Hermitage Ins. Co. v Zaidman
2012 NY Slip Op 30852(U)
April 2, 2012
Sup Ct, NY County
Docket Number: 101241/2011
Judge: Doris Ling-Cohan
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SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
I N D M NO.
MOTION SEQ. NO.
The following papem, numbered 1 to
Notice of MotionlOrdor to $how
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Upon the foregolng paperg, It Is ordered that thls motion 1
1. CHECK ONE:
2. CHECK AS APPROPRIATE:
3. CHECK IF APPROPRIATE:
r CASE DISPOSED
0GRANTED 0DENIED 0GRANTED IN PART 0OTHER
0DO NOT POST 0FIDUCIARY APPOINTMENT 0REFERENCE
HERMITAGE INSURANCE COMPANY,
INDEX NUMBER 101241/20 11
Motion Sequence 001
JUDGMENT & ORDER
SABINA ZAIDMAN, DCD MARKETING, LTD.
and GRACE ZAIDMAN,
DORIS LING-COHAN, J.:
Plaintiff Hermitage Insurance Company (Hermitage) moves, pursuant to CPLR 32 12, for
summary judgment in its favor on the complaint, declaring that it has no obligation to defend or
indemnify defendant Sabina Zaidman (Sabina), and for a default judgment as against defendant
DCD Marketing, LTD. (DCD), pursuant to CPLR 321 5 (a). Defendant Grace Zaidman (Grace),
Sabinaâs daughter, opposes and cross-moves for summary judgment declaring that Hermitage is
obligated to defend and indemnify Sabina. Sabina opposes Hermitageâs motion and supports
Graceâs cross motion. DCD opposes Hermitageâs motion and cross-moves for leave to extend
its time to appear and answer the cornplaint, pursuant to CPLR 3012 (d).
On February 12, 2007, Grace allegedly was injured when she tripped and fell down steps
at 1235 East 69âh Street, Brooklyn, New York (the Premises), owned by Sabina and Theodor
Zaidman (Theodor), Graceâs parents. On September 27, 2007, Grace commenced an action,
Grace Saidrnan v Sabina Zuidmnn and DCâD Marketing, LTD., Kings County Index No.
36154/2007 (the underlying action), alleging that she slipped on newspaper flyers left on the
steps of the Premises by DCD. Ex. A attached to Thomas Support Affirm. On June 9,2008, a
default judgment was issued against Sabina, because she failed to answer the complaint. Ex. C
attached to Davidovic Opp. Affirm.
On October 19, 2007, Hermitage, which insured the Premises, allegedly disclaimed
coverage of Graceâs claim. Ex. H attached to Thomas Support Affirm. However, on December
1,2010, over three (3) years after later, Hermitage (under the name of Tower Group Companies,
its new owner), sent a letter which, while reiterating its disclaimer, indicated that it would defend
Theodor and Sabina in the underlying action, âsubject to resolution of a declaratory judgment
action that we will commence against you to confirm the propriety of our disclaimer.â Ex. D
attached to Davidovic Opp. Affirm. Hermitage commenced the instant action on February 1,
20 1 1, requesting a declaratory judgment that it has no duty to defend or indemnify any of the
defendants for claims made in the underlying action, on the ground of late notice. On March 16,
201 1, Sabina, represented by counsel retained by Hermitage, moved to vacate the default
judgment against her.
âThe 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.â Dallus-
Stephenson v Wuisrnun, 39 AD3d 303, 306 (1â Dept 2007), citing Winegrad v New York Univ.
Med. Center, 64 NY2d 85 1, 853 (1 985). Upon proffer of evidence establishing a prima facie
case by the movant, âthe party opposing a motion for summary judgment bears the burden of
âproduc[ing] evidentiary proof in admissible form sufficient to require a trial of material
questions of fact.ââ People v Grasso, 50 AD3d 535, 545 (1â Dept 2008), quoting Zuckerman v
Cily ufNew York, 49 NY2d 557,562 (1 980). Although summary judgment is considered to be a
drastic remedy, it should be granted where there are no disputed material issues of fact. Andre v.
Pomeroy, 35 NY2d 361 (1974).
