Alfonso v Zurich Am. Ins. Co.
Annotate this CaseDecided on December 4, 2013
Supreme Court, Kings County
Ciro H. Alfonso, Plaintiff,
against
Zurich American Insurance Company, Defendant.
16878/13
Plaintiff Attorney: Law Office of Todd J. Krouner, 93 North Greeley Avenue, Chappaqua, NY 10514
Defendant Attorney: Kevin Mahon, Esq., Morris, Duffy, Alonso & Faley, 2 Rector Street, 22nd Floor, New York, NY 10006
David I. Schmidt, J.
Upon the foregoing papers, plaintiff Ciro H. Alfonso (plaintiff) moves by order to show cause, for a judgment pursuant to CPLR 3001 and Insurance Law § 3420 (a) (6) declaring that, insofar as plaintiff discharged his statutory obligations under Insurance Law § 3420 (a) (4) to provide defendant Zurich American Insurance Company (Zurich) with notice of his claim for personal injuries against its insured, Delmar Sales, Inc. [*2](Delmar), Zurich is obligated to compensate plaintiff for any judgment which may issue for plaintiff in his underlying personal injury action against Delmar. In the alternative, plaintiff moves for an order striking the underlying action from the trial calendar pending resolution of this matter.
On December 15, 2004, plaintiff sustained various injuries when he was allegedly struck by a heating unit that fell from the ceiling of a building which was leased by Delmar and located at 1101 Pacific Street in Brooklyn, New York. By summons and complaint dated April 27, 2006, plaintiff commenced the underlying action against Delmar alleging violations of Labor Law §§ 240 (1) and 241 (6).[FN1] At the time of the accident, Delmar was insured by a liability policy issued by Zurich. However, in a letter dated May 22, 2007, Zurich disclaimed any obligation to indemnify Delmar based upon its alleged failure to provide it with timely notice of plaintiff's claim. This letter also stated that plaintiff failed to provide Zurich with notice of his claim. By summons and complaint dated September 18, 2013, plaintiff commenced the instant declaratory judgment action against Zurich seeking a judgment declaring that Zurich was obligated to compensate him for any judgment he obtained against Delmar in the underlying action. By order to show cause dated September 30, 2013, plaintiff, in effect, moved for summary judgment under its declaratory judgment claim. At the time plaintiff commenced this action and made the instant motion, the underlying action was on the trial calendar and no judgment had been obtained against Delmar. However, in an order dated October 24, 2013, Hon. Kenneth P. Sherman of this court granted the motion of Delmar's attorney to be relieved as counsel and stayed the matter for 60 days. The instant motion is now before this court.
In moving for summary judgment, plaintiff initially maintains that he has standing to bring the instant declaratory judgment action notwithstanding the fact that he was not a party to the insurance contract between Zurich and Delmar. In support of this contention, plaintiff points to Insurance Law § 3420 (a) (6), which provides that "with respect to a claim arising out of . . . personal injury of any person, if the insurer disclaims liability or denies coverage based on failure to provide timely notice, then the injured person . . . may maintain an action directly against such insurer, in which the sole question is the insurer's disclaimer or denial based upon failure to provide timely notice." In further support of his motion, plaintiff points to certain Second Department case law which stands for the proposition that a declaratory judgment action may be commenced by an injured plaintiff in an underlying action against the defendant's insurer prior to the entry of judgment in the underlying action (see Watson v Aetna Cas. & Sur. Co., 246 AD2d 57 [1998]; Tepedino v Zurich-American Ins. Gp., 220 AD2d 579 [1995]). Finally, plaintiff contends that he will be unduly prejudiced if he is forced to conduct an expensive and time-consuming trial against a judgment-proof defendant in the underlying action prior to a definitive ruling on the issue of defendant's insurance coverage in that action.
With respect to the merits of his claim against Zurich, plaintiff maintains that under Insurance Law § 3420 (a) (4), he had an independent right to provide Zurich with notice of his claim. Plaintiff further contends that under this provision, he was only required to make such efforts to provide notice to Zurich as were sufficient in light of the [*3]opportunities afforded him under the circumstances presented. According to plaintiff, under the circumstances presented here, he did not have the means to provide notice to Zurich until after the issuance of the Court's May 30, 2007 Preliminary Conference Order, which gave plaintiff the opportunity to compel discovery and learn that Delmar was insured by Zurich. Under the circumstances, plaintiff argues that he has successfully maintained his independent right to provide Zurich with notice of his claim against Delmar.
