Thomson v. Power Authority of State of N.Y., ZURICH-AMERICAN

• Decision Date: 27 July 1995
• Docket Number: ZURICH-AMERICAN
• Citation: 629 N.Y.S.2d 760,217 A.D.2d 495
• Parties: Edward THOMSON, Jr., et al., Plaintiffs, v. The POWER AUTHORITY OF the STATE OF NEW YORK, Defendant/Third-Party Plaintiff, v. CROUSE NUCLEAR ENERGY SERVICES, INC., Third-Party Defendant. The POWER AUTHORITY OF the STATE OF NEW YORK, Second Third-Party Plaintiff-Respondent-Appellant, v.INSURANCE COMPANY, Second Third-Party Defendant-Appellant-Respondent, and Central National Insurance Company of Omaha, Second Third-Party Defendant-Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 760

629 N.Y.S.2d 760

217 A.D.2d 495

Edward THOMSON, Jr., et al., Plaintiffs, v. The POWER AUTHORITY OF the STATE OF NEW YORK, Defendant/Third-Party Plaintiff, v. CROUSE NUCLEAR ENERGY SERVICES, INC., Third-Party Defendant.

The POWER AUTHORITY OF the STATE OF NEW YORK, Second Third-Party Plaintiff-Respondent-Appellant, v. ZURICH-AMERICAN INSURANCE COMPANY, Second Third-Party

Defendant-Appellant-Respondent,

and

Central National Insurance Company of Omaha, Second

Third-Party Defendant-Respondent-Appellant.

Supreme Court, Appellate Division First Department.

July 27, 1995.

M.J. Lynn, for Power Authority of State of N.Y.

D. Stephens, for Zurich-American Ins. Co.

D. Holmes, for Central Nat. Ins. Co.

Before MURPHY, P.J., and ROSENBERGER, NARDELLI and WILLIAMS, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Harold Tompkins, J.), entered on or about May 26, 1994, which denied the motions by second third-party defendants Zurich-American Insurance Company and Central National Insurance Company of Omaha for summary judgment and the cross-motion by second third-party plaintiff The Power Authority of the State of New York, unanimously modified, on the law, to the extent of granting the motions by the second third-party defendants for summary judgment declaring that both second third-party defendants have no duty to defend or indemnify Crouse Nuclear Energy Services, Inc. pursuant to their respective policies, and otherwise affirmed, with costs and disbursements payable by second third-party plaintiff.

Plaintiff Edward Thomson, Jr., while working for Crouse Nuclear Energy Services, Inc. (Crouse), was injured at the Indian Point Power Plant owned by defendant and second third-party plaintiff Power Authority of the State of New York (Power Authority). On the date of the accident Zurich-American Insurance Company (Zurich) insured Crouse for workers' compensation and employer's liability, and Central National Insurance Company of Omaha (Central National) provided general liability insurance to Crouse under a "claims- made" policy form. Zurich was notified of the accident and began paying workers compensation pursuant to its policy with Crouse. Thereafter in February 1984, this action was commenced against the Power Authority. The defendant impleaded Crouse as a third-party defendant asserting claims for contribution and indemnification in November 1984. Crouse appeared by its own counsel. It did not ask either Zurich or Central National to represent it and, indeed, did not notify either insurer of the action. The action proceeded until July 1987, at which time Crouse declared bankruptcy resulting in a stay of the action. In June 1988, the Power Authority commenced a second third-party suit against both Zurich and Central National seeking a declaration that both were obligated to defend and indemnify under their respective policies.

After some discovery, both insurers moved for summary judgment as did the Power Authority. The IAS court denied all motions finding issues of fact. This holding by the nisi prius court was erroneous and, therefore, we reverse as to the denial of summary judgment to the second third-party defendant-insurers.

Initially, we note that the interpretation and application of unambiguous language in policies of insurance is a legal issue for the court (see, Breed v. Insurance Co., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280). It is also well-established that the insured or the party seeking a declaration of coverage is obliged in the first instance to demonstrate the existence of coverage and the satisfaction of all conditions precedent, including the timeliness of notice.

Notice provisions in insurance policies afford the insurer an opportunity to protect itself (Utica Sanitary Milk Co. v. Casualty Co. of Amer., 210 N.Y. 399 [104 N.E. 918], 31 N.Y.Jur., Insurance, § 1261), and the giving of the required notice is a condition to the insurer's liability. (Rushing v. Commercial Cas. Ins. Co., 251 N.Y. 302 .) Absent a valid excuse, a failure to satisfy the notice requirement vitiates the policy (Deso v. London & Lancashire Ind. Co., 3...