Freeway Co., LLC v. Technology Ins. Co., Inc.

Freeway Co., LLC v Technology Ins. Co., Inc. (2016 NY Slip Op 03245)

Freeway Co., LLC v Technology Ins. Co., Inc.

2016 NY Slip Op 03245

Decided on April 28, 2016

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on April 28, 2016
Acosta, J.P., Renwick, Manzanet-Daniels, Kapnick, Gesmer, JJ.

949 107203/11

[*1]Freeway Company, LLC, Plaintiff-Appellant,

v

Technology Insurance Company, Inc., Defendant-Respondent, Turan Umer, Defendant.

Goldberg & Carlton, PLLC, New York (Robert H. Goldberg of counsel), for appellant.

Farber, Brocks & Zane, LLP, Garden City (Sherri N. Pavloff of counsel), for respondent.

Order, Supreme Court, New York County (Paul Wooten, J.), entered April 28, 2015, which denied plaintiff's motion for summary judgment declaring that defendant Technology Insurance Company, Inc. has a duty to defend and indemnify plaintiff in the underlying action, and granted Technology's motion for summary judgment declaring in its favor, and dismissed the complaint, unanimously modified, on the law, to declare that Technology has no duty to defend or indemnify plaintiff in the underlying action, and otherwise affirmed, without costs.

Plaintiff failed to establish prima facie that its failure to give timely notice of the occurrence to Technology should be excused on the ground that it had a reasonable belief in non-liability (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436 [1972]; SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583 [1st Dept 1998]). The record demonstrates that plaintiff unreasonably failed to keep itself informed of potential claims for damages arising from the incident (see e.g. 310 E. 74 LLC v Fireman's Fund Ins. Co., 106 AD3d 469 [1st Dept 2013]; Tower Ins. of N.Y. v Amsterdam Apts., LLC, 82 AD3d 465 [1st Dept 2011].

Further, Technology was not required to show that it was prejudiced as a result of plaintiff's late notice, because the subject policy was issued before Insurance Law § 3420 was amended to provide that an insurer could disclaim coverage based on untimely notice only if it was prejudiced by the untimely notice (see id. § 3420[5]). The amendment expressly applies to policies issued on or after its effective date, January 17, 2009 (L 2008, ch 38, § 8).

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

While the motion court reached the correct result, we note that where, as here, a declaratory judgment action is resolved on the merits against the plaintiff, the proper course is to declare

in favor of the defendant, rather than dismiss the action (see Maurizzio v Lumbermens Mut. Cas. Co., 73 NY2d 951, 954 [1989]).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: APRIL 28, 2016

CLERK