Beneath New York law (and the regulation of different jurisdictions), an unhappy judgment towards an insured stands out as the topic of an motion to get well the judgment towards the insurance coverage firm. Sounds easy, however the claimant, standing within the sneakers of the policyholder, will probably be topic to all of the defenses the insurance coverage firm can carry towards the policyholder to keep away from protection. In a current case, a New York intermediate appellate courtroom needed to tackle this concern and located for the insurance coverage firm.
In Plotkin v. Republic-Franklin Insurance Co., No. 2016-04231 (N.Y. App. Div. second Dep’t Nov. 13, 2019), the underlying claimant obtained a considerable settlement from her employer and its principal stemming from allegations of assault, battery, false imprisonment, sexual misconduct and different claims. The settlement was diminished to a judgment and the claimant commenced an motion beneath New York Insurance Law § 3420(a)(2) to get well the quantity of the unhappy judgment towards the policyholder’s main and umbrella coverages.
In accordance with the courtroom, the claimant’s counsel despatched a letter to the policyholder with a draft criticism in an effort to resolve the matter with out litigation. Roughly three months later, the summons and criticism had been filed. The following month, the insurance coverage firm obtained first discover of the declare. After an investigation, the insurers issued disclaimer letters 29 days later.
The movement courtroom granted the claimant’s abstract judgment movement to dismiss sure affirmative defenses and the insurers appealed. On enchantment, the courtroom reversed and by itself movement granted abstract judgment to the insurers dismissing the criticism.
The courtroom decided that the policyholder’s discover of declare was late. The coverage required discover “as quickly as practicable” and the failure to supply discover inside an inexpensive period of time was a failure to adjust to a situation precedent that “vitiates the contract.” (citations omitted). The courtroom imputed the pre-action declare letter to the corporate based mostly on the principal’s data and rejected any argument of an hostile curiosity exception to the rule of imputed data. Right here, the principal’s receipt of the declare letter was throughout the scope of his employment as an officer of the employer and, as an insured beneath the insurance policies, had an obligation to inform insurers of the declare. The courtroom discovered that the insurers well timed disclaimed protection following a radical and diligent investigation and that the disclaimers had been affordable as a matter of regulation beneath the circumstances.
The courtroom granted abstract judgment to the insurers by itself movement given the distinctive and compelling circumstances of this case and given the wealth of proof supporting judgment in favor of the insurers and dismissed the criticism.