IN RE: the Arbitration Between PROGRESSIVE INSURANCE COMPANIES (2007)

Respondent was injured in July 2004 when he was struck by a motor vehicle while riding his motorcycle and, over the course of the next 14 months, he received treatment from various health care providers.   Respondent learned in September 2005 that he had sustained permanent injuries, whereupon his attorney notified petitioner of a potential supplementary uninsured/underinsured motorist (SUM) claim by letter dated September 15, 2005.   After conducting an investigation, petitioner denied coverage on the ground that respondent had failed to notify petitioner of the claim “as soon as practicable” in accordance with respondent's SUM insurance policy.   Respondent requested arbitration on the issue of coverage, and petitioner commenced this proceeding seeking a permanent stay of arbitration.

Supreme Court erred in denying the petition upon determining as a matter of law that respondent had provided petitioner with timely notice of the SUM claim.   We conclude that there is an issue of fact whether respondent “knew or should reasonably have known that the tortfeasor was underinsured” (Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 N.Y.2d 487, 495, 693 N.Y.S.2d 81, 715 N.E.2d 107).   In response to the allegation in the petition that there was a delay of over one year in serving petitioner with written notice of the SUM claim (see generally Unwin v. New York Cent. Mut. Fire Ins. Co., 268 A.D.2d 669, 670, 700 N.Y.S.2d 580), respondent alleged that he had hoped that his symptoms would improve during that period and that he therefore had not intended to sue the tortfeasor.   There is evidence in the record suggesting that respondent should have been aware that he had sustained a serious injury as early as December 2004, when he was laid off from work because he was unable to carry out the necessary tasks of his job based on his injuries.   There is also medical evidence in the record, however, that amounts to “a credible basis to support [respondent's] reason for the delay,” i.e., the hope of respondent that his symptoms would improve.   Thus, “the issue of reasonableness becomes one of fact” (Matter of Travelers Ins. Co. [DeLosh], 249 A.D.2d 924, 925, 672 N.Y.S.2d 219;  see Metropolitan Prop. & Cas. Ins. Co., 93 N.Y.2d at 494-495, 693 N.Y.S.2d 81, 715 N.E.2d 107;  Medina v. State Farm Mut. Auto. Ins. Co., 303 A.D.2d 987, 988-989, 757 N.Y.S.2d 178;  Matan v. Nationwide Mut. Ins. Co., 243 A.D.2d 978, 663 N.Y.S.2d 906).   We therefore reverse the order and remit the matter to Supreme Court for a hearing to determine whether notice was given as soon as practicable.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs and the matter is remitted to Supreme Court, Onondaga County, for a hearing.

MEMORANDUM: