Matter of New York Municipal Insurance Reciprocal

• Decision Date: 21 November 2007
• Docket Number: 502578.
• Parties: In the Matter of the Arbitration between NEW YORK MUNICIPAL INSURANCE RECIPROCAL, Appellant, and CHRISTOPHER McGUIRK, Respondent.
• Court: New York Supreme Court — Appellate Division

45 A.D.3d 1166

845 N.Y.S.2d 577

2007 NY Slip Op 09183

In the Matter of the Arbitration between NEW YORK MUNICIPAL INSURANCE RECIPROCAL, Appellant, and CHRISTOPHER McGUIRK, Respondent.

502578.

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

Decided November 21, 2007.

Appeal from an order of the Supreme Court (Hard, J.), entered April 10, 2007 in Albany County, which denied petitioner's application pursuant to CPLR 7503 to stay arbitration between the parties.

Lahtinen, J.

On January 24, 2005, respondent, an employee of the Warren County Sheriff's Department, was injured in a patrol car—a vehicle owned by Warren County and for which supplementary uninsured/underinsured motorist (hereinafter SUM) insurance coverage had been obtained with petitioner—that was struck by a vehicle driven by Rachael McCrea and owned by Michael McCrea and Victoria McCrea. As is relevant here, at the end of July 2005 respondent was informed by the McCreas' insurer that their policy had a $100,000 liability limit. Less than two weeks later, at the beginning of August 2005, respondent notified petitioner of a possible SUM claim and petitioner—asserting that it was not notified of the claim "as soon as practicable" as required under the policy—disclaimed coverage. Respondent served a demand for SUM arbitration in November 2005 and, in response, petitioner commenced this proceeding in Supreme Court to stay the arbitration. Finding that respondent notified petitioner as soon as was practicable under the circumstances, Supreme Court denied the petition, prompting this appeal by petitioner.

We affirm. Notice provisions of insurance contracts establish conditions precedent to the imposition of liability (see Matter of Progressive Ins. Cos. [House], 34 AD3d 889, 890 [2006]). "[I]n the SUM context, the phrase `as soon as practicable' means that `the insured must give notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured'" (Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 474 [2005], quoting Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495 [1999]; see Matter of Progressive Ins. Cos. [House], 34 AD3d at 890). Here, there is no dispute that respondent first discovered that the McCreas were underinsured at the end of July 2005 when he received a letter from their insurer detailing their policy's liability limit. In addition, there is no allegation on the part of petitioner that, through diligent efforts, respondent should reasonably have discovered this information at an earlier time. Petitioner's assertion that respondent was aware at an earlier time that the McCreas' coverage may be insufficient^* is of no moment, as the timeliness of notice in the SUM context does not turn...