Forsythe v Otsego Mut. Fire Ins. Co.

Forsythe v Otsego Mut. Fire Ins. Co. 2010 NY Slip Op 02417 [71 AD3d 554] March 23, 2010 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected through Wednesday, April 28, 2010

Elizabeth Forsythe et al., Respondents,
v
Otsego Mutual Fire Insurance Company, Appellant.

—[*1] Tell, Cheser & Breitbart, Garden City (Kenneth R. Feit of counsel), for appellant.

Patton, Eakins, Lipsett, Martin & Savage, New York (John G. Lipsett of counsel), for respondents.

Order, Supreme Court, New York County (Jane S. Solomon, J.), entered September 9, 2009, which denied defendant's motion for summary judgment dismissing the complaint and for leave to amend its answer to assert the defense of fraud, unanimously modified, on the law, to grant so much of the motion as sought leave to amend, and otherwise affirmed, without costs.

Although defendant did not move for leave to amend until approximately two years after it answered the complaint, plaintiffs do not show, or even allege, prejudice or surprise as a result of the delay (see CPLR 3025 [b]; Arellano v HSBC Bank USA, 67 AD3d 554 [2009]).

However, defendant failed to demonstrate as a matter of law that plaintiffs' proof of loss was fraudulent (see Saks & Co. v Continental Ins. Co., 23 NY2d 161, 164-165 [1968]). Plaintiffs' explanation for their overvaluation of the loss, that the house was uninhabitable and all their furniture destroyed, raises an issue of fact whether they intended to defraud defendant (see Latha Rest. Corp. v Tower Ins. Co., 38 AD3d 321 [2007], lv denied 9 NY3d 803 [2007], cert denied 552 US 1010 [2007]; Kyong Nam Chang v General Acc. Ins. Co. of Am., 193 AD2d 521 [1993]). Concur—Mazzarelli, J.P., Saxe, Nardelli, Abdus-Salaam and RomÁn, JJ.