The Second Department determined the insured’s delay in notifying the insurer of the action against the insured relieved the insurer of the obligation to satisfy the judgment against the insured. The Second Department further noted that the delay in disclaiming coverage was justified by the insurer’s need to investigate:
Where an insurance policy requires that notice of an occurrence be given “as soon as practicable,” notice must be given within a reasonable time in view of all of the circumstances … . “The insured’s failure to satisfy the notice requirement constitutes a failure to comply with a condition precedent which, as a matter of law, vitiates the contract'” …. “However, circumstances may exist that will excuse or explain the insured’s delay in giving notice, such as a reasonable belief in nonliability” … . It is the insured’s burden to demonstrate the reasonableness of the excuse … .
Here, the defendant Scottsdale Insurance Comp any (hereinafter Scottsdale) established its prima facie entitlement to judgment as a matter of law. Scottsdale demonstrated that its insured knew of the occurrence immediately and received a letter of representation from the plaintiff’s attorney in June 2008, but waited until September 25, 2009, to notify Scottsdale … . Since the subject policy was issued prior to the amendment to Insurance Law § 3420, Scottsdale was not required to show that it was prejudiced by the failure to give timely notice in order to satisfy its prima facie burden … . In opposition, the plaintiff failed to raise a triable issue of fact as to whether the insured’s delay in notifying Scottsdale was reasonable based upon its good faith belief in nonliability … . Ramlochan v Scottsdale Ins. Co., 2017 NY Slip Op 04159, 2nd Dept 5-24-17
INSURANCE LAW (INSURED’S FAILURE TO NOTIFY INSURER OF THE ACTION AGAINST THE INSURED RELIEVED THE INSURER OF ANY OBLIGATION TO SATISFY THE JUDGMENT AGAINST THE INSURED)