Appellate Division Dismisses Declaratory Judgment Action Against Insurer Based on Late Notice
In Kleinberg v. Nevele Hotel, LLC, 2015 NY Slip Op 03891 (3d Dep’t 2015), plaintiffs commenced an action seeking a declaration that defendant Lexington Insurance Company was obligated to defend and indemnify Nevele Hotel, LLC, a defendant in an underlying personal injury action. The plaintiffs in Kleinberg were also plaintiffs in the underlying personal injury action, which alleged that plaintiff Robert Kleinberg sustained injuries on the slopes of Nevele’s ski resort. Lexington moved for summary judgment, arguing among other things, that it had not received timely notice of the potential personal injury claim.
Lexington’s insurance policy with Nevele contained a clause which required that Lexington be provided with notice of an occurrence “as soon as practicable.” Lexington established that Nevele generated an incident report on the day of Kleinberg’s accident, in February of 2006. Further, Nevele had received notice of the accident by letter in March of 2006. The Appellate Division held that Lexington established a prima facie entitlement to judgment on the issue of late notice by demonstrating it did not receive notice of the occurrence until January of 2007, over nine months from Nevele’s receipt of plaintiffs’ letter.
The Appellate Division cited established case law that an injured party can provide notice to an insurance company and can overcome an insurance company’s failure to receive timely notice by demonstrating that he or she did not know the insurer’s identity despite his or her reasonably diligent efforts to obtain such information.
In support of an argument that they made reasonable efforts, plaintiffs relied on two letters they had sent to Nevele. The letters gave notice of a contemplated personal injury action, requested that Nevele refer the letter to Nevele’s insurance company, and complete an attached questionnaire. The questionnaire requested insurance information regarding Nevele’s automobile insurer. However, plaintiffs’ incident did not involve an automobile. Nevele responded to one of plaintiffs’ letters but did not respond to the question relating to insurance information. The record was devoid of any evidence that plaintiffs took any further efforts to ascertain Lexington’s identity.
The Appellate Division found that plaintiffs’ letters were insufficient to defeat Lexington’s motion for summary judgment. The Court stated that plaintiffs failed to specifically ask for relevant insurance information, or otherwise follow up with Nevele in any other manner. Accordingly, the Appellate Division reversed the Supreme Court’s ruling and awarded summary judgment in favor of Lexington.
Kleinberg demonstrates the importance of notice to liability insurers being a predicate for coverage. Here, the Court focused on the injured party’s efforts to ascertain the insurer’s identity. The Kleinberg decision is a reminder to carriers and their attorneys considering a late notice defense to pay particular attention to the prior efforts of an injured party and the precise language of a request for insurance information.
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