Admiral Ins. Co. v. State Farm Fire

• Decision Date: 28 July 2011
• Citation: 86 A.D.3d 486,2011 N.Y. Slip Op. 06078,927 N.Y.S.2d 629
• Parties: ADMIRAL INSURANCE COMPANY, et al., Plaintiffs–Respondents–Appellants,v.STATE FARM FIRE and Casualty Company, etc., Defendant–Appellant–Respondent.
• Court: New York Supreme Court — Appellate Division

86 A.D.3d 486
927 N.Y.S.2d 629
2011 N.Y. Slip Op. 06078

ADMIRAL INSURANCE COMPANY, et al., Plaintiffs–Respondents–Appellants,
v.
STATE FARM FIRE and Casualty Company, etc., Defendant–Appellant–Respondent.

Supreme Court, Appellate Division, First Department, New York.

July 28, 2011.

[927 N.Y.S.2d 630]

Saretsky Katz Dranoff & Glass, L.L.P., New York (Allen L. Sheridan of counsel), for appellant-respondent.Kral, Clerkin, Redmond, Ryan, Perry & Van Etten, LLP, Melville (Leonard Porcelli of counsel), for respondents-appellants.ANDRIAS, J.P., SAXE, MOSKOWITZ, ACOSTA, FREEDMAN, JJ.

[86 A.D.3d 486] Order, Supreme Court, Bronx County (Alexander W. Hunter, Jr., J.), entered May 5, 2009, which, in an action seeking, inter alia, a declaration that defendant must defend and indemnify plaintiff P & K Contracting, Inc. (P & K) in the underlying personal injury action, denied plaintiffs' motion for summary judgment and denied defendant's cross motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

In November 2000, the New York State Dormitory Authority hired P & K, insured by plaintiff Admiral Insurance Company, to perform construction work at North Central Bronx Hospital. On May 14, 2001, P & K entered a subcontract with Shahid Enterprises which required Shahid to procure additional insured coverage for P & K. Shahid obtained that coverage under a policy with defendant State Farm.

On October 19, 2002, Lakhwinder Singh, a Shahid employee, was injured when he fell from a ladder at the job site. In 2003,

[927 N.Y.S.2d 631]

Singh sued P & K, the City of New York and New York City Health and Hospitals Corporation. It is unclear from the record when P & K first received notice of the accident or suit.

On or about September 22, 2003, United Claims Service (UCS), as “authorized representatives for Admiral Insurance Company, the liability insurance carrier for P & K,” sent a letter to Shahid, with copies to Admiral and P & K, stating: “Please accept this letter as notice that in view of the fact that our insured [86 A.D.3d 487] [P & K] did not have any employees or equipment on this job site and that the ladder that the claimant fell from was owned by your company, we demand that you assume the defense and indemnification of this matter.” UCS asked Shahid to turn the letter over to its insurance carrier.

On or about December 17, 2003, UCS sent a follow up letter to Shahid, with copies to State Farm, Admiral and Singh's counsel, stating that Shahid was responsible for Singh's injuries and that UCS had been attempting to secure Shahid's cooperation “in the form of reporting this matter to your insurance carrier.” UCS asked for information as to the Workers' Compensation carrier to whom the accident was reported and stated that the letter would serve to advise Singh's counsel that his claim should be pursued through State Farm. State Farm contends that its copy of the letter was forwarded to an inactive claims office and that it did not receive the tender until January 22, 2004.

On or about February 5, 2004, State Farm wrote to USC acknowledging receipt of the December 17, 2003 letter and requesting a copy of the file because it had no information about any alleged accident occurring on October 19, 2002. On the same date, State Farm wrote to P & K, requesting information, and to Shahid, asking its principal to call. State Farm also noted that it had been attempting unsuccessfully to contact Shahid.

By letter dated March 19, 2004, addressed to P & K with copies to UCS, Admiral, Singh's counsel and Shahid, State Farm reserved its rights to deny defense and indemnity to P & K based on late notice. By letter dated March 22, 2004, UCS advised State Farm that Shahid had been placed on notice on September 22, 2003 and reiterated its request that State Farm assume the defense of P & K based upon the contractual and indemnification agreement in the subcontract. By letter dated March 23, 2004, addressed to USC with a copy to P & K, State Farm responded that it needed to know when P & K was first given notice of the claim, and whether the matter was in suit.

By letter dated April 13, 2004, addressed to P & K with copies to UCS, Admiral, Shahid, and Singh's attorney, State Farm advised P & K that it was disclaiming coverage based on P & K's alleged failure to give prompt notice. In February 2007, Admiral and P & K commenced this suit seeking a declaration that the State Farm policy offers primary coverage for the Singh action and that State Farm is obligated to defend and indemnify P & K for any damages awarded against P & K in that action and to reimburse Admiral and P & K for all attorneys' fees, costs, expenses and disbursements they had expended therein. State Farm [86 A.D.3d 488] alleged as an affirmative defense that plaintiffs failed to notify it promptly of the accident, claim and suit, as required by the policy.

Plaintiffs moved for summary judgment on the...