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Coverage Pointers - Volume III, No. 12

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12/21/01:            LIBERTY MUTUAL INS. CO. v.  HO

New York State Supreme Court, Appellate Division, Fourth Department

Insureds Covered for Intentional Beating -- Whether Loss was “Accident” Determined from Insureds’ Point of View

In this declaratory judgment action, the court held that insureds were entitled to defense and indemnification in an underlying action alleging an intentional beating with sticks and bats.  Rejecting the contention that the underlying incident fell within the expected or intended harm exclusion or was not an “occurrence”, the court held that deciding whether a loss is the result of an accident must be determined from the point of view of the insured.  Here, defendants, unlike other defendants in the underlying action, were not indicted for assault and claimed to have had no part in the subject occurrence.  The resulting injuries could not, therefore, have been expected or intended by defendants and from their point of view may be said to have been the result of an accident.

 

12/21/01:            ERIE AND NIAGARA INS. ASSOC. v. STERLING INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

Policy Ambiguities and Evidence that Policy Restricted Coverage Warrants Consideration of Parol Evidence

In an action seeking a declaration that both plaintiff and defendant must provide primary coverage for their insured’s fire loss and must share the costs of defense and indemnification, the court held that the lower court erred in summarily determining that defendant’s policy covered both the office and the apartment uses of the insured premises.  The court concluded that language in defendant’s policy was ambiguous and susceptible to more than one reasonable interpretation.  In addition, the fact that the insured paid a premium for plaintiff’s policy over 25 times greater than the premium he paid for defendant’s policy presented an issue of fact whether defendant’s policy was restricted to losses related to the office.  The court held that under these circumstances parol evidence on the coverage issue should be considered.

 

12/20/01:            WALSH v. LIBERTY MUTUAL INS. CO.

New York State Supreme Court, Appellate Division, Third Department

Court Denies Plaintiff’s Request for Discovery Aimed at Establishing GBL §349 Claims in Action for No-Fault Benefits -- Discovery Cannot be Used to Determine if Cause of Action Exists

Plaintiff sustained personal injuries when the vehicle she was operating was involved in an accident.  She filed a no-fault application and submitted her claims to defendant, who denied certain no-fault benefits under the policy.  Plaintiff then commenced this action to recover benefits pursuant to her policy with defendant, alleging that defendant breached the contract by failing to honor her claim for no-fault benefits and that defendant violated General Business Law §349.  Plaintiff moved pursuant to CPLR 3124 and 3126 for an order requiring defendant to comply with her discovery demands seeking disclosure of any claim files coded “red” between the years 1993 to 1998 pursuant to defendant’s “no-fault initiative” processing policy.  Plaintiff also sought to depose the claims supervisor who plaintiff alleges was principally responsible for denying her no-fault claim. Defendant cross-moved pursuant to CPLR 3103 for a protective order preventing it from having to produce its red-coded files or a second corporate witness for deposition.  First, the court perceived no basis to disturb the lower court’s discretionary determination that the corporate employee who was directly responsible for defendant’s denial of the claim at issue possessed necessary and relevant information germane to the action, and should therefore be produced.  The court also agreed with the lower court’s conclusion that plaintiff had not demonstrated the contents of defendant’s “red-coded” claim files were relevant to her claim that defendant engaged in deceptive practices in violation of General Business Law §349.  A party seeking to recover under GBL §349 must, as a threshold, allege that defendant’s acts or practices have a broad impact on consumers at large, and plaintiff did not sufficiently allege or demonstrate that the practice of classifying no-fault claims into three categories requiring different levels of scrutiny was deceptive or caused harm to the public at large.  Plaintiff’s contention that she needed to examine the red-coded files to establish whether any deceptive practices were aimed at consumers at large was rejected, as the court concluded that discovery could not be used to determine if a cause of action exists.

 

12/20/01:            MOORE v. TRAVELERS INSURANCE COMPANY

New York State Supreme Court, Appellate Division, Third Department

Insured Loses Coverage for Failure to Provide Timely Notice; Notice to Affiliated Insurance Company on Behalf of Other Insured Deemed Inadequate

Plaintiff was injured when she fell on a wet concrete floor that had been installed as part of the work on an addition to a store, and commenced an underlying action against the general contractor and the concrete subcontractor.  At the time of the accident, the general was insured under a CGL policy issued by Travelers Casualty & Surety Company of America (“TCA”) and the subcontractor was the insured under a CGL policy issued by Travelers Casualty & Surety Company of Illinois (“TCI”).  It was undisputed that TCI and TCA were affiliated companies, both owned by defendant.  The subcontractor gave TCI notice of the underlying action, which then undertook its defense in the underlying action.  The general contractor did not provide TCA with notice of the action until almost two years later.  When TCA became aware of that, it denied the general’s request for coverage based upon the general’s failure to report the claim/lawsuit in accordance with policy conditions.  The underlying action against the subcontractor was ultimately dismissed and plaintiff obtained a default judgment against the general.  Plaintiff then commenced this action for satisfaction of the judgment upon the ground that defendant was estopped from disclaiming coverage because the subcontractor’s notice of the incident to its insurer, TCI, constituted notice to defendant by or on behalf of plaintiffs and by or on behalf of the subcontractor and of the summons and complaint in the action against its insureds.  The court held that plaintiff’s complaint was properly dismissed.  The court concluded that the central premise underlying plaintiff’s contentions -- that delivery of the summons and complaint in the underlying action to TCI and subsequent communication between plaintiff’s counsel and TCI constituted notice to defendant of plaintiff’s claim against the general contractor -- was fundamentally flawed.  Although that notice may have made TCI (and therefore the defendant) aware that plaintiff asserted a claim against the general contractor, it failed to provide notice that the general was insured by one of defendant’s affiliates or that the general sought defense and indemnification in the action. The court held this to be a critical distinction because “neither notice provided by another insured nor the insurer's actual knowledge of the claim satisfies the contractual obligation of an insured to give timely notice … As noted by Supreme Court, it would be most unfair to impose upon defendant ‘a duty to independently search its policies for any and all named defendants when an insured provides individual notice of a claim’”.

 

12/20/01:            BRELSFORD v. USAA

New York State Supreme Court, Appellate Division, Third Department

Claim Representative’s Payment of Claim Did Not Constitute Waiver of Right to Cancel Policy where Payment Occurred After Mailing of Notice but Before Effective Date of Cancellation

Plaintiff obtained an auto policy from defendant and gave as his address his residence during the preceding academic year, although he knew he would not be residing there during the ensuing academic year. Upon his return to school, plaintiff failed to notify defendant of his new address.  Thereafter, as a result of the nonpayment of premiums, defendant mailed a notice of cancellation to plaintiff’s previous address, advising that the policy would be cancelled effective September 14, 1998.  As a result of vandalism, plaintiff made a property damage claim against the policy after notice of cancellation was sent. The claims representative admittedly knew of the mailing of the cancellation notice, but did not advise plaintiff.  She was instructed to mail the claim check to the new address, and did so.  Plaintiff was involved in an automobile accident after cancellation had become effective and, upon reporting this to defendant, was informed that the policy had been cancelled and that no coverage was available.  Plaintiff commenced this action seeking a declaration that defendant’s purported cancellation was ineffective and compelling defendant to pay the property damage claim arising out of the accident.  The court held that a policy may be cancelled for nonpayment of premiums by sending notice of termination by regular mail to the named insured at the address shown on the policy (Vehicle & Traffic Law §313 (1)(a)).  As long as the insurer submits sufficient proof of mailing, the policy is effectively cancelled even though the named insured does not actually receive the notice of cancellation. Here, the defendant strictly complied with the statutory mandates.  The court also rejected the contention that waiver or estoppel applied.  The failure of defendant’s claims representative to advise plaintiff that a notice of cancellation had been mailed did not constitute the concealment of a material fact since the notice of cancellation was not relevant to the processing of his vandalism claim. Moreover, processing and paying the claim did not constitute a waiver of the right to cancel since this occurred prior to the effective date of cancellation.

 

12/13/01:            HURLBURT v. INDEMNITY INS. CO. OF NORTH AMERICA

New York State Supreme Court, Appellate Division, Third Department

Off-Duty EMT Not Additional Insured under Squad’s Auto Policy

Plaintiff was an attendant with an emergency squad, which permitted her to assist emergency medical technicians at the scene of accidents.  While driving around town with defendant in her personal vehicle, plaintiff learned through a social encounter with a police officer that there had been a motor vehicle accident in a neighboring town. Plaintiff took it upon herself to proceed to that accident scene to offer assistance and, while en route, was involved in a single-car accident seriously injuring defendant.  Defendant later commenced an underlying personal injury action against plaintiff for the injuries she sustained in their accident. This action was commenced by plaintiff against defendant and Indemnity Insurance seeking a declaration that Indemnity must defend and indemnify her in the underlying personal injury action under a policy issued to the emergency squad.  Plaintiff argued that she was an additional insured under the policy because she was en route to the first automobile accident to offer assistance at the time of her own accident. The policy provided that “any employee of [the squad] is an ‘insured’ while using a covered ‘auto’ you don’t own, hire or borrow in your business or your personal affairs”.  The court concluded that whether plaintiff was an additional insured depended upon whether she was acting in furtherance of the squad’s business at the time of the accident, which the court found was properly resolved in favor of Indemnity by the trial court.  Plaintiff was not on duty on the morning of her accident, had not been contacted by a dispatcher to respond to the first accident and had not even heard about that accident via the portable radio she had been issued by the squad. Moreover, she made no attempt to contact the dispatcher to notify her that she was en route to the accident and did not activate the green courtesy light mounted in her vehicle. Additionally, she was admittedly under the influence of alcohol at the time.  Finally, plaintiff denied she was responding to the accident as a squad member at a special meeting of the squad called soon after the accident. 

 

12/10/01:            PALMIERI v. ALLSTATE INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Action on Policy Dismissed for Lack of Subject Matter Jurisdiction – Policy Required Such Claims be Brought in Federal Court

Plaintiff sustained flood damage to his premises and submitted a claim to his insurance carrier under a standard flood insurance policy.  The insurer paid a portion of the claim, but withheld additional sums pending the submission of proof of replacement and repair costs. The insurer eventually informed plaintiff that it was denying his claim for additional amounts because plaintiff failed to comply with certain terms of the policy, and because the policy did not cover some of the claimed losses.  Plaintiff commenced this action to recover damages for breach of contract.  The insurer moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that the flood insurance policy contained a provision requiring that any action to recover money under the policy, whether based on a denial of all or part of a claim, be brought in the United States District Court in the district in which the insured property was located at the time of the loss.  In opposition, the plaintiff argued that the action was not based on a breach of the policy, but on breach of a separate agreement between him and the defendant approving his claim in full.  The court found that the allegations in the complaint were based on the insurer’s breach of the provisions of the policy, and that it contained no claim concerning the breach of a separate agreement.  Moreover, the court held that “the credible evidence demonstrated that the plaintiff’s claim for flood damage was submitted to the defendant, and that the defendant then withheld the money pending his tender of proof of replacement and repair costs, pursuant to the terms of the policy.  The defendant then issued a partial denial of payment because the plaintiff failed to comply with, and because some of the claimed losses were not covered by, the policy.”  As such, the claim to the withheld sum was governed by the terms of the policy requiring that an action based on the denial of all or part of a claim be brought in Federal Court.

 

12/10/01:         MATTER OF GALLAGHER BASSETT SERVICES, INC. v. MAKEREVICH

New York State Supreme Court, Appellate Division, Second Department

Self-Insured Car Rental Company is Obligated to Provide Primary UM Benefits

While operating a vehicle owned by Dollar Rent-A-Car, a self-insured automobile rental company, Makerevich allegedly sustained personal injuries in an accident with a hit-and-run driver.  At the time of the accident, Makerevich was independently insured by GEICO Insurance Company.  After Makerevich filed a demand for arbitration of her uninsured motorist claim against Dollar, Dollar and its third-party administrator commenced this proceeding to permanently stay arbitration, asserting that it had no obligation to provide uninsured motorist coverage to Makerevich because she had declined the additional insurance coverage offered to her when she rented the vehicle.  The court disagreed, holding that Dollar was obligated by law to provide primary uninsured motorist benefits.

 

12/10/01:            MATTER OF LIBERTY MUTUAL INS. CO. v. HUTARDO

New York State Supreme Court, Appellate Division, Second Department

Summary Judgment Staying Arbitration of UM Claim Proper where Insured Offers No Proof that Vehicle Struck by Unidentified Vehicle

Court held that petition to permanently stay arbitration of a claim for uninsured motorist benefits was properly granted.  The insurer contended that the police report made at the scene of the accident showed that only the appellant’s car and another car were involved in the collision, and that both were insured vehicles.  After the insurer made this prima facie showing that the appellant’s UM coverage was not triggered, the appellant failed to offer admissible evidence to raise a triable issue warranting a hearing regarding whether her vehicle was struck by a third, unidentified vehicle.

 

12/10/01:            FARMBREW REALTY CORP. v. TOWER INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Firearms Exclusion Enforceable; Two-Month Delay in Disclaiming Coverage Deemed Reasonable

In an action for judgment declaring that defendant had a duty to defend and indemnify plaintiff in several underlying personal injury actions arising out of the use of firearms on the plaintiff’s premises, the court held that a “Firearms Exclusion” in the policy clearly excluded coverage for the claims.  A revised exclusion in plaintiff’s policy read: “it is understood that no coverage is afforded by this policy for any injury, death, claims or actions occasioned directly or indirectly or as an incident to the discharge of firearms by person or persons on or about the insured premises”.  The court rejected the contention that the revised exclusion represented a reduction in coverage from the original firearms exclusion, which provided: “in consideration of any premium charged, it is understood and agreed that this policy does not apply to Bodily Injury and/or Property Damage arising out of the Ownership Rental Maintenance, or Use of any Firearms”.  As such, there was no requirement that the defendant give any notice under Insurance Law §3426.  The court also held that the insurer’s two-month delay in disclaiming coverage was reasonable as a matter of law due to the insurer’s need to investigate the occurrence, coupled with the inability of the defendant's investigator, through no fault of his own, to interview the plaintiff's principal and employees, and then write the report.  The subsequent delay in disclaiming was clearly needed to allow the defendant to receive, evaluate, and act upon the report.

