Allstate Ins. Co. v. Manger

• Decision Date: 24 March 1961
• Citation: 30 Misc.2d 326,213 N.Y.S.2d 901
• Parties: ALLSTATE INSURANCE COMPANY v. Jacob J. MANGER, Juan I. Cabrera and Phil Loiodice.
• Court: New York Supreme Court

Page 901

213 N.Y.S.2d 901

30 Misc.2d 326

ALLSTATE INSURANCE COMPANY v. Jacob J. MANGER, Juan I. Cabrera and Phil Loiodice.

Supreme Court, Special Term, Queens County, Part III.

March 24, 1961.

McCarthy & McGrath, New York City, for plaintiff (Edward S. Marshall, New York City, of counsel).

Wing & Wing, New York City, for defendant Phil Loiodice (William Biren, New York City, of counsel).

Ralph Sherman, Brooklyn, for defendant Jacob J. Manger (Abraham Wilkenfeld, New York City, of counsel).

CHARLES MARGETT, Justice.

This is an action by an insurance carrier for a judgment declaring its rights and obligations under an automobile liability policy issued to Florence Manger and insuring a motor vehicle owned by defendant Jacob L. Manger. The policy was in force on July 13, 1959, when the insured vehicle was operated by defendant Juan I. Cabrera with defendant Manger's permission and consent. On that date the vehicle in question was involved in an accident on 19th Street near Ninth Avenue, New York City, in which defendant Phil Loiodice, a pedestrian residing in New Jersey, was injured.

On the date of the accident Cabrera sent an MV 104 form to the Bureau of Motor Vehicles in Albany. He there listed the name and address of Loiodice, stating that the latter was injured in the accident. The plaintiff was also named as the liability insurance carrier and the number of the policy noted.

The first notice the plaintiff had of the accident was on September 18, 1959, sixty-eight days after the occurrence, when copies of a summons and complaint in an action brought in this court, entitled 'Phil Loiodice v. Jacob J. Manger and Juan I. Cabrera,' were forwarded by the insureds.

Thereafter and sometime prior to October 9, 1959, plaintiff caused statements to be taken from both insureds. On that date it sent a letter to Florence Manger who, although she was the named insured in the policy, was not made a party either to the negligence action or to the instant action for a declaratory judgment. This letter reads as follows:

'On September 18, 1959, we received a Supreme Court of the State of New York: County of Queens, Summons and Complaint in the action entitled 'Phil Loiodice against Jacob J. Manger and Juan I. Cabrera' .

'We have not had an opportunity to determine whether the accident, which is the subject of Phil Loiodice's suit, is covered by our policy since this is our first notice of subject claim. We have not had an opportunity to determine whether the terms of the policy, if it does cover, have been complied with. We will resolve these questions as soon as it is reasonably possible for us to do so, and we will immediately notify you and Mr. Loiodice of the results of this investigation and study as may be required.

'We hereby reserve whatever rights we have until we make such determination, and our service of the notice of appearance or answer is intended to be without prejudice to whatever rights we have to enforce the terms of the policy and made for the purpose of preserving whatever rights you had when you forwarded the Summons and Complaint to us, and so that no default might be taken against you pending our determination of our right to disclaim or continue the defense of the case on your behalf, as the situation might later require.'

A copy of this letter was sent to the defendat Loiodice in care of his attorneys. Similar letters were sent to defendants Cabrera and Manager on October 14, 1959.

The plaintiff then designated attorneys to defend Manger and Cabrera in Loiodice's negligence action. An answer was interposed and a bill of particulars demanded. Copies of Loidoce's hospital records were obtained.

On December 24 and 30, 1959, Cabrera and Manger, respectively, were served with the summons and complaint in the instant action. Loiodice was served with the summons and complaint on June 2, 1960, when he was examined before trial by the defendants in the negligence action.

Plaintiff claims that the sixty-eight day delay in giving it notice of the accident was a violation of the following condition of the policy:

'In the event of accident, occurrence or loss, written notice containing all particulars shall be given by or for the insured to Allstate as soon as practicable.'

Its position is that such delay was prejudicial in that it was unable promptly and properly to investigate the facts and circumstances of the accident.