In opposition to plaintiff's motion, Zurich initially maintains that in the case of Lang v Hanover Ins. Co. (3 NY3d 350 [2004]), the Court of Appeals definitively ruled that pursuant to Insurance Law § 3420 (a) (2), in order to directly sue a tortfeasor's insurer, an injured party must first obtain a judgment against the tortfeasor, serve a copy of the judgment on the insurer, and await payment for 30 days. Here, it is undisputed that plaintiff has not obtained a judgment against Delmar in the underlying action. Accordingly, Zurich avers that plaintiff lacks standing in the instant declaratory judgment action. Further, with respect to the Second Department case law cited by plaintiff, Zurich argues that these cases are no longer good law inasmuch as they pre-date the Court of Appeals' ruling in Lang. Zurich also argues that plaintiff's reliance upon Insurance Law § 3420 (a) (6) is misplaced. In this regard, Zurich notes that this provision was enacted in 2008 and only applies to insurance policies issued after January 17, 2009. Here, it is undisputed that the policy in effect at the time of the accident covered the period between December 27, 2003 to December 27, 2004.
In further opposition to plaintiff's motion, Zurich argues that plaintiff's motion is procedurally defective. In particular, Zurich notes that under CPLR 3212 (a), a party may only move for summary judgment after issue has been joined. Here, Zurich has yet to file an answer to the complaint. Finally, Zurich maintains that even if plaintiff had standing and the motion was properly made, there are numerous issues of fact as to whether plaintiff acted diligently in attempting to ascertain the identity of Delmar's insurer.
"Insurance Law § 3420 . . . grants an injured party a right to sue the tortfeasor's insurer, but only under limited circumstances - the injured party must first obtain a judgment against the tortfeasor, serve the insurance company with a copy of the judgment and await payment for 30 days. Compliance with these requirements is a condition precedent to a direct action against the insurance company" (Lang, 3 NY3d at 354). Here, it is undisputed that plaintiff commenced the instant action against Zurich without first obtaining a judgment against Delmar. Indeed, the underlying action is still pending. Moreover, although the Appellate Division, Second Department at one time held that an injured plaintiff may maintain a pre-judgment declaratory judgment action against a tortfeasor's insurer, these decisions pre-date the Court of Appeals' ruling in Lang (see Watson, 246 AD2d at 57; Tepedino, 220 AD2d at 579). Following the issuance of the Lang decision, the Second Department has recognized that "[a] plaintiff may only commence a direct action against an insurer to recover on an unsatisfied judgment entered in a negligence action at the expiration of thirty days from the serving of notice of entry of judgment upon the [the insured] and upon the insurer . . . and this requirement is a condition precedent to the commencement of a direct action against the insurer" (Jimenez v New York Cent. Mut. Fire Ins. Co., 71 AD3d 637, 639 [2010]).
As a final matter, assuming, for the sake of argument, that Insurance Law § 3420 (a) (6) now permits an injured plaintiff to commence a prejudgment action against a torfeasor's insurer notwithstanding the ruling in Lang, this provision is inapplicable in this case. In particular, Insurance Law § 3420 (a) (6) requires that insurance policies contain [*4]a provision "with respect to a claim arising out of . . . personal injury of any person, if the insurer disclaims liability or denies coverage based upon the failure to provide timely notice, then the injured person . . . may maintain an action directly against such insurer." However, this provision was enacted in 2008 and only applies to policies issued or renewed after January 17, 2009 (see Chiarello v Rio, 101 AD3d 793, 794-795 [2012]). Here, the underlying accident occurred in 2004 and the Zurich policy in effect at the time of the accident was issued long before January 17, 2009.
Accordingly, plaintiff's motion is denied. Further, inasmuch as it is undisputed that plaintiff has failed to obtain a judgment in the underlying action and therefore lacks standing, the action is dismissed pursuant to CPLR 3212 (b). However, said dismissal is without prejudice to the commencement of a new action against Zurich if and when plaintiff obtains a judgment in the underlying action, serves a copy of the judgment with notice of entry upon Zurich, and awaits payment for 30 days.
This constitutes the decision, order, and judgment of the court.
E N T E R,
J. S. C.
Footnotes
Footnote 1:Plaintiff also asserted claims against Pacific Classon Realty, LLC. However, those claims were dismissed by the Appellate Division, Second Department (see Alfonso v Pacific Classon Realty, LLC, 101 AD3d 768 [2012]).
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