CARDINELL v. ALLSTATE INSURANCE COMPANY

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Supreme Court, Appellate Division, Third Department, New York.

Jack A. CARDINELL, Appellant, v. ALLSTATE INSURANCE COMPANY et al., Respondents.

Decided: February 25, 1999

Before:  CARDONA, P.J., MERCURE, PETERS, SPAIN and CARPINELLO, JJ. Cherundolo, Bottar & Leone P.C. (Edward S. Leone of counsel), Syracuse, for appellant. Craig P. Neiderpruem, Utica, for Allstate Insurance Company, respondent. Lustig & Brown LLP (Cheryl A. Green of counsel), Buffalo, for W.J.L. Agencies Inc., respondent.

Appeals (1) from an order of the Supreme Court (Demarest, J.), entered September 15, 1997 in St. Lawrence County, which, inter alia, partially denied plaintiff's motion for partial summary judgment, and (2) from an order of said court, entered March 9, 1998 in St. Lawrence County, which, upon reargument, granted a motion by defendant W.J.L. Agencies Inc. for summary judgment dismissing the complaint against it.

Plaintiff sustained personal injuries in an April 19, 1989 vehicular collision;  he was a passenger in an automobile owned and operated by Steve Murdock when it was struck by an automobile owned and operated by Gary Clifford.   At the time of the accident, the Murdock vehicle was insured by Liberty Mutual.   Plaintiff also had in effect a policy issued by defendant Allstate Insurance Company, which he had procured through defendant W.J.L. Agencies Inc. (hereinafter WJL).   Shortly after the accident, plaintiff advised WJL of the accident and was instructed to file a claim for no-fault benefits with Liberty Mutual.   Plaintiff did that and received no-fault benefits of $1,000 per month from April 19, 1989 until May 1992.   In February 1992, WJL first advised plaintiff of his eligibility to receive lost wage benefits under the additional personal injury protection (hereinafter additional PIP) coverage of his policy with Allstate.   Plaintiff gave Allstate verbal notice in late February 1992 and filed a written claim for additional PIP benefits on March 5, 1992.   On July 16, 1992, Allstate gave plaintiff notice that it was disclaiming coverage upon the grounds that written notice was not received until March 5, 1992, that plaintiff's medical disability had not been verified for the entire period claimed and that the full extent of plaintiff's lost wages were included within basic economic loss.

Plaintiff then commenced this action, alleging a cause of action for additional PIP benefits under his insurance contract with Allstate and against WJL based upon its failure to timely advise him of the existence of the additional PIP coverage.   In the meantime, a personal injury action that plaintiff had previously commenced was settled against Clifford for the amount of his insurance policy, $50,000;  the action was apparently dismissed against Murdock.   Following joinder of issue, plaintiff moved for summary judgment for the relief demanded in the complaint.   Allstate cross-moved to dismiss the complaint or for summary judgment in its favor upon the grounds of plaintiff's untimely notice of his claim for additional PIP benefits and his failure to comply with the terms of the policy, to clearly establish the period of his disability and to show his entitlement to lost wage payments in excess of basic economic loss.   Allstate also raised the issue of plaintiff's settlement of his personal injury action against Clifford, contending that plaintiff's tender of a general release absent a reservation of rights deprived Allstate of its subrogation rights against Clifford and constituted a breach of plaintiff's insurance contract with it, thereby providing an additional basis for Allstate's disclaimer or, alternatively, entitling Allstate to a direct setoff against amounts that may be determined to be owed to plaintiff.   Finally, WJL cross-moved for summary judgment dismissing the complaint against it.

Supreme Court partially granted plaintiff's and Allstate's motions, finding as a matter of law that so much of Allstate's disclaimer as was predicated upon plaintiff's late notice was itself untimely and also that, in the event plaintiff is found to be entitled to monetary relief, Allstate will be entitled to a setoff to prevent plaintiff from receiving a double recovery.   Supreme Court denied the parties' motions and cross motions in all other respects.   Thereafter, WJL sought to reargue the denial of its summary judgment motion upon the ground that Supreme Court's determination that Allstate's disclaimer was untimely as a matter of law rendered plaintiff's claim against WJL moot.   Supreme Court granted the motion and upon reargument granted summary judgment in favor of WJL and dismissed the complaint against it.   Plaintiff appeals both of the orders, and we affirm.

In our view, plaintiff predicates much of his analysis upon two fundamental misconceptions.   First, plaintiff presumes that the sole basis for Allstate's disclaimer was the untimely notice of plaintiff's claim for additional PIP benefits.   As already stated, Allstate's disclaimer was predicated upon untimely notice and the additional grounds that plaintiff's medical disability had not been verified for the entire period claimed and that the full extent of plaintiff's lost wages were included within basic economic loss.   Furthermore, an additional ground for disclaimer, plaintiff's settlement of his negligence action without protecting Allstate's subrogation rights (see, Weinberg v. Transamerica Ins. Co., 62 N.Y.2d 379, 381-382, 477 N.Y.S.2d 99, 465 N.E.2d 819), arose during the pendency of this action.   Plaintiff similarly misconstrues the breadth of Supreme Court's order granting him partial summary judgment.   Plaintiff limited his summary judgment motion and Supreme Court accordingly restricted its analysis and determination to the issue of Allstate's disclaimer on the basis of plaintiff's untimely notice of claim, finding that “[t]here was no further investigation after March 11, 1992 as to the issue of timely written notice”.   As recognized by Allstate, there has been no judicial determination regarding the timeliness of Allstate's disclaimer on the remaining grounds.

 Second, plaintiff is incorrect in his analysis concerning the application of the Statute of Limitations to Allstate's prospective subrogation claim.   As the Court of Appeals made clear in Matter of Motor Vehicle Acc. Indem. Corp. v. Aetna Cas. & Sur. Co., 89 N.Y.2d 214, 652 N.Y.S.2d 584, 674 N.E.2d 1349, the Statute of Limitations accrues not on the date of the accident, as plaintiff contends, but when the insurer makes the first payment of benefits (see, id., at 222, 652 N.Y.S.2d 584, 674 N.E.2d 1349).  Obviously, no such payment has been made.   Under the circumstances, we reject plaintiff's contention that Allstate's prospective subrogation claim is time barred.

 Plaintiff's remaining contentions are also found to be lacking in merit.   Based upon our review of the record, we perceive no valid basis for a finding that Allstate has waived its right to subrogation in the event it is ultimately found to be liable for payment of additional PIP benefits to plaintiff.   Next, we agree with Supreme Court's conclusion that Allstate's subrogation rights under the insurance contract entitle it to a dollar-for-dollar setoff against plaintiff's recovery in the negligence action.   Finally, we conclude that plaintiff's cause of action against WJL was effectively nullified by Supreme Court's determination that Allstate's disclaimer based upon plaintiff's untimely notice of claim was itself untimely and thus void.

ORDERED that the orders are affirmed, with costs.

MERCURE, J.

CARDONA, P.J., PETERS, SPAIN and CARPINELLO, JJ., concur.

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