 

12/10/01:            MATTER OF WILHELMINA v. EMPIRE/ALLCITY INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Arbitrator’s Denial of UM Claim Upheld in Absence of Proof that Coverage was Triggered

Petitioner was involved in an 18-car chain-reaction accident in which the vehicle she was driving was hit in the rear and side after she had stopped. The police report identified the 18 vehicles by their license plate numbers, owners’ names, and insurance codes. Thereafter, petitioner made a claim for uninsured motorist’s benefits (UM) under her policy with the respondent.  That claim ultimately went to arbitration and was denied.  This proceeding was commenced to vacate the arbitration award on the ground that the arbitrator exceeded his authority by requiring her to identify the vehicle that struck her.  The lower court vacated the award without providing any reason.  This court reversed, finding that the evidence supported the arbitrator’s award.  Under the UM provisions of her policy, petitioner was required to show that the vehicle that struck her was either uninsured, or that neither the owner nor the operator of that vehicle could be identified.  The record demonstrated that all of the vehicles involved in the accident were identified and insured, and there was no allegation that any vehicle fled the scene. Furthermore, the respondent offered uncontroverted proof that the petitioner had sued the owners and operators of at least two of the vehicles involved in the accident, alleging that the negligence in the operation of those vehicles caused her injuries.

 

ACROSS BORDERS

 

Visit the HOT CASES section of the Federation of Defense and Corporate Counsel website for cases covering a broad range of legal issues from other jurisdictions:  www.thefederation.org.

 

 

12/21/01:            FIREMAN'S FUND INS. COS. v. ATL. RICHFIELD CO.

California Court of Appeal

Don't Need Much to Establish that Liability "Arises Out of Work" -- Presence is Enough

The casual connection required by the phrase “liability arising out of” work or operations in an “additional insured” endorsement is satisfied when the employee of the named insured was injured while present at the worksite and in connection with performing the named insured’s business.

 

12/20/01:            OLSON v. DAUGHENBAUGH

Montana Supreme Court

Where Injured Worker Received Workers Compensation Benefits from Uninsured Compensation Fund Because His Employer Failed to Provide Benefits, He Cannot "Double Recover" Those Benefits from Employer

Employer failed to provide workers’ compensation insurance for employees.  Injured employee was able to recover those benefits from Unemployed Compensation Fund.  Having accepted those benefits, employee cannot recover those benefits a second time from his employer.

 

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REPORTED DECISIONS

 

HURLBURT v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA

 

Carpinello, J.

 

Appeal from a judgment of the Supreme Court (Viscardi, J.), entered August 25, 2000 in Essex County, which, inter alia, declared that defendant Indemnity Insurance Company of North America was not obligated to defend and indemnify plaintiff in a personal injury action.

 

In September 1990, plaintiff became an attendant with the Ticonderoga Emergency Squad Inc. (hereinafter the Squad), a status which permitted her to assist emergency medical technicians at the scene of calls. In the early morning hours of January 1, 1992, while driving with defendant Valerie S. Hunsdon around the Town of Ticonderoga, Essex County, in her personal vehicle, plaintiff learned through a social encounter with an on-duty police officer that there had been a motor vehicle accident in a neighboring town, some five to six miles away. Plaintiff took it upon herself to proceed to that accident scene to offer assistance. While en route, she herself was involved in a single-car accident seriously injuring Hunsdon.

 

In the fall of 1992, Hunsdon commenced a personal injury action against plaintiff for the injuries she sustained in their accident. Five years later, plaintiff commenced this action against Hunsdon and defendant Indemnity Insurance Company of North America seeking a declaration that Indemnity must defend and indemnify her in the Hunsdon action under a policy of insurance it issued to the Squad. The essence of her argument is that she was an additional insured under the Indemnity policy since she was en route to the first automobile accident to offer assistance at the time of her own crash. The policy provision at issue states that "any employee of [the Squad] is an 'insured' while using a covered 'auto' you don't own, hire or borrow in your business or your personal affairs". Following a nonjury trial, Supreme Court determined that plaintiff was not so entitled. She and Hunsdon appeal.

 

The tenor of the briefs submitted by plaintiff and Hunsdon notwithstanding, the instant matter does not involve a complex analysis of contract law, a construction of allegedly ambiguous contract language and/or the propriety of Supreme Court's consideration of purported "extrinsic evidence" in interpreting the subject insurance policy. Rather, the record makes clear that one issue was before Supreme Court in the trial of this matter, an issue that was specifically articulated by plaintiff's counsel at its onset, namely, "whether [plaintiff] was acting in the furtherance of business of the * * * Squad on January 1, 1992", which was a "factual issue" (emphasis supplied) that plaintiff's counsel urged would be determinative of the entire case. n1 To be sure, the issue of whether plaintiff was acting as a member of the Squad when she attempted to respond to the first motor vehicle accident was sharply contested at the trial, but ultimately resolved in favor of Indemnity. While plaintiff and Hunsdon claim that this resolution was in error, we cannot agree upon our own review of the record.

 

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n1 This assertion by plaintiff's counsel was expressly agreed to by counsel for Hunsdon and Indemnity. Thus, plaintiff's appellate contention that "Supreme Court * * * erred when it held that plaintiff * * * could only be covered [under the Indemnity policy] if she were engaged in the business or personal affairs of [the Squad]" is not well taken. Moreover, the record supports Indemnity's appellate assertion that Supreme Court and all parties "were in agreement on the policy provision which is now at issue" and that there was "no ambiguity regarding contract interpretation" at trial; rather, "the parties agreed that a factual determination was necessary to answer the question of whether [plaintiff's] activities on the evening/early morning in question were in furtherance of the business affairs of [the Squad]".

 

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The relatively straightforward facts in this case support Supreme Court's determination that plaintiff was not acting in furtherance of the Squad's business at the time of her accident. First, the record makes clear that plaintiff was not on duty for the Squad on the morning of January 1, 1992, had not been contacted by a dispatcher to respond to the first accident and had not even heard about that accident via the portable radio that she had been issued by the Squad (she was not even carrying her radio that morning). Moreover, she made no attempt to contact the dispatcher to notify her that she was en route to the accident and did not activate the green courtesy light mounted in her vehicle at any time. Additionally, she was admittedly "under the influence of alcohol" at the time, having imbibed at a New Year's Eve party that she herself

 had hosted. n2

 

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n2 Plaintiff testified at trial that she was not to respond to an accident call if she had been consuming alcohol.

