This case on appeal concerns the notice provision of an insurance policy covering a third party contracted employee. The plaintiff in this case, Spoleta Construction, LLC, contracted defendant Hub-Langie Paving, Inc., to complete paving work on a construction job. Plaintiff was named as an additional insured of defendant’s policy. Defendant’s employee Shane VanDerwall (“VanDerwall”) was injured while working on the contracted job for plaintiff in October of 2008. VanDerwall commenced a negligence action against plaintiff and others following the incident. Plaintiff did not receive notice of the accident until December 2009, in a letter from VanDerwall’s attorney. In January 2010, plaintiff’s liability carrier sent a letter to defendant notifying it of VanDerwall’s claim, requesting that defendant put its own insurance carrier on notice. Plaintiff’s counsel then demanded that defendant defend and indemnify it in the underlying action. Defendant disclaimed coverage based on untimely notice.
Thereafter, plaintiff commenced a declaratory judgment action seeking a declaration that defendant provide insurance coverage to plaintiff in VanDerwall’s claim. Defendant moved to dismiss the complaint and the Supreme Court, Monroe County granted the motion. The Supreme Court Appellate Division, Fourth Department reversed the judgment and reinstated the complaint against defendant.
The court looked to the language of the insurance policy and noted that unambiguous provisions must be given their plain and ordinary meaning. Furthermore, in the face of ambiguity, the court noted that it must be construed in favor of the insured and against the insurer. In terms of notice, the court stated that notice requirements will be construed in favor of the insured with substantial compliance being sufficient.
The notice provision of defendant’s insurance policy detailed that the insurer has to be notified “as soon as practicable.” The court noted notice should include: how, when and where the accident happened; names and addresses of the injured and witnesses; and the nature and location of injury or damage that occurred. The court held that the December 2009 letter was a notice of an occurrence that could give rise to a claim, but not a claim under the policy. The court rationalized that the December 2009 letter was not a claim because it did not make any demand for payment nor advise that legal action was forthcoming. The court further held that the January 2010 letter constituted notice as soon as practicable to defendant, and that plaintiff was not required to provide notice so long as notice was given. Therefore, the court determined that the Supreme Court erred in dismissing plaintiff’s claim as a matter of law.
The dissent objected on the grounds that plaintiff failed to provide timely notice of an occurrence to defendant. The dissent sought to modify the judgment by denying part of defendant’s motion seeking to dismiss the declaratory judgment cause, reinstating that cause of action. Further, the dissent would grant judgment to defendant by declaring that defendant had no duty to plaintiff. The dissent disagreed that plaintiff’s January 2010 letter to defendant constituted notice of an occurrence under the terms of the policy, reasoning the letter did not indicate that plaintiff was seeking coverage directly from defendant as an additional insured on the policy.
991 N.Y.S.2d 183 (N.Y. App. Div. 2014)