Don't Ask, Don't Tell Me You Have a Good Faith Belief in Nonliability

CGL – LATE NOTICE – GOOD FAITH BELIEF IN NONLIABILITY
Fine Line Bldrs. & Remodelers, Inc. v. Atlantic Cas. Ins. Co.
(2nd Dept., decided 12/13/2011) 

Atlantic Casualty disclaimed liability coverage based on its insured's late notice of an accident.  The insured attempted to explain its late notice by claiming that it had a good faith belief in nonliability, one of the judicially recognized excuses for late notice in New York.  The motion court was unpersuaded, granting summary judgment to Atlantic Casualty in this declaratory judgment action.

The Appellate Division, Second Department, AFFIRMED, noting:

The plaintiff's claim that it had a reasonable, good faith belief in nonliability was belied by its failure to inquire into the circumstances of the accident at issue in the underlying action (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441; Hanson v Turner Constr. Co., 70 AD3d 641; York Specialty Food, Inc. v Towers Ins. Co. of N.Y., 47 AD3d 589, 590; St. Nicholas Cathedral of Russian Orthodox Church in N. Am. v Travelers Prop. Cas. Ins. Co., 45 AD3d 411; Felix v Pinewood Bldrs., Inc., 30 AD3d at 461).

Belied:  to show something to be false or wrong.

Insureds who do not inquire into the circumstances of a known accident may not legitimately claim that they had a reasonable, good faith belief in nonliability so as to excuse their late reporting of the accident to their liability insurers.