HOMEOWNERS – LATE NOTICE – 7-MONTH DELAY UNREASONABLE AS A MATTER OF LAW – NO GOOD FAITH BELIEF IN NON-LIABILITY
Tower Ins. Co. of New York v. Ubah
(Sup.Ct., New York Co., decided 4/14/2008)
In Tower Ins. Co. of New York v. Ubah, 2008 NY Slip Op 31133(U)(Sup.Ct., New York Co., decided 4/14/2008), the court granted summary judgment to Tower, holding that the insured's 7-month delay in reporting an accident with injury on the insured's property was unreasonable as a matter of law. The insured had learned of the accident on June 6, 2005, was served with a complaint on December 5, 2005, and notified her broker on January 12, 2006. Tower received the complaint on January 13, 2006 and issued a disclaimer on February 10, 2006. In her signed statement given to Tower's investigator, the insured had acknowledged that she had learned of the accident and that the claimant had been taken away by ambulance on the day it happened. She also knew that a fire truck had shown up and that later that day someone had come by to take pictures of the scene.
In noting that the "issue is not whether the insured believes he will ultimately be found liable for the injury, but whether he has a reasonable basis for the belief that no claim will be asserted against him" (emphasis added), the court held that the insured's subjective belief that a claim would not be made against her, standing alone, was insufficient to exempt her from the notice requirement of the policy. The court found no extenuating factors which could have been associated with a reasonable belief that a plaintiff would not assert a claim, such as where there is no indication of injury or no defect at the accident site.
The court summarily rejected as "not supported by case law" the insured's further argument that Tower's 28-day delay in issuing its disclaimer was unreasonable.
Under the law of the First Department, a good faith belief in non-liability is an actual belief that no claim will be asserted, rather than the converse, viz, a lack of any belief that a claim will be made. This is an important distinction that should be made in investigating and assessing late notice situations and potential coverage defenses.