This opinion is uncorrected and subject to revision in the Official Reports. This opinion is not available for publication in any official or unofficial reports, except the New York Law Journal, without approval of the State Reporter or the Committee on Opinions (22 NYCRR 7300.1)
M E M O R A N D U M
SUPREME COURT: QUEENS COUNTY
IA PART: 13
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FARMBREW REALTY CORP.
INDEX NO. 24958/98
BY: THOMAS, J.
- against -
DATED:
TOWER INSURANCE COMPANY OF NEW YORK
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In this declaratory judgment action, defendant Tower Insurance Company of New York (hereinafter "Tower") moves for summary judgment and plaintiff cross-moves for similar relief.
This controversy arises out of an incident involving firearms that occurred on April 20, 1997 and resulted in injuries to patrons at plaintiff's restaurant. Plaintiff notified Tower, its insurer, of the event on April 21, 1997. By letter dated April 23, 1997, Tower advised plaintiff that it reserved its rights to disclaim coverage for this incident on the basis of Firearms Exclusion-Endorsement TOW-FA1 as well as the Assault and Battery Exclusion-Endorsement TOW-F and that an investigator was being assigned to this matter. An interview was scheduled with Mr. Stern, a principal of the plaintiff for April 30, 1997 at which time he refused to provide any information. Mr. Stern and three employees with knowledge of the incident eventually granted the investigator an interview on May 13, 1997. A report of the investigation dated June 2, 1997 was sent to Tower and by letter dated June 18, 1997 coverage was disclaimed on the basis of the Firearms and Assault and Battery Exclusions under the policy.
Turning first to the timeliness of Tower's disclaimer, Insurance Law ' 3420(d) provides that written notice shall be given "as soon as is reasonably possible." (Hartford Ins. Co. v County of Nassau, 46 NY2d 1028.) An insurer bears the burden of explaining the delay in notifying its insured of a disclaimer in coverage. (Prudential Prop. & Cas. Ins. v Persaud, 256 AD2d 502.) Here, Tower's April 23, 1997 letter immediately notified its insured of specific exclusions in the policy and reserved its rights to disclaim coverage for any claims related to these exclusions. Inasmuch as this letter was both timely and specific, it constituted reasonable notice as a matter of law. (See, Waxman v Providence Washington Ins. Co., 207 AD2d 882.) Even assuming this letter was insufficient to constitute a disclaimer notice, Tower's prompt attempt to investigate a matter involving a fatality and numerous injuries was prudent, and delayed solely by the plaintiff's lack of cooperation. (State Farm Mut. Ins. Co.v Daniels, AD2d , 703 NYS2d 796.) Plaintiff's contention that newspaper articles were sufficient to provide knowledge of the claim and obviated the need for an investigation is without merit. (See, Aetna Ins. Cas & Sur. Co. v Brice, 72 AD2d 927 affd 50 NY2d 958; cf., Security Mut. Ins. Co. of New York v Acker-Fitzsimons Corp., 31 NY2d 436.) Under the circumstances, Tower's final disclaimer 16 days afer receiving the investigation report was not untimely. (Silk v City of New York, 203 AD2d 103.)
Plaintiff argues that the revised Firearms Exclusion added in 1996 failed to comply with the notice provisions necessary for a change in coverage under Insurance Law ' 3426(e). The original policy was issued with a Firearms Exclusion which provided,
In consideration of any premium charged, it is understood and agreed that this policy does not apply to Bodily Injury and/or Property Damage arising out of the Ownership, Rental, Maintenance or Use of any Firearms.
Upon renewal of the policy for the third time, the Firearms Exclusion was revised to read as follows:
"It is understood that no coverage is afforded by this policy for any injury, death, claims or actions occasioned directly or indirectly or as an incident to the discharge of firearms by person or persons on or about the insured premises."
While any ambiguity in an insurance policy is to be construed against an insurer (Matter of Metropolitan Prop. and Cas. Ins. Co. v Mancuso, 93 NY2d 487; Matter of Nationwide Ins. Co. v Miscione, AD2d , 699 NYS2d 892), the issue of whether an ambiguity exists is one to be determined by the court as a matter of law. (Breed v Insurance Co. of N. Am., 46 NY2d 351; Board of Mgrs. of Yardarm Condominium II v Federal Ins. Co., 247 AD2d 499.) In Mount Vernon Fire Ins. Co. v Creative Hous. Ltd. (88 NY2d 347), the Court of Appeals analyzed an exclusion which stated:
"It is agreed that no coverage shall apply under this policy for any claim, demand or suit based on Assault and Battery, and Assault and Battery shall not be deemed an accident whether or not committed by or at the direction of the insured."
The court found the language of the policy unambiguous and that coverage for an assault claim was excluded under either portion of the provision, whether committed by the insured, an employee or a third party. Although the original Firearms Exclusion in the instant case utilizes the words "arising out of" rather than "based on", these phrases have been found to be legally indistinguishable. (Mount Vernon Fire Ins. Co. v Creative Hous. Ltd., supra.) Hence, any incident involving firearms was excluded under plaintiff's original policy and, as such, the revision did not change coverage and did not require written notice pursuant to Insurance Law ' 3426(e). Even if notice had been necessary, coverage would have reverted back to the terms of the original policy which precludes recovery for the subject incident. (Insurance Law ' 3426[e][1].)
In view of the foregoing, it is unnecessary to determine whether the Assault and Battery Exclusion had been validly added to plaintiff's policy in 1994.
Finally, plaintiff's contention that the liquor liability coverage in the amount of $100,000 is separate and distinct from the general liability coverage and does not incorporate a Firearms Exclusion is unavailing. Here, unlike Crouse West Holding Corp. v Sphere Drake Ins. Co. (248 AD2d 932 affd 92 NY2d 1017) relied on by plaintiff, a single policy was issued for both liability coverages and that policy originally included a Firearms Exclusion under Endorsement TOW-A, as evidenced on page 3 of the Common Policy Declarations. The policy eventually was revised to include a similar exclusion - Endorsement TOW-FA1. Thus, even if the occurrence could be considered to arise by reason of the selling, serving or furnishing of an alcoholic beverage, the Firearms Exclusion would bar recovery under the policy.
Accordingly, summary judgment is granted in favor of Tower and it is declared that Tower timely disclaimed coverage for the subject incident under the Firearms Exclusion of the policy and it is not required to defend or indemnify plaintiff with regard to any claims arising out of the April 20, 1997 occurrence.
Settle order.
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J.S.C.