516 F.3d 42 (2nd Cir. 2008), 06-3231, Briggs Avenue L.L.C. v. Insurance Corp. of Hannover

Docket Nº:06-3231-cv.
Citation:516 F.3d 42
Party Name:BRIGGS AVENUE L.L.C., Plaintiff-Appellant, v. INSURANCE CORPORATION OF HANNOVER, Defendant-Appellee.
Case Date:February 15, 2008
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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516 F.3d 42 (2nd Cir. 2008)

BRIGGS AVENUE L.L.C., Plaintiff-Appellant,



No. 06-3231-cv.

United States Court of Appeals, Second Circuit.

February 15, 2008

Argued: November 15, 2007.

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Robert Scher, Scher & Scher, PC, Great Neck, N.Y., for Plaintiff-Appellant.

Janet Ford, White, Fleischner & Fino, LLP, New York, N.Y., for Defendant-Appellee.

Before: LEVAL, CALABRESI, and WESLEY, Circuit Judges.

CALABRESI, Circuit Judge:

This case raises a question of state law that has yet to be addressed by the New York Court of Appeals and that has led to divergent opinions in the federal district courts. When an injured party begins its suit against an insured by serving process on the Secretary of State, who, under New York corporate and limited liability company law, is the insured's agent for such service, does this service suffice to trigger

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the provisions in the relevant insurance policy that require the insured to inform its insurer in a timely manner that a suit has been brought, where: (a) the insurance policy does not expressly refer to notice that a suit has been brought being given to an insured's "representative" rather than the insured itself, and (b) the insured plausibly argues that - due to its failure to update its address with the Secretary of State - it had not received actual notice that the suit had been brought? Because we believe that the New York Court of Appeals should be given the opportunity to decide whether it wishes to address this technical but recurring question of New York state law, we CERTIFY the question to the New York Court of Appeals.


Plaintiff-Appellant Briggs Avenue LLC ("Briggs" or "Appellant") filed an action in New York State Supreme Court seeking a declaratory judgment that its insurer, Insurance Corporation of Hannover ("ICH" or "Appellee"), be required to defend and indemnify Briggs in a personal injury lawsuit filed by one of Briggs's tenants against Briggs. ICH removed the suit, pursuant to 28 U.S.C. § 1441, to federal district court in the Southern District of New York.1

At the district court, ICH moved for judgment on the pleadings and/or summary judgment on the ground that Briggs failed to comply with various notice requirements contained in its insurance policy. Briggs cross-moved for summary judgment. The district court granted ICH's motion, denied Briggs's cross-motion, and dismissed the case with prejudice. Briggs Ave. L.L.C. v. Ins. Corp. of Hannover, No. 05 Civ. 4212, 2006 WL 1517606 (S.D.N.Y. May 30, 2006). Briggs appeals that decision.

A. The Underlying Tort Lawsuit

Briggs owns and operates an apartment house at 2570 Briggs Avenue in the Bronx. On or about May 14, 2003, Shaban Mehaj, the sole principal of Briggs, was informed of an incident at this apartment house. A portion of the ceiling in one of the apartments had fallen. Mehaj visited the apartment shortly thereafter, and asserts in his affidavit that he "was not informed that anyone in the apartment had been injured in the incident and had no reason to suspect so." Mehaj did not notify Briggs's insurer, ICH, because, at this point, he assertedly "had no knowledge or notice that anyone had been injured."

Later, on or about July 28, 2003, Nelson Bonilla, an adult son of one of the tenants at 2570 Briggs Avenue, filed a personal injury action against Briggs, alleging that on May 14, 2003, he was injured when a piece of the ceiling fell and struck him, and that the accident was caused by Briggs's negligence in maintaining the premises. The lawsuit sought $2 million in damages. A week or so earlier, Bonilla had served his personal injury complaint on the Secretary of State of New York, who under New York law functions as Briggs's agent for service. N.Y. Ltd. Liab. Co. L. § 203(e)(4). The Secretary of State forwarded copies of the complaint to the address for Briggs then on file at the Secretary's office. That address was, however, incorrect as Briggs had failed to advise the Secretary of State of its new mailing address. Briggs asserts that, because of the wrong address, it did not receive word of Bonilla's suit.

In state court, Bonilla moved for default judgment against Briggs and, in late

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March or early April 2004, directly served Briggs at its correct address. Briggs received the notice and "within days" informed its insurance broker of the lawsuit. Shortly thereafter, ICH received, through the insurance broker, an Accord General Liability Notice of Occurrence/Claim form, dated April 2, 2004.

B. The Briggs Insurance Policy and Affirmative Defenses Claimed by ICH

Briggs's insurance policy, issued by ICH, provided coverage for the period of September 20, 2002 to September 20, 2003, and thus was in place at the time of the ceiling incident. The policy included a section entitled "Commercial General Liability Conditions" which articulated notice requirements that the insured needed to comply with, in the event of an occurrence, offense, claim or suit. The policy stated:

2. Duties in the Event of Occurrence, Offense, Claim or Suit

a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim....

b. If a claim is made or "suit" is brought against any insured, you must:

(1) Immediately record the specifics of the claim or "suit" and the date received; and

(2)Notify us as soon as practicable.

You must see to it that we receive written notice of the claim or "suit" as soon as practicable.

c. You and any other involved insured must:

(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit" ....

ICH, after receiving the notification of Bonilla's lawsuit, replied to Briggs in a disclaimer letter dated April 12, 2004, claiming affirmative defenses and indemnity due to Briggs's failure to comply with the policy notification conditions. The relevant portion of the letter explains that "despite the service on the Secretary of...

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