Griggs, 88 N.J. at 361-62. The court relied upon the insured's reasonable expectation, created by the fiduciary duty of fairness and good faith owed by the insurer to the insured, that, in the absence of some repudiation or other action by the insurer inconsistent with its right to control the claim, the insurer is vigorously exercising its contractual right to control the defense in such a manner as to protect the insured. Id. at 362. The court noted, however, that this reasonable expectation can be dispelled by a contrary action, such as notice of a possible disclaimer of coverage. Id.
The circumstances under which the retrospective premium was billed to Beecham demonstrate that it would be inappropriate to estop Continental from denying that it must defend and indemnify under the 1977-78 policy. Beecham has not claimed that Continental assumed control of the claim, as in Eggleston, or prejudiced it by failing to take any measures for a substantial period of time, as in Griggs. Rather, it claims prejudice because it is "entitled to proper claims handling." Def. Reply Br. at 11. Beecham's claim of prejudice cannot withstand scrutiny. The invoice was sent out by Marsh & McLennan in October, 1989, more than two years after the present coverage litigation had begun and while discovery was ongoing. The invoice apparently was withdrawn when Continental management realized that it had been issued, and Beecham never paid the amount billed. Under these circumstances, Beecham's attempt to gain a tactical advantage from an action on the part of Continental from which it suffered no real prejudice must be rejected. See Liberty Mutual Ins. Co. v. Triangle Industries, Inc., 957 F.2d 1153, 1160 (4th Cir. 1992) (finding no estoppel where no prejudice); Reliance v. Armstrong World Indus., Inc., 265 N.J. Super. 148, 157, 625 A.2d 601 (Law Div. 1993) (estoppel of an insurance company from denying coverage "can only result when there is a demonstrative prejudice to the insured").
E. Timeliness of Beecham's Notification
Count III of Continental's amended complaint alleges that Beecham did not notify Continental of an "occurrence" in a timely fashion as required by the policies. Beecham seeks summary judgment on Count III of the amended complaint, contending that its notification was timely and that, even were it not deemed timely, Continental is unable to demonstrate the prejudice required to disclaim coverage on this basis under New Jersey law.
Beecham first received notice from the PADER that it was a potentially responsible party ("PRP") on April 30, 1986. Def. App. 20. On May 8, 1986, Beecham sent a letter informing insurance broker Davis, Dorland & Co. of the notice received from the PADER and requesting that it advise all Beecham insurance carriers. Def. App. 35. Davis, Dorland notified Continental in a letter dated May 12, 1986. Def. App. 36. The speed with which Beecham notified Continental relative to the PRP notification on April 30, 1986 is not questioned. Instead, Continental bases its untimely notification argument on the premise that Beecham had knowledge of an occurrence prior to 1978. As should now be clear, this contention is the subject of vigorous dispute between the parties and cannot be resolved on these motions for summary judgment. Nevertheless, Beecham asserts that summary judgment is appropriate as to this issue because Continental cannot raise a genuine issue of material fact as to the requisite showing of prejudice.
Under New Jersey law, an insurer cannot succeed on a late notice defense unless it can show that it has suffered appreciable prejudice by reason of the late notice. Cooper v. Government Employees Ins. Co., 51 N.J. 86, 94, 237 A.2d 870 (1968); Solvents Recovery Service v. Midland Ins. Co., 218 N.J. Super. 49, 54, 526 A.2d 1112 (App. Div. 1987); Costagliola v. Lawyers Title Ins. Corp., 234 N.J. Super. 400, 406, 560 A.2d 1285 (Ch. Div. 1988); Morales v. National Grange Mutual Ins. Co., 176 N.J. Super. 347, 351, 423 A.2d 325 (Law Div. 1980). The burden of showing prejudice rests with the insurer. Cooper, 51 N.J. at 94; Solvents Recovery Service, 218 N.J. Super. at 54. The question of whether appreciable prejudice exists is a factual question unique to each case. Allstate Ins. Co. v. Grillon, 105 N.J. Super. 254, 260, 251 A.2d 777 (App. Div. 1969); Morales, 176 N.J. Super. at 351. The court in Morales examined precedent in New Jersey as well as in other states and distilled two variables relevant to the determination of whether there has been appreciable prejudice: (1) whether substantial rights have been "irretrievably lost" by the late notice and (2) whether the insurer can demonstrate that it would have had a meritorious defense had there been timely notification. Morales, 176 N.J. Super. at 355-56.
Beecham asserts that Continental has failed to demonstrate any prejudice resulting from the timing of Beecham's notification. The only claim of prejudice that Continental makes is the claim that its investigation has been hampered due to "the apparent loss of Whitmoyer's files" since 1978, citing the deposition testimony of Thomas Fitzgerald. What the cited testimony reveals, however, is that Fitzgerald went to the PADER to review documents in the possession of the PADER and that certain of those documents were later photocopied by agents for Beecham. Fitzgerald Dep., Pl. Opp. App. 7 at 120. As Beecham points out, it appears that the files in question were or are in the possession of the PADER and that, therefore, Continental had access to them even if Beecham later lost its copies--a point which is not at all clear from the excerpt of the deposition provided to the court. In any event, this one allegation of prejudice with scant support in the record is far from sufficient to support a denial of coverage based on late notice. Because Continental would bear the burden of showing prejudice at trial, and because it has been unable to raise a genuine issue of material fact as to that element in response to Beecham's motion for summary judgment on Count III of the amended complaint, summary judgment will be granted as to Count III. See Celotex Corp. v. Catrett, 477 U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
F. The Owned Property Exclusion
Beecham has also moved for summary judgment on Count IV of Continental's amended complaint, arguing that the owned property exclusion does not prohibit coverage in this case. The owned property exclusion in the CGL policies provides:
This insurance does not apply: