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New York: New York Civil Law
New York Court of Appeals Addresses Certified Question Regard Insurance Policy's Notice Provision
By Matthew Lerner
When an injured party begins its suit against an insured by serving process on the Secretary of State, who, under New York corporate and limited liability company law, is the insured's agent for such service, does this service suffice to trigger the provisions in the relevant insurance policy that require the insured to inform its insurer in a timely manner that a suit has been brought, where: (a) the insurance policy does not expressly refer to notice that a suit has been brought being (a) the insurance policy does not expressly refer to notice that a suit has been brought being given to an insured's "representative" rather than the insured itself, and (b) the insured plausibly argues that - due to its failure to update its address with the Secretary of State - it had not received actual notice that the suit had been brought?
Briggs Avenue LLC, the owner of an apartment building at 2570 Briggs Avenue in the Bronx, was informed when part of the ceiling in one of the apartments fell down in May 2003, but apparently it was not informed that Nelson Bonilla, the son of the tenant, had been injured. Briggs did not notify its liability insurer, Insurance Corporation of Hannover (ICH), of the incident. When Bonilla filed a $2 million negligence suit against Briggs in July 2003, he served the complaint on New York's Secretary of State, who serves as Briggs's agent for service of process under New York law. The Secretary of State forwarded copies of the complaint to the address it had on file for Briggs, but the company did not receive them. Briggs had moved its office and failed to advise the Secretary of State of its new address.
Briggs became aware of the lawsuit in late March or early April of 2004, when Bonilla moved for a default judgment and directly served the papers on Briggs at its new address. Briggs then notified ICH of the lawsuit. ICH disclaimed coverage, contending that Briggs violated the notification conditions of the policy by failing to notify ICH for eleven months after the ceiling fell and eight months after the suit was filed. The policy required Briggs to notify ICH "as soon as practicable of an 'occurrence' or an offense which may result in a claim," notify it "as soon as practicable" when a suit is filed, and "immediately" send ICH any papers received in connection with a lawsuit.
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