New York Central Mutual Fire Insurance v. Aguirre

R.S. Smith, J.

(dissenting). Claimants were required under the policy to send a notice to the insurance company “[a]s soon as practicable.” The Court today holds, in substance, that this requirement was nullified because the insurance company did not, as soon as possible after as soon as practicable, send claimants a notice that they had failed to send a notice. The Catch-22 quality of this holding is too much for me, and I dissent.

Insurance Law § 3420 (d) requires an insurance company to give written notice of a disclaimer of coverage “as soon as is reasonably possible.” I would hold that, where the disclaimer is based on a claimant’s failure to submit a document in timely fashion, and there is no fixed deadline for the claimant’s submission, the time to disclaim does not start running at least until the belated submission arrives. To hold otherwise, it seems to me, places an unreasonable and unnecessary burden on the insurance company.

New York Central Mutual acted reasonably here. It demanded, as was its right, a proof of claim (or “Notice of Intention to *776Make Claim”) form, and then waited to see when and if claimants sent the form in. New York Central Mutual no doubt assumed, quite appropriately, that until the form arrived it was in no position to judge whether the claimants had submitted the form “as soon as practicable.” The insurance company could also reasonably assume that, if it never received the form, it could forget about the claim.

The form was never submitted. This was not an insignificant oversight; a proof of claim form enables an insurance company to investigate a claim and to decide whether it is legitimate or not. To permit claimants who have never submitted proof of their claim to recover is to open the door to claims that are spurious or fraudulent. Under today’s holding, however, insurance companies cannot use the failure to submit proof of claim as a defense unless they themselves do what the claimant is supposed to do — send a notice before too much time has gone by. I do not think it makes sense to impose this requirement on insurance companies, and I do not think the statute requires it.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt and Graffeo concur in memorandum; Judge R.S. Smith dissents in an opinion in which Judge Read concurs.

Order reversed, etc.