 

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Perhaps most problematic is the record evidence that plaintiff emphatically  denied that she was responding to the accident as a Squad member at a special meeting of the Squad called in early January 1992 specifically to explore the circumstances under which she had responded to the first accident. According to David Downing, the Squad captain at that time, plaintiff stated, in response to allegations that she was driving under the influence of alcohol that morning and thus responding to an accident in violation of the Squad's response policy, that "she was not responding to the scene of the [first] motor vehicle accident as a member of the * * * Squad" and therefore her conduct that morning "wasn't any of [the Squad's] business". According to Downing, in light of plaintiff's statement, no disciplinary action was taken against her by the Squad. Four other meeting attendees similarly testified. Plaintiff also made similar denials to friends.

 

Given these facts, we find that Supreme Court appropriately concluded that plaintiff was not acting in furtherance of the Squad's business at the time that she was proceeding to the first accident and therefore is not an additional insured under the Indemnity policy. To countenance the contention of plaintiff and Hunsdon that plaintiff was acting in the furtherance of the Squad's business simply because she took it upon herself to respond to an accident would make all Squad members additional insureds under the policy so long as they too make a unilateral decision to proceed to the scene of a call where assistance is not expected, requested or perhaps even needed. Such an interpretation of the policy would certainly not foster the reasonable expectations of Indemnity and the Squad when they entered into this agreement (see, e.g., Baughman v Merchants Mut. Ins. Co., 87 N.Y.2d 589, 593, 640 N.Y.S.2d 857, 663 N.E.2d 898; Michaels v City of Buffalo, 85 N.Y.2d 754, 757, 628 N.Y.S.2d 253, 651 N.E.2d 1272).

 

Mercure, J.P., Spain, Mugglin and Rose, JJ., concur.

 

ORDERED that the judgment is affirmed, with costs.

 

PALMIERI v. ALLSTATE INS. CO.

 

In an action to recover damages for breach of contract, the defendant appeals from an order of the Supreme Court, Suffolk County (Underwood, J.), entered January 2, 2001, which denied its motion to dismiss the complaint for lack of subject matter jurisdiction pursuant to CPLR 3211(a)(2).

 

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

 

The plaintiff purchased a standard flood insurance policy from the defendant covering the period from January 1991 to January 1992. The plaintiff's premises sustained flood damage in October 1991, and he submitted a claim to the defendant. The defendant paid a portion of the claim, but withheld $ 10,074.28 pending the plaintiff's submission of proof of replacement and repair costs. The defendant eventually informed the plaintiff in writing that it was denying his claim for the $ 10,074.28 due to his failure to comply with certain terms of the policy, and because the policy did not cover some of the claimed losses.

 

The plaintiff commenced this action to recover damages for breach of contract. The defendant moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that the flood insurance policy contained a provision requiring that any action to recover money thereunder, whether based on a denial of all or part of a claim, be brought in the United States District Court in the district in which the insured property was located at the time of the loss. In opposition, the plaintiff argued that the action was not based on a breach of the policy, but rather, on a breach of a separate agreement between him and the defendant. The Supreme Court denied the motion. We reverse.

 

The plaintiff alleged in the complaint that the action was based on the defendant's breach of the provisions of the policy. The complaint contained no claim concerning the breach of an agreement separate from the policy. Moreover, the plaintiff submitted no evidence, other than his own unsubstantiated allegations, that a separate agreement existed wherein the defendant had approved his claim in full and was withholding the $ 10,074.28 until he submitted proof of the replacement and repair costs. The credible evidence demonstrated that the plaintiff's claim for flood damage was submitted to the defendant, and that the defendant then withheld the money pending his tender of proof of replacement and repair costs, pursuant to the terms of the policy The defendant then issued a partial denial of payment because the plaintiff failed to comply with, and because some of the claimed losses were not covered by, the policy. Therefore, the plaintiff's claim to the withheld sum is governed by the terms of the policy requiring that an action based on the denial of all or part of a claim be brought in Federal Court, which is vested with original exclusive jurisdiction over this action (see, 42 USC @ 4053).

 

SANTUCCI, J.P., KRAUSMAN, LUCIANO and FEUERSTEIN, JJ., concur.

 

MATTER OF GALLAGHER BASSETT SERVICES, INC. v. MAKEREVICH

 

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, GEICO Insurance Company appeals from an order of the Supreme Court, Kings County (I. Kramer, J.H.O.), dated September 12, 2000, which, in effect, granted the petition and stayed arbitration of the respondent Valentina Makerevich's uninsured motorist claim against the petitioners.

 

ORDERED that the order is reversed, on the law, with costs, the petition is denied, and the proceeding is dismissed.

 

While operating a vehicle owned by the petitioner Dollar Rent-A-Car (hereinafter Dollar), a self-insured automobile rental company, the respondent, Valentina Makerevich, allegedly sustained personal injuries in an accident with a hit-and-run driver. At the time of the accident, Makerevich was independently insured by the appellant, GEICO Insurance Company (hereinafter GEICO).

 

After Makerevich filed a demand for arbitration of her uninsured motorist claim against Dollar, Dollar and the petitioner Gallagher Bassett Services, Inc., the third-party administrator of Dollar's self-insurance plan, commenced the instant proceeding to stay arbitration, asserting, inter alia, that it had no obligation to provide uninsured motorist coverage to Makerevich because she had declined the additional insurance coverage offered to her when she rented the vehicle. GEICO was added as an additional respondent and, after a hearing, the Supreme Court, in effect, granted the petition. We reverse.

 

The Supreme Court erred in granting the petition since Dollar "is obligated by law to provide primary uninsured motorist benefits" (Matter of ELRAC, Inc. v Fajardo, 270 A.D.2d 415, 416, 705 N.Y.S.2d 264; see, Matter of ELRAC, Inc. v Edwards, 270 A.D.2d 414, 705 N.Y.S.2d 265; Matter of Allstate Ins. Co. v Shaw, 52 N.Y.2d 818, 436 N.Y.S.2d 873, 418 N.E.2d 388; Matter of Allstate Ins. Co. v Lopez, 266 A.D.2d 209, 697 N.Y.S.2d 684).

 

Contrary to Dollar's contention, Makerevich's demand for arbitration was timely (cf., Matter of Allstate Ins. Co. v Torrales, 186 A.D.2d 647, 588 N.Y.S.2d 420; Matter of Allstate Ins. Co. v Morrison, 267 A.D.2d 381).

 

H. MILLER, J.P., TOWNES, CRANE and COZIER, JJ., concur.

 

MATTER OF LIBERTY MUTUAL INS. CO. v. HUTARDO

 

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, Monica Hutardo appeals from an order of the Supreme Court, Nassau County (Adams, J.), entered May 22, 2000, which granted the petition.

