The following papers have been read on this motion:

Notice of Motion/Order to Show Cause/Papers Numbered

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-4

Opposing Affidavits (Affirmations)5,6

Reply Affidavits (Affirmations)7,9

_______________(Affirmation)_

Other Papers

Was it unreasonable as a matter of law for the plaintiff in the underlying litigation to rely upon the response to discovery signed by the defendant's attorney which only identified the primary insurance warranting dismissal of the instant action brought under Insurance Law �3420?

This Court holds that as the plaintiff relied upon the representations contained within the response to discovery demands a question of fact exists as to the reasonableness and diligence of the plaintiff in ascertaining the existence and identity of the excess insurance carrier and therefore summary judgment is inappropriate.

During the discovery phase of the litigation, demands were made for disclosure of insurance coverage. A preliminary Conference Order which required full disclosure of insurance coverage, including excess and/or umbrella coverage. The order was signed and stipulated to by SBP's attorneys Wilson, Elser, Moskowitz, Edelman & Dicker, LLP ("Wilson Elser"), who were procured by the primary insurance carrier, on December 4, 2000. Plaintiff's attorney sent a letter to Wilson Elser, dated June 5, 2001, which requested compliance with the court's directive to provide insurance information. By notice dated June 6, 2001, Wilson Elser certified that Lloyds of London was an insurer, with a policy having a limit of $1 Million Dollars. The notice was signed by a member of Wilson Elser.^[FN1]

Plaintiff's attorney in the underlying personal injury action, Dinkes & Schwitzer alleges in his affirmation, that shortly before the damages trial, in March of 2003, Wilson Elser indicated that their client may have excess coverage.^[FN2] Plaintiff's attorneys followed up with an additional demand for insurance disclosure. On April 29, 2003, approximately, two weeks pre-trial Wilson Elser notified counsel that SBP was insured with an umbrella or excess policy through an AIG company, National Union.^[FN3]

On April 24, 2003, SBP sent notice of the claim to National Union. Thereafter by letter dated April 29, 2003, plaintiff through his attorneys notified AIG of the action.^[FN4] On May 14, 2003, [*3]National Union disclaimed coverage to its insured SBP on the ground of late notice. The disclaimer letter was copied to plaintiff's attorney.

Plaintiff and his wife were awarded $8,522,613 in damages by a jury. The settled for $6,122,000 and were paid $2 Million. Part of the settlement included an assignment of SBP's rights against national Union under its excess policy, against its broker, and against its attorneys, Wilson Elser. Through that assignment plaintiff brought a claim for indemnification which was dismissed on a summary judgment motion. This action seeks to enforce plaintiff's independent statutory rights against National Union.

This Court explicitly noted that any "issues of due diligence that devolve to that claim [the independent right to give notice], cannot be litigated in this action since the claimant is not a party to this action and here can rely only on the effectiveness of the notice given by its assignor." Further the decision reserved plaintiff's right of action in their own names. Therefore, the prior decision did not rule on the instant issues and the matter is properly before this Court.

Plaintiff and defendant both move for summary judgment. Plaintiff asserts that summary judgment is appropriate based essentially on two grounds. First, the disclaimer issued by National Union is ineffective against plaintiff as it does not cite plaintiff's actions as grounds for disclaiming coverage and was not timely. Second, that plaintiff's notice to National Union was timely as a matter of law because plaintiff acted diligently in his attempt to discover any insurance coverage and upon SBP's disclosure of excess coverage timely notified National Union. Plaintiff now claims that as it now moves as a judgment creditor under Insurance Law �3420 there is no genuine issue of material fact as to National Union's obligation to satisfy the outstanding judgment.

Conversely, National Union asserts that summary judgment should be granted in its favor for three reasons. First, that SBP's untimely notice vitiated coverage under the policy. Second that plaintiff's claim is barred due to national Union's proper disclaimer of coverage. Third, plaintiffs failed to act diligently in their attempt to ascertain the existence of insurance coverage.

An injured party is statutorily provided with an independent right to give notice of the accident and to satisfy the notice requirement of the policy. "If the injured person proceeds diligently to ascertain the existence of coverage and to give the required notice to the insurer, he will not be charged with any delay on the part of the assured. In evaluating the timeliness of such notice, it is well established that notice by the injured party is not to be measured by the same standard as notice by the insured, since [w]hat is reasonably possible for the insured may not be reasonably possible [*4]for the person he has injured." Lauritano v. American Fid. Fire Ins. Co., 3 AD2d 564 [1st Dep't 1957]. An injured party will not be charged vicariously with an insured's delay. Sputnik Restaurant Corp. v. United nat. Ins. Co., 62 AD3d 689 [2d Dep't 2009].

The injured party has the burden of proving that he or his counsel acted diligently in attempting to ascertain the identity of the insurer and thereafter expeditiously notified the insurer. Eveready Insurance Company v. Chavis, 150 AD2d 332 [1989] (internal citations omitted). The "reasonableness of the delay and the sufficiency of the excuse offered is a matter for trial." Id. Only when there is no excuse or mitigating circumstances offered is the issue a question for the courts. Id.

Plaintiff's assertion that the disclaimer issued by National Union is ineffective against plaintiff is flawed. Generally, a carrier's disclaimer based on late notice by its insured, but not based on late notice of the injured party is ineffective against the injured party's rights against the carrier. Vacca v. State Farm Insurance Company, 15 AD3d 473 [2d. Dep't ]. However, that rule is applicable where the injured party provides notice prior to the insured or is the only party to provide notice. In this case, the insured, SBP provided notice, albeit untimely, prior to the plaintiff. The courts have previously held that "subsequent information provided by the injured party [is], for notice purposes, superfluous, because there was already prima facie compliance with the contractual notice requirements of the policy." Massachusetts Bay Ins. Co. v. Flood, 128 AD2d 683 [2d Dep't 1987]. Furthermore, it is well established that a disclaimer sent to the insured with a copy to the claimant's counsel comports with the mandates of Insurance Law �3420(d). Excelsior Ins. Co. v. Antretter Contracting Corp., 262 AD2d 124 [1st Dep't 1999]. Therefore, plaintiff's initial arguments fail to establish a prima facie entitlement to summary judgment.

Plaintiff's second argument based on his diligence in attempting to discover SBP's insurance coverage and upon his notice to National Union within a few days of SBP's disclosure of excess coverage likewise fails to prima facie entitle plaintiff to summary judgment. In this case, plaintiff through his attorneys in the original action, brought in July of 2000, sought general discovery demands, which included insurance coverage.^[FN6] During the course of discovery a preliminary conference order (the "PC Order") was entered into which required SBP to disclose all insurance coverage. As the "general discovery demands" are not identified and the underlying personal injury records are not before the Court on this motion, the earliest demands for insurance coverage appear to be contained within the PC Order dated December 4, 2000. Thereafter by letter dated June 5, 2001, six months after the PC Order, plaintiff's attorneys sought the insurance information, which in violation of the order, had not been disclosed. In response Wilson Elser provided a response to the demand with the defendant's primary insurance information only.

Defendant contends that plaintiff failed to "constantly and aggressively press the search" in [*5]ascertaining whether defendant was insured with excess coverage. Further defendants claim that plaintiff's failure to send letters specifically requesting excess coverage, serve additional discovery demands, ask questions at the depositions pertaining to coverage, or file any motions to compel information regarding excess coverage was, as a matter of law, insufficient. In support of their position, defendant relies on several cases which are distinguishable. In the cases relied upon the party had failed to comply with discovery demands for insurance coverage in toto or were acting in an evasive and noncompliant manner. In the instant matter the defendant did respond to the demands and gave no implication that additional information would be forthcoming. However the response was obviously incomplete as SBP failed to indicate their excess coverage.

According to the defendant plaintiff failed to act diligently as a matter of law. Defendant contends that in order to be diligent, plaintiff was required to continue to request insurance information after the defendants had disclosed their insurance carrier. This position ignores the duty placed on members of the bar pursuant to the ethics rules and 22 NYCRR 130 to certify that the information contained in papers bearing their signatures do not contain material misrepresentations. It further ignores the overall duty to disclose and supplement discovery responses and undermines the general goals of discovery, to get to the truth. See generally CPLR �3101.

While the reality of discovery may be that repeated requests followed by motions under CPLR � 3126 are necessary to extract the relevant information to prosecute or defend the action this Court will not find that as a matter of law an attorney is unable to rely upon a fellow member of the bar's assertion found within litigation documents. It was reasonable to rely upon Wilson Elser's disclosure of insurance coverage as it was contained within a signed document. However, this Court cannot find that all of plaintiff's were diligent as a matter of law as that determination is a question of fact.

The Court notes as well that defendant was notified prior to trial and chose to limit its actions to a single disclaimer letter. National Union had at its disposal an arsenal of litigation procedures which it could have utilized, the most obvious, a declaratory judgment action. National Union asserts a heavy burden for the plaintiff to bear in proving diligence yet in its own actions deems a single letter sufficient to protect its interests. The defendant's actions may not have been sufficiently proactive to deny the plaintiff his claim to the insurance proceeds.

The determination of whether plaintiff proceeded diligently in the search for excess coverage and timely notified defendant is a matter for the trier of fact. Therefore, the motions are denied.

This constitutes the decision and order of the court.

J.S.C.