Nishiewat v Preferred Mut. Ins. Co.
Annotate this CaseDecided on December 5, 2012
Supreme Court, Dutchess County
Munther Nishiewat and Four Seasons Deli & Groceries, Inc., Plaintiffs,
against
Preferred Mutual Insurance Company, Defendant.
114/11
KRISTA J. JAKUBOWSKI, ESQ.
Law Office of DAVID A. SEARS
Attorneys for Plaintiffs
One Civic Center Plaza, Suite 302
Poughkeepsie, New York 12601
PETER X. DODGE, ESQ.
DODGE & MONROY, P.C.
Attorneys for Defendant
175 Pinelawn Road, Suite 105
Melville, New York 11747
James D. Pagones, J.
Plaintiffs Munther Nishiewat and Four Seasons Deli &
Groceries, Inc. move for summary judgment against the defendant on their second cause of action for a declaratory judgment. The defendant opposes the plaintiffs' application and cross-moves for summary judgment dismissing the plaintiffs' complaint. For the reasons stated more fully herein, it is ordered that both motions are denied.
The plaintiffs commenced this action after a fire damaged plaintiff Nishiewat's building located at 495 Violet Avenue, Hyde Park, New York on April 25, 2010. Plaintiff Nishiewat operated a business on the subject premises known as Four Seasons Deli & Groceries, Inc. The defendant issued a policy of insurance on the subject premises that provided, inter alia, fire insurance coverage. [*2]
The Dutchess County Department of Emergency Response Fire Investigation Division (Fire Investigation Division) conducted an investigation on April 25, 2010 of the fire and issued a report concluding that the fire was accidental and originated in the right side of a steam table control console. On May 30, 2012, the Fire Investigation Division issued an addendum revising the cause of the fire from accidental to undetermined.
The defendant hired Michael VanValkenburgh Adjusters to perform and inspection of the subject premises. The inspection was performed on April 27, 2010 and a report was issued dated April 28, 2010. The defendant also hired a certified fire explosion investigator to conduct an origin and cause investigation. After two inspections, the fire explosion investigator issued a report on May 19, 2010 and an addendum on July 7, 2010. According to the reports obtained by the defendant, the fire was incendiary in nature and the result of an intentional act.
The defendant also arranged for the testing of the steam table. Ultimately, after the conclusion of multiple tests by both the plaintiffs and the defendant, the defendant received a report from its expert dated November 1, 2010 that ruled out an electrical origin of the fire. On November 15, 2010, the defendant issued a disclaimer letter disclaiming coverage based upon fraud.
The plaintiffs contend they provided notice of the loss to the defendant in April 2010 and submitted all required documentation and completed all necessary examination under oath by June 2010. Accordingly, the plaintiffs assert, the defendant's disclaimer was untimely as a matter of law. The defendant contends that the fire that damaged the subject premises was caused by or at the direction of plaintiff Nishiewat and that its ongoing investigation of the same was not completed until November 1, 2010, thereby making their November 15, 2010 disclaimer timely. The defendant also asserts that the plaintiffs never filed the required proof of loss statement and that they are now barred from prosecuting this action.
In order "to obtain summary judgment, it is necessary that
the movant establish his or her cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his or her favor (CPLR 3212[b]), and he or she must do so by tender of evidentiary proof in admissible form." (Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979].) Parties opposing a motion for summary judgment are obliged to lay bare their evidentiary proof in admissible form in order to show that their allegations are capable of being established at a trial. (Albouyeh v. County of Suffolk, 96 AD2d 543 [2d Dept. 1983] aff'd 62 NY2d 681 [1984].) Bare conclusory allegations, expressions of hope or [*3]unsubstantiated assertions are insufficient. (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980].)
PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
It is well settled that the timeliness of an insurer's disclaimer is measured from the date on which it possesses all the facts necessary to invoke an exclusion. (Vecchiarelli v. Continental Insur. Co., 277 AD2d 992 [4th Dept. 2000]; 2540 Assocs. v. Assicurazioni Generali, S.P.A., 271 AD2d 282 [1st Dept. 2000].) While a delay of over two months may be found unreasonable as a matter of law, an insurer's explanation may excuse the delay and the reasonableness of the explanation is generally an issue of fact. (See, Hartford Ins. Co. v. County of Nassau, 46 NY2d 1028 [1979]; Vecchiarelli, 277 AD2d at 992-993). Additionally, where the underlying claim does not arise out of an accident involving bodily injury or death, delay in giving notice of disclaimer of coverage will still be given effect unless the plaintiff can demonstrate prejudice as a result of the delay. (Incorp. Vil. of Pleasantville v. Calvert Ins. Co., 204 AD2d 689 [2nd Dept. 1994].)
The plaintiffs contend that the defendant was in possession of all relevant information needed to issue its denial by the end of June 2010 and that the defendant's subsequent five month delay in issuing its denial is unreasonable as a matter of law. The defendant asserts its continuing investigation, coupled with delays attributable to the plaintiffs and the plaintiffs' experts, were primarily responsible for its inability to issue a denial until November 15, 2010. Additionally, the defendant has submitted evidence that it was awaiting the final analysis of Stuart Morrison, who examined and tested the steam table on behalf of the defendant, and that it did not receive the report definitively ruling out the electrical origin of the fire until November 1, 2010.
The court finds that the defendant has raised an issue of fact whether the delay in the issuance of the denial resulted from "a prompt, diligent, and good faith investigation with respect to coverage." (Wilczak v. Ruda & Capozzi, 203 AD2d 944, 945 [4th Dept. 1994].) Even if the delay were unreasonable as a matter of law, the plaintiffs have not met their burden of demonstrating prejudice by the delay, the plaintiffs' affidavit being too conclusory in nature to meet the prima facie burden. Moreover, the plaintiffs were notified by the defendant less than thirty days after submitting their claim that the defendant's investigation was ongoing and that it was reserving its right to deny coverage or disclaim liability for the loss.
Therefore, it is ordered that the plaintiffs' motion for summary judgment on their second cause of action is denied. In light of the court's determination, it need not reach the defendant's remaining contentions.
[*4]DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT
The defendant asserts entitlement to judgment as a matter of law based on the plaintiffs' alleged failure to provide a sworn proof of loss pursuant to the terms of the policy.
If an insurer provides its insured with "written notice of its desire that proof of loss under a policy of fire insurance be furnished and provides a suitable form for such proof, failure of the insured to file proof of loss within 60 days after receipt of such notice...is an absolute defense to an action on the policy, absent waiver of the requirement by the insurer or conduct on its part estopping its assertion of the defense." (Igbara Realty Corp. v. New York Property Ins. Underwriting Assoc., 63 NY2d 201, 209-210 [1984].)
Here, the defendant has failed to establish its prima facie entitlement to judgment dismissing the plaintiffs' complaint. The defendant's two notices to the plaintiffs demanding proof of loss both contain the following instruction: "Send us a signed, sworn statement of loss containing the information we request to investigate the claim. You must do this within 60 days after our request. We will supply you with the necessary forms" (emphasis added). The defendant's submission is bereft of any evidence demonstrating that it at any time provided the plaintiffs with the necessary forms. Moreover, the defendant does not allege to have ever provided the necessary form for the plaintiffs for filing a proof of loss. To the contrary, it appears from the parties' submissions that the plaintiffs diligently completed the only form ever provided by the defendant, a contents claim worksheet, and timely submitted the same. Therefore, the court finds that the defendant has failed to establish its entitlement to judgment dismissing the plaintiffs' complaint and its cross-motion is denied.
The Court read and considered the following documents upon these applications:
PAGES NUMBERED
1.Notice of Motion.........................1-2
Affirmation-Jakubowski..............1-7
Affidavit-Munther Nisheiwat.........1-4
Exhibits............................A-J
Memorandum of Law...................1-8
2.Notice of Cross-Motion...................1-2
Affirmation-Dodge...................1-31
Exhibits............................A-N
3.Reply Affirmation-Jakubowski.............1-8
Reply Affirmation-Munther Nisheiwat.1-4
Exhibits............................A-C [*5]
The foregoing constitutes the decision and order of the Court.
Dated:Poughkeepsie, New York
December 5, 2012
ENTER
HON. JAMES D. PAGONES, A.J.S.C.
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