In March 2006, plaintiff reported to defendant CSI, Inc., its third-party claims administrator, that an employee had filed a discrimination claim against it. CSI allegedly failed to notify plaintiff’s insurer until February 2008, after plaintiff again brought its employee’s claim to CSI’s attention. In April 2008, plaintiff’s insurer denied coverage for the claim on the basis of late notice. Plaintiff eventually commenced this action against CSI for malpractice, alleging that CSI had negligently failed to give timely notice of the employee’s claim to plaintiff’s insurer. CSI then sought coverage for plaintiff’s malpractice action from its own professional liability carrier, defendant Admiral Insurance Company. Admiral’s policy contained a prior knowledge exclusion, however, and Admiral disclaimed coverage on the ground that CSI knew or should have known that plaintiff would have a claim against it prior to September 5, 2008, the effective date of Admiral’s claims made policy. In an amended complaint, plaintiff sought a declaratory judgment holding that Admiral was obligated to defend and indemnify CSI. After joinder of issue, but prior to any discovery, Admiral moved for summary judgment seeking, among other [*2]things, a declaration that it was not obligated to defend and indemnify CSI against the claim asserted by plaintiff. Supreme Court granted Admiral’s motion and plaintiff appeals [FN1].  

Ulster County v CSI, Inc.   2012 NY Slip Op 04262   Decided on May 31, 2012   Appellate Division, Third Department   "Plaintiff contends that reversal is warranted here because Admiral failed to establish CSI’s subjective knowledge of the relevant facts with proof in admissible form. We agree.

Admiral argues that the allegations in plaintiff’s own amended verified complaint are a sufficient basis to warrant summary judgment. Those allegations are not conclusive evidence, however, when read in light of CSI’s verified answer. Although there is no dispute that plaintiff notified CSI of the discrimination claim in March 2006, CSI answered by denying the allegation that it failed to notify plaintiff’s insurer until February 2008. CSI also denied knowledge or information sufficient to form a belief as to whether plaintiff’s insurer then disclaimed coverage in April 2008.

Contrary to Admiral’s contention that Supreme Court could have relied on unsworn statements and letters from CSI employees submitted in support of the motion, we note that Supreme Court did not do so. In any event, those writings are not acknowledged as required by CPLR 4538 and, thus, do not qualify as evidentiary proof in admissible form (see CPLR 3212 [b]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Nor do they qualify as an admission absent evidence that the employees were authorized to speak on CSI’s behalf (see Gstalder v State of New York, 240 AD2d 541, 542 [1997]; Vozdik v Frederick, 146 AD2d 898, 900 [1989]). As the unsworn writings are inadmissible hearsay, they are insufficient to support the motion for summary judgment (see Matter of Patricia YY. v Albany County Dept. of Social Servs., 238 AD2d 672, 674 [1997]; Welch v Prevost Landowners, 202 AD2d 803, 804 [1994]). "