Monday, November 3, 2008

No Fire Alarm, No Cooperation, No Coverage

Mirabelli v. Merchants Ins. Co. of N.H.

(2nd Dept., decided 10/28/2008)

Once upon a time, insurers issued insurance policies based on their insureds' warranties.  Warranties made at inception of the policy.  The structure is so many feet from a fire hydrant.  Money will be transported  with an armed security service.  The jewelry store will have a certain kind of safe.  Although it still exists in specialty lines, such as marine and jeweler's block insurance, the concept of warranties has been replaced in most modern personal and commercial policies with policy conditions precedent and conditions subsequent to a loss, with which the insured must comply to be entitled to coverage. 

There are not many facts in this decision, but it seems the insured breached both the policy's fire alarm and cooperation conditions, voiding coverage for what presumably was his property loss due to fire.  In AFFIRMING Suffolk Supreme's award of summary judgment to Merchants, the Second Department held:
On its motion, the defendant established its entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324), by demonstrating, prima facie, that a loss to the plaintiffs' property was not covered under the subject insurance policy. The defendant provided evidence establishing that the plaintiffs not only failed to comply with a policy provision requiring that the property have a particular type of fire alarm, but also failed to fulfill their obligations under the policy's cooperation clause (see 232 Broadway Corp. v New York Prop. Ins. Underwriting Assn., 206 AD2d 419, 421; Dyno-Bite, Inc. v Travelers Cos., 80 AD2d 471, 473-474). Since, in opposition, the plaintiffs failed to raise a triable issue of fact, the Supreme Court properly granted the defendant's motion (see Alvarez v Prospect Hosp., 68 NY2d at 324).

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