ESSEX INSURANCE COMPANY v. Timothy Case, appellant. (2009)

In an action for a judgment declaring that the plaintiff Essex Insurance Company is not obligated to defend and indemnify the defendants Oakwood Construction Corporation and Robert Thornton in an underlying action entitled Case v. Yamaha Motor Co., pending in the Supreme Court, New York County, under Index No. 119640/03, the defendant Timothy Case appeals from an order of the Supreme Court, Suffolk County (R. Doyle, J.), dated July 17, 2007, which granted the plaintiff's motion for summary judgment declaring that the plaintiff is not so obligated, and denied his cross motion, made jointly with the defendants Oakwood Construction Corporation and Robert Thornton, for summary judgment declaring that the plaintiff is so obligated.

ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that Essex Insurance Company is not obligated to defend and indemnify the defendants Oakwood Construction Corporation and Robert Thornton in an underlying action entitled Case v. Yamaha Motor Co., pending in the Supreme Court, New York County, under Index No. 119640/03.

Oakwood Construction Corporation and Robert Thornton (hereinafter together Oakwood) failed to provide Essex Insurance Company (hereinafter Essex) with notice of the underlying incident “as soon as practicable,” in violation of the requirements of their insurance policy (see Felix v. Pinewood Bldrs., Inc., 30 A.D.3d 459, 461, 818 N.Y.S.2d 119).   In opposition, Oakwood failed to demonstrate a good faith belief in nonliability that was reasonable under the circumstances (see id.;  Travelers Indem. Co. v. Worthy, 281 A.D.2d 411, 412, 721 N.Y.S.2d 400;  Zadrima v. PSM Ins. Cos., 208 A.D.2d 529, 530, 616 N.Y.S.2d 817;  Winstead v. Uniondale Union Free School Dist., 201 A.D.2d 721, 723, 608 N.Y.S.2d 487).   Additionally, Oakwood failed to provide notice of Timothy Case's claim “as soon as practicable,” as required by the policy (see Safer v. Government Empls. Ins. Co., 254 A.D.2d 344, 345, 678 N.Y.S.2d 667).   Under the circumstances, Essex disclaimed coverage as soon as reasonably possible (see Insurance Law § 3420[d];  New York Cent. Mut. Fire Ins. Co. v. Majid, 5 A.D.3d 447, 448, 773 N.Y.S.2d 429;  Generali-U.S. Branch v. Rothschild, 295 A.D.2d 236, 237-238, 744 N.Y.S.2d 159;  Farmbrew Realty Corp. v. Tower Ins. Co. of N.Y., 289 A.D.2d 284, 285, 734 N.Y.S.2d 592).

Moreover, Case's injury did not fall within the coverage of the policy (see Singh v. Allcity Ins. Co., 1 A.D.3d 501, 502, 767 N.Y.S.2d 253).   To that extent, Essex was not required to timely disclaim coverage (see Matter of Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188, 712 N.Y.S.2d 433, 734 N.E.2d 745;  Perkins v. Allstate Ins. Co., 51 A.D.3d 647, 649, 858 N.Y.S.2d 238).

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that Essex is not obligated to defend and indemnify Oakwood in the underlying action (see Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670).