Lancer Ins. Co. v Sunrise Removal, Inc.

[*1] Lancer Ins. Co. v Sunrise Removal, Inc. 2010 NY Slip Op 50211(U) [26 Misc 3d 1222(A)] Decided on January 22, 2010 Supreme Court, Nassau County Iannacci, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 22, 2010
Supreme Court, Nassau County

Lancer Insurance Company, Plaintiff(s),

against

Sunrise Removal, Inc., GEOFFREY D. MCCALLUM AND ROSLYN SCHIFFER, Defendant(s).



12034/09



Plaintiff's attorney

Curtis, Vasile and Devine

2174 Hewlett Avenue, P.O. Box 801

Merrick, NY 11566

516-623-1111

Defendant's attorney

Pazer & Epstein

20 Vesey Street

New York, NY 10007

212-227-1212

Angela G. Iannacci, J.

The motion by the defendant, Roslyn Schiffer, for summary judgment pursuant to Insurance Law § 3420 and the cross motion by the plaintiff, Lancer Insurance Company (Lancer), also for summary judgment declaring, inter alia, that it is only liable to Schiffer up to the limits of its policy of insurance, are determined as hereinafter provided:

This action arises from a personal injury action commenced by Schiffer against the co-defendants Sunrise Removal, Inc. and Geoffrey D. McCallum, the owner and operator, respectively of a truck which struck and injured Schiffer. At the time of the accident, Lancer insured the vehicle with a "commercial auto" liability policy with a [*2]coverage limit of $100,000. The policy provides in pertinent part: 2. Coverage Extension

a. Supplementary Payments

In addition to the Limit of Insurance, we will pay for the "insured":

***

(6) All interest on the full amount of any judgment that accrues after entry of the judgment in any "suit" against the "insured" we defend, but our duty to pay interest ends when we have paid, offered to pay or deposited in court the part of the judgment that is within our Limit of Insurance.

There is no dispute that prior to the trial of the underlying action, counsel for Sunrise and McCallum offered the $100,000 policy limit to settle the matter. The offer was rejected, the case went to trial and, after a jury verdict, Schiffer was awarded $776,858.05. Judgment was entered on September 5, 2007. A subsequent appeal by Sunrise resulted in an affirmance.

Now, Lancer has commenced this declaratory judgment action seeking a declaration that it has no obligation to pay interest above its liability limit of $100,000, an order permitting it to deposit the policy liability limit into court and a declaration that it is released from liability. Schiffer answered and asserted a counterclaim seeking a declaration that Lancer is obligated to pay interest on the full amount of the judgment in addition to the $100,000 policy limit.

Insurance Department Regulation 11 NYCRR 60-1-1(b) provides under "Mandatory Provisions" as follows in pertinent part: An "owner's policy of liability insurance", * * * shall contain in substance the following minimum provisions or provisions which are equally or more favorable to the insured and judgment creditors, * * *:(b) With respect to such insurance as is afforded, the insurer, subject to the policy terms shall: * * *pay all expenses incurred by the company, all costs taxed against the insured in any such suit, and all interest accruing after entry of judgment until the insurer has paid or tendered or deposited in court such part of such judgment as does not exceed the applicable policy limits * * *.

While an insurer can't provide less than the regulation requires, there is no prohibition from being more generous than the regulation requires (see Dingle v Prudential Prop. and Cas. Ins. Co., 85 NY2d 657 [1995]). Here, although the policy language indicates that merely an offer of settlement is sufficient, section 60-1.1(b) requires tender of payment. An offer to settle pursuant to the policy limits is not an unconditional tender of payment and is insufficient to stop the accrual of interest on the judgment (see Levit v Allstate Ins. Co., 308 AD2d 475 [2d Dept. 2003]; Fama v Metropolitan Prop. & Cas. Ins. Co., 242 AD2d 663 [2d Dept. 1997]). Accordingly, the language of the regulation must control and Lancer's offer to settle just before trial was insufficient to stop the accrual of interest.

Conversely, while the insurance regulation does not require a provision in the [*3]policy providing for payment of interest on the entire judgment, Lancer's policy is more generous and clearly provides for the payment of interest on the entire judgment in addition to the payment of the policy limit (see Dingle, supra at 662, fn.2).

Therefore, the motion is granted, the cross motion is denied and it is hereby declared that the plaintiff, Lancer Insurance Company is obligated to pay the policy limit of $100,000 plus interest on the entire judgment of $776,858.05 from September 5, 2007 until the date of commencement of this action which sought payment of the policy limits into court.

Settle judgment.

This constitutes the decision and order of the court.

Dated: January 22, 2010Angela G. Iannacci, J.S.C.