A federal appeals court on Wednesday upheld a lower court decision against a Tokyo Marine unit in trials with a Brooklyn school, in which the school had failed to adequately waive coverage in an accident.
"MG", a child, was a pedestrian who was hit and seriously injured by a school bus transporting students to a school run by Yeshivat Beth Hillel in Krasna, according to the decision of the 2nd US Circuit Court of Appeals in New York i Philadelphia Indemnity Insurance Co. v. Yeshivat Beth Hillel of Krasna, Inc., et al.
MG and MG's parents, Rami and Olivia Garber, sued Yeshivat, who immediately notified the insurer, Tokyo Marine Unit Philadelphia Indemnity, of the allegation against it.
Philadelphia investigated the claim and sent a reservation of rights letter to the school informing it that its claim may not be covered by the policy.
Three years later, Philadelphia filed a lawsuit in the U.S. District Court in Brooklyn, seeking a declaratory judgment that it had no obligation to defend or harm the school for Garber's claims. [1
The school countered by seeking an explanation that the policy required Philadelphia to defend and replace it.
The U.S. District Court in Brooklyn ruled in favor of the school and was upheld by a unanimous panel of three judges. "We agree with the district court that Philadelphia failed to adequately waive coverage under New York law, " in the decision.
An insurance company wishing to insure coverage in connection with a motor vehicle accident must "Notify in writing as soon as reasonably possible of such a disclaimer or claim for coverage," it stated, referring to New York Insurance Act.
It must also "inform the plaintiff with a high degree of specificity on the ground or reasons for which the disclaimer is based", it stated, referring to a previous case.
"The" reservation of rights "letter on which Philadelphia is based did not meet these standards," it said. The letter only stated that there was a question as to whether the insurer had a duty or replaced the school.
"The letter otherwise informed Yeshivat that Philadelphia would provide a defense, and it identified only two circumstances under which coverage can be denied under the exclusion of the auto-loss policy, none of which has been implemented.
"The letter was therefore not an effective denial of coverage, although it confirmed that the policy in question was a 'general liability policy not an autopolitical policy'," said Ruing, confirming the lower court's decision.  The lawyer for MG and MG's father, Josh Kelner, to Kelner & Kelner, Esqs. In New York, said in a statement, "We are pleased with the court's ruling, which acknowledged that the insurer here clearly did not fulfill its obligation under New York law to issue a timely and very specific disclaimer. . ”
The school's lawyer, Matthew S Aboulafia, of New York's Aboulafia Law Firm LLC, said in a statement, "I think it is clear and obvious."
Tokyo lawyers did not respond to a request for comment. 19659002]