Opinion
18258-2006.
September 19, 2008.
Feldman, Rudy, Kirby Farquharson, P.C., Attorneys for Plaintiff, Westbury, New York.
Matarazzo, Blumberg A Associates, LLP, Attorneys for Defendant New York Adjustment Bureau, Inc., New York, New York.
Bartlett, Mcdonough, Bastone Monaghan, Attorneys for Defendant, Nationwide Mutual Insurance Company, Mineola, New York.
These motions and cross-motion shall be determined in the Central Calendar Part pursuant to the November 30, 2007 Memorandum of the Hon. Francis A. Nicolai, Administrative Judge, Ninth Judicial District.
Upon the foregoing papers, it is ordered that these motions and cross-motion are decided as follows.
This is an action for breach of contract of an insurance policy issued to plaintiff by defendant Nationwide Mutual Insurance (hereinafter Nationwide) and for negligence as against defendant New York Adjustment Bureau Inc. for its failure to advise plaintiff that the insurance policy contained a two-year limitations period within which to bring an action against Nationwide.
On November 7, 2002, a fire occurred at plaintiff's property, after which plaintiff retained New York Adjustment Bureau to adjust its insurance claim.
The policy provides that the insured may make a claim "on an actual cash value basis instead of on a replacement cost basis. In the event you elect to have loss or damage settled on an actual cash value basis, you may still make a claim on a replacement cost basis . . ." (Section E, Property Loss Conditions, 6. Loss Payment[c]). The policy further provides that the insurer will not pay on a replacement cost basis until the damaged property is actually repaired or replaced and unless the repairs or replacement are made as soon as reasonably possible after the loss or damage (Section E, Property Loss Conditions, 6. Loss Payment [d]).
The policy further provides that any action "under this insurance" must be brought two years after the date on which the direct physical loss or damage occurred.
On May 29, 2003 plaintiff and defendant Nationwide settled plaintiff's claim. The replacement cost of the property $731,273.54, which was more than the total amount of available insurance of $663,372, and the actual cash value was $500,000. A supplemental claim could be filed in accordance with the terms and conditions of the Replacement Cost coverage in the amount of $164,372 ("depreciation holdback" amount) (see Statement as to Full Cost of Repair or Replacement). Payment was thereafter made to plaintiff in the amount of $499,000 ($500,000 actual cash value less a $1,000 deductible). Nationwide was notified several times during 2003 that plaintiff intended to rebuild.
Plaintiff hired an architect in May 2003. Necessary building permit applications were submitted in October 2003, and were rejected several times until approval was finally obtained on January 5, 2005. By letter dated February 20, 2005, Nationwide was advised that the building permit had been issued. Mr. Sarmiento of New York Adjustment Bureau asserts that at that time, David Porter of Nationwide told him that the limitation period would not be a problem. Contracts for the construction were entered into by plaintiff on May 17, 2005.
Documentation was then forwarded to Nationwide showing that reconstruction had been commenced, and requesting release of the holdback (letter dated January 31, 2006). Nationwide then advised that it would not release any of the holdback money (Letter dated March 15, 2006) as "the amount spent to date [$375,500] does not exceed the full ACV amount of the claim" and that "[t]he policy requires that the repairs are actually completed. This building is not even at 25% completed. We cannot make any payments based on those facts."
Thereafter the claim was denied based on the two-year limitation provisions in the (letter dated July 21, 2006). Plaintiff then commenced this action.
Defendant Nationwide contends that this action is barred by the two-year limitation period set forth in the policy. Plaintiff contends that Nationwide waived the limitation period or should be estopped from asserting it.
This action was commenced on September 12, 2006, almost four years after the date of the November 2, 2002 fire, and defendant Nationwide has therefore demonstrated prima facie its entitlement to summary judgment as a matter of law based on the two-year limitation period in the policy ( Strupp v. Heritage Mutual Insurance Company, 143 AD2d 433 [2d Dept., 1988]; see also Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d 966, 968).
In opposition, plaintiff has failed to raise a triable issue of fact as to whether Nationwide waived or should be estopped from asserting the two-year limitation period.
"Evidence of communications or settlement negotiations between an insured and its insurer either before or after expiration of a limitations period contained in a policy is not, without more, sufficient to prove waiver or estoppel (cites omitted). Waiver is an intentional relinquishment of a known right and should not be lightly presumed (cites omitted) ( Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d 966, 968).
As in the case of Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d at 968-[1099], "plaintiff offers no evidence from which a clear manifestation of intent by defendant to relinquish the protection of the contractual limitations period could be reasonably inferred (cite omitted). Nor do the facts show that defendant, by its conduct, otherwise lulled plaintiff into sleeping on its rights under the insurance contract (cite omitted).Indeed, since the conduct complained of occurred subsequent to expiration of the limitations period, plaintiff could not have relied on that conduct in failing to timely commence its action."
There was no contract between the plaintiff and Nationwide from December 2003 until February 2005, after the limitation period had expired. All conduct complained of by plaintiff commenced in February, 23005, after the two-year limitations period, and plaintiff could not therefore have relied on that conduct failing to timely commence an action.
Accordingly, plaintiff's motion for summary judgment in its favor is denied and defendant Nationwide's motion for summary judgment dismissing the complaint and all cross claims against it is granted.
That branch of plaintiff's motion to amend its complaint to assert consequential damages against Nationwide is therefore denied as moot.
Defendant New York Adjustment Bureau's cross-motion for summary judgment is denied. This cross-motion was served on June 2, 2008, after the thirty-day period provided by the IAS Justice for making a summary judgment motion. Movant failed to obtain leave of court on good cause shown prior to making the motion, and movant has not demonstrated on this motion for the delay (CPLR 3212[a]; Micelli v. State Farm Mutual Automobile Insurance Company, 3 NY3d 725; Brill v. City of New York, 2 NY3d 648). That branch of the motion to amend its answer to add a counterclaim for its fees on recovery of the replacement cost is denied.