In re the Arbitration Between State Farm Mutual Automobile Insurance & Callisto ( 1998 )

Hayes and Balio, JJ.

(dissenting). We respectfully dissent and vote to affirm. The insurance policy required respondent to provide petitioner with prior written notice of settlement with a tortfeasor and to obtain its consent to such settlement. It is undisputed that respondent, without notice to petitioner, settled with the tortfeasor and signed a general release, thereby failing to comply with a condition precedent to petitioner’s liability under the policy. In our view, petitioner did not waive its right to notice of the settlement. Although petitioner took the position that it had the right to offset the amount received from a tortfeasor from underinsurance benefits provided by the policy, it nevertheless sent respondent a Notice of Underinsured Motorist form for him to complete and submit to petitioner, together with a letter advising respondent not to sign any release without notifying petitioner. We conclude that, by asserting its rights under the policy, petitioner did not waive its right to require compliance with the policy’s notice provision (see, Lumbermens Mut. Cas. Co. v Fadeyeva, 243 AD2d 368). Furthermore, petitioner was not required to show prejudice before it denied coverage based on respondent’s failure to comply with the notice requirement (see, Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d 436, 440; State Farm Mut. Auto. Ins. Co. v Romero, 109 AD2d 786, 788). (Appeal from Order and Judgment of Supreme Court, Erie County, Mahoney, J. — Arbitration.) Present — Denman, P. J., Pine, Hayes, Pigott, Jr., and Balio, JJ.