December 02, 2011 : Michael S. Savett Obtains Defense Verdict in Late-Notice Insurance Trial

A Nassau County, New York judge recently affirmed an insurer's disclaimer of coverage premised on a landlord's failure to timely notify her carrier of an accident occurring at her apartment complex. Partner Michael Savett represented the insurer in the litigation from inception through trial.

In November 2008, a tenant allegedly sustained serious burns while using a stove in the basement unit of an apartment building in Queens, New York. Within days of the accident, the tenant notified the landlord of the accident by phone, telling her that he had to be taken to a hospital via ambulance as a result of his injuries. The landlord did not notify her insurer, Public Service Mutual Insurance Company, of the accident at that time because she did not believe the tenant was injured. PSM concluded that the five-month delay from the date the insured learned of the alleged accident to the date she received notice of the tenant's lawsuit was untimely and thereafter disclaimed coverage. The insured later filed suit against PSM.

The landlord testified at her deposition that her late notice should have been excused since she didn't believe that a claim would result; she claimed there was no stove in the apartment and she believed the tenant was drunk at the time of the call to her. The motion judge denied PSM's motion for summary judgment, finding that there were issues of fact surrounding the credibility of the insured's excuse. That decision was affirmed on appeal and the case was remanded for a bench trial.

After hearing trial testimony from the landlord and witnesses from PSM, Judge Vito DeStefano of the Nassau County Supreme Court ruled in favor of the insurer. In a written decision, the judge concluded that the landlord could not have had a reasonable belief that no claim would be made, noting that the undisputed fact that the insured was told of the involvement of an ambulance and hospital should have triggered her obligation to advise her carrier. As a result, PSM has no obligation to defend the landlord in the tort action or indemnify her for any settlement or judgment.

File Under: Results, Insurance, Michael S. Savett