Tower Ins. Co. of N.Y. v. Rong Rong Sun

• Decision Date: 18 April 2013
• Citation: 105 A.D.3d 561,2013 N.Y. Slip Op. 02645,963 N.Y.S.2d 225
• Parties: TOWER INSURANCE COMPANY OF NEW YORK, Plaintiff–Appellant, v. RONG RONG SUN also known as Andy Xu, etc., et al., Defendants, Alejo Gomez, an Infant by her Mother and Natural Guardian, Fulvia Rodriguez, etc., et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

105 A.D.3d 561
963 N.Y.S.2d 225
2013 N.Y. Slip Op. 02645

TOWER INSURANCE COMPANY OF NEW YORK, Plaintiff–Appellant,
v.
RONG RONG SUN also known as Andy Xu, etc., et al., Defendants,
Alejo Gomez, an Infant by her Mother and Natural Guardian, Fulvia Rodriguez, etc., et al., Defendants–Respondents.

Supreme Court, Appellate Division, First Department, New York.

April 18, 2013.

[963 N.Y.S.2d 226]

Law Office of Max W. Gershweir, New York (Max W. Gershweir of counsel), for appellant.

Morelli Ratner PC, New York (David T. Sirotkin of counsel), for respondents.

ANDRIAS, J.P., FRIEDMAN, DeGRASSE, MANZANET–DANIELS, GISCHE, JJ.

[105 A.D.3d 561]Order, Supreme Court, New York County (Richard F. Braun, J.), entered August 11, 2011, which, to the extent appealed from as limited by the briefs, denied plaintiff insurer's motion for summary judgment declaring that it is not obligated to indemnify or defend its insured, defendant Andy Xu, in the underlying personal injury action, reversed, on the law, the motion granted, without costs, and it is so declared.

On this record, plaintiff, Tower Insurance Company of New York, is entitled to summary judgment declaring it free of any obligation to defend or indemnify its insured in the underlying personal injury action. As discussed below, neither the insured nor the injured party ever gave Tower notice of the underlying incident or the ensuing lawsuit. In particular, the injured party failed to give Tower notice, or even to conduct further inquiry, for nearly two months after his counsel received a policy renewal certificate evidencing that Tower had renewed the [105 A.D.3d 562]insured's policy only five months after the incident. Under these circumstances, to deny Tower summary judgment would be to abrogate any duty of an injured party to make a reasonable effort, judged by “the means available” to it ( Appel v. Allstate Ins. Co., 20 A.D.3d 367, 369, 799 N.Y.S.2d 467 [1st Dept. 2005] [internal quotation marks omitted] ), to give notice to an insurer pursuant to Insurance Law § 3420(a)(3). We find no warrant for this result in the statute or in case law.

It is undisputed that the insured alleged tortfeasor (Xu) never gave Tower notice of the May 2007 incident giving rise to the claim or of the underlying lawsuit, in which the injured party (Gomez) sued Xu and the school district on whose premises the incident occurred. It is also undisputed that, on or about October 29, 2008, Xu

[963 N.Y.S.2d 227]

served on counsel for the other parties to the underlying action an amended discovery response to which was attached a “Homeowners Policy Renewal Certificate” representing that Xu had been covered by a Tower renewal homeowners policy for the year commencing October 8, 2007—five months after the subject incident. In spite of his counsel's receipt of this information, Gomez neither contacted Tower nor took any other action to investigate whether a Tower policy had been in effect on the date of the incident. The school district, however, based on the same renewal certificate that Gomez ignored, did notify Tower of the matter, by letter dated November 13, 2008. Thereafter, by letter to all parties to the underlying action, dated December 19, 2008, Tower disclaimed coverage.

The question before us is whether Tower may be required to afford coverage to its defaulting insured (Xu) for the benefit of the injured party (Gomez) pursuant to Insurance Law § 3420(a)(3). Gomez is not accountable, of course, for Xu's failure to provide notice to Tower during the period of nearly a year and a half from May 3, 2007, the date of the incident, to October 29, 2008, the date of Xu's amended discovery response providing to Gomez the Tower “Homeowners Policy Renewal Certificate” ( see Appel, 20 A.D.3d at 368, 799 N.Y.S.2d 467 [“Having been statutorily granted an independent right to give notice and recover directly from the insurer, the injured party ... is not to be charged vicariously with the insured's delay”] [internal quotation marks omitted] ).¹ Still, even though “[i]n determining the reasonableness of an injured party's notice, the notice required is measured less [105 A.D.3d 563]rigidly than that required of the insureds” ( id. [internal quotation marks omitted] ), some level of diligence was required of Gomez, as the dissent reluctantly concedes, once his counsel, upon receipt of the certificate evidencing that coverage had been renewed five months after the incident, was put on notice of the likelihood (even if not a certainty) that Xu had been covered by a Tower policy at the time of the incident ( see Kalthoff v. Arrowood Indem. Co., 95 A.D.3d 1413, 1415, 943 N.Y.S.2d 645 [3d Dept. 2012] [where the insured has failed to comply with the notice conditions of the policy, “the injured party bears the burden of demonstrating that it made reasonable efforts to identify the insurer and provide it with prompt notice”], lv. denied19 N.Y.3d 815, 2012 WL 5258814 [2012] ).

It is undisputed that Gomez took no action after his counsel finally received the policy renewal certificate. Again, not only did Gomez not give Tower notice of the claim, but he also made no effort to seek further information about the possibility of coverage from either Xu or Tower. After about seven weeks of inaction by Gomez, Tower issued its...