Keith v. Liberty Mut. Fire Ins. Co.

• Decision Date: 23 June 1986
• Citation: 118 A.D.2d 151,503 N.Y.S.2d 441
• Parties: Donald KEITH, Appellant, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 441

503 N.Y.S.2d 441

118 A.D.2d 151

Donald KEITH, Appellant, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Respondent.

Supreme Court, Appellate Division Second Department.

June 23, 1986.

Bertram Herman, P.C., East Norwich, for appellant.

A. Paul Goldblum, Brooklyn, for respondent.

Before LAZER, J.P., and BRACKEN, WEINSTEIN and KUNZEMAN, JJ.

LAZER, Justice Presiding.

At issue is the timeliness of an insurance company's denial of a no-fault claim. Resolution of the issue involves consideration of a rather complex series of governmental requirements relative to the time available to an insurance company to deny such a claim.

The plaintiff Donald Keith was injured in an automobile accident on April 8, 1984 and was treated for his injuries at Booth Memorial Hospital. On May 24, 1984, the defendant-insurer, Liberty Mutual Fire Insurance Company, received Keith's application for benefits under the no-fault provisions of the policy it issued, and by letter dated June 14, 1984, it requested Keith's hospital records from Booth Memorial Hospital. Those records, received by Liberty Mutual on July 16, 1984, indicated that Keith had alcohol on his breath when he was examined shortly after the accident. On August 8, 1984, Liberty Mutual requested that the hospital provide copies of Keith's blood-test reports, which had not been included in the original package the hospital had sent. The company received the reports on August 27, 1984, and on September 14, 1984, it denied the claim, stating only that "[s]ince claimant was intoxicated as defined by the New York Vehicle & Traffic Law all no-fault benefits are denied".

Keith then commenced this action for a judgment declaring his right to no-fault benefits. After joinder of issue, he moved to strike the affirmative defense of intoxication and for summary judgment in his favor, contending that the defendant's notice denying his application for no-fault benefits was deficient in two respects: (1) it was untimely as a matter of law, and (2) even if timely, it was incomplete. Special Term denied his motion on the ground that issues of fact existed.

Keith's contention concerning the completeness of the denial borders on the frivolous. The claim is that the notice of denial was deficient because it failed to state that Keith's intoxication was the cause of his injuries. Such a notice need only "apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated" (General Acc. Ins. Group v. Cirucci, 46 N.Y.2d 862, 864, 414 N.Y.S.2d 512, 387 N.E.2d 223). It does not have to establish a prima facie defense. Even without alleging causation, the notice clearly refers to the statutory defense of intoxication (Insurance Law § 5103[b][2] ) and the corresponding policy provision; it was therefore sufficient.

Keith's more significant argument concerns the timing of Liberty Mutual's denial of his claim. One of the purposes of the no-fault law (Comprehensive Motor Vehicle Insurance Reparations Act, Insurance Law §§ 5101, et seq.) is, of course, to provide prompt compensation for the economic loss accompanying the personal injuries which result from automobile accidents (see, Granger v. Urda, 44 N.Y.2d 91, 98, 404 N.Y.S.2d 319, 375 N.E.2d 380). Insurance Law § 3420[d] requires that an insurer disclaim liability or deny coverage under a liability insurance policy by "written notice as soon as is reasonably possible". Although a no-fault provision is part of a liability insurance policy (Insurance Law § 5103[a] ) and Insurance Law § 3420(d) has been held applicable to a no-fault policy (see, Nahmias v. Merchants Mut. Ins. Co., 91 A.D.2d 680, 457 N.Y.S.2d 137), the Insurance Law contains a more specific time requirement with respect to no-fault claims. Insurance Law § 5106(a) provides that first-party benefits are overdue if not paid within 30 days of submission of proof of the entire claim.

Pursuant to his statutory authority (Insurance Law § 301), the Superintendent of Insurance has promulgated regulations for measuring the 30-day period (11 NYCRR 65.15[a]-[f] ), and it is those regulations that provide the standard by which we evaluate timeliness in the instant case (see, Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d 159; Matter of Allstate Ins. Co. v. Libow, 106 A.D.2d 110, 118-119, 482 N.Y.S.2d 860, affd. 65 N.Y.2d 807, 493 N.Y.S.2d 127, 482 N.E.2d 923). The regulations construe the statutes as requiring payment or denial of the claim, in whole or in part, within 30 calendar days after the insurer receives all of the verification of the claim to which it is entitled (11 NYCRR 65.15[f][1], [3] ). In addition, where the insurer rests its denial of no-fault benefits on the statutory exception from coverage of persons who are injured as a result of driving a motor vehicle while intoxicated (Insurance Law § 5103[b][2] ), the regulations contain the separate requirement that the insurer notify the applicant of its decision to deny benefits within 10 business days of when the determination to deny is made (11 NYCRR 65.15[f][5][iii] ). As we view the record, Liberty Mutual has complied with the 30-calendar-day requirement but there is an issue of fact concerning its compliance with...