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Admiral Indemnity Co. v. Pancas Restaurant10/3/2005
proffered excuse, a notice will be held untimely as matter of law. Hartford Fire Ins. Co. v Masternak, 55 AD2d 472, 474 (4th Dep't. 1977).
Defendant Pancas argues that given the allegation that Bendenzu's injury occurred as a result of a defective stairway, which Giovanni was contractually obligated to maintain and repair, Pancas had a good-faith belief that it would not be held liable. However, Pancas, as the owner of the building within which the injury occurred should have been aware of his liability with regards to the occurrence which is specifically alleged in the Bendenzu Summons and Complaint. Additionally, Pancas, as an additional insured, agreed to all of Admiral policy's terms, conditions, limitations and exceptions that existed with respect to the original insured. Therefore, Pancas has an independent contractual obligation for which Pancas should have been put on notice by virtue of being an additional insured on the Admiral policy liability.
Under New York law, an insured's satisfaction of the notice of conditions in a policy insurance, absent valid reason for delay, is a mandatory condition precedent to the insured's right of coverage under the policy. New York v Luslow's Sanitary Landfill, Inc., 50 F Supp 2d 135, 138 (NDNY 1999). Where an insured breaches the policy notice conditions, it is deemed as a matter of law, to have forfeited its rights under the policy, thus absolving the insurer of any coverage obligations, whether it be the primary or excess insurer, which would otherwise have existed. Aetna Cas. & Sur. Co. v Lanza, 70 Ad2d 508,(1st Dep't. 1979). Pancas failed to notify Admiral of the subject occurrence, claim and suit in a timely manner and as a result, breached the conditions stipulated in the Admiral policy. Pancas's breach of insurance contract forfeits its rights of coverage under the Admiral policy.Admiral is not estopped from disclaiming liability. In light of the circumstances, investigation, and delay of notice of occurrence and lawsuit, Admiral's disclaimer was provided as soon as reasonably possible. Pursuant to §3420(d):
If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for [...] any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.
It is well established that where an insurance policy would otherwise cover a particular occurrence, but for an exclusion in the policy, an insurance carrier will be precluded from disclaiming coverage when it has unreasonably delayed in issuing its disclaimer. American Ref-Fuel Co. of Hempstead v Employers Ins. Co. Of Wasau, 265 AD2d 49, (2nd Dep't. 2000).
Under New York law, an insurer's statutory obligation to give written notice of disclaimer of coverage "as soon as reasonably possible" pursuant to §3420(d) varies a great deal according to the specific circumstances surrounding the disclaimer. Nevertheless, timeliness is generally measured from the time that the insurer has sufficient information to disclaim liability in good faith. AJ McNulty & Co., Inc. v Lloyds of London, 306 AD2d 211, 212 (1st Dep't. 2003). Admiral was obligated pursuant to New York Insurance Law to notify Pancas and PSM as soon as reasonably possible of its disclaimer upon the predicated exclusion. However, Admiral was not put on notice of the 2002 occurrence until July 2003 and did not receive the Bendenzu pleadings until September 2003.
In the case of Public Service Mutual Insurance Company v Harlen Housing Associates, the court held
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