Lumbermens Mut. Cas. Co. v. Rose, 29 N.Y.2d 762 (1971)
Summary judgment is inappropriate when the record reveals a sharply controverted material issue of fact, and neither party has made a proper evidentiary showing to support their motion.
Summary
Lumbermens Mutual Casualty Co. sought a declaratory judgment that it was not obligated to defend Rose in an action because the insurance policy had expired. The accident occurred after the policy’s stated expiration date, but the Assigned Risk Plan required proper notification of termination. The central issue was whether Lumbermens had properly notified Rose of the policy’s termination as required by the Assigned Risk Plan. Because conflicting evidence existed regarding whether the required 45-day notice was sent, the Court of Appeals held that summary judgment was inappropriate for either party. The case was remitted for trial to resolve the factual dispute.
Facts
Lumbermens Mutual Casualty Co. issued an Assigned Risk Policy to Rose, with a stated expiration date of April 15, 1966.
Rose was involved in an accident on December 3, 1966, after the stated policy expiration date.
Lumbermens sought a declaratory judgment that it was not obligated to defend Rose.
The Assigned Risk Plan required a 45-day notice to the insured before termination could be effective.
There was a dispute over whether Lumbermens sent the required 45-day notice to Rose.
Procedural History
Lumbermens brought an action seeking a declaratory judgment.
Both Lumbermens and the opposing party moved for summary judgment.
The lower court granted summary judgment, the specific outcome of which is not detailed in the Court of Appeals decision.
The Appellate Division affirmed the lower court’s decision, the specifics of which are not detailed in the Court of Appeals decision.
The New York Court of Appeals reversed the Appellate Division’s order, denied both the motion and cross-motion for summary judgment, and remitted the case for trial.
Issue(s)
Whether summary judgment is appropriate when there is a sharply disputed issue of material fact regarding whether an insurer properly notified an insured of policy termination under the Assigned Risk Plan.
Holding
No, because a sharply controverted issue of fact existed as to whether the 45-day notice, required by the Assigned Risk Plan, was sent to the insured, and neither party made a proper evidentiary showing to support their motion for summary judgment.
Court’s Reasoning
The court emphasized that while the failure to file a termination notice with the Commissioner of Motor Vehicles doesn’t necessarily continue coverage, the Assigned Risk Plan does require specific notification to the insured. The court stated: “the Assigned Risk Policy issued by Lumbermens Mutual Casualty Co. would have continued in full force and effect if the insurer failed to comply with the relevant provisions of the Assigned Risk Plan.”
Because Lumbermens’ obligation to defend hinged on proper notification, the factual dispute over whether the 45-day notice was sent was material. The court found that the conflicting evidence presented by both parties created a “sharply controverted material issue of fact.” The court noted, “Inasmuch as the record discloses a sharply controverted material issue of fact as to whether a 45-day notice, required by subdivision 2 of section 14 of the plan, was sent to the insured, and neither Lumbermens nor plaintiffs-appellants has made a proper evidentiary showing in support of the motion and cross motion… summary judgment in favor of either side is unwarranted.”
The court cited CPLR 3212(b) and prior cases, including Sillman v. Twentieth Century-Fox, reinforcing the principle that summary judgment should be denied when a genuine issue of material fact exists. The court effectively stated that summary judgment is not a tool to resolve factual disputes but to determine if such disputes exist requiring a trial.