State Auto Property and Casualty Ins. Co. v. Brumit Services, Inc.

Dist. Ct. erred in granting defendant-insured’s motion for summary judgment in plaintiff-insurance company’s action seeking declaration that it owed no duty to defend or indemnify defendant in underlying personal injury action arising out of incident in which defendant’s truck hit pedestrian who refused medical treatment. Record showed that: (1) policy contained clause indicating that plaintiff owed no duty to provide coverage unless defendant provided prompt notice of accident or loss; and (2) defendant waited 21 months after instant accident to give plaintiff notice of accident, which occurred one day after pedestrian served lawsuit against defendant. Ct. of Appeals found that instant 21-month delay from date of accident was unreasonable, where all five factors in assessing reasonableness of instant delay mentioned in Yorkville, 939 N.E. 2d 288, favored plaintiff, since: (1) reasonable insured would have known at time of accident that future claim may be filed by pedestrian; (2) defendant, as business owner, had certain degree of sophistication in matters of commerce and insurance; (3) there was no reason for defendant to be sure that no claim would be filed by pedestrian; (4) defendant failed to be diligent in ascertaining whether instant accident would be covered; and (5) instant delay prejudiced plaintiff because prompt notice would have given plaintiff opportunity to determine whether pedestrian was willing to settle case and would have given plaintiff opportunity to obtain medical evidence to defend against pedestrian’s claim of latent injury.