On or about May 14, 2004, Plaintiff and her husband hired Defendant's insured to address a plumbing problem at their residence located at 400 Hartson Street, Syracuse, New York. During this engagement, an employee of Defendant's insured damaged a step leading from Plaintiff's residence to the garage and Plaintiff was injured when she fell on said damaged step. According to Plaintiff, the employee concealed the damage done to the step and did not disclose the damage and concealment to either Plaintiff or her husband.

Subsequently, Plaintiff and her husband initiated a civil action against Defendant's insured for both property damage and personal injury by Summons and Complaint dated June 5, 2005 (Exhibit 8). By correspondence dated September 9, 2005 (Exhibit 3) addressed to its insured and copied to Plaintiff's attorney, Defendant disclaimed and denied coverage under its Five Star Contractor's Policy (Exhibit 1) citing lack of timely notice (Exhibit 2). Neither Defendant nor its insured sought a declaratory judgment concerning Defendant's duty to defend or indemnify its insured.

Defendant's insured through the services of various attorneys represented itself. [*2]Ultimately, on December 7, 2007 Plaintiff and her husband secured a judgment against Defendant's insured in the amount of $100,000.00 (Exhibit 9) which judgment totaled $101,818.75 when filed and entered with the Onondaga County Clerk.

Thereafter, Plaintiff commenced this action against Defendant insurer by the filing of a Summons and Complaint on March 11, 2008, seeking recovery of this judgment pursuant to Insurance Law 3420. Defendant interposed an Answer and moved pursuant to CPLR 3001 for declaratory judgment seeking an order declaring that Defendant has no duty to provide coverage or indemnify Plaintiff as the notice provided to it by its insured and Plaintiff was untimely. Defendant also seeks an Order from the Court finding that Plaintiff's action is frivolous and seeks costs and attorneys fees.

Plaintiff opposed said motion and cross moved pursuant to CPLR 3212 for summary judgment.

After hearing oral arguments on these respective motions, the Court scheduled and held a framed issue fact finding hearing to address the issue of Plaintiff's efforts to ascertain the identity of Defendant as insurer and notify Defendant of the original claim. During the course of this hearing, the Court has had the unique opportunity to hear and evaluate the testimony of the witnesses called by the parties, assess their credibility and review all of the exhibits offered and received into evidence.Defendant's commercial liability specialist, DENISE SCHAD, testified on behalf of Defendant. According to this witness, the first notice Defendant received of Plaintiff's accident was on or about September 27, 2005 when it received a copy of the Summons and Complaint in the action of MR. and MRS. HOYER against Defendant's insured. Upon receipt of these pleadings, MS. SCHAD testified that she opened a file, reached out to Plaintiff's attorney, CARL GUY, to secure an extension to answer and copies of correspondence sent to Defendant's insured. She also contacted the insured to arrange to collect statements from CHARLES BAKER, the sole shareholder of the insured and various other employees.

MS. SCHAD, after securing the statements of MR. BAKER and employees BROWN, WALBURGER and FRITCHER, testified that she summarily issued a disclaimer letter addressed to its insured, AAA Plumbing & Mechanical of CNY, Inc, on the basis of late notice. This correspondence was also copied to Plaintiff's attorney advising counsel that Defendant was denying coverage as Plaintiff did not "exercise their rights and obligation to provide timely notice under the policy". (See Exhibit 2). As stated, neither Defendant nor its insured commenced a declaratory judgment action concerning their respective rights and/or obligations under the commercial liability insurance policy issued by Defendant.

CHARLES BAKER testified that he was the owner of Defendant's insured as of the date of Plaintiff's injury and that the insured employed THOMAS FRITCHER who performed the plumbing services at Plaintiff's residence on May 13, 2004, the date of her injury. MR. BAKER testified that he did not recall receiving any correspondence from Plaintiff's attorney, CARL GUY (See Exhibits 3 and 4). He further testified that he did not recall any communications or contact with Plaintiff concerning her injury. According to MR. BAKER, he quite frankly thought the whole lawsuit was "bogus".

In conjunction with MR. BAKER'S "bogus" theory, the Court has reviewed the telephonic statement MS. SCHAD secured from THOMAS FRITCHER, that she indicates was [*3]taken on June 28, 2005 and which is included in her case file. (See Exhibit 6). This statement was taken by MS. SCHAD prior to her issuing Defendant's disclaimer letter. In his recorded statement employee FRITCHER details how the step in question became dislodged from the structure under his weight; how he fell backwards hurting his back; that both Plaintiff and her husband were present when this occurred; that he did not reattach or attempt to conceal this incident; and that he told the HOYERS to get it fixed.

The FRITCHER statement also indicates that he informed BAKER

Obviously, it appears that Defendant paid no heed that its insured might have had a good faith belief that there was no liability to the HOYERS for MRS. HOYER'S injury and this, among other factors, may have caused a justifiable delay in notice. This would be an issue between Defendant and its insured. However, a review of Defendant's claims file (Exhibit 6) indicates that MS. SCHAD made no inquiry of MR. GUY as to what he or his office staff did to ascertain Defendant's identity for notification purposes prior to suing Defendant's insured. Had she done so, an entirely different posture may have been taken by Defendant on the issue of Plaintiff's actions to notify Defendant, which posture may have greatly reduced Defendant's exposure and obviated the necessity of this entire law suit. The Court notes Defendant's opinion that the Court and the 4th Department are not solid or well versed on coverage or the law on late notice as are the other Departments. (See Exhibit 6, 9/2/08 and 9/17/08 file notes).

Sworn testimony was also presented by MRS. HOYER and MR. GUY as well as DONNA KROLL and PATRICIA STUART, employees of Mr. Guy.

MRS. HOYER, the Plaintiff herein, testified that after her injury on May 13, 2004, she was transported to a hospital by ambulance. Approximately two days later she telephoned MR. BAKER and indicated that while she was satisfied with the work performed by his company she sustained an injury as a result of the damage caused by his employee to the step in the garage. MRS. HOYER further testified that during this conversation MR. BAKER told her not to worry as he would put it into his insurance carrier and take care of it.

Plaintiff testified that she attempted to contact BAKER and AAA at least five (5) times by telephone without success. Having no success in contracting the insured, not receiving the insurance paperwork she expected from MR. BAKER, and having been diagnosed by her doctors with an upper and lower disc injury, she sought the services of Attorney Guy.

DONNA KROLL offered sworn testimony in which she described her efforts to ascertain Defendant's identity. MS. KROLL testified that at the time of Plaintiff's injury she was a paralegal in MR. GUY'S law office and was familiar with Plaintiff. A few months after Plaintiff's injury, this witness spoke with Plaintiff and Plaintiff advised her she was awaiting insurance paperwork from MR. BAKER. After MR. GUY became involved, MS. KROLL testified that she made a number of calls to AAA and BAKER, speaking one time with a secretary and other times getting an answering machine. This witness indicated that with each call, whether received by a live person or answering machine, she left a message detailing the [*4]nature of the call concerning Plaintiff's injury. Her calls were never returned. All the calls were not documented as this was not the practice in this small law office. MS. KROLL also related that she contacted an insurance agent, one GENE WALKER, in an effort to ascertain a method of ascertaining the identity of AAA's liability carrier. However, MR. WALKER could not provide her with such a method.

CARL GUY, ESQ. testified under oath that he corresponded to Defendant's insured on September 28, 2004 and October 28, 2004 (Exhibits 3 and 4), which letters went unanswered. MR. GUY'S testimony reiterated that he and/or members of his office staff tried to contact the insured to no avail as calls were not returned. He did not hire a private investigator as Plaintiff had limited financial means. As there was no central registry from which he could access Defendant's identity, and upon the exhaustion of all other efforts to secure this identity, and upon verification that Plaintiff's injuries were serious and not likely to improve, he initiated the action against Defendant's insured.

PATRICIA STUART, ESQ., testified that during the summer of 2004, she was a law clerk in MR. GUY'S office. At his request, she undertook efforts to ascertain the identity of AAA's insurance carrier. In addition to the actions undertaken by MS. KROLL and MR. GUY, attorney STUART detailed six (6) separate and distinct avenues of investigation she undertook to ascertain Defendant's identity.

Said avenues were described by MS. STUART as follows:

First: A computer search on the Department of State web-site which yielded all of BAKER'S business, but no information regarding insurance companies or insurance coverage.

Second: A computer search on the Department of Insurance web-site regarding insurance coverage information yielded nothing.

Third: A general Googling of BAKER as well as his various business names and entities was unsuccessful in ascertaining insurance coverage.

Fourth: A computer search of the City of Syracuse web-site did not disclose any information concerning BAKER, his companies or insurance coverage.

Fifth: A computer search of the Onondaga County web-site yielded information that BAKER'S plumbing license was current, but provided no information regarding insurance coverage.

Sixth: A telephone inquiry to the Department of Insurance disclosed that such insurance information was not in any public record and she was not able to secure from that Department any means to access coverage information.

MS. STUART testified that she periodically repeated her computer search during this period with the same result. In addition, she testified that she did not conduct a Department of Motor Vehicle search as there was no motor vehicle accident and this would not be the same coverage. MS. STUART did not make a FOIL request as she relied in the Department of Insurance representation that coverage was not a matter of public record. She did not go in person to the address where AAA was located as she did not feel it appropriate to go there and confront someone. As an aside, the Court notes that in view of her physical stature and that of MR. BAKER, a visit by MS. STUART to AAA would be ill-advised.

All of this investigatory information would have been available to Defendant's commercial liability specialist had she simply inquired concerning this information of MR. [*5]GUY. A review of Exhibit 6 indicates that she made no such inquiry and confined her inquiry to the letters sent by MR. GUY to AAA.

This information may have had no effect on Defendant's decision to deny AAA a defense under the policy; however, it certainly has an impact on Defendant's disclaimer toward Plaintiff under all of the unique and particular circumstances of this matter.

