Plaintiff's motion for an order pursuant to C.P.L.R. 2221(d) for leave to reargue this court's decision and order dated November 26, 2012, is granted. Upon reargument, this court vacates its prior decision and order and grants summary judgment in plaintiff's favor. Plaintiff's motion for an order directing defendants to remit payment to plaintiff in satisfaction of the underlying judgment in the amount of $81,910.00, plus interest commencing from December 28, 2010, is granted.

By decision and order dated November 26, 2012, this court granted defendants' cross-motion for summary judgment and dismissed plaintiff's complaint. This court determined that plaintiff's failure to provide independent notice of her lawsuit to defendants, a condition precedent, precluded plaintiff from maintaining a direct action against defendants pursuant to Insurance Law § 3402(b)(2).

Plaintiff seeks to re-enter a default judgment obtained against defendants' insureds in an underlying personal injury action. Plaintiff was a passenger involved in a motor vehicle accident on March 10, 2008 with defendants' insureds. After an inquest, plaintiff was awarded a judgment in the amount of $75,000.00, plus interest commencing from February 9, 2010, plus costs and disbursements, for a total judgment of $81,910.00.

After securing a default judgment against defendants' insureds, plaintiff mailed a copy of the judgment along with a request for payment to defendants on January 4, 2011. Prior to January 4, 2011, neither plaintiff nor defendants' insureds provided notice of the underlying action to defendants. By letter dated November 8, 2011, defendants disclaimed coverage for the accident due to their insureds' lack of cooperation and violation of conditions to coverage. [*2]

Plaintiff argues that this court overlooked relevant facts and misapplied the law in rendering its previous decision and order. Plaintiff cites to How Shim Yu v. General Sec. Ins. Co., 95 AD3d 627 (1st Dept. 2012), wherein the Appellate Division held that an insurer's failure to timely disclaim coverage precludes an effective disclaimer in spite of an insured's untimely notice of the incident to the insurer. Despite knowledge of the lawsuit in January 2011, plaintiff asserts that defendants failed to disclaim coverage until ten months later in November 2011. Plaintiff argues that defendants' failure to proffer any sort of excuse to explain its delay renders the disclaimer ineffective.

Defendants oppose the instant motion in its entirety and assert that this court should adhere to its previous decision. Defendants argue that plaintiff has failed to demonstrate how this court overlooked or misapprehended a relevant fact or controlling principle of law. As such, defendants aver that this motion should be denied outright.

As argued in the initial round of motion practice, defendants aver that plaintiff's contentions surrounding the timeliness of defendants' disclaimer is only relevant if plaintiff first provided notice of her lawsuit to defendants. Without satisfaction of this condition precedent, defendants maintain that their duty to timely disclaim coverage never arose. Defendants assert that plaintiff cannot recover under Insurance Law § 3420(b)(2) because she never notified defendants of her lawsuit against the insureds, a violation of a condition precedent coverage.

Plaintiff's motion for leave to reargue is defective as plaintiff failed to submit a copy of her initial moving papers and papers in opposition in accordance with C.P.L.R. 2214(c). Plaintiff's papers consist solely on an affirmation in support by counsel and a copy of this court's previous decision and order. This court notes that defendants have failed to raise this defect in its opposition. "[J]ust as a court should not be compelled to retrieve the clerk's file in connection with its consideration of subsequent motions,' a court should likewise not be compelled, absent a rule providing otherwise, to locate previously submitted documents in the electronic record in considering subsequent motions." Biscone v. JetBlue Airways, Corp., 103 AD3d 158, 179 (2nd Dept. 2012) (internal citations omitted). However, in light of the fact that defendants submitted papers in opposition to the instant motion, this court will overlook the procedural defect and reconsider its previous decision and order. C.P.L.R. 2001.

C.P.L.R. 2221 (d) provides that a motion for leave to reargue "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." " A motion for reargument, addressed to the discretion of the court, is designed to afford a party an opportunity to establish that the court overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law. Its purpose is not to serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided.'" Mangine v. Keller, 182 AD2d 476, 477 (1st Dept. 1992), quoting Foley v. Roche, 68 AD2d 558, 567 (1st Dept. 1979).

