Insurance Defense Cases

Adjacent Construction Case
Audax Construction Corp. v. Metropolitan Transportation Authority, Royal Insurance Company, et al.

Supreme Court of New York, Queens County
Index No.: 2888-1999

Speyer & Perlberg represented the defendant, Royal Insurance Company ("Royal").  Royal insured the plaintiff's premises, located in Long Island City, New York.  The plaintiff alleged that defendant, Metropolitan Transportation Authority and its contractors, constructed an extension of a subway route beneath Northern Boulevard, and that the construction work caused the plaintiff's building to shift and its joints to become loose from its beams.  The plaintiff submitted a claim for damages to it insurer, Royal.  However, Royal disclaimed coverage based upon an exclusion for collapses in the insurance policy.  The plaintiff sued Royal for breach of the insurance contract, and it sued the other defendants for negligence.  On behalf of defendant, Royal, Speyer & Perlberg moved for summary judgment, and the Court granted the motion and dismissed the lawsuit against Royal.  The Court found that the Royal insurance policy was not ambiguous and that it excludes from coverage damage due to the collapse of the plaintiff insured's premises.  The Court also found that the loss was not covered under an exception to the collapse exclusion.  The exception provides coverage where the collapse occurs because of the "use of defective material or methods of construction, remodeling or renovation if the collapse occurs during the course of construction, remodeling or renovation".  In interpreting the meaning of that language, the Court found that the term "construction" in the Royal insurance policy is limited to work upon the insured premises, and that it does not refer to work being performed when a subway line is built in the neighborhood. See the Court's Order here

Business Interruption Loss
J&R Electronics, Inc. v. One Beacon Insurance Company

Supreme Court of New York, New York County
Index No.: 603284/2004

Speyer & Perlberg represented the defendant, One Beacon Insurance Company ("One Beacon").  This case arose out of the terrorist attacks at the World Trade Center on September 11, 2001.  The plaintiff's offices were located on Park Row, Manhattan.  One Beacon insured the plaintiff's premises.  As a result of the terrorist attacks on the World Trade Center, the plaintiff's premises suffered property damage and a loss of business income.  One Beacon paid in excess of $16,500,000 to the plaintiff under the policy.  However, the plaintiff alleged that One Beacon owed an additional $2,179,346.  The Court held that the plaintiff was improperly attempting to collect twice under different provisions of the same insurance policy.  Therefore, the Court granted Speyer & Perlberg's motion to dismiss the case. 12 Misc.3d 1184, 824 N.Y.S.2d 763 (Sup., Ct., N.Y. County 2005). See the published decision here.

Insurance Agent and Newly Acquired Property
M&G Auto Repair, Inc. v. Travelers Property Casualty Company, and William Seda.

Supreme Court of New York, New York County
Index No.: 105704/01

Speyer & Perlberg represented the defendant, Travelers Property Casualty Company ("Travelers").The plaintiff sought a declaratory judgment that the defendants are obligated to pay its insurance claim pursuant to an insurance policy issued by Travelers.  Travelers insured a Manhattan building owned by the plaintiff and located on Broadway.  The plaintiff contended that it entered into a lease for another premises in Manhattan, located on Sherman Avenue, and that the Sherman Avenue premises was added to the existing insurance policy by defendant, William Seda, who allegedly was a Travelers insurance agent.  The Sherman Avenue premises were damaged by fire.  The plaintiff made a claim to Travelers for the damages.  Travelers denied insurance coverage for the additional property and claimed that Mr. Seda was not an employee or agent of Travelers, and that he had no authority to add the Sherman Avenue property to the policy.  Speyer & Perlberg, on behalf of defendant, Travelers, submitted a motion for summary judgment to the Court.  With its motion, it submitted an affidavit of Jeffrey Musumeci, the president of KLM Brokerage, the insurance agent listed on the insurance policy issued to the plaintiff.  Mr. Musumeci attested that he is the sole agent for KLM Brokerage that that at no time was Mr. Seda an agent or an employee of KLM Brokerage.  He also testified at his deposition that he had no idea who Mr. Seda is and that he never met or spoke with him.  The plaintiff failed to present any evidence to refute Travelers' claim that Mr. Seda was not an employ or agent of Travelers.  However, the plaintiff then argued that the Sherman Avenue property was covered under a provision of the original insurance policy that extended coverage to "newly acquired" property.  Insurance coverage for newly acquired property, however, expires 30 days after the insured acquires the new property, pursuant to the plain language of the policy.  The Court found that more than 30 days had elapsed between the time that the plaintiff acquired the Sherman Avenue premises and the date of the fire.  As a result, the Court found that there was no coverage for the Sherman Avenue property and it dismissed the plaintiff's lawsuit against Travelers. See the Decision and Order here.

Two-Year Time to Sue
Rock 49th Restaurant Corp. v. Greater New York Mutual Insurance Company

Supreme Court of New York, New York County
Index No.: 102779/08

Speyer & Perlberg represented the defendant, Greater New York Mutual Insurance Company ("GNY").An insured sued GNY to recover for property damages under an insurance policy issued by GNY.  However, the insurance policy expressly provided that an insured may not sue GNY unless it commences a lawsuit within two years from the date of loss.  The plaintiff insured failed to sue GNY until nearly 3 ˝ years after the 2-year time to sue had already expired, which was 5 ˝ years after the loss.  The plaintiff alleged that GNY is estopped from denying insurance coverage because GNY's actions lulled the plaintiff into inaction.  However, the Court granted Speyer & Perlberg's motion for summary judgment and dismissed the lawsuit against GNY by agreeing that the plaintiff was out of time to sue GNY.  The Court also found that the plaintiff's 16-month delay in suing GNY after GNY issued a denial of coverage letter, belied the plaintiff's contention that GNY lulled the plaintiff into inactivity. See Order Here.

