MORATH v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY (2008)

Plaintiffs commenced the underlying personal injury action against Susan Milliman seeking damages for injuries sustained by Elizabeth G. Morath (plaintiff) when the vehicle driven by Milliman struck the vehicle driven by plaintiff.   At the time of the accident, plaintiff was insured under an automobile liability policy issued by defendant, which included supplementary uninsured/underinsured motorist (SUM) coverage.   After plaintiffs settled the underlying action for the limit of Milliman's liability coverage, defendant denied SUM coverage and disclaimed liability based upon plaintiffs' failure to obtain defendant's prior written consent to the settlement, as required by the policy.   Plaintiffs thereafter commenced this action seeking a declaration that defendant is obligated to provide SUM coverage.

Supreme Court properly granted plaintiff's cross motion seeking summary judgment declaring that defendant must provide SUM coverage to plaintiffs for the accident in question.   The record establishes that, as soon as defendant learned of the settlement, it possessed all of the information necessary to deny coverage and disclaim liability (see Squires v. 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;  cf. Ace Packing Co., Inc. v. Campbell Solberg Assoc., Inc., 41 A.D.3d 12, 15, 835 N.Y.S.2d 32).   In view of the failure of defendant to justify its 36-day delay in notifying plaintiffs of its disclaimer, the court properly concluded that the delay was unreasonable as a matter of law (see First Fin. Ins. Co. v. Jetco Contr. Corp., 1 N.Y.3d 64, 70, 769 N.Y.S.2d 459, 801 N.E.2d 835;  Bovis Lend Lease LMB, Inc. v. Royal Surplus Lines Ins. Co., 27 A.D.3d 84, 88-90, 806 N.Y.S.2d 53;  West 16th St. Tenants Corp. v. Public Serv. Mut. Ins. Co., 290 A.D.2d 278, 279, 736 N.Y.S.2d 34, lv. denied 98 N.Y.2d 605, 746 N.Y.S.2d 279, 773 N.E.2d 1017).

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed with costs.

MEMORANDUM: