Appeal from an order of the Civil Court of the City of New York, Queens County (Howard Lane, J.), entered December 5, 2006. The order denied plaintiffs' motion for summary judgment.

Order affirmed without costs.

In this action, plaintiffs seek a declaration that defendant Allstate Insurance Company must defend and indemnify defendant Ramiz Sinanaj, in an underlying Civil Court action, to the extent of the policy which was in effect on November 12, 2003, and a declaration that defendant Allstate Insurance Company's policy is the primary policy in the underlying action.

On November 5, 2003, in Connecticut, defendant Ramiz Sinanaj signed an agreement with plaintiff Devan Infinity of Fairfield (Devan) that named Ramiz Sinanaj and Ahmet Sinanaj as the borrowers of a 1993 Geo motor vehicle from Devan (the loaner car). In the agreement, Ramiz Sinanaj represented that he was insured under an insurance policy issued to him by defendant Allstate Insurance Company (Allstate). At the time he borrowed the loaner car, Ramiz Sinanaj received written notice that under Connecticut law he was required to have liability insurance in effect "on your own car while you have our loaner."

On November 12, 2003, while in New York, Ramiz Sinanaj drove the loaner car into a parked car owned by defendant Thomas R. Tubiolo and insured by defendant State Farm Mutual Automobile Insurance Company of New York (State Farm). Thereafter, on January 21, 2004, Allstate wrote a disclaimer letter to "our insured," Ahmet Sinanaj, denying coverage on the sole stated ground that because the vehicle was a loaner vehicle, Allstate would only provide excess coverage after the primary insurance coverage on the loaner car was exhausted. [*2]

On July 21, 2004, State Farm, as subrogee of Tubiolo, commenced an action in Civil Court against Devan and Ramiz Sinanaj, seeking damages of $5,512.23 (the underlying action). Allstate refused to defend or indemnify Sinanaj. In December 2004, Devan and its insurer, TIG Specialty Insurance (TIG), brought the present action against Allstate, Ramiz Sinanaj, and State Farm as subrogee of Tubiolo, seeking a declaratory judgment that Allstate had a duty to defend and indemnify Ramiz Sinanaj in the underlying action. Allstate denied liability and asserted four affirmative defenses, including a denial that the policy of insurance issued by Allstate covered the loaner car.

Following joinder of issue, plaintiffs served a notice for discovery and inspection on Allstate, requesting a complete copy of the Allstate insurance policy referenced by Ramiz Sinanaj in the agreement he had signed for the loaner car. The notice specified that the insurance document produced should be "the complete document" including, inter alia, all declaration sheets. The document Allstate produced in response was a 44-page "Allstate Automobile Policy" form that did not include a policy number, a declarations page, a page naming the insured, or any other information identifying the name or address of the insured person or any description of the insured vehicle. One month later, plaintiffs moved for summary judgment pursuant to CPLR 3212, seeking a declaratory judgment that Allstate was obligated to defend and indemnify Ramiz Sinanaj in the underlying action. Plaintiffs contended that Ramiz Sinanaj was a covered individual under the Allstate insurance policy that had been issued to Ahmet Sinanaj and that, as a matter of law, Allstate's insurance policy was primary over the TIG policy. Plaintiffs further contended that, as a matter of law, Allstate was foreclosed from asserting other grounds for disclaiming coverage besides those that had been stated in its disclaimer letter, and that, in any event, Allstate had failed to produce any "competent evidence" to support the factual underpinnings for its assertion that Ramiz Sinanaj was not a covered person under the Allstate insurance policy.

The substance of Allstate's opposition to the summary judgment motion was that the motion was premature because no depositions had been conducted, and that unresolved issues of fact precluded summary judgment. The only issue of fact specifically referred to by Allstate was "whether the defendant operator of the vehicle was a covered person under the policy of insurance issued by Allstate, as all evidence available indicates that he was not, in that he was not a relative who resided in the insured's premises." Plaintiffs' motion for summary judgment was denied on a finding that there were "controverted issues of fact in connection with, inter alia, whether the defendant operator, was residing with Allstate's insured, Ahmet Sinanaj on the date of
the accident, and whether the defendant operator, Ramiz Sinanaj, is a covered person under the applicable Allstate Insurance Policy."

Plaintiffs' contention, that Allstate's disclaimer letter established the parameters under which it could deny insurance coverage, is erroneous. Even though Allstate failed to raise any other basis for disclaimer except in the context of this litigation, Insurance Law § 3420 (d), which sets forth rules respecting the timeliness requirements for disclaimer, applies, by its terms, only in cases of bodily injury or death. In other cases, even an unreasonable delay in giving notice of disclaimer will not estop an insurer from disclaiming unless the insured shows [*3]prejudice arising from the delay (see Fairmont Funding v Utica Mut. Ins. Co., 264 AD2d 581, 581-582 [1999], citing O'Dowd v American Sur. Co. of NY, 3 NY2d 347, 355 [1957]; United States Fid. & Guar. Co. v Weiri, 265 AD2d 321 [1999]; U.S. Underwriters Ins. Co. v A & D Maja Constr. Inc., 160 F Supp 2d 565, 568-569 [SD NY 2001]).

Moreover, disclaimer is only required if a claim falls within the specific exclusions of an insurance policy. Where a claim falls entirely outside the purview of coverage, no disclaimer whatsoever is required (see Zappone v Home Ins. Co., 55 NY2d 131 [1982]; Liberty Mut. Ins. Co. v Allstate Ins. Co., 237 AD2d 260 [1997]), although where there is ambiguity regarding the extent of coverage, disclaimer is required (Jefferson Ins. Co. of NY v Travelers Indem. Co., 92 NY2d 363, 370-371 [1998]; Planet Ins. Co. v Bright Bay Classic Vehs., 75 NY2d 394, 399-400 [1990]).

In the present case, Allstate contends that Ramiz Sinanaj's claim for insurance coverage fell outside the sphere of Ahmet Sinanaj's policy. There was no allegation of prejudice by reason of Allstate's failure to assert other bases for its disclaimer besides those stated in its original disclaimer letter, and there was no ambiguity as to the extent of coverage. Therefore, Allstate was not limited in disclaiming to the basis set forth in its original disclaimer letter (that its coverage was only excess for loaner cars).

Allstate's argument, that a question of fact exists as to whether Ramiz Sinanaj was an insured person, precluding summary judgment, is premised on the language of the Allstate insurance policy.

The Allstate policy defines "insured autos" as including:
"(3) A substitute four wheel private passenger auto or utility auto, not owned by you or a resident, being temporarily used while your insured auto is being serviced or repaired, or if your insured auto is stolen or destroyed.
(4) A non-owned auto used by you or a resident relative with the owner's permission. This auto must not be available or furnished for the regular use of an insured person."

Allstate's policy defines "insured persons" as:

"(1) While using your insured auto:

(a) you,

(b) any resident, and

(c ) any other person using it with your permission.

(2) While using a non-owned auto:

(a) you,
(b) any resident relative using a four wheel private [*4]passenger auto or utility auto.
(3) Any other person or organization liable for the use of an insured auto if the auto is not owned or hired by this person or organization."
For plaintiffs to prevail upon their motion, no question of fact can exist as to whether Ramiz Sinanaj was an insured person under the policy. Part of said determination hinges on whether the subject vehicle was an insured auto under the policy. In our opinion, the Civil Court rightly found that a triable issue of fact existed since questions remained such as whether the car was loaned while the insured auto was being repaired, or was stolen or destroyed; whether Ramiz Sinanaj was a resident relative of the insured's household; whether Ramiz Sinanaj used the automobile with the insured's permission; and whether Ramiz Sinanaj was liable for the use of an insured auto.

The Civil Court's apparent assumption that Ahmet Sinanaj was Allstate's insured was based solely on Allstate's own disclaimer letter, as Allstate failed to provide the declarations page of its policy in response to defendants' request. That letter likewise provides the sole foundation for Allstate's claim that Ahmet Sinanaj and Ramiz Sinanaj did not share a residence on the accident date, even though the letter is dated more than two months after the accident. The agreement for the loaner car, dated a week before the accident, stated that Ahmet Sinanaj and Ramiz Sinanaj did share a common address. The record before the lower court was entirely silent as to the familial relationship, if any, between Ahmet Sinanaj and Ramiz Sinanaj, or as to what, if any, authority Ramiz Sinanaj had to borrow the loaner car under Ahmet Sinanaj's automobile insurance policy.

Plaintiffs argued that Allstate should be precluded from arguing that Ramiz Sinanaj was not insured under the Allstate policy because of its long delay in asserting this claim and because of its failure to produce the declarations page of the insurance policy. "[W]here an adversary withholds evidence in his possession or control that would be likely to support his version of the case, the strongest inferences may be drawn against him which the opposing evidence permits" (Noce v Kaufman, 2 NY2d 347, 353 [1957]; accord Gryphon Domestic VI, LLC v APP Intern. Finance Co., 18 AD3d 286 [2005]), and appellate courts may impose such sanctions where the trial court has not (see Fitzgerald v Tamola, 199 AD2d 122, 122 [1993]). Such a result would only [*5]be appropriate following motions for an order to compel under CPLR 3124 and for sanctions under CPLR 3126, neither of which motions were made herein. We therefore decline to base our decision on Allstate's failure to provide plaintiffs with the information it sought in its discovery request.

Accordingly, the order is affirmed.

In view of the foregoing, we do not reach any of the parties' remaining contentions.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: July 14, 2009