General non-cooperation denial held to be timely despite it being issued quite untimely

Country-Wide Ins. Co. v Preferred Trucking Servs. Corp., 2014 NY Slip Op 01099 (2014)

“The present appeal, on the other hand, involves disclaimer for noncooperation by an insured. A determination as to whether such a disclaimer was made within a reasonable time is more complex because “an insured’s noncooperative attitude is often not readily apparent” (Continental Cas. Co. v Stradford, 11 NY3d 443, 449 [2008]). We have emphasized that “insurers must be encouraged to disclaim for noncooperation only after it is clear that further reasonable attempts to elicit their insured’s cooperation will be futile” (id. at 450).

The primary reason that we allow a longer period for disclaimer for noncooperation lies in a well-established principle of our case law, which is intended to facilitate the full compensation of injured victims suing for damages. This is the requirement that an insurer may not properly disclaim for noncooperation unless it has satisfied its burden, described in the precedent as “a heavy one indeed,” of showing “that it acted diligently in seeking to bring about the insured’s co-operation; that the efforts employed by the insurer were reasonably calculated to obtain the insurer’s co-operation; and that the attitude of the insured, after his co-operation was sought, was one of willful and avowed obstruction” (Thrasher v United States Liability Ins. Co., 19 NY2d 159, 168 [1967] [internal quotation marks and citations omitted]).”

In these circumstances, in which Arias “punctuated periods of noncompliance with sporadic cooperation or promises to cooperate” (Stradford, 11 NY3d at 450), we hold that Country-Wide established as a matter of law that its delay was reasonable. The Gallinas fail to raise a triable issue of fact regarding whether Country-Wide knew or should have known that it would disclaim coverage as soon as it became clear that Markos would not cooperate.”

This has two corollaries in no-fault.  The first is the Park v. Long Island Ins. Co. defense.  This would be the Claimant who refuses to answer and is told that his/her refusal to answer will result in a disclaimer.  This could possibly be a Unitrin defense since this would violate a condition precedent to coverage.

The second is the Simmons v. State Farm non-cooperation defense.  This occurs when a Claimant refuses to engage in vocational training.  On this defense, Preferred Trucking could be illustrative.

Appellate Division, Fourth Department opines on the issue of non-cooperation

Progressive Ins. Co. v Strough
2008 NY Slip Op 07463 (4th Dept. 2008)

We further conclude that the court properly denied that part of plaintiff’s cross motion for [*2]summary judgment declaring that plaintiff has no duty to indemnify defendant for claims arising from the motor vehicle accident in question, including claims for no-fault benefits. Plaintiff failed to support its motion with evidence provided by an individual with personal knowledge of the facts (see Chiarini v County of Ulster, 9 AD3d 769, 769-770), and the documents provided by plaintiff in support of the cross motion do not establish that defendant failed to cooperate with plaintiff, as alleged in the complaint.

Comment: Does the no-fault endorsement provide a non-cooperation defense? I remember a case entitled Utica Mut. Ins. Co. v. Timms, 293 AD2d (2d Dept. 2002) , which says otherwise. There is another case from the Fourth Department a few years ago, which opined on the non-cooperation defense as it relates to no-fault benefits. See, Simmons v. State Farm Mut. Auto. Ins. Co. 16 A.D.3d 1117 (4th Dept. 2005).