âWhen a defendant has failed to appear, plead or proceed to trial of an action reached and
called for trial, or when the court orders a dismissal for any other neglect to proceed, the plaintiff
may seek a default judgment against him.â CPLR 321 5 (a). However, CPLR 3012 (d) pennits
the court to âextend the time to appear or plead, or compel the acceptance of a pleading untimely
served, upon such terms as may be just and upon a showing of reasonable excuse for delay or
default.â âIt is within the courtâs power to grant such an extension where it is established . . . that
the delay in service was not willful or lengthy and that it did not cause any prejudice to the
parties.â A & JConcrete Corp. v A r k ~ 54 NY2d 870, 872 (1981). Further, CPLR 2005,
expressly permits a court to excuse a delay or default, based upon a claim of âlaw office failureâ.
At the time of the incident, the Premises were insured by Hermitage under policy number
HCP/523538-06 (the Policy). Ex. E attached to Thomas Support Affirm. Hermitage claims that
it first received notice of the incident on October 1,2007, by a âGeneral Liability Notice of
Occurrence/Claim,â dated September 28, 2007, from an insurance broker. Ex. F attached to
Thomas Support Affirm. This notice was accompanied by a letter from Graceâs attorney to
Theodor and Sabina, dated September 7, 2007, concerning Graceâs â<personalinjuries as a result
of the negligent operation, maintenance and control of your premises.â Id.
In a letter dated October 19,2007 to Sabinaâ and Theodor, Hermitage denied coverage of
Graceâs accident based upon the seven-and-a-half month interval in providing notice. Ex. H
âHermitage misidentifies her as Sabrina nt various places.
attached to Thomas Support Affirm. It is not disputed that such October 19, 2007 letter was sent
to Sabina and Theodorâs, at, 1 1 Gaylord Drive, Brooklyn, NY 11234, which WEE, not the mailing
address listed on the policy; as of March 7, 2007, the mailing address listed on the policy for
Sabina and Theodorâs address was 9301 Ditmas Avenue, Brooklyn, NY 1 1236. Exh. A attached
to Doris Affirmation in Opposition to Hermitage Motion and in Support of Grace Zaidman
In the October 19, 2007 letter denying coverage, Hermitage relied specifically on Section
IV - Commercial General Liability Obligations of the Policy, which requires that the insured
âsee to it that we [Hermitage] are notified as soon as practicable of an âoccurrenceâ or an offense
which may result in a claim.â Similarly, if a formal claim is made or a law suit brought against
the insured, the insured must ââ[nlotify us as soon as practicable.â The Policy goes on to ask for
the reporting of details of the occurrence, such as, location, nature of the incident, names and
addresses of injured persons and witnesses. Id.
Timeliness of Notice to Hemitage
âThe requirement that an insured notify its liability carrier of a potential claim âas soon as
practicableâ operates as a condition precedent to coverage.â White v City o New York, 81 NY2d
955,957 (1993). Further, âthe insured bears the burden of proving, under all the circumstances,
the reasonableness of any delay in the giving of notice.â Pnramount Ins. Co. v Rosedule
Gardens, I m . , 293 AD2d 235,240 (1st Ilept 2002). Hermitage argues that an unexcused delay
of short duration may be a breach of the insurance contract as a matter of law, citing, among
others, Deso v London & Luncashir-e lmiem. Co. qfâAm. (3 NY2d 127 [ 19571) ( 5 1 days); Power
Authority oflhe Slule q/âNew York v Weslinghouse Eledric Corp. (1 17 AD2d 336 [ 1st Dept
19861) (53 days).
Sabinaâs opposition does not challenge the seven-and-a-half month interval between the
occurrence and its being reported to Hermitage. She acknowledges that she learned of her
daughterâs accident soon after it occurredâ and visited her in the hospital daily.
âHowever, I had no reason to believe that my daughter might make a claim or sue
me as a result of her fall. The facts, as I understood them at the time of the
accident and presently, seem clear to me that I did nothing wrong, and my
relationship to Grace did not lead iiie to believe that she would bring a lawsuit
claiming that I did. In fact, Grace never mentioned the possibility of making a
claim or suing me during the following months as I was helping to care for her.â
Sabina Aff., 16, Ex. B attached to Doris Opp. Affirm. Sabina further elaborates as to her
assertion that she âdid nothing wrongâ, indicating that, â[tlhe concrete steps had been replaced a
few years before the accident, and were in good condition at the time of the occurrence as were
the handrails along both sidesâ. Id. at 115. Sabina maintains that she âdid not place the
newspaper/marketing bundle on the steps [and that she] did not live at [the premises where the
accident occurred] and âwas not aware that the newspaper marketing bundle had been placed on
the stepsâ. fd.
