Bardakjian v Preferred Mut. Ins. Co.
Annotate this CaseDecided on June 24, 2013
Supreme Court, Albany County
Leeza Bardakjian and RAFFI BARDAKJIAN, Plaintiffs,
against
Preferred Mutual Insurance Company, Defendant.
6894-11
LAMARCHE LAW, PLLC
(George E. LaMarche, Esq., of Counsel)
Attorneys for Plaintiffs
1539 Crescent Road
P.O. Box 5437
Clifton Park, New York 12065
COSTELLO, COONEY & FEARON, PLLC
(Christina F. DeJoseph, Esq., of Counsel)
Attorneys for Defendant
5701 West Genesee Street
Camillus, New York 13031
Michael C. Lynch, J.
Plaintiffs commenced this action on October 27, 2011 to recover under a policy of insurance issued by defendant for roof damage sustained to their residence during a hail storm on or about July 16, 2009. The submissions show that defendant issued a homeowner's policy to plaintiffs for the policy period July 30, 2008 to July 30, 2009 (Exhibit "C"). There is no dispute that the policy was [*2]renewed, but then cancelled effective August 26, 2009 for the stated reason "property sold" (Exhibit "D"). Thereafter, plaintiffs submitted a "property loss notice" on December 22, 2010 asserting a claim for "hail damage to roof" (Exhibit "E"). By letter dated April 20, 2011, defendant disclaimed coverage, explaining that "due to the late reporting of your claim we are not able to verify the date of loss occurred within the policy term".
By Notice of Motion returnable March 22, 2013, defendant seeks an order of summary judgment dismissing the complaint as time barred under the two year policy limitations period; due to plaintiffs' failure to provide "prompt notice" of the loss; and for plaintiffs' lack of an insurable interest in the property.
The policy expressly provides that any suit must be "brought within two years after the loss" (Exhibit "C" p. 20 of 22, paragraph 11a). There is appellate caselaw supporting defendant's thesis that this two year period runs from the date of the underlying event, i.e. the July 16, 2009 hail storm (see Dimmick v. New York Prop. Ins. Underwriting Assn., 57AD3d 602; Klawiter v. CGU/One Beacon Ins. Group, 27 AD3d 1155; Costello v. Allstate Ins. Co., 230 AD2d 763). Accepting this thesis, this action commenced in October, 2011, would be time barred.
In Fabozzi v. Lexington Insurance Company (601 F3d 88 [2nd Cir.]), however, the Second Circuit Court of Appeals reviewed this precise question, and concluded that where the policy simply includes generic language "that the limitation period would expire two years after the date of loss,'" that threshold refers to "the date on which the claim accrued, not the date on which damage was incurred" (Id at 93). In so holding, the Second Circuit specifically disregarded the cases relied on by defendant as contrary to the seminal ruling of the NYS Court of Appeals in Steen v. Niagara Fire Ins. Co. (89 NY315). The Second Circuit interpreted Steen as holding "that generic language setting a contractual limitations period should be interpreted to start the clock not at the time of the accident itself but only once, the right to bring an action exists' - that is, once all conditions precedent have been met" (Id at 91). This construction is consistent with the State Court of Appeals ruling in Proc v. Home Ins. Co., (17 NY2d 239). There the Court explained that a policy provision limiting a suit to within a specified time "after the loss or damage occurred" "was to be computed from the time the cause of action accrued rather than from the occurrence of the event insured against" (Id at p. 243). By comparison, the policy in Proc limited the time to commence an action to "within twelve months next after inception of the loss" (emphasis added), which the Court construed as running from the date of the [*3]actual underlying event, a fire (Id 245). Essentially, the Court found that the underscored phrase provides specific direction that the limitations trigger point is the date of the destructive event (see Dubins v. Boston, Inc. Co., 26 AD2d 863).
Given the above, the generic two year limitations provision in the subject policy should be measured from the date a cause of action accrued against the insurer, not the date of the hailstorm. Since plaintiffs commenced this action approximately eleven months after filing notice of their claim, the action is timely. Accordingly, defendant's motion to dismiss the action as time barred is denied.
Next, defendant maintains that plaintiffs failed to give "prompt notice" of the claim as required under the policy (see Exhibit "C" at p. 15 of 22). As noted above, defendant's disclaimer letter was based on the timing of the "property loss notice", filed seventeen months after the event. Such a provision effectively requires notice "within a reasonable time in view of all the facts and circumstances of each particular case" (70A NY Jur 2d Insurance §1970; State Farm Mut. Auto Ins. Co. v. Bush, 46 AD2d 958). In his responding affidavit, plaintiff Raffi Bardakjian explains he has resided with his family at the subject residence from 2007 to date. He explains that he learned about the roof damage "on or about December 22, 2010", but does not elaborate (see Affidavit of Raffi Bardakjian at paragraphs 11 - 12). Plaintiffs also present the affidavit of a meteorologist opining that a hail storm occurred on July 16, 2009 in the area of plaintiff's residence (Exhibit "2"). Given the above, the Court finds that a question of fact has been presented as to whether plaintiffs gave "prompt notice" and whether defendant's ability to determine whether the claim arose during the policy period has been compromised.
The Court also finds that plaintiff Raffi Bardakjian has an "insurable interest" in the property and thus may pursue this action. Insurance Law §3401 provides that an insured must have an "insurable interest in the property insured" which "shall include any lawful and substantial economic interest in the safety or preservation of property from loss, destruction or pecuniary damage". Notably, "a legal or equitable interest in the property insured is not necessary to support an insurable interest" (Taylor v. Allstate Ins. Co., 214 AD2d 610, 611; Scarola v. Insurance Co. of North Amer., 31 NY2d 411; Cross v. The National Fire Ins. Co., 132 NY 133, 137).
The submissions show that BBC Development, LLC, in which plaintiff Raffi Bardakjian represents he holds a 25% ownership interest, held deed title in the residence from 2002, until the property was transferred to George Mekhjian by deed recorded on September 10, 2009 (see Exhibit "7" annexed to LaMarche [*4]Affirmation). As indicated above, the subject policy was issued to plaintiffs in their individual capacity. Nonetheless, given plaintiff Raffi Bardakjian's representation that he has exclusively occupied the premises since 2007, coupled with his ownership interest through the limited liability company, the Court finds that he has an "insurable interest" within the embrace of Insurance Law §3401 (see Scarola v. Insurance Co. of North Amer., supra, at 413; Riggs v. Commercial Mut. Ins. Co., 125 NY 7; 70A NY Jur 2d Insurance §1021). Since there is no indication that plaintiff Leeza Bardakjian has an ownership or other economic interest in the residence, other than occupancy, the Court agrees with defendant that she lacks an "insurable interest" in the property. In this regard, it is worth noting that plaintiff Raffee Bardakjian acknowledged that the LLC pays for all expenses and repairs to the residence (see Affidavit of Raffee Bardakjian at paragraph 7).
Accordingly, it is hereby
ORDERED that defendant's motion for summary judgment is denied, except to the extent the claim of plaintiff Leeza Bardakjian is dismissed for lack of an "insurable interest", all without costs.
This memorandum represents the Decision and Order of this Court. The original Decision and Order is being mailed to attorney for plaintiffs. The original papers are being sent to the Albany County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the provision of that rule regarding filing, entry, or notice of entry.
DATED:June, 2013
Albany, New York
________________________________________
Hon. Michael C. Lynch
Justice of the Supreme Court
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
