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Coverage Pointers - Volume IV, No. 17

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03/06/03:            ITT INDUSTRIES, INC. v FACTORY MUT. INS. CO.

New York State Supreme Court, Appellate Division, First Department

Y2K Remediation Costs Not Covered Due to Exclusion that Superceded Binder

Court held that plaintiff’s claim against insurers for recovery of costs incurred in its Y2K remediation, involving work beginning several months before the effective date of the binder and continuing through a period when there was a clear issue over whether the final policy would include an exclusion barring such claim, was excluded under the policy, which superseded the binder. Given the well-known concern over problems anticipated in computer date recognition immediately preceding the year 2000, no reasonable insurer could have been expected to ignore the issue in drafting new policies, especially for large and diverse technology companies such as plaintiff. Plainly, this was not a situation in which plaintiff could justifiably assume standard policy provisions would be carried over into its policy. Plaintiff’s contention that coverage was provided under the ‘sue and labor’ clause was rejected; the clause provides coverage for the insured’s mitigation of damages resulting from covered perils only.

 

03/10/03:            SILVA v UTICA FIRST INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Assault and Battery Exclusion Bars Coverage for Claim Against Restaurant Owner

Insurer was not required to defend and indemnity its insured restaurant where underlying claims were rooted in intentional tortuous conduct.  Court held that assault and battery exclusion, which is clear and unambiguous, serves to exclude coverage when a claim arises from an assault.  If no cause of action would exist but for the assaultive behavior, and the clear and unambiguous provisions of the insurance policy exclude coverage for intentional assaultive behavior, the insurer is under no obligation to defend the action.

 

03/10/03:            MATTER OF TRANSTATE INS. CO.

New York State Supreme Court, Appellate Division, Second Department

If That Wasn’t Clear, Assault and Battery Exclusion Bars Coverage for Claim Against Restaurant Owner

Claimant, the owner of a restaurant/bar, sought defense and indemnification from the New York State Superintendent of Insurance, as Liquidator of Transtate Insurance Company, under its commercial general liability policy in an underlying action that arose from an assault and battery.  Court held that insurer’s denial of the claim based upon a policy endorsement excluding claims arising from assault and battery was proper.

 

03/10/03:            MATTER OF ALLSTATE INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Evidentiary Hearing Required on Validity of Insurer’s Disclaimer in Proceeding to Stay Uninsured Motorist’s Claim

Allstate commenced this proceeding to permanently stay arbitration of its insured’s claim for uninsured motorist benefits on the ground that the offending vehicle was insured by Nationwide. Alternatively, Allstate sought to add Nationwide as an additional respondent to the proceeding, and sought a framed issue hearing. Allstate's insured opposed the petition, submitting a letter from Nationwide indicating that it had disclaimed coverage of the offending vehicle based on its insured's failure to report and cooperate in the investigation of the accident.  Allstate contended that there were issues of fact concerning whether Nationwide timely disclaimed coverage, and whether the disclaimer was valid.  Supreme Court denied the petition and directed the parties to proceed to arbitration.  The appellate court reversed, and remitted the matter for an evidentiary hearing on the issues of whether Nationwide timely disclaimed coverage of the offending vehicle, and whether the disclaimer was valid.  Court found that Allstate had made a prima facie showing that the offending vehicle was insured by Nationwide through the submission of the police report and the registration record expansion from the New York State Department of Motor Vehicles.  The letter from Nationwide to its insured purporting to disclaim coverage, submitted by Anderson in opposition to the petition, merely raised issues of fact as to whether Nationwide timely and validly disclaimed coverage of the offending vehicle.  An evidentiary hearing was necessary to resolve these issues.

 

03/10/03:         MAXI-AIDS, INC. v GENERAL ACCIDENT INS. CO. OF AMERICA

New York State Supreme Court, Appellate Division, Second Department

Late Notice of Possible Claim Vitiates Coverage

Court held that insurer’s motion for summary judgment was properly granted where insureds failed to raise a triable issue of fact as to why they did not provide the insurer with timely notice of the possible claims contained in the underlying action. Where an insurance policy requires an insured to provide notice of an accident or loss as soon as practicable, such notice must be provided within a reasonable time in view of all the facts and circumstances of the case. Providing timely notice to an insurer is a condition precedent to recovery, and the failure to satisfy the notice requirement, absent a valid excuse, vitiates the policy.

 

03/03/03:            MAHMOOD v FIDELITY & GUAR. INS. CO.

New York Appellate Division Second Department

SUM Arbitration is Mandatory Where Minimum Limits Provided

Plaintiff sustained personal injuries as a result of a motor vehicle accident involving an uninsured vehicle. Fidelity and Guaranty Insurance Company insured plaintiffs’ vehicle under a policy that allegedly afforded uninsured motorist coverage for the minimum mandatory amount of $25,000, and which included coverage for hit-and-run accidents. In the instant action, the plaintiffs sought to recover uninsured motorist benefits from Fidelity. Court held that the claim must be resolved through arbitration, and dismissed the complaint.  Arbitration was mandatory pursuant to paragraph 12 of the conditions section of the prescribed uninsured motorist endorsement contained in 11 NYCRR 60-2.3(f), which provides that where the maximum amount of uninsured motorist coverage provided in an endorsement to an insurance policy equals the minimum amount of coverage required by Insurance Law § 3420(f)(1), disagreements “shall be settled by … arbitration procedures upon written demand of either the insured” or the insurance carrier.

 

03/03/03:            MATTER OF STATE FARM MUT. AUTO. INS. CO. v COOPER

New York Appellate Division Second Department

Improper Disclaimer Letter Makes Disclaimer Invalid

Zurich disclaimed coverage of the injured party (Cooper) on the ground that Cooper failed to give it timely notice of his underlying negligence action. Court held it is well settled that to disclaim coverage for bodily injuries, an insurer must give written notice as soon as reasonably possible of such disclaimer to the injured party or any other claimant, as well as the insured, and such notice must properly apprise the injured party or claimant, with a high degree of specificity, of the ground or grounds on which the disclaimer is predicated. Further, in order for a disclaimer letter to be valid against an injured party, the notice of disclaimer must specifically advise the claimant that his or her notice of claim was untimely. Here, the court held that Zurich’s disclaimer was invalid as to Cooper because the letter sent to the insured disclaimed coverage based upon the insured’s failure to timely notify Zurich of the lawsuit, not Cooper’s failure to give timely notice.

 

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.

 

03/13/03:         NEW HAMPSHIRE INDEM. CO. v BUDGET RENT-A-CAR SYS., INC.

Washington Supreme Court

Car Rental Company’s “Super Escape Clause” Forced an Individual’s Own Liability Insurer to Assume the Role of Primary Insurer

In the instant case, Budget Rent-A-Car’s rental contract with insured included a “super escape clause” and insured’s own liability carrier provided only for excess coverage in the event that its insured has an accident in a rental car. However, the Court ruled to enforce Budget’s “super escape clause” to give effect to the parties’ clear intent to exclude coverage where excess insurance is available. The Court held that Budget effectively avoided primary coverage and that the insured’s liability carrier must provide coverage under its excess policy provisions.

Prepared by Mark Gesk of Wayman, Irwin & McAuley, LLC in Pittsburgh

 

03/12/03:            FARMERS INS. EXCH. v NEAL

Nevada Supreme Court

Supreme Court Finds the Exclusionary Clause of an Uninsured Motorist Policy Barring Claims in Excess of the State Statutory Minimum Valid

The Supreme Court held that exclusionary clauses in uninsured motorist policies, where clearly written, provide protection for insurers from claims in excess of the state statutory minimum coverage level. The Court reasoned that it is the insured’s responsibility to read the insuring agreement and attach plain meaning to its provisions. The Court found that the exclusionary clause at issue unambiguously provided no more than the statutory minimum for any claim coming within its purview. As such, the Court held that Appellant Farmers did not have to provide uninsured motorist benefits in an amount exceeding the state statutory minimum level of coverage

Prepared by Mark Gesk of Wayman, Irwin & McAuley, LLC in Pittsburgh

 

03/11/03:            CLARK v PRUDENTIAL PROPERTY AND CAS. INS. COMPANY

Idaho Supreme Court

In an Uninsured Motorist Policy Coverage Dispute, Supreme Court Finds No Coverage Where Insurer Denies Liability as Opposed to Coverage

The Supreme Court upheld a grant of summary judgment for Defendant insurance carrier where Plaintiff alleged that injuries sustained when a pipe flew through his car window, injuring his arm, should be covered under his own uninsured motorist policy. The Court refused to find coverage because the insurer of the motorist who set the pipe in motion did not deny coverage for the accident, but denied liability. Such a denial of liability, as opposed to a denial of coverage, does not trigger the applicability of the uninsured motorist policy.

Prepared by Mark Gesk of Wayman, Irwin & McAuley, LLC in Pittsburgh

 

03/07/03:            GREGSON v ZURICH AMERICAN INS. CO.

Fifth Circuit (applying Texas law)

Insureds Not Required To Exhaust Administrative Remedies For Workers’ Compensation Before Filing Lawsuit Where No Preauthorization Is Required For Treatment

The plaintiff insured sustained an injury at work, which required back surgery. Following surgery, he attempted to have an antibiotic prescription filled, but his insurer denied coverage for the medication. The insured then developed a staph infection, which required hospitalization and two additional surgeries. Under Texas law, the plaintiff insured was not required to exhaust an administrative remedy through the Texas Workers’ Compensation Commission before pursuing an extra-contractual claim against his insurer for denial of coverage for the prescription medication because the medical benefit he sought did not require preauthorization.

Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles

 

03/06/03:            KOIKOS v TRAVELERS INSURANCE CO.

Florida Supreme Court

Insured Restaurateur Sued for Negligent Failure to Provide Adequate Security; Each Shooting of a Separate Victim Held to Constitute an Occurrence Under a General Liability Insurance Policy

A restaurant owner leased his premises to a fraternity for a party. Two uninvited guests were denied admission but returned, one with a gun. A fight broke out, and one of the guests fired two separate but nearly concurrent rounds, injuring five people. Two of the injured parties sued the restaurateur, who in turn filed a declaratory judgment action against his insurer, contending that the two shootings constituted two separate occurrences within the meaning of a general liability policy defining "occurrence" as "an accident, including continuous or repeated exposure to the same general harmful conditions." In answering a question certified to it by the U.S. Court of Appeals for the Eleventh Circuit, the Supreme Court of Florida held that there were multiple occurrences, reasoning that the inquiry must focus on the conduct of the shooter, not on the insured's underlying negligence. Two justices dissented, contending that there was but one act of negligence, the insured's failure to provide adequate security.

Prepared by Michael G. Tracy of Craighead Glick LLP in Boston

 

03/06/03:            EVERETT v STATE FARM INDEMNITY COMPANY

Supreme Court of New Jersey

New Jersey Supreme Court Upholds Decision on Timely Filing for Pip Benefits

Everett argued before the appellate court that in reducing the $56.03 bill for the heating pad to $46.84 and applying the balance to the deductible, State Farm’s actions constituted the “last payment of benefits,” thereby tolling, for two years from that date, the time period within which to file a complaint for PIP benefits. The New Jersey Supreme Court found that the process of adjusting the heating pad bill to the fee schedule and applying the balance to the insured’s deductible constituted a “last payment of benefits” under the No-Fault Insurance Act, making Everett’s complaint, which was filed within two years of that date was timely.

Prepared by Gary Crapster of Strasburger & Price LLP in Dallas

 

03/04/03:            AUTO EUROPE v CONNECTICUT INDEM. CO.

First Circuit (applying Maine law)

Maine Law Provides Duty To Defend Where Later Facts Could Fall Within Policy Coverage, Even If Not Alleged

The insured was sued under a consumer fraud cause of action which alleged that the insured gave consumers information which was “designed to mislead and conceal” and which accused the insured of engaging in a “fraudulent scheme of overcharges.” The insured’s policy excluded coverage for any “willfully dishonest, fraudulent or malicious” act. The consumer fraud cause of action did not require intentional conduct for recovery, so there was a possibility that the facts developed at trial would reveal an improper practice that was unaccompanied by an intent to deceive. Because Maine law broadly extends the duty to defend to claims that could be developed either legally or factually at trial so as to fall within the policy’s coverage, the policy exclusion did not apply and the insurer was obligated to defend the insured in the underlying lawsuit.

Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles

 

AND IN DEFENSE

 

03/10/03:            NORFOLK & W. RY. CO. v AYERS

United States Supreme Court

Asbestos Cancerphobia Claims by Railroad Workers Viable Under FELA

A railroad worker suffering from actionable injury asbestosis caused by work-related asbestos exposure may recover mental anguish damages resulting from the fear of developing cancer under the Federal Employers’ Liability Act.

 

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ITT INDUSTRIES, INC. v FACTORY MUT. INS. CO.

 

Order and judgment (one paper), Supreme Court, New York County (Helen Freedman, J.), entered December 14, 2001, which, inter alia, granted the motion of the Industrial Risk Insurer defendants and the cross motion of defendant American Guarantee and Liability Insurance Company for summary judgment declaring that no coverage exists for plaintiff's claim and dismissing the complaint, unanimously affirmed, with costs.

 

Plaintiff's claim against the remaining insurer defendants for recovery of the costs it incurred in its Y2K remediation, involving work beginning several months before the effective date of the binder and continuing through a period when there was a clear issue over whether the final policy would include an exclusion barring such claim, was excluded under the policy, which superseded the binder (see Springer v Allstate Life Ins. Co., 94 NY2d 645, 649). Given the well-known concern over problems anticipated in computer date recognition immediately preceding the year 2000, no reasonable insurer could have been expected to ignore the issue in drafting new policies, especially for large and diverse technology companies such as plaintiff. Plainly, this was not a situation in which plaintiff could justifiably assume standard policy provisions would be carried over into its policy. Plaintiff, by advancing the untenable interpretation that the policy provided coverage for a resulting loss of an excluded risk (see Narob Dev. Corp. v Ins. Co. of N. Am., 219 AD2d 454, lv denied 87 NY2d 804; Laquila Constr., Inc. v Travelers Indem. Co., 66 F Supp 2d 543, 545-546, affd 216 F3d 1072), did not satisfy its burden to show that coverage rested on an exception to the exclusion (see Northville Indus. Corp. v Natl. Union Fire Ins. Co., 89 NY2d 621, 634; Monteleone v Crow Constr. Co., 242 AD2d 135, 140, lv denied 92 NY2d 818). Its contention that coverage was provided under the 'sue and labor' clause lacks merit for the similar reason that such clauses provide coverage for the insured's mitigation of damages resulting from covered perils only (see Louis Magnone, Inc. v Pac. Coast Fire Ins. Co., 197 Misc 264, 269; Intl. Commodities Export Corp. v Am. Home Assur. Co., 701 F Supp 448, 453-454, affd 896 F2d 543).

 

We have considered plaintiff's other contentions and find them unavailing.

 

SILVA v UTICA FIRST INS. CO.

 

In an action for a judgment declaring that the defendant Utica First Insurance Company is obligated to defend and indemnify David Wong Restaurant, Inc., d/b/a K-O Gourmet Chinese Restaurant, and David Wong, individually, in an action entitled Silva v Dome Realty N.Y. Corp., pending in the Supreme Court, Queens County, under Index No. 160435/00, the defendant Utica First Insurance Company appeals from an order of the Supreme Court, Queens County (Dye, J.), dated December 21, 2001, which denied its motion, inter alia, for summary judgment dismissing the complaint. Presiding Justice Prudenti has been substituted for the late Justice O'Brien (see 22 NYCRR 670.1[c]).

 

ORDERED that the order is reversed, on the law, with costs, the motion is granted, the complaint is dismissed, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant, Utica First Insurance Company, is not obligated to defend and indemnify David Wong Restaurant, Inc., d/b/a K-O Gourmet Chinese Restaurant, and David Wong, individually, in the underlying action entitled Silva v Dome Realty N.Y. Corp., pending in the Supreme Court, Queens County, under Index No. 160435/00.

 

An assault and battery exclusion provision in a policy of insurance, which is clear and unambiguous, can serve to exclude coverage when a claim arises from an assault (see U.S. Underwriters Ins. Co. v Val-Blue Corp., 85 NY2d 821; Malek v Allcity Ins. Co., 264 AD2d 468, 469; Dudley's Rest. v United Nat. Ins. Co., 247 AD2d 425, 426). If no cause of action would exist but for the assaultive behavior, and the clear and unambiguous provisions of the insurance policy exclude coverage for intentional assaultive behavior, the insurer is under no obligation to defend the action (see Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347; Malek v Allcity Ins. Co., supra; Sphere Drake Ins. Co. v 72 Centre Ave. Corp., 238 AD2d 574, 575-576). Here, the plaintiff's claims in the underlying action are rooted in intentional tortious behavior which the defendant specifically excluded from coverage by the clear and unambiguous provisions of the subject policy (see Mount Vernon Fire Ins. Co. v Creative Hous., supra; U.S. Underwriters Ins. Co. v Val-Blue Corp., supra). Accordingly, the defendant is not obligated to defend and indemnify the defendants in the underlying action, and is entitled to summary judgment and a declaration that it is not so obligated.

 

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant, Utica First Insurance Company, is not obligated to defend or indemnify David Wong Restaurant, Inc., d/b/a K-O Gourmet Chinese Restaurant, and David Wong, individually, in the underlying action entitled Silva v Dome Realty N.Y. Corp., pending in the Supreme Court, Queens County, under Index No. 160435/00 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

 

PRUDENTI, P.J., FEUERSTEIN, McGINITY and H. MILLER, JJ., concur.

 

MATTER OF TRANSTATE INS. CO.

 

In a liquidation proceeding pursuant to Insurance Law article 74, the claimant, Estiminet, Inc., appeals from an order of the Supreme Court, Nassau County (DeMaro, J.), dated February 5, 2002, which granted the motion of the respondent New York State Superintendent of Insurance to confirm the report of a referee disallowing its claim for a defense and indemnification in an action entitled Lehanka v Heffrons, pending in the Supreme Court, Suffolk County, under Index No. 26742/98, and denied its cross motion to disaffirm the referee's report.

 

ORDERED that the order is affirmed, with costs.

 

It is well settled that an insurance carrier can be relieved of its duty to defend if it establishes, as a matter of law, that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision (see Spoor-Lasher Co. v Aetna Cas. & Sur. Co., 39 NY2d 875, 876; Allstate Ins. Co. v Bostic, 228 AD2d 628). The claimant, Estiminet, Inc. (hereinafter Estiminet), the owner of a restaurant/bar doing business under the name "Heffrons," sought a defense and indemnification from the New York State Superintendent of Insurance, as Liquidator of Transtate Insurance Company (hereinafter the Insurer), under its commercial general liability policy in an action commenced against it by Christopher Lehanka. Since the underlying action arose from an assault and battery, the Supreme Court properly confirmed the referee's report, affirming the Insurer's denial of the claim based upon a policy endorsement excluding claims arising from assault and battery (see Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347, 350).

 

The appellant's remaining contentions are without merit.

 

SANTUCCI, J.P., FRIEDMANN, LUCIANO and RIVERA, JJ., concur.

 

MATTER OF ALLSTATE INS. CO.

 

In a proceeding, inter alia, pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, the petitioner appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (McCarty, J.), dated June 11, 2002, as denied, without a hearing, that branch of the petition which was to permanently stay the arbitration.

 

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the matter is remitted to the Supreme Court, Nassau County, for an evidentiary hearing to determine whether Nationwide Mutual Insurance Company, a/k/a Nationwide Assurance Company, a/k/a Colonial Insurance Company of Wisconsin, timely and validly disclaimed coverage of the offending vehicle for the subject accident; and it is further,

 

ORDERED that the petitioner shall serve a supplemental notice of petition (see CPLR 305[a]) and amended petition (see CPLR 3025[b]) upon Nationwide Mutual Insurance Company, a/k/a Nationwide Assurance Company, a/k/a Colonial Insurance Company of Wisconsin, joining it as an additional respondent to the proceeding within 30 days of service upon it of a copy of this decision and order.

 

The petitioner, Allstate Insurance Company (hereinafter Allstate), commenced this proceeding, inter alia, to permanently stay arbitration of its insured's claim for uninsured motorist benefits on the ground that the offending vehicle was insured by Nationwide Mutual Insurance Company, a/k/a Nationwide Assurance Company, a/k/a Colonial Insurance Company of Wisconsin (hereinafter Nationwide). Alternatively, Allstate sought to add Nationwide as an additional respondent to the proceeding, and sought a framed issue hearing. Allstate's insured, the respondent Reginald Anderson, opposed the petition, submitting a letter from Nationwide indicating that it had disclaimed coverage of the offending vehicle based on its insured's failure to report and cooperate in the investigation of the subject accident. In reply, Allstate contended that there were issues of fact concerning whether Nationwide timely disclaimed coverage, and whether the disclaimer was valid. The Supreme Court denied the petition, without a hearing, and directed the parties to proceed to arbitration.

 

We reverse, and remit the matter to the Supreme Court, Nassau County, for an evidentiary hearing on the issues of whether Nationwide timely disclaimed coverage of the offending vehicle, and whether the disclaimer was valid. Allstate made a prima facie showing that the offending vehicle was insured by Nationwide on the day of the accident through the submission of the police report and the registration record expansion from the New York State Department of Motor Vehicles (see Matter of State Farm Mut. Auto. Ins. Co. v Youngblood, 270 AD2d 493; Matter of Nationwide Ins. Co. v Sillman, 266 AD2d 551). The letter from Nationwide to its insured purporting to disclaim coverage, submitted by Anderson in opposition to the petition, merely raised issues of fact as to whether Nationwide timely and validly disclaimed coverage of the offending vehicle (see Matter of Lumbermens Mut. Cas. Co. v Beliard, 256 AD2d 579). Thus, Nationwide must be joined as a party respondent to the proceeding, and the matter remitted to the Supreme Court, Nassau County, for an evidentiary hearing to resolve these issues.

 

FEUERSTEIN, J.P., FRIEDMANN, SCHMIDT and MASTRO, JJ., concur.

 

MAXI-AIDS, INC. v GENERAL ACCIDENT INS. CO. OF AMERICA

 

In an action, inter alia, for a judgment declaring that the defendant General Accident Insurance Company of America is obligated to defend and indemnify the plaintiffs in an underlying action entitled Independent Living Aids v Maxi-Aids, Inc., commenced in the United States District Court, Eastern District of New York, under Docket No. 95 CV 656, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (Alpert, J.), entered December 13, 2001, as granted the respective motions of the defendants General Accident Insurance Company of America, and Country Brokerage Services, Inc., and Gerald M. Levy, for summary judgment dismissing the complaint insofar as asserted against them.

 

ORDERED that order is affirmed insofar as appealed from, with one bill of costs to the respondents appearing separately and filing separate briefs.

 

Where an insurance policy requires an insured to provide notice of an accident or loss as soon as practicable, such notice must be provided within a reasonable time in view of all the facts and circumstances of the case (see Nationwide Ins. Co. v Empire Ins. Group, 294 AD2d 546). Providing timely notice to an insurer is a condition precedent to recovery (see Travelers Indem. Co. v Worthy, 281 AD2d 411), and the failure to satisfy the notice requirement, absent a valid excuse, vitiates the policy (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436; Travelers Indem. Co. v Worthy, supra). In response to the respondents' establishment of prima facie entitlement to judgment as a matter of law, the appellants failed to raise a triable issue of fact as to why they did not provide the respondents with timely notice of the possible claims contained in the underlying action. Accordingly, the Supreme Court properly granted the respondents' respective motions for summary judgment dismissing the complaint insofar as asserted against them.

 

The appellants' remaining contentions need not be addressed in light of our determination.

 

SMITH, J.P., GOLDSTEIN, TOWNES and MASTRO, JJ., concur.

 

MAHMOOD v FIDELITY & GUAR. INS. CO.

 

In an action, inter alia, to recover uninsured motorist benefits from the defendant Fidelity and Guaranty Insurance Company, the plaintiffs appeal from so much of an order of the Supreme Court, Kings County (Clemente, J.), dated March 15, 2001, as granted the cross motion of the defendant Fidelity and Guaranty Insurance Company to dismiss the causes of action against it on the ground that those causes of action were subject to mandatory arbitration.

 

ORDERED that the order is affirmed insofar as appealed from, with costs.

 

The plaintiff Sajid Mahmood sustained personal injuries as a result of a motor vehicle accident involving an uninsured vehicle. The plaintiffs' vehicle was insured by the defendant Fidelity and Guaranty Insurance Company (hereinafter Fidelity), under a policy which they allege afforded them uninsured motorist coverage for the minimum mandatory amount of $25,000 and which included coverage for hit-and-run accidents. In the instant action, the plaintiffs seek to recover uninsured motorist benefits from Fidelity.

 

Pursuant to paragraph 12 of the conditions section of the prescribed uninsured motorist endorsement contained in 11 NYCRR 60-2.3(f), if, as in the instant case, the maximum amount of uninsured motorist coverage provided in an endorsement to an insurance policy equals the minimum amount of coverage required by Insurance Law § 3420(f)(1), disagreements "shall be settled by * * * arbitration procedures upon written demand of either the insured" or the insurance carrier (11 NYCRR 60-2.3[f]). Accordingly, arbitration of the
dispute between the plaintiffs and Fidelity is mandatory (see Cacciatore v New York Cent. Mut. Fire Ins. Co., AD2d [4th Dept, Nov. 15, 2002]) and the complaint against Fidelity was properly dismissed.

 

PRUDENTI, P.J., KRAUSMAN, GOLDSTEIN and SCHMIDT, JJ., concur.

 

MATTER OF STATE FARM MUT. AUTO. INS. CO. v COOPER

 

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, Zurich Insurance Company appeals from an order of the Supreme Court, Nassau County (Trainor, R.), dated February 14, 2002, which, upon determining that its disclaimer of coverage was invalid, granted the petition and permanently stayed the arbitration.

 

ORDERED that the order is affirmed, with costs.

 

The appellant, Zurich Insurance Company (hereinafter Zurich), disclaimed coverage of the injured party, Lou Cooper, on the ground, inter alia, that Cooper failed to give it timely notice of his underlying negligence action. It is well settled that to disclaim coverage for bodily injuries, an insurer must give written notice as soon as reasonably possible of such disclaimer to the injured party or any other claimant, as well as the insured, and such notice must properly apprise the injured party or claimant, with a high degree of specificity, of the ground or grounds on which the disclaimer is predicated (see Insurance Law § 3420[d];
General Acc. Ins. Group v Cirucci, 46 NY2d 862; Matter of State Farm Mut. Auto. Ins. Co. v Joseph, 287 AD2d 724). Further, in order for a disclaimer letter to be valid against an injured party, the notice of disclaimer must specifically advise the claimant that his or her notice of claim was untimely (see Matter of State Farm Mut. Auto. Ins. Co. v Joseph, supra; Hazen v Otsego Mut. Fire Ins. Co., 286 AD2d 708). Here, the Supreme Court properly determined that Zurich's disclaimer was invalid as to Cooper, because the letter sent to the insured, the defendant Nazir Butt, disclaimed coverage based upon Butt's failure to timely notify Zurich of the lawsuit, not Cooper's failure to give timely notice (see General Acc. Ins. Group v Cirucci, supra; Matter of State Farm Mut. Auto. Ins. Co. v McGovern, 283 AD2d 582). Thus, the Supreme Court properly determined that Zurich's disclaimer of coverage was invalid, granted the petition, and permanently stayed the arbitration.

 

SMITH, J.P., GOLDSTEIN, TOWNES and MASTRO, JJ., concur. [*3]

 

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