Timely Notice Of Insurance Claim

Dallas insurance lawyers know to tell their clients to give timely notice of a claim to the insurance company. A 2006, Dallas Court of Appeals case discusses this issue. The style of the case is, Blanton v. Vesta Lloyds Insurance Company. Here is the relevant information.
This is a suit for declaratory judgment concerning insurance coverage. Don Blanton appeals the granting of Vesta Lloyds Insurance Company’s second motion for summary judgment, and Vesta appeals the denial of its initial motion for summary judgment. Because Vesta conclusively established that Blanton breached the “timely notice of occurrence” provision of the policy and that Vesta was prejudiced as a result this court ruled against Blanton.
In June 1997, Blanton leased certain property to Justin Burgess to operate a retail store of “one-of-a-kind restored art-deco furniture and related items.” On August 27, 1998, Vesta wrote a commercial general liability coverage policy for the property; the policy ran for a term of one year.
On August 17, 2000, Burgess sued Blanton, alleging that the roof and structure of the property were defective when he leased the property, and Blanton covered up the defects. Burgess alleged that, prior to entering into the lease, Blanton represented to him that the roof was in good condition and did not leak and promised to repair any leaks within forty-eight hours. Burgess alleged that, from the beginning of the lease through the filing of the petition, the roof and structure leaked “whenever it rains, snows, or sleets.” Burgess alleged he notified Blanton of the leaks on more that eighty occasions and that Blanton attempted to repair the leaks, but the leaks persisted. Burgess alleged the leaks caused significant water damage to his inventory. He also alleged that he moved onto the property, and, as a result of the leaks, mold was growing, aggravating health problems.
Blanton was served with Burgess’s original petition on October 24, 2000. He forwarded the original petition to Vesta on or about December 6, 2000. Vesta’s receipt of the petition was its first notice of Burgess’s complaints or of the lawsuit.
Vesta filed this lawsuit seeking a declaration that it had no obligation to defend or indemnify Blanton in connection with Burgess’s suit.
The policy covered bodily injury and property damage only if the bodily injury or property damage was caused by an occurrence that took place in the coverage territory (including the premises leased to Burgess) during the policy period. The policy defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
Section IV of the policy addressed CGL conditions; paragraph 2 dealt with the insured’s duty of notice:
2. Duties in The Event Of Occurrence, Claim Or Suit.
a. You must see to it that we are notified as soon as practicable of an “occurrence” or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the “occurrence” took place;
(2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the occurrence” or offense.
The “Texas Changes–Conditions Requiring Notice” endorsement modified the insurance provided under the commercial general liability coverage part and provided:
With regard to Bodily Injury and Property Damage Liability, unless we are prejudiced by the Insured’s or your failure to comply with the requirement, any provision of this Coverage Part requiring you or any insured to give notice of occurrence, claim, or suit, . . . will not bar liability under this Coverage Part.
Compliance with the provision that notice of an occurrence or accident be given “as soon as practicable” is a condition precedent, the breach of which voids policy coverage. As soon as practicable” means as soon as notice would have been given by an ordinary prudent person in the exercise of ordinary care in the same or similar circumstances. What constitutes a reasonable time within which notice must be given depends on the individual facts and circumstances of each particular case, including but not limited to age, experience, and capacity for understanding and knowledge that coverage exists in one’s favor.
The purpose of the timely notice requirement is to enable an insurer to investigate the circumstances of an accident while the matter is fresh in the minds of the witness so that it may adequately prepare to adjust or defend any claims that may be asserted against persons covered by its policy.
The court concluded Vesta presented evidence that Blanton failed, without excuse, to notify Vesta of Burgess’s complaints about roof leaks until over two and one-half years after he first made them and that Vesta was prejudiced by this untimely notice, thus establishing as a matter of law that Blanton failed to timely notify it of “an ‘occurrence’ or an offense which may result in a claim” and prejudice.