September 19, 2006

Matter of Nationwide Mut. Ins. Co. v Perlmutter (2006 NY Slip Op 06582)

https://www.beynensonlaw.com/case-law/matter-of-nationwide-mut-ins-co-v-perlmutter-2006-ny-slip-op-06582/

Court
Appellate Division, Second Department
Decided
September 19, 2006
Citation
2006 NY Slip Op 06582 · 32 AD3d 947
Posture
Article 75 petition
Outcome
Provider prevailed
Issues
SUM / uninsured motorist Timeliness and preclusion
Cite as
Matter of Nationwide Mut. Ins. Co. v Perlmutter, 32 AD3d 947 (2d Dept 2006)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

A SUM insurer must show prejudice to disclaim solely for late claim notice or suit papers after timely accident notice and a no-fault claim. On reargument, the Appellate Division, Second Department, reversed the judgment granting the insurer's CPLR article 75 petition to permanently stay arbitration and remitted for a prejudice hearing and a new determination. The injured claimant initially received no-fault benefits, later sued the other driver, and notified the insurer of a SUM claim after learning that driver's policy limits. The insurer disclaimed for late SUM notice and failure to forward the summons and complaint. Under Rekemeyer v State Farm Mut. Auto. Ins. Co., those grounds required proof of prejudice. The court did not reach the claimant's remaining contentions and denied leave to appeal.

Reported in New York Official Reports at Matter of Nationwide Mut. Ins. Co. v Perlmutter (2006 NY Slip Op 06582)

Matter of Nationwide Mut. Ins. Co. v Perlmutter
2006 NY Slip Op 06582 [32 AD3d 947]
September 19, 2006
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, November 08, 2006
In the Matter of Nationwide Mutual Insurance Company, Respondent,
v
Ilene Perlmutter, Appellant.

—[*1]

Motion by the appellant for leave to reargue an appeal from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which was determined by decision and order of this Court dated May 23, 2005 [18 AD3d 756], or, in the alternative, for leave to appeal to the Court of Appeals from the decision and order of this Court.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is

Ordered that the branch of the motion which is for leave to reargue is granted; and it is further,

Ordered that the motion is otherwise denied; and it is further,

Ordered that upon reargument, the decision and order of this Court dated May 23, 2005 is recalled and vacated and the following decision and order is substituted therefor:

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the [*2]appeal is from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which granted the petition.

Ordered that the order and judgment is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings in accordance herewith.

On May 13, 1999 the appellant was involved in an automobile accident with nonparty Rajinder Dharamshot. She filed a no-fault claim dated May 14, 1999 with her insurer, the petitioner Nationwide Mutual Insurance Company (hereinafter Nationwide), and initially received no-fault benefits from Nationwide. Those benefits were cancelled in October 1999 after Nationwide conducted an independent medical examination of the appellant.

According to the appellant, while her injuries did not appear to be serious at first, they eventually proved to be serious. As a result, in June 2000 she commenced an action against Dharamshot. The appellant’s counsel subsequently learned, on or about April 25, 2001, that Dharamshot’s policy was limited and less than the appellant’s. Accordingly, by letter of April 26, 2001, he notified Nationwide that the appellant would be making a claim for underinsured coverage under the SUM provisions of her policy (hereinafter the SUM coverage).

By letter dated May 14, 2001, Nationwide asked the appellant to fill out a 25-page questionnaire. Before she could comply, by letter dated May 25, 2001, Nationwide disclaimed coverage based on the appellant’s failure to timely notify it of her SUM (underinsured motorist) claim, and failure to forward the summons and complaint in her personal injury action to it.

In April 2002 after Dharamshot’s carrier tendered its policy, Nationwide indicated that it had no objection to the appellant accepting the full policy and settling with Dharamshot. After Nationwide received the appellant’s demand for arbitration, it commenced this proceeding to stay the arbitration. The Supreme Court agreed and granted the petition without a hearing, finding that the appellant failed to timely comply with the notification provisions of her policy with Nationwide. We reverse.

Under Rekemeyer v State Farm Mut. Auto. Ins. Co. (4 NY3d 468, 475-476 [2005]) where, as here, there was timely notice of the accident and a claim for no-fault benefits, the insurer must show that it was prejudiced before it can rely on the policy provisions requiring timely notice of the SUM claim and/or a claimant’s failure to promptly forward the claimant’s summons and complaint to it, to disclaim a demand for SUM coverage solely based on late notice by the claimant. Therefore, the Supreme Court should have held a hearing on the issue of prejudice to Nationwide prior to making a determination on its petition, and we remit the matter to the Supreme Court, Nassau County, for a hearing on the issue of prejudice to Nationwide and a new determination of the petition thereafter.

In light of this determination, we need not reach the appellant’s remaining contentions. Florio, J.P., Schmidt, Rivera and Lifson, JJ., concur.

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