E.T. Nutrition Inc. v. Central Mut. Ins. Co.

• Decision Date: 07 February 1994
• Citation: 607 N.Y.S.2d 392,201 A.D.2d 451
• Parties: E.T. NUTRITION INCORPORATED, Appellant, v. CENTRAL MUTUAL INSURANCE COMPANY, Respondent, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 392

607 N.Y.S.2d 392

201 A.D.2d 451

E.T. NUTRITION INCORPORATED, Appellant, v. CENTRAL MUTUAL INSURANCE COMPANY, Respondent, et al., Defendants.

Supreme Court, Appellate Division,

Second Department.

Feb. 7, 1994.

Shayne, Dachs, Stanisci, Corker & Sauer, Mineola (Jonathan A. Dachs, on the brief), for appellant.

Gladstein & Isaac, New York City (Allen H. Isaac, Brian J. Isaac, and Norman E. Frowley, of counsel), for respondent.

Before BRACKEN, J.P., and SULLIVAN, KRAUSMAN and GOLDSTEIN, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, for a judgment declaring that the defendant Central Mutual Insurance Company is obligated to defend and indemnify the plaintiff in an underlying tort action pursuant to a policy of liability insurance, the plaintiff appeals from an order of the Supreme Court, Nassau County (Collins, J.), dated September 27, 1991, which (1) granted the motion of the defendant Central Mutual Insurance Company for summary judgment, (2) denied the plaintiff's cross motion for summary judgment, and (3) declared that the defendant Central Mutual Insurance Company is not obligated to defend or indemnify the plaintiff.

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting the motion of the defendant Central Mutual Insurance Company for summary judgment and declaring that it is not obligated to defend or indemnify the plaintiff in the underlying tort action, and by substituting therefor a provision denying the motion of the defendant Central Mutual Insurance Company for summary judgment; as so modified, the order is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith.

The defendant Central Mutual Insurance Company (hereinafter Central) issued a liability insurance policy to the plaintiff covering the period of June 8, 1987, to June 8, 1988. On or about March 1, 1988, a regular customer of the plaintiff's store allegedly purchased and consumed a prepackaged beverage product from the plaintiff and thereafter became ill. On March 22, 1988, a police detective visited the store and informed the proprietor that there was a complaint that someone became seriously ill after consuming the beverage and that a criminal investigation into possible product tampering was being conducted. The detective directed the proprietor to remove the product from the shelves and took some containers of the beverage for laboratory testing. According to the deposition testimony of the plaintiff's proprietor, the detective stated that he would let her know if there was anything wrong with the product, and that if she did not hear anything further from him, "everything is okay". There was no further contact between the police and the proprietor regarding the matter. In February 1989 the plaintiff was served with a summons and complaint in the underlying tort action which arose from the incident. The plaintiff promptly notified Central of the pending action, but Central disclaimed coverage, claiming that the plaintiff had breached a condition of the insurance policy by its unreasonable delay in providing Central with notice of the occurrence which arose in March 1988. The plaintiff thereafter commenced the instant action for a declaration that Central was obligated to defend and indemnify it in the underlying action. Both parties moved for summary judgment, and the Supreme Court, inter alia, granted...