CROCODILE BAR INC v. DRYDEN MUTUAL INSURANCE COMPANY (2009)

 Plaintiff commenced this action seeking, inter alia, a declaration that defendant Dryden Mutual Insurance Company (Dryden) is obligated to defend and indemnify it in three underlying personal injury actions.   Supreme Court properly granted plaintiff's motion for summary judgment with respect to, inter alia, that declaration on the ground that Dryden failed to provide a timely disclaimer of coverage (see Insurance Law § 3420[d];  Matter of Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188-190, 712 N.Y.S.2d 433, 734 N.E.2d 745).  “[A] timely disclaimer [of coverage] pursuant to Insurance Law § 3420(d) is required [where, as here,] a claim falls within the coverage terms but is denied based on a policy exclusion” (Markevics v. Liberty Mut. Ins. Co., 97 N.Y.2d 646, 648-649, 735 N.Y.S.2d 865, 761 N.E.2d 557;  see Worcester, 95 N.Y.2d at 188-190, 712 N.Y.S.2d 433, 734 N.E.2d 745;  Penn-America Group v. Zoobar, Inc., 305 A.D.2d 1116, 1117, 759 N.Y.S.2d 825, lv. denied 100 N.Y.2d 511, 766 N.Y.S.2d 164, 798 N.E.2d 348).  “[O]nce the insurer has sufficient knowledge of facts entitling it to disclaim, or knows that it will disclaim coverage, it must notify the policyholder in writing as soon as is reasonably possible” (First Fin. Ins. Co. v. Jetco Contr. Corp., 1 N.Y.3d 64, 66, 769 N.Y.S.2d 459, 801 N.E.2d 835;  see Republic Franklin Ins. Co. v. Pistilli, 16 A.D.3d 477, 479, 791 N.Y.S.2d 639;  Squires v. Robert Marini Bldrs., 293 A.D.2d 808, 810, 739 N.Y.S.2d 777, lv. denied 99 N.Y.2d 502, 752 N.Y.S.2d 589, 782 N.E.2d 567).   Here, Dryden's claims adjuster was aware when he received the claim on November 10, 2005 that the claim was excluded from the policy, and Dryden failed to establish that its 62-day delay was “ reasonably related to the completion of a necessary, thorough, and diligent investigation” (Quincy Mut. Fire Ins. Co. v. Uribe, 45 A.D.3d 661, 662, 845 N.Y.S.2d 434;  see First Fin. Ins. Co., 1 N.Y.3d at 70, 769 N.Y.S.2d 459, 801 N.E.2d 835;  Morath v. New York Cent. Mut. Fire Ins. Co., 49 A.D.3d 1245, 853 N.Y.S.2d 757).

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.

MEMORANDUM: