Security Mutual Insurance v. Acker-Fitzsimons Corp. , 330 N.Y.S.2d 865 ( 1972 )

McNally, J. (dissenting).

I dissent and vote to affirm.

In this action for a declaratory judgment, defendant corporations (owner, managing agent) appeal from a judgment after a six-day noninjury trial in favor of the plaintiff adjudging that it is not obligated to defend certain personal injury actions or to pay any judgment entered against its insureds in these actions. Some 90 exhibits were offered in evidence in the course of the trial. Through some unexplained circumstance, these exhibits have been lost. Counsel stated on the argument that the appeal could be decided without the exhibits.

The policy issued by Security under which Levy and Acker-Fitzsimons were unnamed insureds was not a policy of fire insurance but a policy of bodily injury liability insurance. The key to the liability of Security under this policy was bodily injury resulting from an occurrence as defined by the occurrence clause of the policy. The occurrence clause was added to the policy at the time of its issuance. Nevertheless, in my opinion, it did not alter the fact that the policy was a liability policy covering only bodily injury occurring on premises owned by Fernley.

It did not serve the policy requirement of notice that Security may have been given notice of the fire of October 4, 1965 on November 16, 1965. The notice which Security was entitled to receive under the terms of its policy was notice of bodily injury arising from the fire.

It is not disputed that Levy, the president of Fernley, learned on November 9, 1965 that some firemen claimed they were injured during the course of the fire of October 4, 1965. Levy immediately communicated this information to one Kannar, secretary of Acker-Fitzsimons and the insurance broker for Fernley. He then wrote Kannar a letter on the same date requesting him to communicate this information to the liability insurance carrier.

It is further undisputed that on December 27, 1965 Levy sent a photostat of a newspaper clipping from the Sunday News of December 19, 1965 to Kannar. This clipping stated that firemen were injured during the course of the fire. Fitzsimons, one of the principals of Acker-Fitzsimons, testified that Kannar showed him the clipping and they both decided not to notify Security since Kannar was of the opinion there was nothing official to report.

Despite the knowledge possessed by Levy, the president of Fernley, and Kannar, the insurance broker of Fernley and Acker-Fitzsimons, the managing agent of the property involved, that some firemen were injured in the fire of October 4, 1965, this information was not communicated to Security until May 5, 1967, 19 months thereafter, when it received a copy of the summons and complaint served on Acker-Fitzsimons.

In Deso v. London & Lancashire Ind. Co. (3 N Y 2d 127) the Court of Appeals held that a delay of 51 days in notifying the insurer of the accident after it was learned that bodily injury had resulted was an unreasonable delay as matter of law precluding recovery on the policy..

There is no rule that requires a showing of prejudice where it appears that a condition of the liability policy has been broken. Once a condition has been broken, the insurer has the right to seek relief from its contractual obligation. (Coleman v. New Amsterdam Cas. Co., 247 N. Y. 271; National Grange Mut. Liab. Co. v. Fino, 13 A D 2d 10, 13; American Sur. Co. v. Mariani, 130 N. Y. S. 2d 755, affd. 286 App. Div. 1083.)

The difference between the instant case and 875 Forest Ave. Corp. v. Ætna Cas. & Sur. Co. (37 A D 2d 11) is apparent. In the instant case, Levy had notice of the fire and the fact that firemen had made a claim for personal injuries. He concluded it was necessary to notify the insurance carrier. An employee of his own broker, Kannar, assumed not to transmit the notice to the plaintiff. The fact is that Levy’s broker did not inform the plaintiff that persons had been injured in the fire. He limited his advice to the insurer to the fact that a fire had taken place, as to which the carrier had no liability since the policy insured against liability, not a fire loss. In 875 Forest Ave. (supra) the plaintiff did not know of any accident claim. The insured had no knowledge of any fact suggesting its liability for the fall from the window which caused the death of the infant. Here Levy had knowledge of claimed ■injuries as a result of the fire. The plaintiff may not be charged with Kannar’s failure or refusal to notify it of the claimed personal injuries arising from the fire.

Stevexs, P. J., and MoG-iverx, J., concur with Tilzer, J.; McNally, J., dissents in an opinion in which Kupfermax, J., concurs.

Amended judgment, Supreme Court, Bronx County, entered on September 29, 1970, reversed, on the law and the facts, and judgment directed declaring that plaintiff is obligated to defend under the owners’, landlords’ and tenants’ liability policy the action brought by defendants Adams, Harrington and Manning and' is further obligated to pay any judgment which may be recovered in that action against defendants Fernley Realty Corp., Acker-Fitzsimons Corp. and Norman Levy. Defendants-appellants shall recover of respondent $50 costs and disbursements of this appeal.

Settle order on notice.