Underberg v. Dryden Mut. Ins. Co.
| Decision Date | 07 June 2019 |
| Docket Number | CA 18–02325,411 |
| Citation | 173 A.D.3d 1653,102 N.Y.S.3d 376 |
| Parties | Jared N. UNDERBERG, Plaintiff-Appellant-Respondent, v. DRYDEN MUTUAL INSURANCE CO., Defendant-Respondent-Appellant. |
| Court | New York Supreme Court — Appellate Division |
BURDEN, HAFNER & HANSEN, LLC, BUFFALO (PHYLISS A. HAFNER OF COUNSEL), FOR PLAINTIFF–APPELLANT–RESPONDENT.
BARCLAY DAMON, LLP, BUFFALO (ANTHONY J. PIAZZA OF COUNSEL), FOR DEFENDANT–RESPONDENT–APPELLANT.
PRESENT: WHALEN, P.J., CENTRA, LINDLEY, TROUTMAN, AND WINSLOW, JJ.
It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by denying plaintiff's amended cross motion in its entirety and vacating the declaration, and as modified the judgment is affirmed without costs.
Memorandum: This action involving an insurance coverage dispute arises from an incident that occurred on November 14, 2008 during which plaintiff sustained injuries when a security guard at a nightclub allegedly assaulted him. The nightclub was owned by 236 Delaware Associates, LLC, doing business as Quote (Quote), and was insured by a policy issued by defendant. On November 13, 2009, plaintiff commenced a personal injury action against Quote and three individual defendants, one of whom he alleges was an employee of Quote and the other two he alleges are not employees but are agents of Quote. On February 17, 2011, defendant disclaimed coverage based on the policy's assault and battery exclusion, Quote's failure to give timely notice of the incident, and Quote's failure to promptly forward lawsuit papers. Plaintiff obtained a default judgment against Quote and two individual defendants and, after a nonjury trial, obtained a judgment against a third individual defendant on the issue of liability. After an inquest on damages, plaintiff obtained a money judgment against Quote and the three individual defendants. Plaintiff served defendant with a demand for payment, but defendant refused to satisfy the money judgment.
Plaintiff commenced this action seeking a judgment declaring that defendant's disclaimer of coverage was invalid and improper and that defendant was obligated to indemnify Quote and the three individual defendants in the underlying lawsuit and seeking a judgment ordering defendant to pay the full judgment amount in that lawsuit. Defendant moved for summary judgment dismissing the complaint and seeking a judgment declaring that it was not obligated to defend, indemnify, or otherwise compensate anyone in the underlying lawsuit. By his amended cross motion, plaintiff sought a judgment declaring that defendant's disclaimer of coverage was invalid and improper and that defendant was obligated to indemnify Quote and the individual defendants in the underlying lawsuit and pay the related money judgment. Supreme Court denied the motion, granted in part the amended cross motion by declaring that the assault and battery exclusion did not apply, and otherwise denied the amended cross motion. Plaintiff now appeals, and defendant cross-appeals.
We agree with defendant that the court erred in granting plaintiff's amended cross motion in part and declaring that the assault and battery exclusion in the policy did not apply, and we therefore modify the judgment by denying plaintiff's amended cross motion in its entirety and vacating the declaration. Contrary to plaintiff's contention, the language of the policy exclusion is unambiguous (see U.S. Underwriters Ins. Co. v. Val–Blue Corp., 85 N.Y.2d 821, 823, 623 N.Y.S.2d 834, 647 N.E.2d 1342 [1995] ; Haines v. New York Mut. Underwriters, 30 A.D.3d 1030, 1030, 815 N.Y.S.2d 858 [4th Dept. 2006] ), and all of the causes of action in the amended complaint in the underlying lawsuit are based on the assault by the security guard, "without which [plaintiff] would have no cause of action" ( U.S. Underwriters Ins. Co., 85 N.Y.2d at 823, 623 N.Y.S.2d 834, 647 N.E.2d 1342 ; see Mount Vernon Fire Ins. Co. v. Creative Hous., 88 N.Y.2d 347, 350, 645 N.Y.S.2d 433, 668 N.E.2d 404 [1996] ; Haines, 30 A.D.3d at 1030–1031, 815 N.Y.S.2d 858 ; Mark McNichol Enters. v. First Fin. Ins. Co., 284 A.D.2d 964, 965, 726 N.Y.S.2d 828 [4th Dept. 2001] ). Inasmuch as "no cause of action would exist ‘but for’ the assault, it is immaterial whether the assault was committed by the insured or an employee of the insured on the one hand, or by a third party on the other" ( Mount Vernon Fire Ins. Co., 88 N.Y.2d at 353, 645 N.Y.S.2d 433, 668 N.E.2d 404 ).
Defendant, however, is not entitled to its requested declaratory relief at this point inasmuch as we agree with the court that there is a triable issue of fact whether defendant issued a timely disclaimer of coverage. An insurer's reliance upon a policy exclusion to deny coverage of an incident requires a timely disclaimer (see Matter of Worcester Ins. Co. v. Bettenhauser, 95 N.Y.2d 185, 188–189, 712 N.Y.S.2d 433, 734 N.E.2d 745 [2000] ). Defendant met its initial burden on its motion for summary judgment by submitting the affidavit of its claims manager, who averred that defendant was first notified of the November 14, 2008 incident on February 3, 2011, and it disclaimed coverage two weeks later, which we agree is timely as a matter of law (see Sirius Am. Ins. Co. v. TGC Constr. Corp., 37 A.D.3d 818, 819, 830 N.Y.S.2d 773 [2d Dept. 2007] ). In opposition to the motion, however, plaintiff raised a triable issue of fact by submitting the affidavit of Matthew Dole, who was one of the individuals who owned Quote on the day of the incident. Dole averred that he received letters from plaintiff's attorney on November 17 and 25, 2008 regarding the incident and that he forwarded those letters to defendant on or before December 31, 2008. If those averments are true, then defendant's disclaimer of coverage over two years later would be untimely as a matter of law (see generally Potter v. North Country Ins. Co., 8 A.D.3d 1002, 1004, 778 N.Y.S.2d 805 [4th Dept. 2004] ). Although defendant contends that the "credible evidence" shows that it did not receive notice until February 2011, "[i]t is not the court's function on a motion for summary judgment to assess credibility" ( Ferrante v. American Lung Assn., 90 N.Y.2d 623, 631, 665 N.Y.S.2d 25, 687 N.E.2d 1308 [1997] ). Contrary to defendant's contention, Dole's affidavit was not inconsistent with his deposition testimony and was not incredible as a matter of law (see Chapman–Raponi v. Vescio, 11 A.D.3d 1042, 1043, 783 N.Y.S.2d 166 [4th Dept. 2004] ; cf. Sexstone v. Amato, 8 A.D.3d 1116, 1117, 778 N.Y.S.2d 635 [4th Dept. 2004], lv denied 3 N.Y.3d 609, 786 N.Y.S.2d 812, 820 N.E.2d 291 [2004] ).
We agree with defendant that Quote failed to comply with the policy condition requiring it to "promptly forward ... all ... legal papers received in connection with" the occurrence. "Distinct from notice of an accident, an insurer may also demand that it receive timely notice of a claimant's commencement...
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