Barchester Realty Corp. v New Hampshire Ins. Co., Inc.

[*1] Barchester Realty Corp. v New Hampshire Ins. Co., Inc. 2015 NY Slip Op 51173(U) Decided on August 12, 2015 Supreme Court, Kings County Schack, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 12, 2015
Supreme Court, Kings County

Barchester Realty Corp., Plaintiff,

against

New Hampshire Insurance Co., Inc. and AIG INSURANCE SERVICES, INC., Defendants.



2066/04



Plaintiff:

John A. Dalley, Esq.

NY NY

Defendant:

Seth Weinstein, Esq.

Lewis Brisbois Bisgaard & Smith, LLP

NY NY
Arthur M. Schack, J.

The following papers numbered 1 to 4 read on this motion:Papers Numbered:

Notice of Motion/Affirmation Annexed1

Affirmation in Opposition2

Memoranda of Law_______________________________3, 4

________________________________________________________________________

Plaintiff BARCHESTER REALTY CORP. (BARCHESTER) owns the apartment building at 425 Keap Street, Brooklyn, New York. Plaintiff BARCHESTER purchased the building and during a period of years totally renovated the vacant building for apartment rentals at market rates. On January 23, 2003, when renovations were almost completed and the building not yet occupied, the pipes froze in 17 of the 22 apartments. Plaintiff filed a damages claim, pursuant to its "Special Multi-Peril Policy," with defendants NEW HAMPSHIRE INSURANCE CO., INC. and AIG INSURANCE SERVICES, INC. Defendants disclaimed coverage on the grounds that the freezing of the pipes was not an accident or a "fortuitous" event.

Subsequently, plaintiff commenced the instant action for defendants' violation of the insurance contract between plaintiff and defendants. A jury trial commenced on November 10, 2014 and concluded with a unanimous jury verdict in favor of defendants on November 25, 2014. The jury answered "No" to the first interrogatory on the verdict sheet, "Has Plaintiff BARCHESTER REALTY CORP. established by a fair preponderance of the credible evidence, that the pipe freeze-up was caused by chance or an accident?"

Plaintiff BARCHESTER moves to set aside the jury verdict and order a new trial, pursuant to CPLR § 4404 (a), because the jury verdict was unsupported by the evidence adduced at trial. Defendants oppose the instant motion, claiming that the jury's verdict was consistent with the evidence, because the jury found that plaintiff did not establish by a fair preponderance of the credible evidence that the pipe freeze-up was caused by chance or an accident.

The Court, for the reasons following, finds that the jury's verdict was not against

the weight of the credible evidence. The verdict was based upon the jury's fair interpretation of the evidence. Therefore, plaintiff's instant motion is denied in its entirety.

Background

Frank Mazzocchi, the owner of plaintiff BARCHESTER, testified that he first supplied heat to the building undergoing renovations during the 2001-2002 winter season. The installed boiler system had individual boilers for each of the 22 apartments in the [*2]building. Each boiler has its own on/off switch and there was also a master switch for the entire system to be shut off by the Fire Department in an emergency.

For the 2002-2003 winter season, Mr. Mazzocchi testified that he started operating the boilers to heat the building on December 4, 2002. Subsequently, he went to Florida in December 2002 and returned in early January 2003 to process the final payroll for another business entity of his, Max Smith Construction, which performed the construction work at

plaintiff's building. Mr. Mazzocchi then went back to Florida in late January, intending to return at the beginning of February, to rent apartments at the building. He testified that between the discharge of the Max Smith workers and his trip back to Florida, he checked on the building and the boilers daily to confirm that they were operational. On January 16, 2003, the day he left for Florida, he called Ray Lam, Max Smith's construction manager, and left Mr. Lam a message on his answering machine to ask him to check on the building while he was away.

Plaintiff conceded that the actual cause of the pipe freeze is unknown. Mr. Mazzocchi testified that the master boiler switch and the boiler room ceiling light switch were nearly identical in appearance and function. On January 23, 2003, Mr. Mazzocchi received a call from Mr. Lam, who had keys to the building, that he went to 425 Keap Street to inspect the building and discovered that the pipes were frozen. Mr. Mazzocchi testified that Mr. Lam found the boiler room emergency switch flipped down, which shut off the boilers and he had "no clue" who flipped the switch.

