Rejecting the homeowners’ argument that the insurer was equitably estopped from asserting a statute of limitations defense, the United States District Court for the Southern District of New York recently held that the two year suit limitations provision of the insurer’s policy barred the insured’s breach of contract action, which was not filed until almost nine years after the date of loss. In granting the insurer’s Motion for Judgment on the Pleadings, the court in Clement v. Farmington Casualty Company found that the insureds failed to prove any affirmative wrongdoing by the insurer that could meet the requirements of the
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Monthly Archives November 2015
Bad Faith Count Against Insurer Dismissed by New York Court as Duplicative of Breach of Contract Cause of Action
A Nassau County trial court dismissed an insured’s bad faith counterclaim against an insurer in a declaratory judgment action on the basis that New York law does not recognize a claim for bad faith refusal to comply with an insurance contract. In Preferred Contractors Ins. Co. v. Cipco Boarding Co, Inc., the insurer moved to dismiss the insured’s bad faith counterclaim for failure to state a cause of action. While the court recognized that New York does recognize a claim for bad faith failure to settle a tort action within insurance policy limits, the court held that there is no
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New York Court Holds No Coverage for Restaurant’s Losses from Sandy Power Outage
In a case arising from business losses due to power outages caused by flooding during Superstorm Sandy, a New York trial court found that the water damage exclusion of the insurance policy unambiguously excluded coverage for power interruptions caused by flood. In La Casa di Arturo, Inc. v. Tower Group, et al., the policy provided coverage for loss associated with power interruptions that “result from direct physical loss or damage by a Covered Cause of Loss.” Water and flood were specifically excluded as covered causes of loss. Relying on the adjuster’s report and a Con Edison report—both of which concluded
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New York Insurer Can’t Avoid Defending Insured After Late Denial of BI Claim
The United States District Court of the Southern District of New York ruled that an insurer ran afoul of the timeliness requirements of New York Insurance Law § 3420(d)(2) when it disclaimed coverage 10 months after receiving notice of the claim. In Montpelier U.S. Insurance Co. v. 240 Mt. Hope Realty Co., the court held that the insurer’s late disclaimer failed to meet the law’s requirement that written notice of a denial for a bodily injury claim must be given as soon as is reasonably possible to the insured and the injured person. In addition, since the insurer had initially
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