Question of Fact Found on Service on Insurer of Money Judgment Against Insured

AUTO – INSURANCE LAW § 3420(B)(1)– TIMELINESS OF DISCLAIMER
Liriano v. Eveready Ins. Co.
(2nd Dept., decided 6/9/2009)

Plaintiff obtained a $40,112.06 money judgment against Eveready's insured on default, and served that judgment by mail on Eveready on August 13, 2007.  Eveready claimed it did not receive that judgment in the mail, and instead first learned of it on March 13, 2008, promptly issuing a disclaimer six days later.

Plaintiff commenced this action to enforce payment of the judgment pursuant to Insurance Law §§ 3420(a)(2) and (b)(1).  Queens Supreme granted plaintiff's motion for summary judgment and Eveready appealed. 

In REVERSING the plaintiff's judgment, the Second Department held that Eveready had created a triable issue of fact on its alleged non-receipt of the money judgment by submitting "a sworn denial of receipt and an affidavit of an employee with personal knowledge regarding the defendant's regular practices and procedures in retrieving, opening, and indexing its mail and in maintaining its files on existing claims."  That employee averred that Eveready had not received the judgment in the mail.  "Under the circumstances of this case, the defendant's submissions sufficed to raise a triable issue of fact regarding the service of the judgment, and the question of whether the defendant's disclaimer of coverage was timely must await the resolution of that issue", ruled the Second  Department.

The appellate court also overruled the Supreme Court's determination that Eveready's disclaimer letter was defective and invalid as against the plaintiff:

Rather, the letter sent to the plaintiff adequately recited that the defendant was disclaiming coverage as to the plaintiff on the ground that he failed to provide the defendant with timely notice of the underlying litigation and with legal papers filed in connection therewith (see American Tr. Ins. Co. v Sartor, 3 NY3d 71; Matter of GEICO Co. v Wingo, 36 AD3d 908; cf. Shell v Fireman's Fund Ins. Co., 17 AD3d 444; Vacca v State Farm Ins. Co., 15 AD3d 473). 

For those who might wonder why the Second Department did not grant reverse summary judgment to Eveready on the timeliness of a disclaimer issued only six days after first notice, the triable issue identified by the court was not whether six days was timely, but whether Eveready would be able to convince the trier(s)-of-fact that it did not receive the judgment in the mail.