GREATER NEW YORK MUTUAL INSURANCE COMPANY et al. v. QBE INSURANCE CORPORATION

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6308-04T56308-04T5

GREATER NEW YORK MUTUAL

INSURANCE COMPANY and

BAY PARKWAY PARTNERSHIP,

Plaintiffs-Respondents,

v.

QBE INSURANCE CORPORATION,

Defendant-Appellant.

________________________________

 

Argued December 6, 2006 - Decided March 5, 2007

Before Judges Winkelstein and Fuentes.

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No.

L-1104-04.

Robert B. Hille argued the cause for appellants (Waters, McPherson, McNeill, attorneys; Mr. Hille, of counsel and on the brief; Donald J. Fay, on the brief).

Bruce E. Barrett argued the cause for respondent (Margolis Edelstein, attorneys; Mr. Barrett, on the brief).

PER CURIAM

Plaintiff Greater New York Mutual Insurance Company (GNY) filed this declaratory judgment action against defendant QBE Insurance Corporation (QBE) seeking a judicial declaration that QBE was contractually responsible to indemnify and defend Bay Parkway Partnership, L.P., in connection with a personal injury suit filed by Shadi Negri. QBE appeals from the order of the Law Division granting plaintiffs' motion for summary judgment.

Bay Parkway is a New York State limited partnership that owns six apartment complexes in New Jersey. QBE issued a policy of insurance covering all of the apartment buildings, including one in South Orange, where the incident took place. The QBE policy had a coverage period from November 16, 2000 to November 16, 2001.

On December 7, 2000, Shadi Negri, a tenant in the South Orange property, was criminally assaulted and seriously injured. Two years later, Negri filed suit against the insured erroneously listing the date of the incident as December 7, 2001. By that time, the building was insured by GNY. When QBE noticed that the incident date listed on Negri's complaint fell outside its coverage period, it forwarded the complaint to GNY. From this point, GNY assumed responsibility for defending Bay Parkway. GNY did not discover the erroneous incident date until almost three years later.

Upon discovering the error, GNY disclaimed coverage, and filed this declaratory judgment action against QBE. The first issue raised by QBE involves a choice of law. Bay Parkway was organized under New York State law, and has its principal offices in that state. All of the insured properties are located in New Jersey and the incident leading to the claim obviously occurred in New Jersey. In this light, the trial court concluded that New Jersey had a greater interest than New York in this law suit.

This conclusion is significant because under New York law, a carrier is permitted to disclaim liability if it is not notified of the incident in a timely fashion. New Jersey law requires the carrier to show that the delay actually prejudiced its ability to defend the action. Palorome Mfg. Co. v. Commerce & Indus. Ins. Co., 310 N.J. Super. 168, 175 (App. Div.), certif. denied, 155 N.J. 590 (1998). Judge Bernstein decided that New Jersey law applies. We agree.

New Jersey's interest here is clearly superior to New York. The incident occurred in New Jersey; all of the witnesses reside in this state; the policy of insurance covered a New Jersey property; and New Jersey has a clear public interest in insuring that landlords managing residential rental properties provide a safe and secure environment for their tenants. See Pfizer v. Emp. Ins. of Wausau, 154 N.J. 187, 194-98 (1998); Sensient Colors, Inc. v. Allstate Ins. Co., 388 N.J. Super. 374, 388 (App. Div. 2006) (reaffirming the site-specific analysis principle, focusing on New Jersey's dominant interest in providing maximum insurance coverage to its citizens).

Having decided that New Jersey law controls, Judge Bernstein concluded that QBE had not been prejudiced by the three-year delay because (1) GNY had extensively investigated the incident, conducted discovery, and otherwise aggressively defended the claim; and (2) at the time QBE entered the case, there was still seven months left before the discovery end-date. Again, we agree.

At the time QBE was notified of the error in the incident date, it could have easily conducted whatever investigation it thought warranted, and had at its disposal the entire prior discovery conducted by plaintiff.

Affirmed.

 

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A-6308-04T5

 

March 5, 2007