Sabina states that she firs1 learned of Graceâs intentions to sue whcn she received a letter
from Graceâs lawyer, dated September 7. 2007. Id., 7 7. Sabina relies upon Argentina v Otsego
Mut. Fire hs. Co. (86 NY2d 748. 75 1 [ 1995]), where the Court of Appeals held that âthe close
familial relationship between the insureds and the accident victim was of such a nature as to
support a finding that the insureds reasonably believed that they would have been apprised if the
injured party had been contemplating a lawsuit,â in support of her argument that she proceeded in
good faith in the aftermath of the incident. While the insured in Argenlina waited 171 days to
2Hermitage submits an unsworn, lintid-written statement, signed by Theodor, dated October 12, 2007, which
states that âI first learned that my daughter was in.jcired on February 13,2007.â Ex. G attached to Thomas Support
Affirm. In conjunction with this document, Charlie Dimino, a11investigator for First Judicial Claim Service, submits
an affidavit asserting that he met with Theodor 011 October 12, 2007, discussed the incident with him, transcribed
Theodorâs statement and had him sign a copy. as attached.
give notice of the occurrence, the Court focused on âthe peculiar circumstances of this caseâ (id.)
in accepting âthe insuredsâ âgood-faith belief that the injured party would not seek to hold them
liableâ (id. 750).
â[Tlhe insured bears the burden of establishing the reasonableness of the proffered
excuse.â Great Canul Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 744 (2005). Typically, such
a good-faith belief does not rest solely in the mind of the beholder. Paramount, 293 AD2d at
239 (âthe courts have not turned over lo the insured, or its agents, the exclusive responsibility for
deteminating when an accident is likely to give rise to a liability claimâ); see also Tower Ins.
Co. ofN. Y. v Clusson Hgrs., LLCâ,82 AU3d 632, 635 (1st Dept 201 1) (âSince the insureds
admitted that their building managex knew on October 30, 2006 that Gonzalez had fallen on the
premises and had been taken by ambulance to a hospital, their purported belief that no claim
could possibly be filed by Gonzalez because she was not injured was unreasonableâ); Hey&
Contracting Corp. v American Home Assurirnce Câo., 146 AD2d 497,499 (1 st Dept 1989) (âThe
fact that a particular occurrence limy not in the end result in a ripened claim does not relieve the
insured from advising the carrier olâlhat cvcnt. and plaintiffs policy with defendant dictates that
timely written notice be provided whenever a claim âmayâ ariseâ). Yet, these latter cases lack the
intimate familial connection found in Aiyyn!inli. I n Paramount, an employee of the buildingâs
managing agent delayed acting on his knowledge of an occurrence; in Classon Hgtx, it was the
building manager; in Heydl, it was a contractor on a construction project. Thus, in the instant
action, arguably, it was reasonable Iâor Sahina, focusing on her daughterâs recovery, not to
speculate about unexpressed legal considerations, and to hold a good-faith belief that she would
not face liability for the accident, providing a reasonable basis for her delay in notifying
Hermitage. See Argenlinu, 86 NY2d at 750.
Timeliness of Hermitageâs Disclaimer
Regardless of whether it has been established that Sabina had a reasonable excuse for her
delay in notifying Hermitage, Sabina and Grace also contend that insurance coverage is
warranted, since, as a matter of law, Hermitage failed to timely disclaim coverage as required by
Insurance Law 0 3420 (d) (2). As detailed below, this court agrees.
Insurance Law 83420 (d) (2) provides that:
â[ilf under a liability policy issued or delivered in this state, an insurer shall
disclaim liability or deny coverage for death or bodily injury arising out of a motor
vehicle accident or any other type of accident occurring within this state, it shall
give written notice as soon as is reasonably possible of such disclaimer of liability
or denial of coverage to the insured and the injured person or any other claimant.â
Graceâs counsel notes that the purported disclaimer notice bears the certified mail
tracking number 7006 3450 0002 41 19 6505. See Ex H attached to Thomas Support Affirm. He
submits the results of a search of the United States Postal Serviceâs (USPS) tracking web site for
this number reporting âno record for this item.â Ex. G attached to Davidovic Opp. Affirm.
Additionally, Graceâs counsel argues that the October 19, 2007 disclaimer was sent to the wrong
address in that it was not sent to the most recent mailing address indicated in the policy.
While Hermitage claims the October 19,2007 disclaimer was sent to Theodor and Sabina at 1 1
Gaylord Drive, Brooklyn, N Y 1 1234, it is undisputed that as of March 7, 2007, the mailing
address which was listed on the policy was 9301 Ritrnas Avenue, B r o o w Y I 1236, as
evidenced by an endorsement included in the copy of the policy attached to Hermitageâs m ~ t i o n . ~
In addition, Sabinaâs counsel asserts that the October 19, 2007 disclaimer sent by
Hermitage to the Zaidmans, was in fact sent to the wrong address in that it was sent to â1 1
It is noted that, neither of these addresses is the address of the subject Premises.
Gaylord Drive, Brooklyn, New Yorkâ, and that no such address existsn4128, Doris Affirm.
Sabinaâs counsel argues that there can be no presumption of receipt if a letter is sent to a wrong
address. Sabinaâs counsel also asserts that, six months prior to the alleged mailing of the
October 19,2007 disclaimer, the policyâs was amended to provide the mailing address for Sabina
and Theodor as, 9301 Ditmas Avenue, Brooklyn, New York, and the disclaimer was not sent to
Hermitage does not dispute that the October 19, 2007 disclaimer was not sent to the
current mailing address listed on the policy.
Under the within circumstances, Hermitage has not met its burden of establishing timely
notice of disclaimer, pursuant to Insurance Law Â§ 3420 (d) (2). See Leher McGovern Bovis v.
Public Service Mut. Ins. Co., 260 AD2d 388, leuve dismissed 94 NY2d 944 (2000). I is
undisputed that Hermitage addressed its notice of disclaimer (the October 19, 2007 letter), to 1 1
Gaylord Drive, Brooklyn, N Y 11234, which was not the current address listed on the policy. It is
also not disputed that, as of March 7, 2007, Sabina and Theodorâs mailing address as listed in the
policy was, 9301 Ditmas Avenue, Brooklyn NY 11236. Thus, the statutory notice was not
effected. See Elacqua v PhysiciunsâReciprocal Insurers (21 AD3d 702, 706 [(3d Dept 20051)
(âThe failure to satisfy that statuteâs [Insurance Law 3 3420 (d)] requirements precludes an
insurer from denying coverage based on a policy exclusionâ); c[ Bcrdio v. Liberty Mutual Fire
Ins., Co., 12 AD3d 229 (1ââ Dept 2004)(âan insurer may effectively cancel its policy by mailing a
notice of cancellation to the address ShQwg on the policvâ(emphasis supplied)); 18ââ
C o y . v. Aetna Casually and Surely Co., 240 AD2d 287 (1 Dept 1997)(â[t]he insurer satisfzed
Counsel indicates that the proper address for âGaylord Driveâ is âGaylord Drive,
Northâ and that âGaylord Driveâ does not exist.
its burden of proving a proper mailing...sent ...[to the] addresses as they appeared on the
declaration page of the policy...â). Where a notice is mailed to an address which does not
conform to the information contained in the partiesâ contract, such notice is without effect. See
1626 SecondAve., LLC v. Nolle Rsstaurunt Corp., 21 Misc 3d 1 143(A), 2008 N Y Slip Op
5249O(U)(Civ Court, New York County 2008). Moreover, Hermitageâs (second) notice of
disclaimer dated December 1,2010, sent almost three (3) years after receiving notice from
Sabina of the subject occurrence, in which it reiterated its denial of coverage, is insufficient to
constitute a timely notice of disclaimer, as a matter of law. Firemen âs Fund Ins. Co. qf Newark
v. Hopkins, 88 NY2d 836 (1 996); Hurlford Insurance Co. v. County qjâNassau, 46 NY2d 1028
(1 979); Allcity Ins. Co. v. 601 Crown St. Rlty. Corp., 264 AD2d 3 15 (1 ââDept 1999).
Thus, as Hermitage failed to establish that it provided Sabina with a timely notice of
disclaimer, as required by Insurance Law $3420 (d) (2), Hermitageâs motion for summary
judgment is denied and Graceâs motion for summary judgment is granted. The court notes that,
no factual issues with respect to Hemitageâs failure to send a timely notice of disclaimer have
been raised by any party, since it is undisputed that the October 19, 2007 notice of disclaimer was
not sent to the current mailing address listed on the policy. As such, Hermitageâs motion for a
declaration that it has no obligation to defend or indemnify Sabina in the underlying action is
denied, while Graceâs cross motion for a declaration that Hennitage has an obligation to defend
or indemnify Sabina is granted.
Befaub Judgment as to DCD Marketing, I ,td./Extend time to An$wer
The remaining issues pertain to Hermitageâs motion for a default judgment as to DCD,
which DCD has opposed, as well as DCDâs cross-motion for an extension of time to appear and
answer Hermitageâs complaint, pursuant to CPLR 3012 (d)
However, since the within decision
has determined the issue of insurance coverage as a matter of law, the case as against defendant
DCD is deemed moot.â
The court notes that the pleadings fail to contain any specific relief
asserted as against defendant DCDn6
Accordingly it is,
ORDERED that Hermitage Insurance Companyâs motion for summary judgment,
seeking a declaration that it is not obliged to provide a defense to and indemnify the defendant
Sabina Zaidman in the personal injury action of Grace Zuidman v Sabinu Zaidman and DCD
A copy of the summons and complaint in the instant action was served on DCD,
through the Secretary of State, on February 25,201 1, pursuant to Business Corporation Law (j
306 (b) (1). Ex. I attached to Thomas Support Affirm. After no answer was received or
appearance entered by DCD, Hermitage sent a letter to DCD,on June 15,20 1 1, notifying it of its
default. Ex. J attached to Thomas Support Affirm. The letter contained an additional copy of the
summons and complaint. Ex. K attached to Thomas Support Affirm. Because DCD has not
served an answer, asked for an extension of time to answer, nor made an appearance, as of the
date Hermitage filed the instant motion, Hermitage moved for the entry of a default judgment
against DCD, pursuant to CPLR 321 5 (f).
DCD did in fact serve an answer on July 5,201 1 (Ex.B attached to DCD cross motion),
but Hermitage rejected it as it untimely (Ex. C attached to DCD cross motion). DCD contends
that âfaulty office practice rather than any willful neglect or dilatory tacticsâ accounted for the
approximately four-and-a-half month delay in answering. Absent prejudice to Hermitage, this
delay may be excused. See Elkrnun v Sourhgufe Owners Corp., 243 AD2d 356 (1 st Dept 1997)
(four months delay); Mufulli v Ford Motor Co., I05 AD2d 642 (1 st Dept 1984) (three-and-a-half
months delay). While âa showing of a potential meritorious defense is not an essential
component of a motion to serve a late answer (CPLR 3012 [d]) where, as here, no default order
or judgment has been enteredâ (Jones v 414 Equifies LLC, 57 AD3d 65, 8 1 [ 1st Dept 2008]),
DCD has nonetheless provided one. DCD states that it has never been an insured under the
Policy, and DCD is not seeking that Hermitage defend or indemnify it fdr a claim made in the
underlying action (Index Number 361 54/20080), thus, there can be no declaratory relief
regarding DCD under the terms of the Policy. Based upon the above, DCD7scross motion for
leave to extend its time to answer would have been graqted, and Hermitageâs motion for-a default.
judgment against DCD denied, had the within relief not be determined to be moot.
The only relief requested in the complaint is that: âthis [clourt issue ajudgment
declaring that [Hermitage] had not duty to defend or indemnify defendants for claims being made
in the action Grace Zaidman v. Sabina Zaidman and DCD Marketing, pending in the Supreme
Court of the State of New York, County of Kings, under Index Number 361 54/2007 ...â. Exh. B,
Thomas A f i n n in Support.
Marketing, LTD., Kings County Index No. 361 54/2007, is denied; and it is further
ORDERED that defendant Grace Zaidmanâs cross motion for summary judgment,
seeking a declaration that Hermitage Insurance Company is obliged to provide a defense to and
indemnify the defendant Sabina Zaidman in the said action pending in Kings County, is granted;
and it is further
ADJUDGED and DECLARED that Hermitage Insurance Company is obliged to
provide a defense to and indemnify the defendant Sabina Zaidman in the said action pending in
Kings County; and it is further
ORDERED that defendant DCD Marketing LTD.âs cross motion for leave to an
extension of time to answer the complaint is deemed moot; and it is further
ORDERED that within 30 days of entry of this order, defendant Sabina Zaidman
shall serve a copy upon all parties with notice of entry.
Doris Ling-Cohan, J.S.C.