Insurance Law § 3420(d)(2) provides that if "an insurer shall disclaim liability or deny coverage for death or bodily injury it shall give written notice as soon as is reasonably possible [*3]of such disclaimer of liability or denial of coverage." "When an insurer fails to do so, it is precluded from disclaiming coverage based upon late notice, even where the insured has in the first instance failed to provide the insurer with timely notice of the accident." Hunter Roberts Constr. Group, LLC v. Arch Ins. Co., 75 AD3d 404, 408-409 (1st Dept. 2010). The "timeliness of an insurer's disclaimer is measured from the point in time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage." First Financial Ins. Co. v. Jetco Contracting Corp., 1 NY3d 64, 68-69 (2003), quoting Matter of Allcity Ins. Co. v. Jimenez, 78 NY2d 1054, 1056 (1991). Where there is a delay is disclaiming coverage, the insurer bears the burden of explaining the delay. See, State of New York v. General Star Indem. Co., 299 AD2d 537 (2nd Dept. 2002).

Even though the insureds had a duty under the terms of the insurance policy to provide notice of the underlying personal injury action to defendants, plaintiff also had the right under Insurance Law § 3420(a)(3) to provide such notice to defendants. "A liability insurer, which has a duty to indemnify and often also to defend, requires timely notice of lawsuit in order to be able to take an active, early role in the litigation process and in any settlement discussions and to set adequate reserves." Argo Corp. v. Greater NY Ins., 4 NY3d 332, 340 (2005); see also, American Tr. Ins. Co. v. Sartor, 3 NY3d 71, 75 (2004). Absent a showing of prejudice, an insurer is not entitled to disclaim coverage based upon late notice of suit, where the notice of claim was timely. See, Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d 491 (2002); American Tr. Ins. Co. v. B.O. Astra Mgt. Corp., 39 AD3d 432 (1st Dept. 2007), lv denied 9 NY3d 802(2007); City of New York v. Continental Cas. Co., 27 AD3d 28 (1st Dept. 2005).

Defendants first learned of the accident on April 29, 2008, when Empire received a notice of representation from plaintiff's former counsel. Thereafter, defendants sent plaintiff's then counsel a letter dated May 19, 2008 acknowledging receipt of the letter of representation. By letter dated February 6, 2009, plaintiff's current counsel sent a letter of representation to defendants. It is undisputed that defendants received a timely notice of claim.

Here, defendants first learned of the underlying action only after plaintiff had already obtained a default judgment against the insureds. Plaintiff purposefully chose not to notify defendants of the commencement of the underlying action and her motion for a default judgment. As a result, defendants were deprived of their right to interpose a defense against plaintiff's claims in the underlying action. Defendants have made a sufficient showing that they were prejudiced by the untimely notice of suit permitting them to disclaim coverage. However, once defendants learned of the reasons for a disclaimer or a denial of coverage, defendants had a duty to timely disclaim coverage. Any delay in providing a timely disclaimer requires an explanation by the insurer for the delay. Although defendants learned of the default judgment in January 2011, defendants did not disclaim coverage until at least November 2011. Since defendants have failed to provide an explanation for the delay, this court finds that their disclaimer of coverage was ineffective in spite of plaintiff's untimely notice of suit.

Accordingly, plaintiff's motion for an order pursuant to C.P.L.R. 2221(d) for leave to reargue this court's decision and order dated November 26, 2012, is granted. Upon reargument, this court vacates its prior decision and order and grants summary judgment in plaintiff's favor. [*4]Plaintiff's motion for an order directing defendants to remit payment to plaintiff in satisfaction of the underlying judgment in the amount of $81,910.00, plus interest commencing from December 28, 2010, is granted.

This constitutes the decision of this court.

Settle order and judgment.

Dated:July 22, 2013

ENTER:

________________________

J.S.C.