Good Faith Belief in Non-Liability -- Late Notice Excused

CGL – LATE NOTICE – GOOD FAITH BELIEF IN NON-LIABILITY
North Country Ins. Co. v. Jandreau
(3rd Dept. decided 4/24/2008)

In North Country Ins. Co. v. Jandreau, 2008 NY Slip Op 3552, 2 (3rd Dept. decided 4/24/2008), the 3rd Department affirmed the lower court's denial of summary judgment to the plaintiff insurer based on its late notice defense. Although defendant GC knew a roofing subcontractor's employee had broken his leg and later had surgery after having fallen off a roof, defendant did not report the accident to his insurer until approximately one year later when he was served with a summons and complaint. The relevant provision of the policy stated that "[i]n case of an occurrence or if you become aware of anything that indicates there might be a claim under this policy, you must give us or our agent notice . . . as soon as practicable."

In this case, the defendant explained that he did not contact his insurer because the injured employee was working for the subcontractor and under the subcontractor's control and supervision at the time of the accident. The subcontractor had provided proof of liability and workers' compensation coverage prior to commencing work, and informed defendant on the day of the accident that it was submitting a claim to its insurer. Defendant did not hear from the injured worker or anyone on his behalf from the date of the accident until defendant was served with the pleadings in the underlying action. He further believed that there was no liability because the injured worker was acting contrary to his own advice, and presumably that of the worker's supervisor, that no one go on the roof. Despite owning a construction company for 12 years, defendant had never been sued for a construction site injury and was thus unfamiliar with the nuances of liability. Defendant notified plaintiff the same day that he was served process.

Under the circumstances, and in light of the preference for permitting a jury to decide the question of reasonableness, the 3rd Department held that Supreme Court did not err in denying plaintiff's motion for summary judgment.