Rivkin Radler Secures Affirmance of Summary Judgment On Behalf of State Farm

February 2, 2017 | Appeals | Insurance Coverage

Rivkin Radler recently secured an affirmance of summary judgment from the United States Court of Appeals  for the Second Circuit in favor of State Farm Fire & Casualty Company, based on the insureds’ failure to comply with the policy condition that requires prompt reporting  of the loss. In this case the plaintiffs, Nikolai and Hartyun Minasian allegedly suffered a theft of jewelry.  While the alleged theft was immediately reported to the police, the plaintiffs waited 86 days before reporting the loss to State Farm and another insurer.

In affirming the grant of summary judgment, the Second Circuit Court of Appeals noted that the notice obligation is triggered when “the circumstances known to the insured…would have suggested to a reasonable person the possibility of a claim.”  In affirming the District Court’s grant of summary judgment dismissing the complaint, the Second Circuit held that the policy language at issue was unambiguous and the reasons advanced by the plaintiffs for the delay—that they were waiting for the police to complete the investigation and that they lacked the sophistication to understand their obligations under the policy—were simply unreasonable as a matter of law.

The case also highlights the distinction in New York law between claims of late notice in first versus third party claims.  N.Y. Insurance Law §3420, which applies only to policies insuring against claims by third parties for bodily injury and property damage, imposes a prejudice requirement on insurers claiming late notice.  However, New York law is clear that there is no prejudice requirement in first-party claims, like the one at issue here.

To read the original decision by the District Court, Click Here.

To read the Order issued by the Second Circuit Court of Appeals, Click Here.

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