 

ORDERED that the order is affirmed, with costs.

 

Liberty Mutual Insurance Company (hereinafter Liberty Mutual) petitioned to stay arbitration of the appellant's uninsured motorist claim. Liberty Mutual contended that the police report made at the scene of the accident showed that only the appellant's car and another car were involved in the collision, and that both were insured vehicles. The Supreme Court properly granted the petition to permanently stay arbitration of the appellant's claim. After Liberty Mutual made a prima facie showing that the appellant's uninsured motorist coverage was not triggered, the appellant failed to offer admissible evidence to raise a triable issue warranting a hearing regarding whether her vehicle was struck by a third, unidentified vehicle (see, Matter of Maryland Cas. Co. v Piasecki, 235 A.D.2d 423, 652 N.Y.S.2d 545; Matter of Atlantic Mut. Ins. Co. v Shaw, 222 A.D.2d 581, 635 N.Y.S.2d 297).

 

The appellant's remaining contention is without merit.

 

RITTER, J.P., GOLDSTEIN, FRIEDMANN, FEUERSTEIN and CRANE, JJ., concur.

 

FARMBREW REALTY CORP. TOWER INS. CO.

 

In an action for a judgment declaring that the defendant has a duty to defend and indemnify the plaintiff in several underlying personal injury actions pending in the Supreme Court, Queens County, arising out of the use of firearms on the plaintiff's premises on April 20, 1997, the plaintiff appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Thomas, J.), dated June 1, 2000, which granted the defendant's motion for summary judgment, denied its cross motion for summary judgment, and declared that the defendant has no duty to defend and indemnify the plaintiff in any claims or actions seeking damages for alleged bodily injuries arising from the incident involving the use of firearms that occurred at the plaintiff's premises on April 20, 1997.

 

ORDERED that the order and judgment is affirmed, with costs.

 

The revised Firearms Exclusion in the plaintiff's insurance policy with the defendant, known as TOW FA-1, reads:

 

"it is understood that no coverage is afforded by this policy for any injury, death, claims or actions occasioned directly or indirectly or as an incident to the discharge of firearms by person or persons on or about the insured premises".

 

This firearms exclusion became effective with the policy renewal of July 2, 1996. There is no merit to the plaintiff's contention that this represented a reduction in coverage from the original firearms exclusion. That exclusion, known as TOW-A, reads:

 

"in consideration of any premium charged, it is understood and agreed that this policy does not apply to Bodily Injury and/or Property Damage arising out of the Ownership Rental Maintenance, or Use of any Firearms".

 

Both provisions clearly exclude any claim arising out of any use by anyone of any firearm or firearms (see, Mount Vernon Fire Ins. Co. v Creative Hous., 88 N.Y.2d 347, 645 N.Y.S.2d 433, 668 N.E.2d 404). Since there was no reduction in coverage, there was no requirement that the defendant give any notice under Insurance Law @ 3426 (see, Cappelli v State Farm Mut. Auto. Ins. Co., 259 A.D.2d 581, 686 N.Y.S.2d 494).

 

The plaintiff contends that the Supreme Court erred in finding that the delay in disclaiming from the time the defendant was first notified of the occurrence from the plaintiff's broker on April 21, 1997, until it sent its disclaimer letter dated June 18, 1997, was reasonable as a matter of law. This contention is without merit. Under the circumstances of this case, the delay was warranted

 by the defendant's need to investigate the occurrence, coupled with the inability of the defendant's investigator, through no fault of his own, to interview the plaintiff's principal and employees until May 13, 1997, and then write the report, which was sent June 2, 1997 (see, Aetna Cas. & Sur. Co. v Brice, 72 A.D.2d 927, 422 N.Y.S.2d 203, affd 50 N.Y.2d 958, 431 N.Y.S.2d 528, 409 N.E.2d 1000). The subsequent delay in disclaiming was clearly needed to allow the defendant to receive, evaluate, and act upon the report. Thus, the delay in disclaiming was clearly reasonable as a matter of law (see, Insurance Law @ 3420[d]; State Farm Mut. Auto. Ins. Co. v Daniels, 269 A.D.2d 860, 703 N.Y.S.2d 796; Silk v City of New York, 203 A.D.2d 103, 610 N.Y.S.2d 36).

 

RITTER, J.P., KRAUSMAN, S. MILLER and FLORIO, JJ., concur.

 

MATTER OF WILHELMINA v. EMPIRE/ALLCITY INS. CO.

 

In a proceeding pursuant to CPLR article 75 to vacate an arbitration award, dated August 23, 2000, the appeal is from an order of the Supreme Court, Kings County (Mason, J.), dated January 23, 2001, which, inter alia, granted the petition and denied the appellant's cross application to confirm the award.

 

ORDERED that the order is reversed, on the law, with costs, the petition is denied, and the cross application is granted.

 

The petitioner was involved in an 18-car chain-reaction accident in which the vehicle she was driving was hit in the rear and side after she had stopped. The police report identified the 18 vehicles by their license plate numbers, owners' names, and insurance codes. Thereafter, the petitioner made a claim for uninsured motorist's benefits under the uninsured motorist provision of her insurance policy (hereinafter the UM provision). That claim ultimately went to arbitration and the arbitrator denied it.

 

The petitioner commenced this proceeding to vacate the arbitration award. She alleged that the arbitrator exceeded his authority by requiring her to identify the vehicle or vehicles which struck her car and thus the award should be vacated. The Supreme Court, in a conclusory order that gave no reason for its determination, inter alia, vacated the arbitration award. We reverse.

 

An arbitration award in a mandatory arbitration proceeding, such as this one, may be upheld only if it is supported by the evidence and is not arbitrary and capricious (see, Matter of Motor Vehicle Acc. Indem. Corp. v Aetna Cas. and Sur. Co., 89 N.Y.2d 214, 652 N.Y.S.2d 584, 674 N.E.2d 1349; Matter of Brua Cab Corp. v Royal Indem. Co., 275 A.D.2d 778, 713 N.Y.S.2d 746). In this case the award was supported by the evidence.

 

 The UM provision of the appellant's insurance policy provides, inter alia:

 

"1. Damages for Bodily injury Caused by Uninsured Motor Vehicles. We will pay all sums which the insured, as defined herein, or the insured's legal representative, shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, and caused by accident arising out of such uninsured motor vehicle's ownership, maintenance or use.

 

"2. Definitions.

 "(b) Uninsured Motor Vehicle. The term 'uninsured motor vehicle' means a motor vehicle that through its ownership, maintenance or use, results in bodily injury to an insured, and for which:

 

"(1) No bodily injury liability insurance policy or bond applies to such vehicle (including a vehicle that was stolen, operated without the owner's permission, or unregistered) at the time of the accident; or

 

"(2) Neither the owner nor driver can be identified, including a hit-and-run vehicle, and which causes bodily injury to an insured".

 

Thus, to recover under the clear language of this portion of the UM provision of her policy, the claimant must show, inter alia, that the vehicle that struck her car was either uninsured, or that neither the owner nor the operator could be identified (see, Austrian v Equitable Life Assur. Soc. of U.S., 48 A.D.2d 144, 368 N.Y.S.2d 201, affd 39 N.Y.2d 477, 384 N.Y.S.2d 418, 348 N.E.2d 893).

 

The arbitrator's rejection of the petitioner's bare assertion that the vehicle which struck her car could not be identified had a rational basis in the record. The record demonstrates that all of the vehicles involved in this accident were identified and insured, and there was no allegation that any vehicle fled the scene. Furthermore, in opposing the petition, the appellant offered uncontroverted proof that the petitioner had sued the owners and operators of at least two of the vehicles involved in the accident, alleging that the negligence in the operation of those vehicles caused her injuries.

 

 Since the petitioner failed to meet her burden of showing that her car was struck by a vehicle or vehicles which could not be identified, as required by the UM provision of her insurance policy, the arbitrator's determination is supported by the record (see, Matter of Motor Vehicle Acc. Indem. Co. v Aetna Cas. and Sur. Co., supra; Don v MGM Transp. Corp., 279 A.D.2d 446, 718 N.Y.S.2d 867; Matter of Brua Cab Corp. v Royal Indem. Co., supra; see also, 11 NYCRR

 60-2.3).

 

 The petitioner's contention that the arbitrator exceeded his authority by requiring her to identify the vehicle which struck her vehicle is without merit.

 

O'BRIEN, J.P., FLORIO, SCHMIDT and TOWNES, JJ., concur.

 

WALSH v. LIBERTY MUTUAL INSURANCE COMPANY

 

Cross appeals from an order of the Supreme Court (Nolan Jr., J.), entered August 17, 2000 in Saratoga County, which, inter alia, partially denied plaintiff's motion to compel discovery and partially denied defendant's cross motion for a protective order.

 

On January 24, 1994, plaintiff sustained personal injuries when the vehicle she was operating, which was insured by defendant, was involved in an accident. She subsequently filed a no-fault application and submitted her claims to defendant, which denied certain no-fault benefits under the policy. Plaintiff thereafter commenced this action to recover benefits pursuant to her insurance policy with defendant which provided no-fault insurance coverage, alleging that defendant breached her contract of insurance by failing to honor her claim for no-fault benefits and that defendant violated General Business Law @ 349.

 

Following joinder of issue, plaintiff moved pursuant to CPLR 3124 and 3126 for an order requiring defendant to comply with her notice for discovery and inspection, seeking disclosure of any claim files coded "red" between the years 1993 to 1998 pursuant to defendant's "no-fault initiative" processing policy. Plaintiff, who had deposed a corporate representative selected by defendant, also sought to depose a second corporate witness, the claims supervisor who plaintiff alleges was principally responsible for denying her no-fault claim. Defendant cross-moved pursuant to CPLR 3103 for a protective order preventing it from having to produce its red-coded files or a second corporate witness for deposition.

 

Supreme Court concluded that plaintiff failed to demonstrate the relevance of the content of the red-coded files to her cause of action under General Business Law @ 349 and, therefore, denied plaintiff's motion to compel discovery of those files. The court held, however, that the claims supervisor, whom plaintiff sought to depose, directly participated in the denial of the benefits at issue and that her deposition was clearly appropriate. To that extent, the court granted plaintiff's motion to compel discovery and denied defendant's cross motion for a protective order. Plaintiff and defendant both appeal, and we affirm.

 

First, with respect to plaintiff's request to depose defendant's claims supervisor, Supreme Court determined that the sought-after disclosure was "material and necessary" for the prosecution of plaintiff's action (CPLR 3101 [a]; see, Allen v Crowell-Collier Publ. Co., 21 N.Y.2d 403, 406, 288 N.Y.S.2d 449, 235 N.E.2d 430; see also, Kavanagh v Ogden Allied Maintenance Corp., 92 N.Y.2d 952, 954, 683 N.Y.S.2d 156, 705 N.E.2d 1197) and clearly appropriate. "'The trial court is invested with broad discretion to supervise discovery and to determine what is "material and necessary" as that phrase is used in CPLR 3101 (a)'" (Dolback v Reeves, 265 A.D.2d 625, 626, 696 N.Y.S.2d 270quoting NBT Bancorp v Fleet/Norstar Group, 192 A.D.2d 1032, 1033, 597 N.Y.S.2d 236), and we will accord deference to that determination unless a clear abuse is shown (see, Allen v Krna, 282 A.D.2d 946, 947, 723 N.Y.S.2d 730; Matter of Pyramid Crossgates Co. v Board of Assessors of Town of Guilderland, ___ A.D.2d ___, 731 N.Y.S.2d 301). We perceive no basis, on this record, to disturb the court's discretionary determination that the corporate employee who was directly responsible for defendant's denial of the claim at issue possessed necessary and relevant information germane to this action, and should therefore be produced (see, Allen v Crowell-Collier Publ. Co., supra, at 406- 407; Arendt v General Elec. Co., 270 A.D.2d 622, 622-623, 704 N.Y.S.2d 346).

 

Further, we agree with Supreme Court's conclusion that plaintiff has not demonstrated that the contents of defendant's claim files which were red-coded are relevant to her claim that defendant engaged in deceptive practices in violation of General Business Law @ 349. A party seeking to recover under section 349 must, as a threshold, allege that the defendant's acts or practices have a broad impact on consumers at large (see, New York Univ. v Continental Ins. Co., 87 N.Y.2d 308, 320, 639 N.Y.S.2d 283, 662 N.E.2d 763), and plaintiff has not sufficiently alleged or demonstrated that the practice of classifying no-fault claims into three categories requiring different levels of scrutiny is deceptive or has caused harm to the public at large (see, id.; Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 N.Y.2d 20, 25, 623 N.Y.S.2d 529, 647 N.E.2d 741). Although plaintiff alleges that she needs to examine the red-coded files to establish whether any deceptive practices were aimed at consumers at large, discovery is not to be used to determine if a cause of action exists (see, Matter of Byramain v Stevenson, 278 A.D.2d 619, 620, 717 N.Y.S.2d 717; Matter of Decrosta v State Police Lab., 182 A.D.2d 930, 931, 581 N.Y.S.2d 938). Accordingly, Supreme Court properly denied that portion of plaintiff's motion seeking to compel discovery of defendant's red-coded files.

 

Mercure, J.P., Peters, Carpinello and Rose, JJ., concur.

 

ORDERED that the order is affirmed, without costs.

 

MOORE v. TRAVELERS INSURANCE COMPANY

 

Appeal from an order of the Supreme Court (Demarest, J.), entered November 17, 2000 in St. Lawrence County, which, inter alia, granted defendant's cross motion for summary judgment dismissing the complaint.

 

In July 1994, plaintiff Barbara Moore, an employee at a supermarket in the Village o Gouverneur, St. Lawrence County, was injured when she fell on a wet concrete floor that had been installed as part of the work on an addition to the store. In June 1997, plaintiffs commenced an action (hereinafter the underlying action) against Calnero Construction Company Inc., the general contractor on the project, and M.A. Calcagnino Concrete Flooring (originally sued as "John Doe"), the concrete subcontractor.  At the time of the accident, Calnero was the insured under a commercial general liability insurance policy issued by Travelers Casualty & Surety Company of America (hereinafter TCA) for the policy period January 1, 1994 to January 1, 1995, and Calcagnino was the insured under a commercial general liability insurance policy issued by Travelers Casualty & Surety Company of Illinois (hereinafter TCI) for the policy period August 1, 1993 to August 1, 1994. It is undisputed that TCI and TCA are affiliated companies, both owned by defendant.

 

In July or August 1997, Calcagnino gave TCI notice of the underlying action and requested that it be provided with a defense and indemnification. TCI undertook Calcagnino's defense in the underlying action and, in September 1997, served an answer to the complaint. Calnero did not provide TCA with notice of the action against it until February 1999. When TCA became aware that Calnero had been served with the complaint in the underlying action in July 1997, it denied Calnero's request for coverage based upon Calnero's failure to report the claim/lawsuit in accordance with the conditions of the policy.

 

Ultimately, the action against Calcagnino was dismissed and plaintiffs obtained a default judgment against Calnero in the amount of $ 750,000. Plaintiffs then commenced the present action seeking to have defendant satisfy plaintiffs' judgment against Calnero upon the ground that defendant is estopped from disclaiming coverage because Calcagnino's notice to TCI constituted notice to defendant of the incident by or on behalf of plaintiffs and by or on behalf of Calcagnino and of the summons and complaint in the action against its insureds Calcagnino and Calnero. Following joinder of issue, plaintiffs moved and defendant cross-moved for summary judgment. Supreme Court denied plaintiffs' motion, granted defendant's cross motion and dismissed the complaint. Plaintiffs appeal.

 

We affirm. In our view, the central premise underlying all of plaintiffs' contentions, that the August 1997 delivery of the summons and complaint in the underlying action to TCI and subsequent communication between plaintiffs' counsel and TCI constituted notice to defendant of plaintiffs' claim against Calnero, is fundamentally flawed. Although that notice very likely made TCI (and, inferentially, defendant) aware that plaintiffs asserted a claim against

 an entity identified as Calnero Construction Company Inc., it failed to provide notice that Calnero was insured by one of defendant's affiliates or that Calnero sought a defense and indemnification in the action brought by plaintiffs. The distinction is a critical one because "neither notice provided by another insured nor the insurer's actual knowledge of the claim satisfies the contractual obligation of an insured to give timely notice" (Roofing Consultants v Scottsdale Ins. Co., 273 A.D.2d 933, 933, 709 N.Y.S.2d 782, lv denied 95 N.Y.2d 770). As noted by Supreme Court, it would be most unfair to impose upon defendant "a duty to independently search its policies for any and all named defendants when an insured provides individual notice of a claim" (compare, Insurance Law @ 3420 [a] [3]). We also note that Calcagnino's delivery of the underlying complaint to TCI cannot have constituted notice from plaintiffs because plaintiffs took a position adverse to Calcagnino in the underlying action (see, Structure Tone v Burgess Steel Prods. Corp., 249 A.D.2d 144, 145, 672 N.Y.S.2d 33).

 

In view of the uncontradicted evidence that defendant received no effective notice of the underlying claim or action against Calnero until nearly 20 months following the commencement of the underlying action against Calnero, the notice provided by Calnero in February 1999 was clearly untimely (see, Heydt Contr. Corp. v American Home Assur. Co., 146 A.D.2d 497, 498, 536 N.Y.S.2d 770, appeal dismissed 74 N.Y.2d 651, 542 N.Y.S.2d 520, 540 N.E.2d 715). Further, the notice of disclaimer provided by TCA was both timely and sufficiently detailed to preserve defendant's late notice defense. Notably, defendant had no obligation to address its disclaimer to any of the communications from plaintiffs or Calcagnino that plaintiffs erroneously claim to have constituted notice (cf., Massachusetts Bay Ins. Co. v Flood, 128 A.D.2d 683, 684, 513 N.Y.S.2d 182, lv denied 70 N.Y.2d 612).

 

Plaintiffs' additional contentions have been considered and found to be lacking in merit.

 

Peters, Spain, Carpinello and Rose, JJ., concur.

 

ORDERED that the order is affirmed, with costs.

 

BRELSFORD v. USAA

 

Appeal from an order of the Supreme Court (Canfield, J.), entered September 29, 2000 in Rensselaer County, which, inter alia, denied plaintiff's motion for summary judgment.

 

Plaintiff, a full-time student at Rensselaer Polytechnic Institute in the City of Troy, Rensselaer County, purchased an automobile in his home state during August 1998. Plaintiff obtained an automobile insurance policy from defendant for the period August 15, 1998 through February 11, 1999, and gave as his address his Troy residence during the preceding academic year, although he knew he would not be residing there during the ensuing academic year. Upon his return to school, plaintiff failed to notify defendant of his new address.  As the result of the nonpayment of premiums, defendant mailed a notice of cancellation, dated August 21, 1998, n1 to plaintiff's previous address, advising that the policy would be cancelled effective September 14, 1998.

 

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

n1 There is evidence (although plaintiff denied it) that a request to forward plaintiff's mail to his new address was filed with the post office on August 25, 1998.

 

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

 

As a result of vandalism, plaintiff made a property damage claim against the policy by telephone call on August 25, 1998. The claims representative admittedly knew of the mailing of the cancellation notice, but did not advise plaintiff. She was instructed to mail the claim check to the new address, and did so. Plaintiff also asserts that on September 17, 1998, he contacted defendant to provide it with his new address. Plaintiff was involved in an automobile accident on September 26, 1998 and, upon reporting this to defendant, was informed that his policy had been cancelled, effective September 14, 1998, and that no coverage was available.  Plaintiff commenced this action seeking a declaration that defendant's purported cancellation of his automobile liability insurance policy was ineffective, and compelling defendant to pay the property damage claim arising out of this automobile accident. This appeal by plaintiff stems from Supreme Court's denial of his motion for summary judgment and the grant of defendant's cross motion for summary judgment dismissing the complaint.

 

A contract of insurance may be cancelled by its issuer for nonpayment of a premium by sending a notice of termination by regular mail to the named insured at the address shown on the policy (see, Vehicle & Traffic Law @ 313 [1] [a]). As long as the insurer submits sufficient proof of mailing the notice of termination, the policy is effectively cancelled even though the named insured does not actually receive the notice of cancellation (see, Makawi v Commercial Union Ins. Co., 244 A.D.2d 533, 664 N.Y.S.2d 470; Pressman v Warwick Ins. Co., 213 A.D.2d 386, 387, 623 N.Y.S.2d 306; Hughson v National Grange Mut. Ins. Co., 110 A.D.2d 1072, 1073, 488 N.Y.S.2d 930). Here, the record establishes that defendant strictly complied with the statutory mandates, thereby effectively cancelling plaintiff's insurance policy on September 14, 1998.

 

We are unpersuaded by plaintiff's three arguments for reversal of Supreme Court's order. First, plaintiff asserts that the notice of cancellation was ineffective since defendant had notice of his new address prior to the effective date of cancellation, yet failed to advise plaintiff of the notice of cancellation. As above set forth, defendant complied completely with the requirements of the statute governing cancellation. Plaintiff's telephone call made some five days after notice of cancellation was mailed, but before the effective date of the cancellation, creates no new duty on defendant to send a second notice of cancellation.

 

Second, plaintiff asserts that principles of equitable estoppel and waiver require reversal. To be afforded the protection of equitable estoppel, a party must establish as to their adversary:

 

"(1) Conduct which amounts to a false representation or concealment of material facts * * * which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention, or at least expectation, that such conduct shall be acted upon by the other party; (3) knowledge, actual or constructive of the real facts. As related to the party claiming the estoppel, [the elements] are: (1) lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance upon the conduct of the party estopped; and (3) action based thereon of such a character as to change his position prejudicially" (Michaels v Travelers Indem. Co., 257 A.D.2d 828, 829, 683 N.Y.S.2d 640, quoting State Bank of Albany v Fioravanti, 70 A.D.2d 1011, 1012-1013, 418 N.Y.S.2d 202, affd 51 N.Y.2d 638, 435 N.Y.S.2d 947, 417 N.E.2d 60).

 

The record conclusively demonstrates that plaintiff's evidentiary submissions fail to establish any of the requisite elements of equitable estoppel as they apply to either plaintiff or defendant. The failure of defendant's claims representative to advise plaintiff that a notice of cancellation had been mailed does not constitute the concealment of a material fact since the notice of cancellation was not relevant to the processing of his vandalism claim. Moreover, processing the vandalism claim and paying it does not constitute a waiver of the right to cancel since this occurred prior to the effective date of cancellation.

 

Plaintiff's third argument is that he made partial payment of the required premium prior to cancellation. Supreme Court correctly rejected his evidence -- a copy of his mother's check register -- as it was not in admissible form and did not establish that a check was sent or received, or to what policy it was to be applied.

 

Mercure, J.P., Spain, Carpinello and Rose, JJ., concur.

 

ORDERED that the order is affirmed, with costs.

 

LIBERTY MUTUAL INS. CO. v.  HO

 

Judgment unanimously affirmed without costs.  Memorandum:  Supreme Court properly granted the cross motion of Julie Ann Ho and Joshua Ho (defendants) seeking a declaration that plaintiff has the duty to defend them in the underlying action, defendants may retain independent counsel at plaintiff's expense, and plaintiff shall be liable for costs and reasonable counsel fees associated with the defense of this declaratory judgment action.  Plaintiff contends that the underlying occurrence was based on an intentional beating with sticks and bats and therefore falls within a policy exclusion for bodily injury that "is expected or intended by the insured".  In addition, plaintiff contends that the underlying incident is not an occurrence inasmuch as the policy defines an "occurrence" as "an accident".        

 

We reject those contentions.  "[I]n deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual or unforeseen" (Agoado Realty Corp. v United Intl. Ins. Co., 95 NY2d 141, 145).  The policy exclusion for "expected or intended" acts must also be viewed from the point of view of the insured in the absence of clear and unambiguous exclusionary language to the contrary (see, Agoado Realty Corp. v United Intl. Ins. Co., supra, at 145-146; cf., Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347).  Here, defendants, unlike the other defendants in the underlying action, were not indicted for assault and claimed to have had no part in the subject occurrence.  The resulting injuries could not, therefore, have been expected or intended by defendants and from their point of view may be said to have been the result of an accident.  Because the duty to defend is broader than the duty to indemnify, the court properly determined that the underlying action against defendants may be "within the embrace of the policy" and that plaintiff must defend defendants therein (Agoado Realty Corp. v United Intl. Ins. Co., supra, at 145, citing Ruder & Finn v Seaboard Sur. Co., 52 NY2d 663, 670, rearg denied 54 NY2d 753). 

 

Finally, the court properly denied that part of plaintiff's motion seeking summary judgment on the ground that defendants failed to notify plaintiff of the occurrence "as soon as practicable".  There is a question of fact whether the notice given by defendants, less than one week after they were served with the underlying summons and complaint and approximately one year after the occurrence, was as soon as practicable (see, Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 16).  (Appeal from Judgment of Supreme Court, Erie County, Cosgrove, J. - Declaratory Judgment.)  PRESENT:  GREEN, J. P., KEHOE, BURNS, GORSKI AND LAWTON, JJ.  (Filed Dec. 21, 2001.)

 

ERIE AND NIAGARA INS. ASSOC. v. STERLING INS. CO.

 

Order unanimously modified on the law and as modified affirmed without costs and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum:  Plaintiff commenced this action seeking a declaration that both plaintiff and defendant must provide primary coverage for their insured's fire loss and must share the costs of defense and indemnification.  Supreme Court erred in granting in part plaintiff's motion for summary judgment, determining that defendant's lack of compliance with Insurance Law § 3420 (d) prohibited defendant from disclaiming coverage for the fire loss.  Disclaimer under section 3420 (d) is unnecessary where "a claim falls outside the scope of the policy's coverage portion" (Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188; see, Zappone v Home Ins. Co., 55 NY2d 131, 134).  The court further erred in summarily determining that defendant's policy covered both the office and the apartment uses of the insured premises.  In our view, the language of defendant's policy on the coverage issue is "ambiguous and is susceptible to more than one reasonable interpretation * * *, making resolution of the ambiguity upon this record particularly inappropriate" (North Riv. Ins. Co. v Kay-R Elec. Corp., 187 AD2d 961).  In addition, the fact that the insured paid a premium for plaintiff's policy over 25 times greater than the premium he paid for defendant's policy presents an issue of fact whether defendant's policy was restricted to losses related to the office (see, Mount Vernon Fire Ins. Co. v Besser, Inc., 203 AD2d 54, 54-55).  Consequently, the court should consider parol evidence on the coverage issue (see, State of New York v Home Indem. Co., 66 NY2d 669, 671).  We therefore modify the order by vacating the first five ordering paragraphs and denying plaintiff's motion in its entirety, and we remit the matter to Supreme Court for a hearing on the issue of coverage (see, North Riv. Ins. Co. v Kay-R Elec. Corp., supra, at 962).  (Appeals from Order of Supreme Court, Erie County, Rath, Jr., J. - Summary Judgment.)  PRESENT:  PIGOTT, JR., P. J., GREEN, PINE, HAYES AND HURLBUTT, JJ.  (Filed Dec. 21, 2001.)

 

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