109 A.D.3d 514
N.Y. App. Div.2013Background
- Plaintiff sued Monadnock, Related, Amsterdam, and Sylgar for injuries allegedly suffered while working for Bedroc at 350 Amsterdam Ave.; claims included negligence and Labor Law violations.
- Monadnock, Amsterdam, and Sylgar third‑partied Bedroc seeking indemnification and related relief; they served a second third‑party complaint on American Safety Casualty Insurance Co. (ASCIC) and American Safety Claims Services, Inc. (ASCSI) alleging ASCIC issued a liability policy to Bedroc for the project.
- ASCIC/ASCSI disclaimed coverage to Bedroc, citing late notice and certain policy exclusions (OCIP and employee bodily injury); Bedroc filed a cross claim seeking a declaration that ASCIC must defend and indemnify it.
- Bedroc moved for summary judgment on its cross claim; ASCIC/ASCSI cross‑moved for summary judgment declaring no duty to defend or indemnify.
- Supreme Court (Kings County) applied New York law, denied Bedroc’s motion and granted ASCIC/ASCSI’s cross motion; the appellate court reversed, holding New Jersey law governed notice prejudice, ASCIC failed to show prejudice, and exclusions did not bar coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for notice/prejudice question | New York law applies | New Jersey law applies (Bedroc is NJ corp; policy and broker NJ contacts) | New Jersey law applies — domicile/proxy for insured risk governs |
| Effect of late notice on insurer's duty | Late notice does not relieve ASCIC absent proof of prejudice | ASCIC: disclaimer valid due to untimely notice | ASCIC failed to show prejudice under NJ law; disclaimer invalid |
| Applicability of OCIP and employee bodily injury exclusions | Exclusions do not apply to bar coverage for this claim | Exclusions apply and preclude coverage | ASCIC did not meet its burden to show exclusions applied; exclusions inapplicable |
| Relief sought (declaratory judgment) | Declaratory judgment that ASCIC must defend and indemnify Bedroc | Deny declaration; affirm disclaimer/no duty | Court remitted for entry of judgment declaring ASCIC obligated to defend and indemnify Bedroc |
Key Cases Cited
- Matter of Allstate Ins. Co. [Stolarz — New Jersey Mfrs. Ins. Co.], 81 N.Y.2d 219 (choice‑of‑law test; actual conflict and contacts analysis)
- Matter of Midland Ins. Co., 16 N.Y.3d 536 (insured’s domicile as proxy for principal location of risk in multi‑state exposures)
- Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309 (grouping of contacts/center of gravity approach)
- Gazis v. Miller, 186 N.J. 224 (insurer must prove prejudice from late notice under New Jersey law)
- Cooper v. Government Empls. Ins. Co., 51 N.J. 86 (early New Jersey precedent requiring insurer to show prejudice for late notice)
- Chiarello v. Rio, 101 A.D.3d 793 (New York precedent on notice disclaimers under pre‑2009 policies)