Opinion
391 CA 19–01333
10-02-2020
Louis Michael MAGNANO, Plaintiff-Appellant, v. ALLEGANY CO-OP INSURANCE COMPANY, Defendant-Respondent, et al., Defendant.
HOGANWILLIG, PLLC, AMHERST (SCOTT MICHAEL DUQUIN OF COUNSEL), FOR PLAINTIFF-APPELLANT. STUART B. SHAPIRO, KENMORE, FOR DEFENDANT-RESPONDENT.
HOGANWILLIG, PLLC, AMHERST (SCOTT MICHAEL DUQUIN OF COUNSEL), FOR PLAINTIFF-APPELLANT.
STUART B. SHAPIRO, KENMORE, FOR DEFENDANT-RESPONDENT.
PRESENT: WHALEN, P.J., CENTRA, PERADOTTO, WINSLOW, AND BANNISTER, JJ.
MEMORANDUM AND ORDER
It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is denied, and the complaint is reinstated against defendant Allegany Co-op Insurance Company.
Memorandum: Plaintiff commenced this action seeking damages for breach of a homeowner's insurance policy. In his complaint, plaintiff alleged that his home suffered extensive damage as a result of a water leak in the second floor master bathroom. Plaintiff had a homeowner's insurance policy through defendant Allegany Co-Op Insurance Company (Allegany), which included coverage for water damage. Plaintiff notified Allegany of the loss and submitted a sworn statement in proof of loss, which contained a description of the damage to the home and a contractor's estimate of the cost to repair the damage, and a claim of loss in the amount of $72,748. Allegany disclaimed coverage of plaintiff's claim on, inter alia, the grounds that the claim was inflated and that there was prior damage to the home that was not disclosed to Allegany. Supreme Court granted the motion of Allegany for summary judgment dismissing the complaint against it. Plaintiff appeals, and we reverse.
We agree with plaintiff that Allegany failed to meet its initial burden on its motion of establishing as a matter of law that the claim was inflated (see generally Zuckerman v. City of New York , 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ). A policy may be voided if the insured " ‘willfully and fraudulently placed in the proofs of loss a statement of property lost which [the insured] did not possess, or has placed a false and fraudulent value upon the articles which [the insured] did own’ " ( Saks & Co. v. Continental Ins. Co. , 23 N.Y.2d 161, 165, 295 N.Y.S.2d 668, 242 N.E.2d 833 [1968] ; see Domagalski v. Springfield Fire & Mar. Ins. Co. , 218 App. Div. 187, 190, 218 N.Y.S. 164 [4th Dept. 1926] ). "Incorrect information is not necessarily tantamount to fraud or material misrepresentation as the insurer must tender ‘proof of intent to defraud—a necessary element to the defense’ " ( Magie v, Preferred Mut. Ins. Co. , 91 A.D.3d 1232, 1233-1234, 937 N.Y.S.2d 452 [3d Dept. 2012], quoting Deitsch Textiles v. New York Prop. Ins. Underwriting Assn. , 62 N.Y.2d 999, 1001, 479 N.Y.S.2d 487, 468 N.E.2d 669 [1984] ; see Azzato v. Allstate Ins. Co. , 99 A.D.3d 643, 646, 951 N.Y.S.2d 726 [2d Dept. 2012] ; Kittner v. Eastern Mut. Ins. Co. , 80 A.D.3d 843, 847, 915 N.Y.S.2d 666 [3d Dept. 2011], lv dismissed 16 N.Y.3d 890, 924 N.Y.S.2d 319, 948 N.E.2d 926 [2011], 18 N.Y.3d 911, 940 N.Y.S.2d 558, 963 N.E.2d 1259 [2012] ). " ‘[U]nintentional fraud or false swearing or the statement of any opinion mistakenly held[, however,] are not grounds for vitiating a policy’ " ( Christophersen v. Allstate Ins. Co. , 34 A.D.3d 515, 516, 824 N.Y.S.2d 171 [2d Dept. 2006] ).
Here, although Allegany's submissions in support of its motion demonstrate a disparity between the estimates of plaintiff's contractor and Allegany's assessor of the amount of damage and loss (see generally Magie , 91 A.D.3d at 1233-1234, 937 N.Y.S.2d 452 ), the submissions fail to establish fraudulent intent on the part of plaintiff (cf. Azzato , 99 A.D.3d at 646, 951 N.Y.S.2d 726 ). Plaintiff's proof of loss statement did not include duplicative items, unincurred expenses, or substantial sums of money that were unaccounted for (cf. Latha Rest. Corp. v. Tower Ins. Corp. , 38 A.D.3d 321, 321, 831 N.Y.S.2d 411 [1st Dept. 2007], lv denied 9 N.Y.3d 803, 840 N.Y.S.2d 763, 872 N.E.2d 876 [2007], cert denied 552 U.S. 1010, 128 S.Ct. 545, 169 L.Ed.2d 373 [2007] ), and the disparity between the damage estimate of plaintiff's contractor and the estimate of Allegany's assessor is not "so grossly excessive as to constitute false swearing and misrepresentation" ( Pogo Holding Corp. v. New York Prop. Ins. Underwriting Assn. , 97 A.D.2d 503, 505, 467 N.Y.S.2d 872 [2d Dept. 1983], affd 62 N.Y.2d 969, 479 N.Y.S.2d 336, 468 N.E.2d 291 [1984] ; cf. Azzato , 99 A.D.3d at 646, 951 N.Y.S.2d 726 ).
To the extent that the court based its determination on its finding that plaintiff's inclusion "in his claim [of] cabinets to replace those not damaged by water in this event" vitiated the insurance policy and prohibited plaintiff's recovery under the policy, we note that neither the estimate of plaintiff's contractor nor plaintiff's proof of loss statement specified an amount for the replacement of the cabinets. Thus, that part of the court's determination appears to be based on a credibility determination and, inasmuch as there is no evidence of any self-serving, incredible, or demonstrably false statements made by plaintiff (cf. Carthen v. Sherman , 169 A.D.3d 416, 417, 94 N.Y.S.3d 34 [1st Dept. 2019] ; Finley v. Erie & Niagara Ins. Assn. , 162 A.D.3d 1644, 1645-1646, 79 N.Y.S.3d 796 [4th Dept. 2018] ), we conclude that this is not one of the "rare instances where credibility is properly determined as a matter of law" ( Carthen , 169 A.D.3d at 417, 94 N.Y.S.3d 34 ; see Ingarra v. General Acc./PG Ins. Co. of N.Y. , 273 A.D.2d 766, 768, 710 N.Y.S.2d 168 [3d Dept. 2000] ).
Finally, Allegany failed to meet its burden of establishing as a matter of law that plaintiff breached the terms of the insurance policy by failing to disclose a previous insurance claim that he submitted for prior damage to the home (see generally Zuckerman , 49 N.Y.2d at 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ), and thus the burden never shifted to plaintiff with respect to that issue (see Pullman v. Silverman , 28 N.Y.3d 1060, 1062, 43 N.Y.S.3d 793, 66 N.E.3d 663 [2016] ; Winegrad v. New York Univ. Med. Ctr. , 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ).