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Notice of claim must be timely to trigger a duty to defend and indemnify the party being sued

Notice of claim must be timely to trigger a duty to defend and indemnify the party being sued
Gutierrez v State of New York, 2009 NY Slip Op 00506, Decided on January 27, 2009, Appellate Division, Second Department

Typically lawsuits in which the issue is whether or not timely notice of a claim has been made involve individuals attempting to sue the State or a political subdivision of the State.

The Gutierrez case concerns such a requirement except that in this instance the State is faulted for failing to give the ?indemnifying party? ? The Compass Group USA -- timely notice of a claim.

Maria Gutierrez, an employee of the Chartwell Division of Compass Group USA, was injured when she slipped and fell on a wet floor inside a rest room in the main dining hall at the State University of New York at Purchase. On October 8, 2004, Gutierrez served a notice of intention to file a claim on the State Attorney General pursuant to Court of Claims Act §10(3). Gutierrez alleged that she had been injured as a result of the State's negligence and said that she would commence a lawsuit against the State if payment for her injuries was not forthcoming.

Gutierrez did not receive the payment she demanded and on March 24, 2005, she served a summons and complaint on the State seeking to recover damages for personal injuries [the main claim]. Twelve days later the Attorney General's office notified Compass of the Gutierrez claim and requested that Compass hold the State harmless and defend it against the claim as required by the terms of the Purchase contract.

According to the decision, Compass, through its Chartwells Division, had a contract to provide food and cafeteria services at Purchase. The agreement also provided that Compass was to "indemnify, defend, and save harmless" the State of New York against any claim for liability caused by Compass's negligent acts or omissions and that Compass had to receive "[n]otification of an event giving rise to an indemnification claim . . . 30 days following receipt of such claim."

Further, the agreement provided that any such indemnification claim would be "expressly subject to and conditioned upon compliance with the Notice provisions hereunder."

Compass rejected the State's request ?to defend and indemnify? it as untimely and, in response, the State filed a petition seeking a judgment declaring that Compass was required to defend and indemnify it in the main claim.

The Court of Claims dismissed the State?s petition, holding that Compass was not required to defend the State in the main claim because the State had failed to comply with the contractual provision requiring it to provide notice of an event giving rise to an indemnification claim to Compass within 30 days of its receipt of such a claim.

The Appellate Division sustained the Court of Claims? decision, holding that the State's obligation to provide the notice of the Gutierrez claim was triggered when it received Gutierrez' notice of her intention to file a claim unless she received compensation for the injuries she had allegedly sustained in the accident. Accordingly, said the court, the notification that the State gave Compass was untimely as the contract required giving Compass notice within 30 days of October 8, 2004, the date on which Gutierrez initially submitted her claim to the Attorney General and demanded compensation.

The full text of the decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_00506.htm

Full post as published by New York Public Personnel Law on February 05, 2009 (boomark / email).