STATE v. General Accident Insurance Company of America, Third-Party Defendant-Respondent. (1997)

Appeal from an order of the Supreme Court (Donohue, J.), entered January 27, 1997 in Albany County, which granted third-party defendant's motion for summary judgment dismissing the amended third-party complaint.

In the third-party action from which this appeal arises, defendant Robert Ackley (hereinafter defendant), owner and operator of a gasoline and service station, seeks a declaration that his liability insurance provider, General Accident Insurance Company of America (hereinafter GAI), has a duty to defend and indemnify him in connection with the underlying suit brought by plaintiff to recover the cost of cleaning up an underground gasoline leak.   Supreme Court granted GAI's motion for summary judgment, finding that defendant's failure to promptly notify GAI of the discharge, as the policy requires, justified GAI's disclaimer of coverage.   Defendant appeals.

 Although filed prior to service of its answer, GAI's motion papers expressly sought either dismissal or, in the alternative, summary judgment;  in response, defendant submitted affidavits and other documentary evidence purportedly substantiating his allegations.   Both parties having thus demonstrated an intention to “chart a summary judgment course”, Supreme Court did not, as defendant charges, err in treating the application as one for summary judgment (see, Gregware v. Key Bank of N.Y., 218 A.D.2d 859, 861, 630 N.Y.S.2d 148, lv. denied 87 N.Y.2d 803, 639 N.Y.S.2d 311, 662 N.E.2d 792).

Regarding the merits, we conclude, for essentially the same reasons outlined by Supreme Court, that GAI is entitled to the relief it seeks.   In support of its motion, GAI proffered evidence establishing that defendant did not file a notice of loss, or otherwise notify GAI that a leak had occurred, until March 30, 1993, despite having been notified that he would be liable for the cleanup costs shortly after cleanup efforts began in 1986.   In opposition, defendant asserted that his delay was not unreasonable because he was unaware that he had suffered a loss until plaintiff demanded reimbursement in February 1993;  that GAI had received actual or constructive notice of the leak within several months of its occurrence, either by means of a communication between defendant and his insurance agent, or through GAI's annual inspection of the premises;  and that GAI had waived its right to disclaim by failing to do so in a timely manner.

 The first of these arguments is belied by the record evidence, which clearly demonstrates that defendant was told of his ultimate liability for the cleanup costs, and plaintiff's intent to seek reimbursement thereof, just days after the spill occurred;  hence, he could not have entertained a “reasonable belief in nonliability” thereafter (White v. City of New York, 81 N.Y.2d 955, 957, 598 N.Y.S.2d 759, 615 N.E.2d 216).   The second of defendant's contentions, to the extent that it is based on principles of constructive notice, is unavailing, for it simply has no foundation in the law (see, Heydt Contr. Corp. v. American Home Assur. Co., 146 A.D.2d 497, 499, 536 N.Y.S.2d 770, lv. dismissed 74 N.Y.2d 651, 542 N.Y.S.2d 520, 540 N.E.2d 715).   And, insofar as defendant maintains that he satisfied the notice requirement by informing his agent of the events at issue, the proof does not support that assertion.

 As for GAI's purported waiver, defendant's reliance on Insurance Law § 3420(d) is misplaced, for that provision does not apply where, as here, the underlying claim does not involve bodily injury or death (see, Incorporated Vil. of Pleasantville v. Calvert Ins. Co., 204 A.D.2d 689, 690, 612 N.Y.S.2d 441;  State of New York v. Ladd's Gas Sta., 198 A.D.2d 654, 603 N.Y.S.2d 609).   Having failed to demonstrate how he was prejudiced by GAI's delay, defendant cannot prevail on this basis (see, State of New York v. Ladd's Gas Sta., supra, at 655, 603 N.Y.S.2d 609;  Kamyr Inc. v. St. Paul Surplus Lines Ins. Co., 152 A.D.2d 62, 67, 547 N.Y.S.2d 964).   In any event, the record discloses that GAI's disclaimer of coverage was not unreasonably delayed (see, Matter of Prudential Prop. & Cas. Ins. Co. [Mathieu], 213 A.D.2d 408, 623 N.Y.S.2d 336).

ORDERED that the order is affirmed, with costs.

YESAWICH, Justice.

MIKOLL, J.P., and MERCURE, CREW and WHITE, JJ., concur.