Nicholas M. Kaess, Claimant,
The State of New York, Defendant. THE STATE OF NEW YORK, Third-Party Claimant, ARCH INSURANCE COMPANY, Third-Party Defendant.
For Claimant: Proner & Proner, By: No Appearance
For Defendant: Hon. Eric T. Schneiderman, Attorney General, John L. Belford, IV, Assistant Attorney General
For Third-Party Defendant: D'Amato & Lynch, LLP, Kevin J. Windels, Esq.
Gina M. Lopez-Summa, J.
The following papers were read and considered by the court on these motions: Third-Party Claimant's Notice of Motion, Third-Party Claimant's Affirmation with annexed Exhibits A-L, Third-Party Claimant's Memorandum of Law, Third-Party Defendant's Notice of Cross-Motion, Third-Party Defendant's Affidavit with annexed Exhibits A-E, Third-Party Defendant's Memorandum of Law, Third-Party Claimant's Affirmation in Opposition with annexed Exhibit M, Third-Party Claimant's Memorandum of Law in Opposition, Third-Party Defendant's Reply Affirmation with annexed Exhibits 1-2 and Third-Party Defendant's Reply Memorandum of Law.
Third-Party Claimant, the State of New York, has brought this motion pursuant to CPLR § 3001 seeking an order granting a declaratory judgment which would require, Third-Party Defendant, Arch Insurance (Arch), to defend and indemnify the State in the underlying action. Arch has initiated a cross-motion pursuant to CPLR § 3212 seeking an order granting it summary judgment and dismissing the Third-Party claim.
The underlying action in this matter concerns the claim of claimant, Nicholas Kaess, wherein he asserts that on July 1, 2009, at approximately 12:45 a.m., he was operating a motorcycle northbound on Route 347, approximately 250 feet south of Alexander Avenue, Town of Brookhaven, County of Suffolk, State of New York. Claimant was injured when the motorcycle he was operating on Route 347 collided with a motor vehicle which was owned by Kamac Trucking Corp. (Kamac) and operated by a private individual. At the time of the accident, the Kamac vehicle was allegedly entering Route 347 from a construction yard site located on the side of the roadway. Claimant alleges that the State was negligent in the construction, maintenance and design of the construction yard and in failing to post appropriate warnings for both the trucks that would be entering and exiting the construction yard and for motorists on Route 347. Claimant also provides a 30 line catch-all sentence in which he lists a number of allegations against defendant.
Claimant served a notice of intention upon defendant on August 11, 2009 in which he raised similar allegations to those that he later included in the claim. The claim was filed on July 16, 2010. Claimant attached photographs of the location and a police report to the notice of intention.
The State asserts that the Kamac Trucking Corp. is a subsidiary of ALAC Contracting Corp. (ALAC). ALAC was working under a construction contract it had entered into with the New York State Department of Transportation (NYSDOT). After receiving the underlying notice of intention a State investigator was assigned to the file in the Suffolk Regional Office of the Attorney General's Office on September 22, 2009. The State investigated and concluded that ALAC had purchased an insurance policy from Arch which required Arch to defend and indemnify the State for any claims arising under the policy.
In a letter dated November 6, 2009, the State allegedly notified Arch that a notice of intention had been served on the State. The letter requested that Arch confirm its defense and indemnification of the State pursuant to the insurance policy. Arch concedes receiving the November 6, 2009 letter with a copy of claimant's notice of intention on November 10, 2009. In a letter dated December 10, 2009, Arch disclaimed coverage under the policy, claiming that the State had failed to comply with a condition precedent to coverage. Specifically, Arch claimed that under section IV subsection 4 of the insurance policy the State was required to notify Arch of an "occurrence" and/or "suit" "as soon as practicable." Arch claimed that the State was not entitled to coverage under the insurance policy due to the State's failure to comply with the "as soon as practicable" condition precedent to the policy.
In response, the State served Arch with a notice of impleader on March 14, 2011 and a third-party claim on April 18, 2011. In it answer dated May 16, 2011, Arch restated its reasons for disclaiming in its affirmative defenses.
Defendant argues that ALAC was contractually obligated to purchase and maintain insurance policies naming the State as an insured. Arch concedes that it issued a Special Protective and Highway Liability Insurance Policy (Policy) to ALAC under which the State was an insured. The Policy period ran from April 11, 2008 through April 11, 2011. The Policy was in effect on the date of claimant's underlying accident and covers the project in question. The State argues that since the acts complained of in the underlying claim occurred during the course and within the scope of the Policy the State is entitled to defense and indemnification from Arch in the underlying action.
Further, the State avers that it did not delay in notifying Arch of a "suit" and that the State notified Arch of the "occurrence" "as soon as practicable."
Arch contends that the State, as an insured under the Policy, had the duty to notify Arch as soon as practicable of an occurrence that may result in a claim or a "suit." Arch continues that the notice of intention constitutes, at the very least, an occurrence as defined by the Policy and the State was required to submit the notice of intention to Arch as soon as practicable. The Policy defines the term "occurrence" as "an accident including continuous or repeated exposure to substantially the same general harmful conditions." The Policy defines the term "suit" as "a civil proceeding in which damages because of bodily injury' or property damage' to which this insurance applies are alleged." "Suit" includes "[a]n arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with [the insurer's] consent" or "[a]ny ...