Based on the record before this Court, there is no question that Plaintiff obtained a judgment against Defendant's insured which judgment remained unsatisfied in excess of thirty (30) days after service of notice of entry. As such, Plaintiff has standing to commence this action directly against Defendant. Insurance Law § 3420 (b)(1). Standing having been established, the validity of Defendant's disclaimer as concerns Plaintiff and Plaintiff's due diligence in attempting to ascertain Defendant's identity and giving notice to Defendant are the issues to be determined. Insurance Law §3420 (a)(3) and (4).

As previously noted, Defendant's liability specialist, despite interviewing and taking statements from at least four of it's insured's principals and/or employees, summarily issued a disclaimer of coverage. As a matter of policy, reasonable and good faith investigations are preferable over summary disclaimers. 2540 ASSOCIATES, INC. v. ASSICURAZIONI GENERALI, S.p.A., et al., 271 AD2d 282 (1st Dept., 2000). The statements which are part of this record, can reasonably be interpreted as the insured's good faith belief in non-liability, especially when considered with MR. BAKER'S testimony that he thought Plaintiff's claim was "bogus". Such a good faith belief may excuse any purported delay by the insured in giving notice to the carrier and thereby arguably require coverage under the insurance policy. ALLSTATE INSURANCE COMPANY v. MOON, 89 AD2d 804 (4th Dept., 1982).

By not seeking a declaratory judgment on this issue of coverage or conducting a good faith and diligent investigation of the underlying claim and not participating in the underlying law suit, Defendant can only litigate the validity of its disclaimer and cannot challenge the liability and damage award of the underlying judgment that Plaintiff secured. LANG v. HANOVER INC. Co., 3 NY3d 350 (2004). 2540 ASSOCIATES, INC v. ASSICURAZIONI GENERALI, S.p.A, et al., supra.

Even assuming that Defendant's insured did not provide it with timely notice, Plaintiff's independent right to provide such notice is preserved, affording Plaintiff the right to proceed directly against Defendant on the basis of her unsatisfied judgment against Defendant's insured. Insurance Law §3420 (a)(3); LAURITANO v. AMERICAN FIDELITY FIRE INS. CO., 3 AD2d 564 (1st Dept., 1957), aff'd 4 NY2d 1028. Plaintiff, as the injured party, cannot be charged vicariously with the insured's failure or delay in giving notice. METROPLITAN PROPERTY & LIABILITY INSURANCE COMPANY v. HORNER 79 AD2d 869 (4th Dept., 1980).

In this particular matter, the Plaintiff's summons and complaint in the underlying action was Plaintiff's notice to Defendant. Defendant's outreach to Plaintiff's attorney and its request for copies of his correspondence to its insured and an extension of time to interpose an answer was Defendant's acknowledgment of said notice.

Pursuant to Insurance Law §3420(a)(4), the burden is on the injured party to show that it was not reasonably possible to give notice to the insurer within a time prescribed in a policy of insurance and that notice was given as soon as it was reasonably possible. However, notice given by an injured party is not governed by the same standard, in terms of time, as governs notice by [*6]the insured, as what is reasonably possible for the insured may not be reasonably practical for the injured party. ALLSTATE INSURANCE COMPANY v. MARCONE, et al., 29 AD3d 715 (2nd Dept., 2006).

As concerns an injured party, the test is one of due diligence. That is, whether such party gave notice as soon as reasonably possible in light of all of the particular and unique circumstances surrounding the individual case after insurance coverage was known or should have been known through the exercise of due diligence. MCCABE v. ST. PAUL FIRE AND MARINE INS. CO., 25 Misc 3d 726, (2009), aff'd 79 AD3d 1612 (4th Dept., 2010), lv to app den 2011 NY Slip. Op. 981; ALLSTATE INSURANCE CO., v. MOON, supra.

Based on the record before this Court as reflected by the pleadings, the testimony taken at the framed issue hearing and the exhibits received into evidence, the Court finds as a matter of law that Plaintiff acted diligently in an attempt to secure the relevant insurance information not only from Defendant's insured through correspondence and numerous telephone calls, but also through numerous independent informational and internet investigations and searches as outlined herein above and detailed in the testimony of the various witness.

Furthermore, Plaintiff notified Defendant by the only means left available, the initiation of the underlying action against Defendant's insured, which thereafter delivered the pleadings to Defendant, thereby revealing Defendant's identity and providing notice. Therefore, as a matter of law, under all of the unique factors and dynamics of this particular case, Plaintiff did not unreasonably delay in reporting the claim to Defendant, and the denial of coverage as to Plaintiff is voided.

By reason of the foregoing, and based on the entire record before the Court, Defendant's motion for declaratory judgment is DENIED, and Plaintiff's cross-motion for summary judgment against

Defendant is GRANTED.

AND IT IS SO ORDERED.

ENTER

ANTHONY J. PARIS

J.S.C.

Dated: April 15, 2011

Syracuse, New York