District court’s grant of summary judgment was affirmed where plaintiff failed to promptly notify defendant insurer of the damage, as required by the policy.

NOTE: Unpublished opinion

The plaintiff appealed from the order of a district court granting summary judgment in favor of the defendant with regard to the plaintiff’s breach of contract counts arising from a property damage claim. The district court determined as a matter of law that: (1) the plaintiff’s notice of property damage to the defendant insurer was untimely and unexcused; (2) the plaintiff’s lawsuit was untimely; (3) the plaintiff had breached the cooperation clause of the policy; and (4) the plaintiff’s bad faith contractual claims were not cognizable. On appeal, the plaintiff argued that the district court had made incorrect conclusions of fact regarding the reasonableness of his excuse for the late notice. The Second Circuit noted that notice-of-occurrence provisions in insurance contracts are generally upheld to aid insurers in early investigations, detection of fraud claims and proper capital allocation. The court held that, even when viewed in the light most favorable to the plaintiff, the plaintiff’s notice of the damages to the defendant was untimely. The policy required the plaintiff to provide the defendant with “prompt notice of the loss or damage.” The plaintiff did not dispute when he first notified the defendant of the damage but, rather, the reasonableness of his excuses justifying delayed notice. The plaintiff claimed that he thought the building damage was his neighbor’s responsibility. As a result, he did not promptly notify his insurer. The court found this excuse unavailing. Delay is not excused simply because the insured thought that someone else was responsible for the damage. The plaintiff also alleged that he had investigated and documented the building’s cracks and wall shifts between his discovery of the damage in December 2006 and his notification to the defendant in January 2008. These unilateral initiatives, however, could not substitute the requirement of timely notification to the defendant. The court noted that, where coverage is unclear, a reasonable insured gives notice to its insurer. Furthermore, the plaintiff’s notice of the damage to his broker in December 2006 was not a proper substitute for notice to the defendant under New York law. Thus, the plaintiff’s failure to comply with the notice provision of the policy was fatal to his claim, and the district court’s grant of summary judgment was affirmed.

Case Law Alert - 1st Quarter 2013