Where an indoor sports arena waited 18 months before notifying its insurer about an accident on its premises, and the insurer experienced difficulty in investigating the accident, including interviewing witnesses, it had no duty to defend or indemnify the facility.
Basma Hassan suffered a serious leg injury while trampolining at Short Pump Airsports LLC in January 2018, and Short Pump informed HDI Global Specialty SE about the accident 18 months later. HDI now seeks a determination that it does not owe coverage because Short Pump did not notify HDI about an accident that occurred on Short Pump’s premises “as soon as practicable” as required under the policy terms.
HDI brings this action against Short Pump, Hassan and Robert Lupica as defendants because all three parties are involved in state court litigation regarding Hassan’s injuries. Hassan and HDI have filed motions for summary judgment. Three factors bear upon the materiality of a breach of the notice provision of a policy: “(1) the reasonableness of the delayed notice, (2) the amount of prejudice suffered by the insurer as a result of the delay, and (3) the length of time that elapsed before notice was given.”
First, the court concludes that the 572-day delay was unreasonable. The parties do not dispute when Hassan suffered an injury (Jan. 20, 2018), and when Short Pump notified HDI about the occurrence (Aug. 15, 2019). Importantly, the record reflects that an employee at Short Pump called an ambulance for Hassan to escort her from the premises after her accident, signaling under an objective standpoint that she suffered an injury that could give rise to an insurance claim.
Hassan’s suggestion that Short Pump did not timely notify HDI because of its prior dealings with the insurance company does not excuse the delay. That HDI had previously covered two claims without objecting to the delay of notice of eight months and 12 months respectively, does not render this 18-month delay reasonable. The notice given here exceeds by six months that of any previously covered occurrence. This undermines Hassan’s argument that HDI’s conduct when providing coverage for other claims allowed Short Pump to delay in satisfying the “as soon as practicable” provision in the policy.
Second, HDI suffered prejudice from the 18-month delay. As courts in this district have explained, “a prolonged delay in notification alone may breach the policy even absent a showing of prejudice.” Here, although the language in the policy required Short Pump to notify HDI “as soon as practicable” of an occurrence that may result in a claim, Short Pump did not inform HDI about Hassan’s injuries until after she filed her lawsuits in state court. More importantly, Short Pump wound up its business after Hassan’s injury occurred and before HDI received notice of the injury. As a result, HDI experienced difficulty in investigating the occurrence, including interviewing witnesses. Third, the length of time that elapsed before notice was given – 572 days – supports finding a breach of the policy.
Short Pump significantly delayed in notifying HDI of Hassan’s accident. As such, the delay was both substantial and material and constituted a breach of the notice provisions of the policy. Short Pump’s breach of the notice provision in the policy requires an award of summary judgment to HDI. As a result, HDI owes no duty to defend or indemnify Short Pump and Lupica in connection with the two ongoing state lawsuits filed by Hassan.
HDI’s motion for summary judgment granted. Hassan’s motion for summary judgment denied.
HDI Global Specialty SE v. Hassan, Case No. 3:19-cv-891, Sept. 14, 2021. EDVA at Richmond (Lauck). VLW 021-3-447. 21 pp.