Badio v. Liberty Mutual Fire Insurance Co.

• Decision Date: 16 November 2004
• Docket Number: 3064.
• Parties: SOEURETTE BADIO, Respondent-Appellant, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant-Respondent, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

12 A.D.3d 229

785 N.Y.S.2d 52

2004 NY Slip Op 08159

SOEURETTE BADIO, Respondent-Appellant, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant-Respondent, et al., Defendant.

3064.

Appellate Division of the Supreme Court of the State of New York, First Department.

November 16, 2004.

Order, Supreme Court, New York County (Norman Ryp, J.), entered February 27, 2003, which denied defendant Liberty Mutual's motion for a directed verdict dismissing the complaint and so much of plaintiff's motion for a directed verdict dismissing Liberty Mutual's fourth affirmative defense, but granted plaintiff's motion to the extent of vacating the jury verdict in Liberty Mutual's favor and remanding for a new trial, unanimously modified, on the law, Liberty Mutual's motion for a directed verdict dismissing the complaint granted, plaintiff's motion to the extent of vacating the jury verdict in Liberty Mutual's favor denied, and otherwise affirmed, without costs. The Clerk is directed to enter judgment accordingly.

The insurer has the burden of proving the validity of its timely cancellation of an insurance policy (see Lehrer McGovern Bovis v Public Serv. Mut. Ins. Co., 268 AD2d 388 [2000], lv dismissed 94 NY2d 944 [2000]). An insurer is entitled to a presumption that a cancellation notice was received when "the proof exhibits an office practice and procedure followed by the insurers in the regular course of their business, which shows that the notices of cancellation have been duly addressed and mailed" (Nassau Ins. Co. v Murray, 46 NY2d 828, 829 [1978]). In order for the presumption of receipt to arise "office practice must be geared so as to ensure the likelihood that a notice of cancellation is always properly addressed and mailed" (id. at 830).

The trial court improperly ruled that Liberty Mutual did not present evidence of its office mailing practice sufficient to establish that the notice of cancellation had been mailed and presumably received. Indeed, Liberty Mutual did present the testimony of an employee who possessed personal knowledge of the office mailing practice, including how the mail was picked up and counted, and how the names and addresses on each item were confirmed. Such proof of regular office practice and procedure obviated the necessity of producing a witness with personal knowledge of the actual mailing of plaintiff's notice of cancellation (see Bossuk v Steinberg, 58 NY2d 916 [1983]). The court also improperly precluded the signed and stamped certificate of mailing as direct proof of actual mailing (see Abuhamra v New York Mut. Underwriters, 170 AD2d 1003 [1991]; see also Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Pardo v Central Coop. Ins. Co., 223 AD2d 832 [1996]), questioning even its admissibility as proof of office practice.

By establishing its routine and reasonable office practice, defendant met its burden of proof that notice was mailed to plaintiff and presumed received. The burden then shifted to plaintiff to rebut the presumption of receipt (see Abuhamra, supra). An insured's denial of receipt, standing alone, is insufficient to rebut the presumption. Indeed, "[i]n addition to a claim of no receipt, there must be a showing that routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed" (Nassau Ins., 46 NY2d at 830).

The main issue at trial was whether defendant Liberty Mutual's notice of cancellation of plaintiff's homeowner's insurance was effective. To that end, the trial court asked the jury the following questions:

"1. Did the defendant . . . follow reasonable procedures in mailing out the notice of fire insurance policy cancellation to...