Issue of Fact Exists Regarding Whether Insurer's 28-Day
Delay in Disclaiming Coverage for Assault in Building Was
Reasonable
Zevrone Realty Corp. v. N.Y. Marine & General Ins. Co.,
(Supreme Court, Bronx County May 2010)
In this coverage case the trial court held that although an
insured's 14-month delay in giving notice to its carriers
after receiving notice of a personal injury claim was
inexcusably late, liability insurers that waited more than two
months to deny coverage were estopped, on the basis of Ins.
Law 3420(d), from disclaiming. The court also held that one
insurer's 28-day delay in disclaiming coverage presented an
issue of fact as to the validity of its disclaimer, and left
it to a jury to decide whether the insurer's delay was
reasonable or not.
Insurer Not Required to Demonstrate
Prejudice in Order to Disclaim Coverage on Late Notice Grounds
In Ponok
Realty Corp. v. United National Specialty Insurance Co, (New
York Appellate Division, 2nd Dept 2010), the Appellate
Division rejected the insured’s argument that the insurer
was obligated to demonstrate prejudice in order to disclaim
coverage based upon its insured’s late notice of the
incident. The court agreed with the carrier's position that
the amendment to Insurance Law 3420, which requires
such a showing, was not applicable, as the amendment is not
retroactive, and the policy was issued prior to the
amendment's effective date (January 17, 2009).
Commercial
Landlord Found Entitled to Additional Insured Coverage Under
Tenant's Policy But Only on an Excess Basis
In L&B
Estates, LLC v. Allstate Ins. (New York Appellate Division, 2d
Dept. 2010), the
court decided the priority of coverage for a commercial
landlord that had its own policy, but was named as an
additional insured on its tenant's policy for liability
arising out of the use of the tenant's premises. The
commercial landlord, L&B Estates ("L&B")
leased a Brooklyn premises to tenant 21st Century Achievers
(21st Century"). As
required by the lease, the tenant obtained a CGL policy from
Allstate, naming the landlord as an additional insured, but
"only with respect to liability arising out of the
ownership, maintenance or use of that part of the premises
shown in the [d]eclarations as leased to [tenant]."
The Allstate policy's declarations did not mention the
sidewalk in front of the premises as having been leased to
21st Century.
L&B, the
landlord, was covered by its own CGL policy with United
National Specialty Insurance Company, and the Allstate and
United policies each contained an "other insurance"
provision.
In November
2005, a pedestrian allegedly was injured when she tripped and
fell as a result of an alleged defect in the sidewalk in front
of the leased premises. She
sued both the landlord and the tenant, and the landlord,
L&B, tendered the suit to Allstate (21st Cebtury's
insurer) for defense and indemnification as an additional
insured under the tenant's CGL policy.
Allstate rejected the tender on the ground that the
injured party's claim did not arise out of the ownership,
maintenance or use of "that part of the premises shown in
the Declarations as leased to [Century]."
L&B
therefore commenced this declaratory judgment action seeking a
efense and indemnity coverage from Allstate as an additional
insured under Century's policy, as well as damages for breach
of contract against Allstate and Century. L&B cross-moved
for summary judgment on its complaint against Allstate and
Century, and the Kings Supreme (Knipel, J.) granted L&B's
cross motion, declaring that Allstate was obligated to defend
and indemnify L&B in the underlying lawsuit.
The Appellate
Division, Second Department, modified this determination,
holding instead that although L&B was entitled to coverage
as an additional insured under Century's policy with Allstate,
Allstate's Additional Insured coverage was actually excess to
L&B's primary coverage with its own insurer, United and,
therefore, Allstate was not obligated to contribute towards
L&B's defense or indemnification in the underlying
personal injury action unless and/or until L&B's coverage
with United was exhausted:
"L&B
established its prima facie entitlement to judgment as a
matter of law against Allstate by submitting, among other
things, the Allstate policy, which established that it was an
additional insured with respect to [underlying] claim, and
that Allstate had refused to provide coverage. Inasmuch as
Administrative Code of the City of New York § 7-210 imposes
liability on owners of commercial property for defects in
sidewalks, L&B's potential liability arises from its
ownership of the premises leased to Century. Since unambiguous
terms in an insurance contract are given their plain and
ordinary meaning (see Antoine v City of New York, 56 AD3d 583,
584), L & B is an additional insured under the Allstate
policy for claims arising from defective conditions on the
sidewalk in front of the premises.
In opposition,
however, Allstate established, as a matter of law, that its
coverage of L&B under the Allstate policy was excess to
the coverage provided to L&B under the United policy. When
a policy provides only excess coverage, the duty to defend or
indemnify is not triggered until coverage under the primary
policy has been exhausted or otherwise terminated (see Great
N. Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682,
686-687; Sport Rock Intl., Inc. v American Cas. Co. of
Reading, Pa., 65 AD3d 12, 20; Osorio v Kenart Realty, Inc., 48
AD3d 650, 653). Consequently, upon searching the record,
Allstate is entitled to summary judgment declaring that it is
not the primary insurer, that the coverage it provided to
L&B is excess to that provided by the United policy, and
that, therefor, it was not obligated to defend or indemnify
L&B in the underlying action unless its obligated [sic] to
provide excess coverage is triggered."
Physician's Summary Judgment Motion
Insufficient to Warrant Dismissal of Medical Malpractice
Complaint
Larsen v. Interlakes Orthopaedic
Surgery, P.C (New York Appellate Division,
4th Dep't 2010) was an action seeking damages for
injuries the plaintiff allegedly sustained as the result of
defendants' medical malpractice. The trial court granted the
defendant's motion for summary judgment and dismissed the
Complaint but the appellate division unanimously reversed,
agreeing with the plaintiff patient that since the defendant's
expert's affidavit, in support of summary judgment, failed to
address each of the specific factual claims of negligence
raised in plaintiff's bill of particulars, the affidavit in
support of summary judgment was insufficient to support the
granting of the motion, and thus, the motion should have been
denied, regardless of the sufficiency/insufficiency of
plaintiff's opposing papers.
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