Opinion
0015302/04.
Decided July 16, 2004.
Respondent Kristos Katehis filed a demand for arbitration to resolve an uninsured motorist claim with State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company. Respondent claims he was injured as a result of an automobile accident which occurred on October 2, 2000 at East 116th Street between Lexington Avenue and Third Avenue, wherein the alleged offending vehicle left the scene. Petitioners now seek a permanent stay to the arbitration, asserting that respondent made untimely notice of his uninsured motorist claim. In the alternative, petitioners ask for a temporary stay to conduct further discover in aid of arbitration. Respondent maintains that he was duly diligent in trying to ascertain the offending vehicle's insurance, and therefore made timely notification of his uninsured motorist claim. However, for the following reasons, the petitioner's permanent stay is granted.
Civil Practice Law and Rules § 7503(c) states that "[a]n application to stay arbitration must be made by the party served within 20 days after service upon him of the notice or demand." In conjunction operates General Construction Law § 25(a): "When any period of time, computed from a certain day, within which or after which or before which an act is authorized or required to be done, ends on a Saturday, Sunday, or public holiday, such act may be done on the next succeeding business day . . ."
Respondent affirms that the Demand for Arbitration was served on State Farm Mutual Auto Insurance, by certified mail, on April 5, 2004. Affirmation in Opp'n. ¶ 3. Although C.P.L.R. § 7503(c) would have allowed April 25, 2004 as the final day to petition to stay arbitration, April 25, 2004 was a Sunday. Thus, according to Gen. Constr. Law § 25(a), petitioner's petition to stay arbitration, served on Monday April 26, 2004, is timely.
In order for an uninsured motorist claim to successfully proceed to arbitration, the claim must be filed with one's insurance carrier "as soon as practicable." Pet. to Stay Arbitration, Ex. B (quoting State Farm UM and SUM coverage policy); see, Matter of Kauffman, 25 A.D.2d 419, 419 (1st Dept 1966); see also, Matter of State Farm Mutual Automobile v. Fuccio, 288 A.D.2d 46, 47 (1st Dept 2001); accord, Matter Travelers Insurance Company v. DeLosh, 249 A.D.2d 924, 924 (4th Dept 1998). Providing such notice is the "condition precedent" to receiving uninsured motorist benefits for two reasons. Application of Merchants Mutual Insurance Company v. Anziano, 59 Misc.2d 673, 676 (1969) (citing Matter of Kauffman, 25 A.D.2d 419, 419 (1st Dept 1966)). The notice requirement serves "to permit the insurer to investigate and prepare while claims are fresh and memories have not faded, and to permit the insurer to obtain an early physical examination." Id. Finally, the "as soon as practicable" time period begins to toll on the date of the accident. Matter of State Farm Mutual Insurance Company v. Pizzonia, 147 A.D.2d 703, 704 (2nd Dept 1989).
Yet at the same time, "[i]t is well settled that the phrase 'as soon as practicable' is an elastic one, not to be defined in a vacuum" which calls "for a determination of what was within a reasonable time in light of the facts and circumstances of the case at hand." Mighty Midgets, Inc. v. Centennial Insurance Company, 47 N.Y.2d 12 (1979); e.g., Matter of Metropolitan Property and Casualty Insurance Company v. Mancuso, 93 N.Y.2d 487, 494 (1999). Thus the term requires a case by case analysis rather than an "ironbound" yardstick. See, Mighty Midgets, Inc. v. Centennial Insurance Company, 47 N.Y.2d at 19. Hence a reasonable excuse can justify an untimely delay in filing an uninsured motorist claim. See, Witriol v. Travelers Insurance Group, 251 A.D.2d 497, 498 (2nd Dept 1998); see also, New York Central Mutual Fire Insurance Company v. Szymaszek, 305 A.D.2d 988, 989 (4th Dept 2003).
The burden of providing such a reasonable excuse is upon the insured. Delosh, 249 A.D.2d at 925, Travelers Indemnity Company v. Worthy, 281 A.D.2d 411, 412 (2nd Dept 2001). Likewise, the reasonableness of the excuse is determined on a case-by-case basis, and so is a question of fact. Witriol, 251 A.D.2d at 498. In order for the insured to prevail with their excuse for delayed notice, the facts must show that the insured exercised due diligence in "(1) ascertaining the insurance status of the other operator, and (2) giving notice once his lack of insurance is discovered." Anziano, 59 Misc.2d at 676; accord, Pizzonia, 147 A.D.2d at 704.
Lastly, if the insurance company is to deny coverage of a potential uninsured motorist claim, such a denial must be made within a reasonable time of being notified of the claim. Pizzonia, 147 A.D.2d at 704. "Reasonableness is the standard by which the insurer's action is judged and reasonableness is a question of fact determined upon the circumstances of the case which require the insurer to take more or less time to make, complete and act diligently on the investigation of its coverage." Aetna Casualty and Surety Company v. Brice, 72 A.D.2d 927, 927 (2nd Dept 1979).
Here State Farm Mutual Automobile Insurance Company's and State Farm Fire and Casualty Company's policy states in pertinent part that a claim for uninsured motorist shall be made in writing "as soon as practicable." Pet. To Stay Arbitration, Ex. B, page 3. However, respondent did not provide notice to State Farm insurance company until approximately thirty months after the accident for which he seeks recovery occurred. The accident occurred on October 2, 2000 and respondent's first evidence of contacting petitioner insurance company is on May 20, 2003. Without an excuse, such a delay "demonstrates a lack of diligence." Fuccio, 288 A.D.2d at 46 (granted insurer's petition to stay arbitration when respondent had no excuse in delay of more than 19 months before contacting insurance company); e.g., Szymaszek, 305 A.D.2d at 988 (granted insurer's permanent stay of arbitration when respondent waited three years to notify insurer of SUM claim).
Here, respondent offers some evidence of his attempts to identify the offending vehicle, of identifying the insurance coverage of the offending vehicle, and of giving notice once the lack of insurance was realized. Respondent asserts that in the first two years after the accident, he retained two different lawyers successively. Both lawyers were unable to locate the police report of the accident or the license plate number of the offending vehicle, despite retaining the help of private investigators. In actuality, this is because a police report was not filed for the accident until two years after its occurrence. But, "[t]he results of those inquiries should have alerted him to the fact that he had a potential uninsured motorist claim." Matter of Nova Casualty Company v. Helmstadt, 204 A.D.2d 330, 330 (2nd Dept 1994); see, generally, Security Mutual Insurance Company of New York v. Acker-Fitzsimons Corporation, 31 N.Y.2d 436 (1976) (noting that the need to alert one's insurance company of a potential claim is the responsibility of the insured when it can reasonably be deduced from the circumstances that a claim may soon arise). Especially since respondent retained counsel during this entire period of time, it was both possible and reasonable for respondent to have notified petitioner of a potential claim. See, Matter of Shehata v. Government Employees Insurance Company, 66 A.D.2d 821, 821 (2nd Dept 1978) (citing Matter of Acevedo v. Motor Vehicle Accident Indemnification Corporation, 56 A.D.2d 817, 817) (seven month delay in giving notice to insurance company considered untimely as a matter of law)); see, also, Matter of Becton v. Motor Vehicle Accident Indemnification Corporation, 35 A.D.2d 660, 660 (1st Dept 1970) (nine month delay in notifying MVAIC of intention to make claim considered untimely as matter of law); accord, Matter of Nassau Insurance Company v. Doyle, 114 A.D.2d 899, 899-900 (2nd Dept 1985). Thus, although there is some evidence to suggest respondent exercised some diligence in trying to ascertain the identity of the offending vehicle, there is no sensible reason as to why he failed to notify petitioner during the first two year period when there was already some evidence that he was dealing with a potential uninsured motorist.
Thus, respondent's failure to notify petitioner of a potential uninsured motorist claim after two years only because of a lack of a police report with the offending vehicle's license number represents a lack of diligence and "forecloses a finding that notice had been filed as soon as practicable." State Farm Mutual Automobile Insurance Company v. Romero, 109 A.D.2d 786, 788 (2nd Dept 1985); see, generally, Matter of Country-Wide Insurance Company v. Aubry, 233 A.D.2d 189, 189 (1st Dept 1996). The point of notifying the insurance company of a potential claims is to allow the insurance company to conduct investigations into the accident, such as interviewing witnesses with fresh memories, and take medical examinations as soon as possible after the accident. See Anziano, 59 Misc.2d at 676 (citing Matter of Kauffman, 25 A.D.2d 419, 419 (1st Dept 1966); see, also, Power Authority v. Westinghouse Electric Corporation, 117 A.D.2d 336, 339 (1st Dept 1986). Consequently, "[a]bsent a valid excuse, failure to satisfy an insurance policy notice requirement vitiates coverage." Matter of Allcity Insurance Company v. Jimenez, 78 N.Y.2d 1054, 1055 (1991).
Lastly, petitioner's denial of coverage of respondent's claim is deemed timely. Insurance Law § 3420(d) provides that:
If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.
Thirty months after the accident, respondent's third attorney notified petitioner of a potential uninsured motorist claim after finally learning the offending vehicle's license number and its lack of insurance. One month later, after receipt of respondent's demand for arbitration, petitioner denied coverage of this claim. Petitioner affirms this month was necessary to investigate and locate, within their records, respondent's policy which was in effect approximately three years earlier. Respondent notified State Farm Mutual Automobile Insurance Company of the claim while respondent actually held a policy with petitioner State Farm Fire and Casualty Company. As such, petitioner's denial of coverage was made "as soon as reasonably possible." Matter of Country-Wide Insurance Company v. Aubry, 233 A.D.2d 189 (1st Dept 1996); Jimenez, 576 N.Y.S.2d at 88 ("The timeliness of an insurer's disclaimer is measured from the point in time when the insurer first learns of the grounds for . . . denial of coverage.")
Based on the foregoing, the court determines respondent lacks a reasonable excuse for his failure to notify petitioner of his uninsured motorist claim "as soon as practicable" and petitioner's denial of coverage is deemed timely and in compliance with the procedures of C.P.L.R. § 7503(c). As a result, petitioner's application to permanently stay arbitration is granted.
Petitioner is directed to serve a copy of this decision and order, with notice of entry, upon respondent via certified mail within 21 days hereof.
This constitutes the court's decision and order.