Mr. Lam testified that he discovered the pipes had burst after freezing and found the boilers were off. He did not know who was last in the basement prior to January 23, 2003. Other than himself and Mr. Mazzocchi, he didn't know who else may have had keys to the building.

Defendants' independent claims adjustor, Frank Grutza, testified that he made an initial post accident visit to investigate the premises on February 11, 2003 and spoke with Mr. Mazzocchi. Mr. Mazzocchi told him that he did not know how the master boiler switch came to be off and Mr. Mazzocchi speculated that it was turned off by someone mistakenly turning it off because they thought it was the light switch.

Further, Mr. Mazzocchi testified about his financial problems with funding the building renovations. He testified that he and Mike Kane, his mortgage broker, would lie to get mortgage loans [trial transcript, p. 445]. Defense counsel, in his summation, pointed out that both Mr. Mazzocchi and Mr. Lam had no clue as to what happened in terms of there being no heat in the building when the pipes froze.

The jury had to decide a question of fact, was the freeze-up of the pipes an accident or did Mr. Mazzocchi turn off the heat to save money on utilities or intentionally cause damage to the building to collect money from his insurance carrier. Plaintiff had the burden of proof to show by a preponderance of the evidence that the pipe freeze-up was caused by chance or an accident. The jury determined that plaintiff BARCHESTER did not met its burden of proof.

[*3]

Discussion

The power of the Court to set aside a jury verdict and order a new trial is discretionary. It is codified in CPLR Rule 4404 (a), which states:

Motion after trial where jury required. After a trial of a cause

of action or issue triable of right by a jury, upon the motion of any party

or on its own initiative, the court may set aside a verdict or any judgment

entered thereon and direct that judgment be entered in favor of a party

entitled to judgment as a matter of law or it may order a new trial of a

cause of action or separable issue where the verdict is contrary to the

weight of the evidence, in the interest of justice or where the jury

cannot agree after being kept together for as long as is deemed

reasonable by the court.

This broad power is invoked only when the jury verdict is against the weight of the

evidence. The Court, in Cohen v Hallmark Cards, Inc. (45 NY2d 493, 499 [1978]), instructed that, "the question whether a verdict is against the weight of the evidence involves what is in large part a discretionary balancing of many factors (see Mann v Hunt, 283 App Div 140 [3d Dept 1953])." The Appellate Division, Second Department, in applying the Cohen v Hallmark Cards, Inc. standard in Nicastro v Park (113 AD2d 129, 133-134 [2d Dept 1985]), held: The fact that determination of a motion to set aside a verdict

involves judicial discretion does not imply, however, that the trial

court can freely interfere with any verdict that is unsatisfactory or with

which it disagrees. A preeminent principle of jurisprudence in this

area is that the discretionary power to set aside a jury verdict and

order a new trial must be exercised with considerable caution, for in

the absence of indications that substantial justice has not been done,

a successful litigant is entitled to the benefits of a favorable jury verdict.

Fact-finding is the province of the jury, not the trial court, and a court

must act warily lest overzealous enforcement of its duty to oversee the

proper administration of justice leads it to overstep its bounds and

"unnecessarily interfere with the fact-finding function of the jury to a

degree that amounts to an usurpation of the jury's duty" [citations

omitted]. This is especially true if a verdict is contested solely on

weight of the evidence grounds and interest of justice factors have

not intervened to flavor the judicial response to the motion. Absent

such complications, the challenge is directed squarely at the accuracy

of the jury's fact-finding and must be viewed in that light. [Emphasis

added]

(See Matter of State of New York v Ian I.,127 AD3d 766, 767 [2d Dept 2015]; Matter of State of New York v Edison G., 107 AD3d 723, 724 [2d Dept 2013]; Felicia v Boro Crescent Corp., 105 AD3d 697, 698 [2d Dept 2013]; Caliendo v Ellington, 104 AD3d 635, 636-637 [2d Dept 2013]; Loprieto v Scotti, 101 AD3d 829, 829-830 [2d Dept 2012];

Daniels v Sims, 99 AD3d 658, 659 [2d Dept 2012]; Bergamo v Verizon N.Y, Inc., 95 AD3d 916, 917 [2d Dept 2012]).

