9-Month Delay in Providing Notice of Accident "Fatally Late"

CGL – LATE NOTICE – ADDITIONAL INSURED
Tower Ins. Co. of New York v. Joselyn Grocery Corp.
(Sup. Ct., New York Co., decided 6/20/2008)

Tower insured Joselyn Grocery Corp. under a CGL policy. 2238 M LLC (LLC) and Rose Mack Management (Rose) were the landlord and managing agent of the store property, respectively. Joselyn's lease required that it hold harmless and indemnify LLC and Rose for any injuries or damages resulting from Joselyn's negligence.

In May 2005, Olga Zuniga commenced an action against Joselyn, LLC and Rose for injuries she allegedyl sustained on July 26, 2004 when she tripped on plastic wrapping and fell to the sidewalk in front of Joselyn's grocery store. Tower's first notice of the accident was on May 2, 2005, when it received a tender letter from a third-party claims administrator for Rose and LLC, requesting that Tower defend and indemnify Rose in the underlying action based upon the lease agreement between Joselyn and Rose. Byt letters dated May 31, 2005, Tower: (1) rejected the tender of coverage on the ground that Rose was not named as an insured or additional insured under the policy on the date of the accident; and (2) disclaimed coverage to Joselyn on the ground of late notice. Tower then brought this DJ action.

In GRANTING Tower's motion for summary judgment as against Joselyn, New York County Supreme Court Justice Martin Shulman held that "[t]he notice received by plaintiff on May 2, 2005, nine months after Zuniga’s July 26, 2004 accident, was fatally late[.]"

In rejecting Rose and LLC's claims for coverage and granting summary judgment to Tower, Justice Shulman ruled:

Rose was never named as an additional insured under the policy and LLC was not named as an additional insured until April 24, 2005. Clearly, Rose and LLC were not covered on the date of the accident. Defendants’ contention that insurance coverage for LLC and Rose can be imputed because Joselyn’s lease contains an indemnification provision in favor of the landlord is misplaced for two reasons. First, the obligation to procure insurance is separate and distinct from the obligation to indemnify (citations omitted). Second, Rose and LLC are not parties to the lease which is between Joselyn, as tenant, and 1700 Development Co., Inc., as landlord * * *.

Interestingly, the court granted summary judgment to Tower against LLC and Rose even though Tower's notice of motion requested relief as against Joselyn only. Tower's supporting papers requested summary judgment relief against LLC and Rose, and they fully responded to Towers' arguments. Additionally, Tower's notice of motion requested “such other and further relief as the Court deems just, equitable and proper.”