McNulty v Allstate Ins. Co.

[*1] McNulty v Allstate Ins. Co. 2005 NY Slip Op 51453(U) [9 Misc 3d 1108(A)] Decided on September 14, 2005 District Court Of Nassau County, Fourth District Miller, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 14, 2005
District Court of Nassau County, Fourth District

KATHLEEN MCNULTY, Plaintiff(s)

against

ALLSTATE INSURANCE COMPANY, Defendant(s)



00074/05



Tomao & Marangas

Attorney for Plaintiff

1325 Franklin Avenue, Suite 375

Marjorie E. Borner, Esq.

75 Harvard Drive

Plainview, NY 11803

Howard S. Miller, J.

Defendant moves for an order, pursuant to CPLR 3211[FN1], dismissing this action. Pre-trial motion practice is generally unavailable in small claims proceedings. While the Court could deny the motion on that basis alone, the Court elects not to do that because the issue appears to be one that will recur repeatedly in small claims proceedings unless the Court makes and publishes a ruling.

The undisputed facts appear to be that the Plaintiff is suing under her policy of insurance for comprehensive coverage of a vandalism incident involving her 2002 Mercedes Benz SL500. As is well-known in the community, an SL500 is a very expensive car. The Defendant presumably collected substantially more than an average premium on the vehicle, arising out of its elevated market value.

After the vandalism incident, Plaintiff notified the Defendant that she wished to have her vehicle repaired at Mid-Island Collision, a facility that purports to be authorized by Mercedes Benz to perform body work. Apparently Defendant contacted Mid-Island. The nature of the Defendant's contacts with Mid-Island are disputed, but it is clear that Defendant and Mid-Island reached no agreement to repair the Plaintiff's vehicle. It seems relatively clear that no agreement was likely to be reached, because Defendant apparently has a policy of paying no more than $40 per hour for labor, and Mid-Island alleges that it will not work for less than $65 per hour.

In the end, Defendant alleges that it notified the Plaintiff that it could not agree on a repair contract with Mid-Island, and it gave her several choices of repair shops where she could obtain repairs at $40 per hour, including Master Collision, whose work Defendant said it would guarantee. Plaintiff's witness alleges that Master is not authorized by Mercedes to perform body work, and that allegation is uncontested by Defendant. Defendant tendered a check based on Master's estimate. Plaintiff endorsed the check under protest, and now sues for the difference between Mid-Island's estimate and Master's estimate.

Defendant argues that it is entitled to a summary disposition, despite a prior determination of this Court[FN2] to the contrary. Defendant argues that an April 16, 2002 opinion letter from the New York State Insurance Department conclusively establishes its right to a summary disposition. In that letter, an Insurance Department Supervising Attorney opines, in reply to an ex parte inquiry from Defendant, that when an insurer makes a bona fide offer, the insurer need not pay more than the amount of the offer.

While the Court is charged with giving deference to administrative agencies when they interpret their own regulations, the Court does not believe that it must abdicate its own authority to interpret regulations. That is particularly so when the agency in question is responding to an ex parte inquiry, rather than making a determination that it has been statutorily charged with making after holding a public hearing.

The Court need not reach the question of whether the Insurance Department correctly interpreted its regulations, however, because the fundamental issue of fact in this case is whether the Defendant made a bona fide offer in the first place. If it did not, the premise of the opinion [*2]letter does not hold. Defendant's argument assumes that issue has already been resolved in their favor. It has not. It is a triable issue of fact whether it is reasonable to expect Plaintiff to accept the offer of a non-Mercedes-approved body shop to repair a late-model SL 500. The Court acknowledges the possibility that a car of such value cannot be repaired at an unauthorized facility without substantially affecting its market value. Whether that is true or not must be determined on the basis of evidence to be submitted at trial.

Accordingly, Defendant's motion to dismiss is denied. Furthermore, because both parties appear by counsel and this matter may involve complicated technical issues where pretrial discovery would be appropriate, this proceeding is hereby transferred to the regular civil part of this court, pursuant to 22 NYCRR 212.41(f-1). Plaintiff is directed to pay any additional filing fees as required by law.

So Ordered. Footnotes

Footnote 1:No subdivision is cited, and indeed it appears that the motion is more in the nature of a CPLR 3212 summary judgment motion, albeit one that has been served prior to joinder of issue.

Footnote 2:Nedelka v Allstate, NYLJ, May 22, 2003, at 25.