Further, the Court is mindful of the admonition in Shaw v Board of Educ. of City of

New York (5 AD3d 468 [2d Dept 2004]), that a "jury verdict is entitled to great deference and should be set aside as against the weight of the evidence only when it could not have been reached on any fair interpretation of the evidence." (See Lopez v Hage, 127 AD3d 824, 825 [2d Dept 2015]; Maharaj v LaRoche, 121 AD3d 953 [2d Dept 2014]; Schwartz v

Nagori, 115 AD3d 733, 734 [2d Dept 2014]; Hatzis v Buchbinder, 112 AD3d 890 [2d Dept 2013]; Wallace v City of New York, 108 AD3d 760, 761 [2d Dept 2013]; Doran v McNulty, 107 AD3d 843, 844 [2d Dept 2013]; Soto v Elmback Owners, LLC, 106 AD3d 986 [2d Dept 2013]; Delva v New York City Transit Authority, 85 AD3d 712 [2d Dept 2011]). Moreover, "[i]t is well settled that a jury verdict should not be set aside where to do so interferes with the fact finding function of the jury (see Durante v Frishling, 81 AD2d 631 [2d Dept 1981])." (Bivona v Port Authority of New York and New Jersey, 118 AD2d 747, 748 [2d Dept 1986]).

In Hernandez v Carter and Parr Mobile, Inc. (224 AD2d 586, 587 [2d Dept

1996]), the Court instructed that "[i]t is beyond cavil that the determination of the jury which observed the witnesses and the evidence is entitled to great deference. We find that the jury's determination in favor of the defendant was based upon a fair interpretation of the evidence and we reject the plaintiffs' contention that the verdict is against the

weight of the evidence." (See Wallace v City of New York, supra; Das v Costco

Wholesale Corp., 98 AD3d 712, 712 [2d Dept 2012]; Gaudiello v City of New York, 80

AD3d 726 [2d Dept 2011]; Delva v New York City Transit Authority, supra).

During the trial, the jury observed the witnesses, measured their credibility and

weighed the evidence. The jury had a rational basis for its verdict. It was neither against the weight of the evidence nor inconsistent. Therefore, the Court cannot find any reason

to set aside the jury's verdict.

The policy at issue in this action was titled by defendants as a "Special Multi-Peril Policy," which is an all-risks policy. "An insured seeking to recover for a loss under an

insurance policy has the burden of proving that a loss occurred and also that the loss was a covered event within the terms of the policy." (Vasile v Hartford Acc. & Indem. Co., 213 AD2d 541, 541 [2d Dept 1995]). (See U.S. Dredging Corp. v Lexington Ins. Co., 99 AD3d 695 [2d Dept 2012]; Simplexdiam, Inc. v Brockbank, 283 AD2d 34 [1d Dept 2001]). The loss had to be a "fortuitous event," which is defined in Insurance Law

§ 1101 (a) (2) as "any occurrence or failure to occur which is, or assumed by the parties to be, to a substantial extent beyond the control of either party." (See 525 Fulton Street Holding Corp. v Mission Nat. Ins. Co., 256 AD2d 243 [1d Dept 1998]).

The jury's verdict can be easily reconciled with a reasonable view of the evidence. Both Mr. Mazzocchi and Mr. Lam testified that they had no idea why there was no heat in the building and plaintiff confirmed this in its instant motion. Mr. Mazzocchi testified that he was the only one in the building for weeks leading up to his Florida vacation and he was having financial problems. The jury could fairly conclude, based upon the

evidence, what when Mr. Mazzocchi left for his vacation in late January 2003 he was having financial problems. The jury had to consider if the freeze-up of the pipes was an accident or did Mr. Mazzocchi turn off the heat to save money on utilities or did Mr. Mazzocchi intentionally cause damage to the building to collect insurance money. The burden was on plaintiff to show by a preponderance of the evidence that the pipe freeze-up was caused by chance or an accident. The jury concluded that plaintiff failed to meet its burden of proof. The Court cannot interfere with this fact-finding by the jury and usurp its function.

Therefore, plaintiff BARCHESTER's instant motion is denied in its entirety.

Conclusion

Accordingly, it is

ORDERED, that the motion of plaintiff BARCHESTER REALTY CORP. to set aside the jury verdict and order a new trial, pursuant to CPLR § 4404 (a), because the jury verdict was unsupported by the evidence adduced at trial, is denied in its entirety.

This constitutes the Decision and Order of the Court.

ENTER

___________________________HON. ARTHUR M. SCHACK

J. S. C.