TEAGUE v. AUTOMOBILE INSURANCE COMPANY OF HARTFORD (2010)

Plaintiffs commenced this action seeking, inter alia, a declaration that Automobile Insurance Company of Hartford, Connecticut (defendant) is obligated to defend plaintiffs in the underlying action. Paul Bloser and Carole Bloser, defendants herein, commenced the underlying action seeking damages for injuries sustained by Paul Bloser when he slipped and fell during the course of repair work at plaintiffs' residence. Contrary to the contention of plaintiffs, we conclude that Supreme Court properly granted the motion of defendant for summary judgment declaring that it is not obligated to defend or indemnify plaintiffs in the underlying action.

It is well established that “[t]he requirement that an insured notify its liability carrier of a potential claim ‘as soon as practicable’ operates as a condition precedent to coverage” (White v. City of New York, 81 N.Y.2d 955, 957, 598 N.Y.S.2d 759, 615 N.E.2d 216). “Absent a valid excuse, a failure to satisfy the notice requirement vitiates the policy ․, and the insurer need not show prejudice before it can assert the defense of noncompliance” (Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., 31 N.Y.2d 436, 440, 340 N.Y.S.2d 902, 293 N.E.2d 76). “[T]here may be circumstances that excuse a failure to give timely notice, such as where the insured has ‘a good-faith belief of nonliability,’ provided that belief is reasonable” (Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 N.Y.3d 742, 743, 800 N.Y.S.2d 521, 833 N.E.2d 1196). Specifically, “[w]hen the facts of an occurrence are such that an insured acting in good faith would not reasonably believe that liability on his [or her] part will result, notice of the occurrence given by the insured to the insurer is given ‘as soon as practicable’ if given promptly after the insured receives notice that a claim against him [or her] will in fact be made” (Merchants Mut. Ins. Co. v. Hoffman, 56 N.Y.2d 799, 801, 452 N.Y.S.2d 398, 437 N.E.2d 1155; see D'Aloia v. Travelers Ins. Co., 85 N.Y.2d 825, 623 N.Y.S.2d 837, 647 N.E.2d 1345, rearg. denied 85 N.Y.2d 968, 629 N.Y.S.2d 727, 653 N.E.2d 623). The insured bears the burden of establishing a reasonable excuse for his or her delay in providing notice (see Security Mut. Ins. Co. of N.Y., 31 N.Y.2d at 441, 340 N.Y.S.2d 902, 293 N.E.2d 76; Philadelphia Indem. Ins. Co. v. Genesee Val. Improvement Corp., 41 A.D.3d 44, 46, 834 N.Y.S.2d 802).

The homeowners' insurance policy issued by defendant requires plaintiffs to notify it “as soon as practical” of an “ ‘[o]currence,’ ” which is defined as “[a]n accident ․ [that] results in ‘bodily injury’ or ‘property damage’ during the policy period.” Here, the record establishes that plaintiffs received notice that Paul Bloser sustained “ ‘bodily injury’ ” in the accident on their property no later than March 2004, when he sent plaintiffs a letter stating that he was “proceeding with legal action” against them “for injuries sustained when [he] fell on [their] ice-covered sidewalk steps” (see generally D'Aloia, 85 N.Y.2d 825, 623 N.Y.S.2d 837, 647 N.E.2d 1345; Merchants Mut. Ins. Co., 56 N.Y.2d at 801, 452 N.Y.S.2d 398, 437 N.E.2d 1155). Plaintiffs did not, however, notify defendant of the accident and seek coverage under the homeowners' insurance policy until March 2006. That delay is unreasonable as a matter of law (see Philadelphia Indem. Ins. Co., 41 A.D.3d at 46-47, 834 N.Y.S.2d 802; Lyell Party House v. Travelers Indem. Co., 11 A.D.3d 972, 973, 783 N.Y.S.2d 187), and plaintiffs failed to raise a triable issue of fact establishing a reasonable excuse for their delay (see generally Lyell Party House, 11 A.D.3d at 973, 783 N.Y.S.2d 187).

We further conclude, however, that the court erred in dismissing the complaint in this declaratory judgment action (see City of New York v. State of New York, 94 N.Y.2d 577, 588 n. 3, 709 N.Y.S.2d 122, 730 N.E.2d 920), and we therefore modify the judgment by vacating the provision dismissing the complaint.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by vacating the provision dismissing the complaint and as modified the judgment is affirmed without costs.

MEMORANDUM: