Plaintiff commenced this action seeking damages of $5,304.33 against the defendant based upon a default judgment plaintiff procured against defendant's insured in a previous action. Defendant answered and moved for an order dismissing this action pursuant to CPLR 3212. Plaintiff cross-moved for summary judgment. The matter now comes before the Court for a decision.

Many of the facts herein are not in dispute: A motor vehicle accident occurred on December 24, 2005. The accident involved property damage to a utility pole by a vehicle owned by defendant's insured, Shamar Johnson. On or about January 14, 2008, plaintiff commenced an action in this court against defendant's insured based upon that property damage. While plaintiff contacted defendant regarding the accident and the claimed damages to its utility pole before commencing the prior action against defendant's insured, it is uncontroverted that plaintiff never informed defendant about the legal action commenced against defendant's insured until after plaintiff had procured a judgment therein based upon Shamar Johnson's default in appearing for arbitration. On or about October 23, 2008, defendant sent a disclaimer notice to its insured, and to plaintiff's counsel, denying all liability or obligation since notice of the underlying suit was not given to defendant until after a judgment [*2]had been obtained against defendant's insured.

Insurance Law §3420(c)(2)(A) and (B) states, in pertinent part, that "(A) In any action in which an insurer alleges that it was prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on: (i) the insurer to prove that it has been prejudiced, if the notice was provided within two years of the time required under the policy; or (ii) the insured, injured person or other claimant to prove that the insurer has not been prejudiced, if the notice was provided more than two years after the time required under the policy. (B) Notwithstanding subparagraph (A) of this paragraph, an irrebuttable presumption of prejudice shall apply if, prior to notice, the insured's liability has been determined by a court of competent jurisdiction or by binding arbitration" (emphasis added).

Although defendant was timely notified of the accident, it is clear that "distinct from notice of an accident, an insurer may also demand that it receive timely notice of a claimant's commencement of litigation, ... [t]he purpose of such notice ... (being) to provide the insurer with a fair and reasonable opportunity to appear and defend against a claim or exercise its right to settle the matter". American Transit Insurance Company v Sartor, 3 NY3d 71, 75 (2004). "The insurer's receipt of such notice is therefore a condition precedent to its liability under the policy ... (and) [t]he failure to satisfy this requirement may allow an insurer to disclaim its duty to provide coverage." Id. at 76.

While "notice to the insurer" by an injured party will satisfy the insured's obligation to give notice of a claim [Insurance Law §3420(a)(3)], neither defendant's insured nor plaintiff, the injured party, gave notice to defendant of the commencement of plaintiff's action against defendant's insured until after plaintiff had already obtained a judgment. Plaintiff argues that the only notice it was required to give defendant was notice of the accident. The Court disagrees, and finds that the notice plaintiff provided was insufficient to afford defendant a fair and reasonable opportunity to appear and defend the claim against its insured.

Based upon the foregoing, defendant's motion for summary judgment is granted and this action is dismissed.

So ordered.

Dated at Albany, New York

February 10, 2011

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Gary F. Stiglmeier

Albany City Court Judge