Leave Granted to Add Proof of Loss Defense

PROPERTY – PROOF OF LOSS – INSURANCE LAW § 3407(a)
Gongolewsky v Empire Ins. Co.
(2nd Dept., decided 5/13/2008)

Empire denied coverage for for a water loss to plaintiff's home, and she sued. Empire moved for leave to amend its answer to assert a defense based on the insured's alleged failure to file a timely proof of loss, and for summary judgment on that defense.

In MODIFYING the lower court's order, the Second Department held that Empire should have been allowed to amend its answer to assert a defense based on Insurance Law § 3407(a), and that such a defense is not waived if not included in the original answer.

The appellate court agreed, however, with the lower court's denial of summary judgment to Empire, noting:

Empire failed to demonstrate, prima facie, that a due demand for a proof of loss was made upon the plaintiff (citation omitted). Rather, the letter by which the demand was made came from attorneys identifying themselves as counsel for "Allcity Insurance Company," which is apparently a legally distinct sister company to Empire. Nonetheless, the letter did properly identify the property and the policy number. Thus, neither party demonstrated its prima facie entitlement to judgment as a matter of law on the issue of whether Insurance Law § 3407(a) was complied with[.]

Add this to a number of other New York cases in which courts have held that to expect compliance with a policy's proof of loss condition, the insurer must strictly follow the required procedures of Insurance Law § 3407(a) and its policy. Anything other than perfect clarity and precision in making the request for POLs may preclude summary judgment from being granted to the insurer.