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Agoado Realty Corp. v. United International Insurance Co.6/20/2000
In this appeal we are asked to determine whether the intentional assault of a tenant by an unknown assailant is an "accident" and hence a covered "occurrence" under a landlord's insurance policy, and whether a policy exclusion for "expected or intended" injuries applies. We conclude that the loss is a covered occurrence and, concomitantly, that the policy exclusion does not apply to the circumstances presented here.
Plaintiff landlords owned a building in which on May 19, 1996, a tenant was murdered by an unknown assailant. On February 10, 1997 decedent's estate commenced a wrongful death action against plaintiffs by service of a summons and complaint on the Secretary of State, alleging, among other causes of action, negligent security. Notice of service was forwarded to plaintiffs' designated agent (their attorney), who, allegedly unbeknownst to plaintiffs, was deceased. On April 8, 1997, counsel representing decedent's estate informed plaintiffs by letter that, despite service of a summons and complaint several weeks earlier, no response had been received.
Plaintiffs received a copy of the summons and complaint on June 9, 1997 and notified their broker. On June 20, 1997 defendant insurer received the summons and complaint, as well as a notice of occurrence. Defendant disclaimed coverage several weeks later citing provisions in the policy requiring notice "as soon as practicable" of any occurrence, claim or suit brought against the insured. Defendant noted that it did not receive notice of the occurrence until 397 days after the "assault," nor did it receive notice of suit until 130 days after service of the summons and complaint on the Secretary of State.
Shortly thereafter, plaintiffs commenced this action seeking a declaration that defendant was required to defend and indemnify them in the underlying wrongful death action. Defendant raised five affirmative defenses, the first three based on plaintiffs' failure to notify defendant as soon as practicable of the occurrence, the lawsuit and the claim. Almost one year later defendant moved to amend its answer to add two affirmative defenses: that there was no covered "occurrence" because the claim was based on an intentional assault; and that a policy exclusion for bodily injuries "expected or intended" applied. Plaintiffs opposed the motion, relying on Insurance Law § 3420(d) and cross- moved for summary judgment.
Supreme Court granted defendant's motion and denied plaintiffs' cross-motion. The Appellate Division unanimously modified. The court denied defendant's motion to amend, concluding that the wrongful death action was premised on an "occurrence" as defined in the policy and that Insurance Law § 3420(d) precluded late assertion of the policy's "expected or intended" exclusion. The court also granted partial summary judgment to plaintiffs to the extent of dismissing the second and third affirmative defenses (late notice of the lawsuit and claim). We agree with the Appellate Division's conclusion that defendant should not have been permitted to amend its answer. However, questions of fact remain as to whether plaintiffs notified defendant of their claim as soon as practicable and we therefore modify the Appellate Division order.
The policy at issue covers bodily injury and property damage only if caused by an "occurrence" that takes place on the covered premise while the policy is in effect. An "occurrence," as defined by the policy, is "an accident." The policy also excludes claims for bodily injury and property damage that is "expected or intended from the standpoint of the insured." The policy does not provide an assault and battery exclusion. Finally, the policy states that defendant must be not
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