based only on its insured' s failure to notify it ofthe claim. Ordinarily, this disclaimer would not [* 5] effective against the injured part, who was entitled to give independent notice ofthe claim. However, the sequence of events in this case cannot be overlooked. The notice provided to NGM by CHB of plaintiff s claim against it , arising out ofthe subject accident , also operated to provide NGM with notice of the Conde Defendants claim as against CHB , NGM' s insured (Steinberg v. Hermitage Ins. Co., 26 A. D.3d 426 , 809 S.2d 569 (2d Dept. , 2006); Loeffler c. Sirius America Insurance Co., 82 A. D.3d 1172 923 N. 2d 550 (2d Dept. , 2011); Massachusetis Bay Ins. Co. v. Flood 128 A. D.2d 683 513 N. 2d 182 (2dDept. , 1987); cf 23- 08- 18 Jackson Realty Assoc. v. Nationwide Mut. Ins. Co. 53 A. D.3d 541 , 543 , 863 N. S.2d 35 (2d Dept. , 2008)). Herein , the injured part, the Conde Defendants , did not communicate with the insurer after NGM had already received notice from its insured , albeit in the form of a copy of Conde s counsel' s letter , and after NGM had already disclaimed coverage and had copied the Conde defendants counsel on the disclaimer letter. Any subsequent disclaimer would have been redundant inasmuch as Conde was already aware that the insurer disclaimed based upon the untimeliness of the notice of the accident. until more critically, As to the question of whether the Conde Defendants ' notice to NOM was timely, in determining the reasonableness of an injured part' s notice , the notice required is measured (Malik v. Charter Oak Fir Ins. Co. 60 A. 1013 , 877 N. 2d 114 (2d Dept. Becker v. Colonial Coop. Ins. Co. 24 A. D.3d 702 , 806 N. 2d 720 (2d Dept. , 2005)). That is , the " sufficiency of notice by an injured part is governed not by mere passage of time but by the means available for such notice Further , the injured party, such as the Conde Defendants in the case at bar , must nonetheless establish that they had difficulty ascertaining the identity of the insured or ofthe less rigidly than that required of the insured" , 2009); (Id). insurer. This may excuse their delay in giving notice of the accident but only if they demonstrate that they exercised reasonable diligence in their attempts for identification of (Spentrev Realty Corp., v. United National Specialty Ins. Co. 90 A. D.3d 636 , 933 2d 725 (2d Dept. Elmuccio v. Allstate Ins. Co. 149 A. 2d 653 , 540 2d465 (2d Dept. , 1989)). same , 2011); The injured part has the burden of proving that he , or counsel acted dilgently in attempting to ascertain the identity ofthe insurer and thereafter acted dilgently in attempting to ascertain the identity of the insurer and thereafter expeditiously notified the insurer (Hanover Ins. Co. v. 81 A. 3d 778 , 916 N. 2d 615 (2d Dept. , 2011)). The Conde Defendants submit that the homeowner Carini , never mentioned CHB Construction in her discovery responses or during her deposition in the underlying personal injury action. It was not the burden of Carini to volunteer such information. Rather , it is incumbent upon the Conde s to ascertain the responsible parties. There is no proof that Carini withheld Prakin, [* 6] information , or that the Conde s made so much as an inquiry to elicit such information. Additionally, Malagon was known to Conde and was on the stairs with Conde at the time of the accident. It is notable that Malagon , from whom the Conde s allegedly first learned the identity of CHB at his August 2009 deposition, is the same person interviewed by an investigator on behalf ofthe Conde s on December 28 2008. Although Conde asserts that Malagon did not mention CHB' s involvement , Conde again does not suggest that an inquiry was ever made or set forth any reason why Conde could not have learned of CHB earlier. Conde s efforts to identifY the part responsible for the staircase any sooner than one year after commencement of the litigation , and approximately eighteen months after the Februar 2008 accident were woefully inadequate. Clearly, since Conde alleged that he had some idea of the involvement of contractors in the happening of the incident , and brought an action under the Labor Law , in order to protect his direct claim against the insurer, he was required to make a reasonably dilgent effort to locate the responsible part. While Conde asserts that he was unaware ofthe involvement of CHB , and attempts to shift responsibilty for that lack of knowledge to Carini and Malagon , absent any proof that Conde made the necessar inquiries, or followed up on discovery demands , or took any steps to learn the identity of the responsible par, Conde has failed to establish that he was thwared in his investigation. Had due dilgence been exercised , the Conde s could , should and would have been aware ofCHB as early as the date of the accident or at the very least by December 28 , 2008. Conde s summary judgment motion bases the timeliness of their notice to NGM based upon the October 7 , 2009 letter. It was only in counsel's affirmation in opposition to NGM' s cross motion for summar judgment , that he claimed the January 2010 letter constituted independent notice by the injured part. In the interest of judicial expediency, the Court wil address both letters. Turning to the issue of notice to the carier , counsel , on behalf of Conde sent one letter to CHB dated October 7, 2009 wherein he asked CHB to notify the carrier and to return the enclosed postcard setting forth the insurance company applicable to this claim your policy number and policy limits . There is no evidence of any followup or additional demand for the name of the insurer to enable the Conde s to independently provide notice. Conde has failed to establish that it dilgently attempted to lear the identity of the carrier. CHB' s forwarding ofthe letter from Conde s counsel did not constitute notice by the injured to the insurer. It was notice by the insured to the insurer. !t was not until par [* 7] January 27 , 2010 , 47 days after the Conde s were clearly aware of the identity of the insurer and after receipt of the disclaimer and almost two years after the accident , that the Conde sent a letter to NOM. The letter neither mentions the prior disclaimer nor does it state that it was exercising the injured part' s right to provide notice directly to the insurer. That alone is not dispositive. Assuming said letter constitutes independent notice , no explanation whatsoever was offered for the delay in sending the letter. The Conde s have failed to meet the burden of proving that they or counsel acted dilgently in attempting to ascertain the (Becker v. Colonial identity of the insurer and thereafter expeditiously notified the carrier Spentrev Realty Corp., v United National Specialty Ins. Co., Ins. Co. OfNYv. Jaison John Realty 60 A. D.3d 418 874 N. S.2d 91 (1 st Dept. , 2009)). There is a failure of proof as to both prongs , thus Conde has not Coop. Ins. Co., supra); supra); Tower established a Corp., prima facie case. Therefore , the Conde Defendants motion for an Order granting them summary judgment and determining that the plaintiff, NGM Insurance Company, is obligated to defend and indemnifY the defendant , CHB Construction , Inc. is denied. Accordingly, plaintiff, NGM' s cross motion for summar judgment on the declaratory judgment action and determining that it is not obligated to defend and indemnifY CHB in connection with the underlying lawsuit entitled Horacio A. Conde v. Josephine Carini , et. al. is granted in its entirety. The parties remammg contentions have been considered and do not warrant discussion. All applications not specifically addressed are denied. Settle Judgment on Notice. Dated: February 8 , 2012 Mineola , N. ENTERED FEB 16 2012 NASAU COUNTY COUNTY CLERK' S OFFtCE

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