SORBARA CONSTRUCTION CORPORATION v. HRH (2007)

Order, Supreme Court, New York County (Marcy Friedman, J.), entered January 18, 2007, which denied plaintiff's motion for summary judgment and granted defendant insurer's cross motion for summary judgment to the extent of absolving it of any obligation to defend or indemnify plaintiff in the underlying personal injury action, affirmed, with costs.

 Where a liability insurance policy requires notice of an occurrence to the carrier as soon as practicable, such notice must be given within a reasonable period of time, and the insured's noncompliance in this respect constitutes failure of a condition precedent (Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d 742, 800 N.Y.S.2d 521, 833 N.E.2d 1196 [2005] ), thus vitiating the contract as a matter of law, without a showing of prejudice (Argo Corp. v. Greater N.Y. Mut. Ins. Co., 4 N.Y.3d 332, 339, 794 N.Y.S.2d 704, 827 N.E.2d 762 [2005] ).

 Plaintiff became aware of its employee's accident and his ensuing lawsuit almost immediately, but did not notify defendant excess insurer for some 5 1/212 years, until after the defendants in the underlying matter had instituted a third-party action against it.  “[W]here a reasonable person could envision liability, that person has a duty to make some inquiry” (White v. City of New York, 81 N.Y.2d 955, 958, 598 N.Y.S.2d 759, 615 N.E.2d 216 [1993] ).   Although a good-faith belief in non-liability may excuse the failure to give timely notice (see Great Canal Realty Corp. v. Seneca Ins. Co., 5 N.Y.3d 742, 800 N.Y.S.2d 521, 833 N.E.2d 1196 [2005] ), there is no indication plaintiff ever took any action to ascertain the possibility of its own liability for the accident prior to the commencement of the third-party action.   Accordingly, there is no basis for a good-faith belief in its non-liability.   Moreover, plaintiff's own duty to provide notice to the excess insurer is not negated by the insurer's actual knowledge acquired from another source (Ocean Partners, LLC v. North Riv. Ins. Co., 25 A.D.3d 514, 515, 810 N.Y.S.2d 430 [2006];  Travelers Ins. Co. v. Volmar Constr. Co., 300 A.D.2d 40, 752 N.Y.S.2d 286 [2002] ).   Notice under a workers' compensation policy does not constitute notice under a liability insurance policy (see Nationwide Ins. Co. v. Empire Ins. Group, 294 A.D.2d 546, 548, 742 N.Y.S.2d 387 [2002] ).   Plaintiff's protracted delay in giving defendant insurer the requisite contractual notice relieved the insurer of its obligation to defend or indemnify plaintiff.

I concur in the result but write separately because while I believe that Great Canal Realty Corp. v. Seneca Ins. Co. Inc., 5 N.Y.3d 742, 800 N.Y.S.2d 521, 833 N.E.2d 1196 (2005), the decision by which we are constrained today, was wrongly decided, I nonetheless agree with the majority that in this case, it would not have made a difference even had the Court affirmed our decision in Great Canal.   In that case, the time lapse between occurrence and plaintiff's notification to insurer was just four months whereas here plaintiff did not notify defendant insurer for 5 1/212 years, thus prejudice can be assumed as a matter of law.

All concur except CATTERSON, J. who concurs in a separate memorandum as follows: