New York City Housing Authority v. Tower Insurance , 918 N.Y.2d 435 ( 2011 )

The record demonstrates that upon receiving an untimely notice of the claim from plaintiff, defendant issued a formal disclaimer that was timely under the circumstances. Defendant’s delay in issuing the disclaimer was justified, as the timeliness of the disclaimer is measured from the time that the insurer first learns of the grounds for disclaimer (see A.J. McNulty & Co. v Lloyds of London, 306 AD2d 211, 212 [2003]). “An insurer is not required to disclaim on timeliness grounds before conducting a prompt, reasonable investigation into other possible grounds for disclaimer; in fact, a ‘reasonable investigation is preferable to piecemeal disclaimers’ ” (DiGuglielmo v Travelers Prop. Cas., 6 AD3d 344, 346 [2004], lv denied 3 NY3d 608 [2004], quoting 2540 Assoc. v Assicurazioni Generali, 271 AD2d 282, 284 [2000]). Accordingly, before issuing its disclaimer, it was reasonable for defendant to investigate whether plaintiff had contemporaneous knowledge of the incident, and whether plaintiff was actually insured via a written contract with its contractors, which was not apparent from the face of the notice of claim or the letter transmitted by plaintiff. Concur — Saxe, J.E, Friedman, Acosta, DeGrasse and Richter, JJ.