Security Mut. Ins. Co. v. Acker-Fitzsimons Corp., ACKER-FITZSIMONS
| Decision Date | 24 April 1972 |
| Docket Number | ACKER-FITZSIMONS |
| Citation | 330 N.Y.S.2d 865,39 A.D.2d 34 |
| Parties | SECURITY MUTUAL INSURANCE COMPANY of New York, Plaintiff-Respondent, v.CORP. et al., Defendants-Appellants, and Edward Yogert, first name being unknown to plaintiff, and The City of New York, Defendants. |
| Court | New York Supreme Court — Appellate Division |
Eugene A. Leiman, New York City, of counsel (Rein, Mound & Cotton, New York City, attorneys), for defendants-appellants Norman Levy and Fernley Realty Corp.
Bernard Trencher, New York City, for defendant-appellant Acker-Fitzsimons Corp.
Thomas F. McCarthy, New York City, for defendants-appellants Richard Adams, Kenneth Harrington and John J. Manning.
William F. McNulty, New York City, of counsel (Anthony J. McNulty, New York City, with him on the brief; Tropp, Goldfinger & Berson, New York City, attorneys), for plaintiff-respondent.
Before STEVENS, P.J., and McGIVERN, KUPFERMAN, McNALLY and TILZER, JJ.
This is an appeal from a judgment declaring that plaintiff insurer is not required to defend (pursuant to the owners', landlords' and tenants' liability policy issued to defendant Fernley Realty Corp.) the action brought by defendants Adams, Harrington and Manning (hereinafter referred to as the prime action) and further declaring that plaintiff is not required to pay any judgment which may be recovered in that action. The issue is whether the insured complied with the provision of the policy requiring notice as soon as practicable after the occurrence.
On November 29, 1964, plaintiff issued a liability policy to Fernley Realty insuring it against liability for personal injuries arising out of and in connection with the operation of premises 2--10 East 196 Street, Bronx, New York. In addition to the named insured, the policy, by definition, covered defendant Norman Levy, president of Fernley Realty and defendant Acker-Fitzsimons Corp., managing agents of the property. A fire occurred on May 23, 1965, causing the removal of all tenants from the premises. Thereafter, a fence was erected enclosing the premises. It is not disputed that on May 26, 1965, various violations were placed against the premises. On October 4, 1965, a second fire occurred and it is alleged that in the course of attempting to extinguish that fire, three firemen, defendants Adams, Harrington and Manning, were injured. It appears that defendant Levy became aware of the second fire on the afternoon of its occurrence, but there is nothing to indicate that he was then aware that personal injuries had resulted. On November 9, 1965, however, Levy, for the first time, heard rumors that firemen (unnamed) had been injured in the course of fighting the fire. This information was communicated by telephone to one Kannar, an employee of Fernley's insurance broker. Kannar was of the opinion that until a more concrete claim was made, there was no reason to report the incident to the insurer. He was also of the opinion that, in effect, there was no liability since 'firemen go on their own risk.' Nevertheless, Levy followed this coversation with a letter requesting the broker to communicate the information to the insurer. In response, Kannar replied by letter stating:
Subsequently, on November 15, 1965, Kannar communicated with one of plaintiff's employees, informing the latter of the contemplated demolition of the premises. Kannar testified and the trial court found that during a telephone conversation on November 16, 1965 plaintiff's agent was informed of the fire of October 4, 1965. On December 19, 1965, the Sunday News reported that claims had been filed against the City by two firemen who had allegedly sustained injuries in the October 4th fire. Additional mention was made with respect to the liability of the owners and operators of the premises. Defendant Levy, upon becoming aware of this article, forwarded a photocopy to Kannar. The latter, however, did not comply with the request to forward it to the insurer.
While it appears that the firemen served a notice of claim upon the City on December 17, 1965, it does not appear that any claim was then asserted as against Fernley Realty. The personal injury action by the three firemen was instituted in October 1966 against the City only. Service upon Acker-Fitzsimons and Fernley Realty was not effected until April 28, 1967. Promptly upon receiving the summons in the prime action, defendant Acker-Fitzsimons informed plaintiff of the pendency of that action.
The Trial Court concluded that notice of the fire alone was insufficient and that it was the duty of the insured to report any injuries which occurred. We agree that merely informing the insurer, that a fire occurred, in and of itself, was insufficient to comply with the notice provision of the policy. This is liability insurance and the only effective notice would involve the reporting of injuries which resulted from the fire. Thus, as stated earlier, the question is whether the notice given 19 months after the occurrence was given as soon as practicable. Before considering this question however, we note that the numerous exhibit submitted at the trial have been lost. While under certain circumstances that factor might require affirmance of the judgment, we agree with the position taken on argument of the appeal, that the record as it now stands is sufficient upon which to base a determination.
We therefore consider the merits of the controversy. Whether the insured breached the condition of the policy requiring notice as soon as practicable depends in the first instance on whether at any time prior to having been served with the summons in the prime action, there was any duty to give notice to the insurer. Of course, if the insured, after the exercise of reasonable diligence, was without knowledge of the accident resulting in the firemen's injuries, there would be no breach of any duty owing to the insurer under the notice provision of the policy. (See Deso v. London & Lancashire Indem. Co., 3 N.Y.2d 127, 164 N.Y.S.2d 689, 143 N.E.2d 889; Rushing v. Commercial Casualty Insurance Co., 251 N.Y. 302, 167 N.E. 450; Woolverton v. Fidelity & Casualty Co., 190 N.Y. 41, 82 N.E. 745; Appleman, Insurance Law & Practice, vol. 8, § 4742; Couch on Insurance; vol. 13, § 49: 340.)
We believe that the evidence presented at the trial did not establish that the insured had knowledge of facts upon which it could have been concluded that injuries did in fact occur as a result of the October 4, 1965 fire. True, there were rumors. There was also knowledge of a newspaper article which was addressed primarily to the liability claim against the City. However, there was no direct knowledge of injuries; no claim was made upon the insured; no letters of claim were made for or on behalf of the injured parties and no one with actual knowledge ever informed the insured of any injuries.
We are of the further opinion, that the insured, under these facts was not under any duty to pursue and investigate what amounted to little more than rumors. We thus conclude, that there was no duty to report the aforementioned rumors to the insurer and hence there was no violation of the policy's provision requiring notice.
We acknowledge, of course, that Levy, acting cautiously, did communicate with his broker, instructing the latter to give notice to the insurer. These instructions were not implemented. Whatever duty the broker owned with respect to his client, the failure to report the information to the insurer cannot constitute a breach of the notice provision in the policy where, as we have determined, there was no duty owing by the insured to give such notice.
Concerning the broker's determination not to report the matter, he apparently believed that not only...
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