No Coverage for Business Interruption Without Direct Physical Loss
Weiss & Associates v. Travelers Indemnity Company

Supreme Court of New York, New York County
Index No.: 107384/02

Speyer & Perlberg represented the defendant, Travelers Indemnity Company ("Travelers").This case arose out of the terrorist attack on the World Trade Center on September 11, 2001.  The plaintiff is a law firm in Manhattan, and its property was insured by Travelers.  The plaintiff's law offices were not physically damaged as a result of the terrorist attack.  However, it claimed that it suffered a loss of business income as a result of physical damage to, and the temporary closing of, the Traffic Violation Bureau.  According to the plaintiff, it represented hundreds of motorists and attracted clients at the Traffic Violation Bureau.  The plaintiff submitted a claim for loss of business income to Travelers under a clause in the insurance policy that provided "additional coverage" for "loss or damage caused by or resulting from risks of direct physical loss involving collapse of a building".  Travelers denied coverage to the plaintiff because the plaintiff's law offices did not suffer any direct physical damage as a result of the terrorist attack.  The insurance policy provides coverage for "direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from a Covered Cause of Loss."  The policy also states that, "We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your - operations' during the - period of restoration'.  The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations, including personal property in the open (or in a vehicle) within 100 feet of the described premises, caused by or resulting from a Covered Cause of Loss".  The Court found that the collapse of the World Trade Center did not cause a "necessary suspension" of the plaintiff's operations "because the policy clearly and unambiguously provides coverage for business interruption only if the business interruption results from "direct physical loss" or damage to property at the plaintiff law firm.  The Court found that because the plaintiff law firm did not suffer any direct physical loss to its offices, Royal properly denied its claim for loss of business income.  The Court, therefore, granted the motion for summary judgment by Speyer & Perlberg, on behalf of defendant Royal, and dismissed the lawsuit against Royal. See the Memorandum Decision annexed here.

Insured's Claims for Physical and Emotional Damages Dismised in Breach of Contract Case
William A. Gamble, Jr., et. al. v J. A. Faccibene & Associates, et. al.

New York County
Index No.: 650024/2007

Insured sued to recover under several insurance policies in connection with a burglary loss.  The suit included a claim for personal injuries (heart problems and depression) allegedly sustained as a result of the carriers' refusal to pay the claims.  Our motion to dismiss the consequential injury claims was granted by Judge Stallman, who held that there was no right of recovery for mental distress related injuries resulting from breach of contract. Read More...

Insured's Case Dismissed Because Examination Under Oath Had Not Been Completed.
Chez Monique Restaurant, inc. v The Charter Oak Fire Insurance Co.

Westchester County
Index No.: 6080/2007

Insured commenced suit on on a fire policy before complying with the carrier's demand for an Examination Under Oath.  We moved to dismiss the action as premature.  Although the examination was conducted after the action was filed, Judge Donovan granted the motion to dismiss based on the insured's failure to furnish documents demanded in accordance with the policy conditions. Read More...

Case Dismissed Due to Policy Exclusion for Faulty Workmanship
Uniondale Realty Associates v The Hartford Insurance Company, et. al.

Nassau County
Index No.: 585/2006

Insured commenced suit to recover under a property  policy for the collapse of its plumbing system caused by the improper installation of the hanger system supporting the pipes.  We moved for summary judgment on behalf of the insurer based the policy exclusions relating to faulty workmanship and inherent vice.  Judge Phelan granted the motion and rejected the insured's contention that the pipe damage was covered as an "ensuing loss". Read More...

Case Dismissed Because of an Accord & Satisfaction
Boulder Apartments, LLC v Greater New York Mutual Insurance Company

Civil Court, New York County
Index No.: 54410/2004

Insured brought suit to recovery under his fire insurance policy.  The case was tried before Judge Jaffe.  We moved to dismiss at the conclusion of the insured's case based on the carrier's previous payment of the amount set forth in the insured's proof of loss.  Judge Jaffe held that the payment constituted an accord and satisfaction and dismissed the suit. Read More...

Suit Barred by Insurance Policy's Time to Sue Clause
Penna v Peerless Insurance Company

Index No.: 2007 WL 2769668 (WDNY)

Insured's suit to recover under a homeowners Policy for water and mold damage was barred by the policy suit limitation provision despite an extensive claims investigation which included several partial payments and an examination that was conducted after the limitation period expired. Read More...

Dismissal of Insureds' Claims for Personal Injuries Due to Mold
Leboeuf v Safeguard Insurance Company

Westchester County
Index No.: 09202/2004

Insureds sued their homeowners insurance carrier and a remediation company retained by the carrier to recovery for personal injuries allegedly sustained as a result of their exposure to mold conditions exacerbated by the handling of their water damage claim.  In granting summary judgment to the defendants, the court held that the insureds were unable, as a matter of law, to demonstrate a causal connection between their mold exposure and their symptoms using a methodology that is generally accepted in the scientific community.  If upheld on appeal, this decision will make it extremely difficult for claimants to establish that exposure to indoor mold produces lasting injuries. Read More...