AMERICAN TRANSIT INSURANCE COMPANY v. Kuok Hang Leong, Defendant-Respondent. (2007)

Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered May 2, 2006, which, inter alia, granted defendant Kuok Hang Leong's motion for summary judgment dismissing the complaint, unanimously modified, on the law, to declare that plaintiff insurer is obligated to indemnify its insured in the underlying action, and otherwise affirmed, with costs in favor of defendants.

 Having received timely notice of claim, plaintiff insurer was not entitled to disclaim coverage based on untimely notice of the claimant's commencement of litigation unless it was prejudiced by the late notice (see Rekemeyer v. State Farm Mut. Auto. Ins. Co., 4 N.Y.3d 468, 476, 796 N.Y.S.2d 13, 828 N.E.2d 970 [2005];  Matter of Brandon  [Nationwide Mut. Ins. Co.], 97 N.Y.2d 491, 498, 743 N.Y.S.2d 53, 769 N.E.2d 810 [2002] ), and such prejudice was not shown.   The relief afforded defendant claimant Kuok Hang Leong was proper notwithstanding the default of plaintiff's insured.   Indeed, in enacting Insurance Law § 3420, the Legislature has made it clear that the right of a claimant to seek recovery of insurance proceeds is not defeated by the insured's failure to perform its claim-related obligations.

We modify only to declare in defendant's favor (see Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670 [1962], appeal dismissed 371 U.S. 74, 83 S.Ct. 177, 9 L.Ed.2d 163 [1962], cert. denied 371 U.S. 901, 83 S.Ct. 205, 9 L.Ed.2d 164 [1962] ).

We have considered plaintiff's remaining arguments and find them unavailing.