New York County Supreme Court Grants Insurer's CPLR 3211(A)(1) Motion to Dismiss Plaintiff's Complaint Based on Insured's Failure to Submit Timely Proof of Loss

PROPERTY – BURST WATER PIPE-CAUSED WATER LOSS – PROOF OF LOSS REQUEST – MOTION TO DISMISS

Stein v. National General Ins. Co.
(Sup. Ct., NY Co., 6/9/2020)

Just when you thought you understood the "documentary evidence" basis of a CPLR 3211(a) pre-answer motion to dismiss, this decision issues.

In February 2018, Stein's Manhattan apartment sustained water damage from a burst water pipe.  National General investigated the loss and on April 15, 2019, paid Stein $30,519.82 for his loss. Unhappy with the amount of the loss payment, Stein hired a public adjuster, who inspected the loss and estimated the claim at $404,977.78.  National General declined to enter into an appraisal and, on July 9, 2019, sent a demand to Stein for a signed sworn proof of loss to be provided within 60 days.

On October 24, 2019, National General wrote to Stein, denying coverage for his claim based on various grounds, including Stein's failure to submit a signed sworn proof of loss within 60 days. Stein brought this action on February 18, 2020, alleging breach of contract and breach of the covenant of good faith and fair dealing.

In lieu of answering the complaint, National General moved on March 6, 2020 to dismiss Stein's complaint based on CPLR 3211(a)(1) (documentary evidence) and 3211(a)(7) (failure to state cause of action).  In support of its motion, National General submitted its attorney's affirmation with exhibits and a memorandum of law.  The exhibits attached to its attorney's affirmation were:

• a copy of the complaint;
• a copy of the relevant insurance policy;
• a copy of National General’s "Disclaimer of Coverage"; 
• copies of emails exchanged between National General and Stein’s public adjuster, Scott Modlin; 
• copies of emails exchanged between Stein and Modlin; 
• copies of emails sent by Modlin to National General and its representatives; 
• a copy of National General’s May 28, 2019 "Request for Information and Examination under Oath (“EUO”) demand"; 
• a copy of relevant sections of Stein’s testimony at his September 10, 2019 EUO; 
• a copy of National General’s June 24, 2019 letter requesting information and demanding an EUO; 
• a copy of National General’s July 15, 2019 letter requesting information and demanding an EUO; 
• a copy of a July 26, 2019 letter from Stein’s previous attorney; and
• a copy of National General’s July 9, 2019 letter demanding a signed, Sworn Statement in Proof of Loss, as well as the July 10, 2019 delivery receipt from Federal Express.

Stein opposed National General's motion to dismiss on two bases: (1) that National General's motion pursuant to CPLR 3211(a)(1) relied upon Stein's deposition testimony and, therefore, was not properly founded upon "documentary evidence"; and (2) National General should not be permitted to disclaim coverage as it only sent its proof of loss demand to Stein and not to his public adjuster.

In rejecting these arguments and GRANTING the motion, Supreme Court held:

These submissions conclusively resolve all factual issues as a matter of law and conclusively disposes of the plaintiff's claims for breach of contract and breach of the duty of good faith and fair dealing inasmuch as it is well settled that a plaintiff's "failure to file proof of loss within 60 days after receipt of defendant's 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." Hunter v Seneca Ins. Co., 114 AD3d 556, 557 (2014) citing Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 209-210 (1984).  

In opposition, the plaintiff argues (i) that the defendant's motion pursuant to CPLR 3211(a)(1) relies upon the plaintiff's deposition testimony, and therefore is not properly founded upon documentary evidence, and (ii) the defendant should not be permitted to disclaim coverage as it only sent the demand to the plaintiff, not his insurance adjuster. The plaintiff's contentions are without merit. Contrary to the plaintiff's first contention, the defendant's submission of its demand of proof, with service, and the subsequent disclaimer of coverage are sufficient to establish the plaintiff's failure to respond within the 60-day time limit. See Hunter v Seneca Ins. Co., supra. Moreover, on a motion to dismiss pursuant to CPLR 3211(a)(1), documentary evidence may be supplemented by affidavits or deposition testimony that are not disputed. See Rosenbaum, Rosenfeld & Sonnenblick, LLP v Excalibur Grp. NA, LLC, 146 AD3d 489 (1 Dept. 2017). As the plaintiff does not dispute, in his deposition testimony or his opposition papers, that he did not timely respond to the defendant's demand, the court may properly rely on such evidence. See id. 

Furthermore, to the extent that the plaintiff contends that the defendant's failure to serve its demand on his adjuster constitutes a defense to this motion, such an argument is contrary to the plain language of New York Insurance Law § 3407, which only requires service of the demand be made upon the insured. Therefore, the plaintiff fails to rebut the documentary evidence submitted by the defendant, and dismissal pursuant to CPLR 3211(a)(1) is granted. 

As the action is dismissed pursuant to CPLR 3211(a)(1), the court does not reach the portion of the defendant's motion seeking to dismiss the complaint pursuant to CPLR 3211(a)(7).

Can this decision be reconciled with the Bonavita v. GEICO decision that I blogged about last week?  Is it because Stein did not dispute that he failed to submit a timely proof of loss?  Tell me what you think in the comments below.

As of the date of this post, no notice of appeal has been filed.