Kotula, Levy and Maloney Win Summary Judgment for Insurer

July 17, 2017 | Insurance Coverage

In an action brought by a successive insurer for contribution against Fireman’s Fund Insurance Company to pay for pollution cleanup costs for a gasoline release from an underground storage tank at a gasoline service station, Michael Kotula, Larry Levy and Robert Maloney won summary judgment dismissing all claims against Fireman’s Fund with prejudice.

After the State of New York notified Fireman’s Fund’s insured, Kirkwood Heating Oil, Inc., the gasoline supplier, and Kirkwood’s then-insurer, Utica Mutual Insurance Company, of the claim involving a gasoline leak causing groundwater contamination that led to the closure of a municipal drinking water well nearby, Utica immediately notified several other successive insurers of Kirkwood, but waited three years to notify Fireman’s Fund.

When the State of New York brought an action under New York’s Navigation Law to recover pollution cleanup costs from the station’s owner/operator, Kirkwood, and Utica, among others, Utica brought a contribution action against Fireman’s Fund and others. Fireman’s Fund successfully moved for summary judgment based on New York’s late notice “no prejudice” rule applicable to insurance policies issued before January 17, 2009. Justice Gerald Connolly of Albany County Supreme Court agreed with Fireman’s Fund that New York’s notice requirements “have been applied among successive insurers and when an insured gives only one of multiple insurers timely notice of a claim, the insurer that received notice may obtain reimbursement from the other insurer only if it gives the other insurer notice of the claim that is reasonable under the circumstances.”

The Court found that “the failure to provide [Fireman’s Fund] notice for approximately three years from the date of the incident is unreasonable in the absence of any adequate excuse.” “In this case, Utica acknowledges that it knew of the claim in 2007 and has provided no explanation as to what took place (i.e. what research or search efforts were made) between its knowledge of the claim in 2007 and the letter requesting additional information of July 10, 2010 regarding additional insurers, approximately three years later.”

To read the decision, click here.

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