HERMITAGE INSURANCE COMPANY v. ARM ING INC (2007)

In an action for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendants Arm-ing, Inc., and Roseann Caceres in an underlying action entitled Santiago v. Caceres, pending in the Supreme Court, Kings County, under Index No. 36451/05, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Smith, J.), entered June 5, 2006, as, in effect, denied its motion for summary judgment declaring that it is not obligated to defend and indemnify the defendants Arm-ing, Inc., and Roseann Caceres in the underlying action, and the defendants Arm-ing, Inc., and Roseann Caceres cross-appeal, as limited by their brief, from so much of the same order as, in effect, denied their cross motion for summary judgment declaring that the plaintiff is obligated to defend and indemnify them in the underlying action.

ORDERED that the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

 An insurer waives its affirmative defense of late notice if it fails to disclaim coverage “as soon as is reasonably possible” (Insurance Law § 3420 [d] ) after it “first learns of the grounds for disclaimer of liability or denial of coverage” (Matter of Allcity Ins. Co. [Jimenez], 78 N.Y.2d 1054, 1056, 576 N.Y.S.2d 87, 581 N.E.2d 1342;  see First Fin. Ins. Co. v. Jetco Contr. Corp., 1 N.Y.3d 64, 68-69, 769 N.Y.S.2d 459, 801 N.E.2d 835;  Hartford Ins. Co. v. County of Nassau, 46 N.Y.2d 1028, 1029, 416 N.Y.S.2d 539, 389 N.E.2d 1061;  Reyes v. Diamond State Ins. Co., 35 A.D.3d 830, 831, 827 N.Y.S.2d 263, lv. denied 9 N.Y.3d 814, 848 N.Y.S.2d 25, 878 N.E.2d 609;  New York Cent. Mut. Fire Ins. Co. v. Majid, 5 A.D.3d 447, 448, 773 N.Y.S.2d 429).   Here, the delay of two months, occasioned by the insurer's need to investigate the claim to determine when its insureds received notice of the accident, was reasonable under the circumstances (see Halloway v. State Farm Ins. Cos., 23 A.D.3d 617, 618, 805 N.Y.S.2d 107;  Farmbrew Realty Corp. v. Tower Ins. Co. of N.Y., 289 A.D.2d 284, 285, 734 N.Y.S.2d 592;  Silk v. City of New York, 203 A.D.2d 103, 103-104, 610 N.Y.S.2d 36).   Thus, the plaintiff made out a prima facie case that its denial of coverage was timely (see Halloway v. State Farm Ins. Cos., 23 A.D.3d at 618, 805 N.Y.S.2d 107;  Farmbrew Realty Corp. v. Tower Ins. Co. of N.Y., 289 A.D.2d at 285, 734 N.Y.S.2d 592;  Silk v. City of New York, 203 A.D.2d at 104, 610 N.Y.S.2d 36).

 In opposition, however, the defendants Arm-ing, Inc., and Roseann Caceres raised a triable issue of fact as to whether they notified the plaintiff of the claim as soon as practicable, as required by the relevant insurance contract.   The reasonableness of “a good-faith belief of nonliability” is a matter ordinarily left for determination by the finder of fact (see Argentina v. Otsego Mut. Fire Ins. Co., 86 N.Y.2d 748, 750, 631 N.Y.S.2d 125, 655 N.E.2d 166;  Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., 31 N.Y.2d 436, 441, 340 N.Y.S.2d 902, 293 N.E.2d 76;  Morris Park Contr. Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 33 A.D.3d 763, 822 N.Y.S.2d 616;  Jordan Constr. Prods. Corp. v. Travelers Indem. Co. of Am., 14 A.D.3d 655, 656, 789 N.Y.S.2d 298;  see also 875 Forest Ave. Corp. v. Aetna Cas. & Sur. Co., 37 A.D.2d 11, 13, 322 N.Y.S.2d 53, affd. 30 N.Y.2d 726, 332 N.Y.S.2d 896, 283 N.E.2d 768).   Accordingly, the Supreme Court properly, in effect, denied the motion and cross motion for summary judgment.