FERREIRA v. MEREDA REALTY CORP (2009)

Order, Supreme Court, Bronx County (Howard H. Sherman, J.), entered June 9, 2008, which denied appellants' motion for summary judgment declaring that respondent had an obligation to defend and indemnify them in the personal injury action and granted respondent's cross motion for summary judgment dismissing the third-party complaint and directed entry of judgment, unanimously affirmed, without costs.

 Appellant insureds were required by the policy to notify the insurer “as soon as practicable of an ‘occurrence’ or offense which may result in a claim.”   Here, where they did not give notice for more than two months after first learning of the infant plaintiff's accident, it was their burden (see Great Canal Realty Corp. v. Seneca Ins. Co., 5 N.Y.3d 742, 743-44, 800 N.Y.S.2d 521, 833 N.E.2d 1196 [2005] ) to establish that a reasonably prudent person, upon learning of the accident, would have a good faith, objective basis for believing that litigation would not be commenced (see Kambousi Rest. v. Burlington Ins. Co., 58 A.D.3d 513, 871 N.Y.S.2d 129 [2009];  Paramount Ins. Co. v. Rosedale Gardens, 293 A.D.2d 235, 239, 743 N.Y.S.2d 59 [2002] ).   It is not disputed that, on meeting with plaintiff mother no later than April 11, 2005, the insureds' property manager had seen burn scars on the infant plaintiff and been told that the infant had been in the hospital.   At that point, the insureds could not have reasonably believed that there would be no litigation arising out of the accident (see e.g. Tower Ins. Co. of New York v. Dyker Contr., 47 A.D.3d 522, 854 N.Y.S.2d 644 [2008];  Rondale Bldg. Corp. v. Nationwide Prop. and Cas. Ins. Co., 1 A.D.3d 584, 585-86, 769 N.Y.S.2d 46 [2003] ), and therefore have not shown any extenuating circumstances to justify their having delayed reporting the occurrence until late June 2005 (see Paramount Ins. Co., 293 A.D.2d at 242, 743 N.Y.S.2d 59).   We reject appellants' alternate argument that the policy was ambiguous, since appellants fail to show how the term “claim,” as used in this policy, could be parsed in two different, equally logical ways (see Schechter Assoc. v. Major League Baseball Players Assn., 256 A.D.2d 97, 681 N.Y.S.2d 266 [1998];  cf. Matter of Ancillary Receivership of Reliance Ins. Co., 55 A.D.3d 43, 863 N.Y.S.2d 415 [2008], affd. 12 N.Y.3d 725, 876 N.Y.S.2d 341, 904 N.E.2d 495).