It is well settled that the foregoing condition in a policy requires that written notice be given within a reasonable time under all of the circumstances. Deos v. London & Lancashire Indem. Co. of America, 3 N.Y.2d 127, 164 N.Y.S.2d 689; Mason v. Allstate Insurance Co., 12 A.D.2d 138, 209 N.Y.S.2d 104. It is 'unquestioned that a failure to satisfy the requirements of this cause by timely written notice vitiates the contract as to both the insured and the plaintiff recovering a judgment against him.' Deso v. London & Lancashire Indem. Co. of America, supra, 3 N.Y.2d at page 129, 164 N . Y.S.2d at page 691; Bazar v. Great American Indem. Co., 306 N.Y. 481, 119 N.E.2d 346; Mason v. Allstate Insurance Co., supra. While an injured person may preserve his rights by giving his own notice to the insurer (Insurance Law, § 167, subd. 1[d]), such notice must also be given within a reasonable time under all of the circumstances (Mason v. Allstate Insurance Co., supra). A more liberal standard, however, is applied as to what delay is reasonable (Marcus v. London & Lancashire Indem. Co., 6 A.D.2d 702, 174 N.Y.S.2d 423, affirmed 5 N.Y.2d 961, 184 N.Y.S.2d 837). The burden of proving that the dealy was reasonable is upon the injured person or the insured, as the case may be. Rushing v. Commercial Casualty Ins. Co., 251 N.Y. 302, 167 N.E. 450; Mason v. Allstate Insurance Co., supra.

Delay on the part of an insured to give notice may be excused where he lacks knowledge of the accident or of an injury and also where there is a justifiable lack of knowledge of the fact that there was insurance coverage. If such excuses are claimed then there is a triable issue as to whether the notice was timely. Gluck v. Londson & Lancashire Ind. Co., Sup., 134 N.Y.S.2d 889, affirmed 2 A.D.2d 751, 153 N.Y.S.2d 518, affirmed 2 N.Y.2d 953, 162 N.Y.S.2d 357. Delay on the part of the injured party to give notice may be excused where he had difficulty ascertaining the identity of the insured or the insurer (Lauritano v. American Fidelity Fire Ins. Co., 3 A.D.2d 564, 162 N.Y.S.2d 553, affirmed 4 N.Y.2d 1028, 177 N.Y .S.2d 530), but he must show that he exercised diligence. Safeguard Insurance Company v. Baldauf, 20 Misc.2d 667, 188 N.Y.S.2d 762.

Where no excuse is offered the question of whether notice was timely is one of law for the court. Greenwich Bank v. Hartford Fire Ins. Co. of Hartford, Conn., 250 N.Y. 116, 128, 164 N.E. 876, 879. Thus unexcused delays of 51 days (Deso v. Londong & Lancashire Indem . Co. of America, 3 N.Y.2d 127, 164 N.Y.S.2d 689 supra), 27 days (Reina v. United States Casualty Co., 228 App.Div. 108, 239 N.Y.S. 196, affirmed 256 N.Y. 537, 177 N.E. 130), 22 days (Rushing v. Commercial Casualty Ins. Co., 251 N.Y. 302, 167 N.E. 450, supra), 30 days (Mason v. Allstate Insurance Co., 12 A.D.2d 138, 209 N.Y.S.2d 104, supra) and 49 days (Abitante v. Home Indemnity Co., 240 App.Div . 553, 270 N.Y.S. 641) have been held as matter of law to violate the condition of the policy.

In the case at bar neither the insureds nor the injured person claim an excuse for not giving notice. The insureds were aware of the accident and of the identity of the injured victim. The latter could have learned the identity of the insurer from the MV 104 form which was received in Albany on July 15, 1959, as well as directly from the Motor Vehicle Bureau. The sixty-eight day delay was, therefore, unreasonable as matter of law.

Even if the delay were not unreasonable as matter of law, the plaintiff has shown that it was prejudiced. Walter Kraak, its claims evaluator, testified that the normal procedure in the plaintiff's office, upon notification of an accident involving an insured, is immediately to begin an investigation, in the course of which the insured driver and the possible claimant are interviewed, a canvass is made of the scene of the accident to ascertain the identity of any witnesses, the scene itself is inspected for debris, skid marks or anything that would contribute to preserve the facts of the accident and the insured vehicle is photographed for any probative evidence in regard to the accident. Also, if personal injury may be involved, a physical examination of the claimant is obtained and, in order to save expenses, an attempt is made to settle the claim before an attorney is retained.

The defendant Loiodice has asserted four defenses in his answer which will be considered in inverse order. The fourth, to the effect that the plaintiff was not prejudiced by the delay and in any event such delay was not unreasonable, has already been considered and rejected.

It is claimed in the third defense that inasmuch as the insurance policy was issued pursuant to the compulsory insurance law, Loiodice's rights were fixed upon the happening of the accident and consequently the subsequent failure of the insured to comply with the terms of the policy did not 'vitiate, nullify or modify the obligations of the plaintiff' to him. A similar contention was considered by Mr. Justice McDonald in General Accident Fire & Life Assurance Corporation Ltd. v. Martino, 12 Misc.2d 935, 175 N.Y.S.2d 894. The court held that the rights of the injured party are not fixed at the time of the accident; that while the Safety Responsibility Act (Vehicle & Traffic Law, Art. 7) specifically stated that the liability of the insurance company became absolute at the time of the accident, such a provision does not appear in the new compulsory insurance law (id., Art. 6). The court expressly held that under the Safety Responsibility Act...