A motion for the dismissal of the verified complaint was filed by the defendants, who are insurance companies. The plaintiffs were limited partnership and two other corporations; one is a development corporation while the other is a management firm.
A suit for personal injuries were filed against the plaintiffs by a private individual who sustained injuries when he fell from the stairway of a building owned by the plaintiffs and such person was a tenant in the said building. As such, the plaintiffs are now claiming insurance from the defendants pending the personal injury case filed by the tenant against the plaintiffs.
The defendants issued an insurance policy in favor of the plaintiffs for one year, which included commercial general liability. The terms of the policy include the requirement of the insured to inform the defendants, as soon as practicable, of any occurrence that would result to a claim against the insured. This was the situation that happened when the tenant fell off a stairway of the building owned by the plaintiffs during the term of the policy where it may result to a claim against the insured. The defendants were notified of the accident of the tenant. Two witnesses testified to the occurrence of the accident; one was the building superintendent and the other was the property manager. No incident report was made in relation to the accident during that time.
The tenant informed the building superintendent about his accident and the latter relayed the information to the property manager who ordered the preparation of an incident report. The building superintendent filed the incident report a week after the incident. There were several discussions that happened between the tenant and the building superintendent but there was no mention about a personal injury lawsuit to be filed by the tenant against the plaintiffs.
After several months, the tenant sought the service of a lawyer and the letter of the tenant’s attorney was received by the plaintiffs only after almost eight months from the date of the accident. The plaintiffs informed the insurance company a month after the receipt of the letter from the tenant’s lawyer.
The court noted the ruling in a particular case, which stated that “It is well settled that when a policy of liability insurance requires that notice of an occurrence be given as soon as practicable,’ such notice must be provided within a reasonable period of time; failure to give such notice relieves the insurer of its obligations under the contract, regardless of whether the insurer was prejudiced by the delay.” Evidently, the insurance company was informed about a claim against the insured only after nine months from the happening of the accident.
While it is to be considered that the building superintendent had known of the incident several days after its occurrence and he was even aware that the tenant already consulted a counsel about the accident several months after that. The property manager was also informed about the accident but failed to inform the defendants about it as soon as practicable. And the actual notice to the insurance companies was only made nine months from the date of the accident. Thus, the knowledge of both the building superintendent and the property manager was imputable to the building owners or the plaintiffs. Unless it can be proven by the plaintiffs that there were valid and justifiable reasons of why there was delay in informing the insurance companies about the insurance claim as a result of a personal injury case filed by the tenant.
The court found no triable issue as to any valid excuse for the delay in giving notice to the defendants and the plaintiffs failed to establish good faith to escape liability in favor of the tenant. As a result thereof, the court granted the motion filed by the appellant and dismissed the plaintiffs’ verified complaint.
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