USDC for Western District of New York Grants Summary Judgment to Homeowner’s Insurer in Property Coverage Dispute and Finds that Demolition Costs Should Be the Responsibility of the Property Owner

In Porter v. State Farm Fire & Casualty Co., the District Court for the Western District of New York addressed a case in which Plaintiff brought suit against her homeowner’s insurer following a fire that destroyed the insured property. Plaintiff sought coverage under the policy for replacement cost, rental income, personal property coverage and debris removal.

The matter was assigned to a Magistrate Judge, who analyzed the coverage issues and submitted a Report and Recommendation (“R&R”) that the Court grant State Farm’s Motion for Partial Summary Judgment on Plaintiff’s claims for replacement cost, rental income and personal property coverage and deny Defendant’s motion as to the claim for debris removal. The Court agreed with the R&R on the first three claims, but reversed with respect to the debris removal claim. The judge found that Plaintiff had no admissible evidence to support her claim and thus could not raise a genuine issue of fact for trial. The Court also held that demolition costs should be the responsibility of the property’s owner. Plaintiff’s Complaint was dismissed in its entirety.

Plaintiff bought the property at foreclosure as an accommodation for her sister’s boyfriend. The boyfriend paid all costs associated with the purchase. Although the property was in Plaintiff’s name, she did not manage or have any interest on the property. The sister’s boyfriend managed, maintained, and leased the property, made renovations, and paid property taxes. Plaintiff had no authority to sell the property and did not receive any economic benefit from the property. She testified during one of her depositions that she was not involved in obtaining the insurance policy on the property and that any insurance proceeds would go straight to the sister’s boyfriend. She also testified that she had no intention of replacing or rebuilding the property.

After reviewing the R&R, the Court agreed with the magistrate’s reasoning regarding the rental income and personal property coverage and dismissed those claims. With respect to the replacement cost coverage, the Court found that Plaintiff’s unequivocal testimony that she would not rebuild the house precluded any claim for replacement cost because the policy required actual repair or replacement as a condition precedent to recovery of replacement cost. Turning to the debris removal claim, the Court found that the only evidence that Plaintiff incurred any debris removal expense was a vague invoice from the local government that did not contain any detail about whether the demolition actually occurred or the nature of the specific services of demolition. Moreover, the invoice was submitted via an attorney affirmation—not one from the Plaintiff—and the attorney had no personal knowledge of the timing and nature of the demolition services. Therefore, the Court held that Plaintiff had insufficient admissible evidence to raise a genuine issue of fact for trial to avoid summary judgment. He found that the demolition costs should be the responsibility of the property owner, which Plaintiff had testified multiple times was her sister’s boyfriend.

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