IROHA CORPORATION d/b/a SAKE BAR HAGI v. KOOKMIN BEST INSURANCE COMPANY, formerly known as LEADING INSURANCE GROUP INSURANCE Co., LTD. (US BRANCH), et al.
Attorneys and Parties
Brief Summary
Insurance coverage—duty to defend; timeliness of notice and insurer prejudice under New York Insurance Law § 3420(a)(5), (c)(2)(C) [adopts a prejudice standard for late notice and allocates the burden of proving prejudice—insurer bears the burden if notice is within two years; after two years, the insured must show no prejudice].
The trial court denied plaintiff’s motion for summary judgment on the duty to defend and granted insurers’ cross-motion, dismissing the complaint.
The grant of the insurers’ cross-motion dismissing the complaint.
There are triable issues of fact as to when notice was required, whether plaintiff’s delay was reasonable, the admissibility of the primary evidence relied upon to show earlier notice, and whether the insurers suffered actual prejudice under Insurance Law § 3420(a)(5), (c)(2)(C).
Background
The underlying claimant, Dylan Riley, allegedly fell on a stairwell at plaintiff’s premises on or about May 28, 2014. Riley’s attorney sent plaintiff a letter on April 9, 2017. Plaintiff notified its insurers by email on April 24, 2017—its first notice to them—and Riley filed a negligence action that same month. Plaintiff sought a declaration that the insurers owed a duty to defend.
Lower Court Decision
Supreme Court, New York County, denied plaintiff’s motion for summary judgment on the duty to defend and granted defendants’ cross-motion, dismissing the complaint.
Appellate Division Reversal
Modified to deny the insurers’ cross-motion; otherwise affirmed. The Appellate Division held that factual disputes exist concerning when plaintiff was obligated to provide notice, the reasonableness of any delay (see Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 42-43 [1st Dept 2002]), the admissibility of the evidence purportedly showing 2014 notice, and whether defendants were actually prejudiced under Insurance Law § 3420(a)(5), (c)(2)(C) (see Salvo v Greater N.Y. Mut. Ins. Co., 213 AD3d 587, 588 [1st Dept 2023]).
Legal Significance
Reaffirms that late-notice disputes and the prejudice requirement under Insurance Law § 3420 commonly present questions of fact that preclude summary judgment, particularly where key proof of early notice is inadmissible and the insurer’s prejudice is not established.
Insurers cannot obtain dismissal on late notice where material facts and admissibility issues remain and prejudice is unresolved; conversely, insureds may be denied summary judgment on the duty to defend when those factual disputes persist.