Scott McLaughlin Truck & Equipment Sales, Inc. v. Selective Insurance Co. of America

William W. Winchell Jr. was injured in 2001 when plaintiff Jeff Paris, an employee of plaintiff Scott McLaughlin Truck & Equipment Sales, Inc., mistakenly lowered a trailer onto Winchell’s right foot. McLaughlin’s liability insurance carrier, defendant Selective Insurance Company of America, was not notified of the accident until 2005. Selective disclaimed coverage, asserting that McLaughlin had not provided timely notice of the incident.

We affirm. It is well settled that, “if an insurer does not disclaim coverage in writing to the insured as soon as is reasonably possible, it is precluded from disclaiming coverage based upon late notice” (One Beacon Ins. v Travelers Prop. Cas. Co. of Am., 51 AD3d 1198 , 1200 [2008]; see Insurance Law § 3420 [former (d)]; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64 , 67 [2003]; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028 , 1029 [1979]). This is true even if, as Selective claims, McLaughlin’s notice of the claim was, in fact, untimely (see Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d 772 , 774 [2006]; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 67 ; Tex Dev. Co., LLC v Greenwich Ins. Co., 51 AD3d 775 , 778 [2008]). The timeliness of Selective’s disclaimer is measured from the moment when it first learned of the grounds for disclaimer — i.e., that McLaughlin’s notice of claim was arguably late (see Continental Cas. Co. v Stradford, 11 NY3d 443 , 449 [2008]; Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d at 774 ).

Here, Selective was first made aware of the claim in a May 26, 2005 fax which set out the facts of the claim and included a note from McLaughlin’s insurance agent that, to his knowledge, the claim had not been previously reported. Selective did not disclaim on the ground of late notice, however, until July 26, 2005. The burden of justifying that two-month delay in disclaiming rests with Selective and, while the timeliness of such a disclaimer generally presents a question of fact, “an insurer’s explanation is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of the delay” (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 69 ; see Continental Cas. Co. v Stradford, 11 NY3d at 449 ; Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d at 774 ). Selective asserts that difficulties in its investigation of the claim caused the delay, but does not explain why — given the facts made known to it in the May 26, 2005

Cardona, EJ., Spain, Lahtinen and Kane, JJ., concur. Ordered that the order is affirmed, with one bill of costs.