639 BUSHWICK LLC v. AMERICAN WESTERN HOME INSURANCE COMPANY (2008)

In an action for a judgment declaring, inter alia, that the defendants are obligated to defend and indemnify the plaintiff, 639 Bushwick, LLC, in an underlying action entitled Rueda v. City of New York, pending in the Supreme Court, Kings County, under Index No. 11124/06, the defendant American Western Home Insurance Company appeals from so much of an order of the Supreme Court, Kings County (Jacobson, J.), dated March 24, 2008, as denied that branch of the defendants' motion which was for summary judgment declaring that it is not so obligated.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, that branch of the defendants' motion which was for summary judgment declaring that the defendant American Western Home Insurance Company is not obligated to defend and indemnify the plaintiff, 639 Bushwick, LLC, in the underlying action is granted, the action against that defendant is severed, and the matter is remitted to the Supreme Court, Kings County, for the entry of judgment declaring that it is not so obligated.

The defendant American Western Home Insurance Company (hereinafter the defendant) made a prima facie showing of its entitlement to judgment as a matter of law by submitting an uncontroverted affidavit of service and other evidence demonstrating that the plaintiff was served with process in the underlying action in April 2006.   Contrary to the determination of the Supreme Court, the plaintiff's conclusory and unsubstantiated denial of receipt of the papers was insufficient to rebut the presumption of proper service (see Kihl v. Pfeffer, 94 N.Y.2d 118, 122, 700 N.Y.S.2d 87, 722 N.E.2d 55;  Malik v. Noe, 54 A.D.3d 733, 864 N.Y.S.2d 82;  Coyle v. Mayer Realty Corp., 54 A.D.3d 713, 864 N.Y.S.2d 75;  Trini Realty Corp. v. Fulton Ctr., LLC, 53 A.D.3d 479, 480, 861 N.Y.S.2d 743;  Koyenov v. Twin-D Transp., Inc., 33 A.D.3d 967, 968-969, 824 N.Y.S.2d 338).   Accordingly, the plaintiff's failure to provide the defendant with notice of the commencement of the underlying action until September 2006 constituted a breach of its obligation under the subject policy to provide such notice as soon as practicable.   The defendant's disclaimer of coverage therefore was valid, and the Supreme Court erred in denying its motion for summary judgment.

Since this is a declaratory judgment action, the matter must be severed against the defendant and remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that it is not obligated to defend and indemnify the plaintiff, 639 Bushwick, LLC, 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, appeal dismissed 371 U.S. 74, 83 S.Ct. 177, 9 L.Ed.2d 163, cert. denied 371 U.S. 901, 83 S.Ct. 205, 9 L.Ed.2d 164).