| Valentine v Quincy Mut. Fire Ins. Co. |
| 2014 NY Slip Op 08984 [123 AD3d 1011] |
| December 24, 2014 |
| Appellate Division, Second Department |
[*1]
| Paul W. Valentine et al.,Respondents-Appellants, v Quincy Mutual Fire Insurance Company,Respondent, and Tim Sheridan, Doing Business as Tim Sheridan Insurance and Another,Appellant-Respondent. |
Law Office of Christopher P. Foley, LLC, Katonah, N.Y., forappellant-respondent.
Kantrowitz, Goldhamer & Graifman, P.C., Chestnut Ridge, N.Y. (Reginald H.Rutishauser of counsel), for respondents-appellants.
Gladstein Keane & Partners, LLC, New York, N.Y. (Thomas F. Keane, HarveyGladstein, and Jan B. Rothman of counsel), for respondent.
In an action, inter alia, to recover damages for breach of an insurance contract andfor declaratory relief, the defendant Tim Sheridan, doing business as Tim SheridanInsurance, doing business as Sheridan Associates, appeals, as limited by his brief, fromso much of an order of the Supreme Court, Rockland County (Alfieri, Jr., J.), dated May29, 2013, as, upon reargument, in effect, adhered to the determination in an order of thesame court dated January 31, 2013, denying his cross motion for summary judgmentdismissing the complaint and cross claim insofar as asserted against him, and theplaintiffs cross-appeal, as limited by their brief, from so much of the same order datedMay 29, 2013, as (a), upon reargument, adhered to the determinations in the order datedJanuary 31, 2013, granting that branch of their motion which was for summary judgmentdeclaring that, pursuant to a certain endorsement to a policy of casualty insurancereferable to the year 2008/2009, they are entitled to replacement costs for real andpersonal property destroyed in a fire only to the extent of declaring that the endorsementwas in full force and effect as of the date of their loss, and granting that branch of theseparate cross motion of the defendant Quincy Mutual Fire Insurance Company whichwas for summary judgment dismissing the third cause of action, which alleged thatQuincy Mutual Fire Insurance Company violated General Business Law§ 349, and (b) searched the record and thereupon amended the order datedJanuary 31, 2013, to the extent of adding a provision thereto awarding summaryjudgment to Quincy Fire Mutual Insurance Company declaring that the underlying policyof casualty insurance referable to the year 2008/2009, rather than the underlying policyreferable to the year 2009/2010, remained in full force and effect as of the date of theirloss.
Ordered that on the Court's own motion, the plaintiffs' notice of cross appeal from somuch of the order dated May 29, 2013, as searched the record and thereupon amendedthe order dated January 31, 2013, to the extent of adding a provision thereto awardingsummary judgment to [*2]Quincy Fire Mutual InsuranceCompany declaring that the underlying policy of casualty insurance referable to the year2008/2009, rather than the underlying policy referable to the year 2009/2010, remainedin full force and effect as of the date of their loss is deemed to be an application for leaveto cross-appeal from that portion of the order dated May 29, 2013, and leave to appeal isgranted (see CPLR 5701 [c]); and it is further,
Ordered that the order dated May 29, 2013, is modified, on the law, (1) by deletingthe provision thereof, upon reargument, adhering to the determination in the order datedJanuary 31, 2013, granting that branch of the cross motion of the defendant QuincyMutual Fire Insurance Company which was for summary judgment dismissing the thirdcause of action, and substituting therefor a provision, upon reargument, vacating thatdetermination and thereupon denying that branch of that cross motion, (2) by deleting theprovision thereof, upon reargument, adhering to the determination in the order datedJanuary 31, 2013, denying that branch of the cross motion of the defendant TimSheridan, doing business as Tim Sheridan Insurance, doing business as SheridanAssociates, which was for summary judgment dismissing the cross claim asserted againsthim, and substituting therefor a provision, upon reargument, vacating that determinationand thereupon granting that branch of his cross motion, and (3) by deleting the provisionthereof, upon searching the record, amending the order dated January 31, 2013, to theextent of adding a provision thereto awarding summary judgment to the defendantQuincy Mutual Fire Insurance Company declaring that the underlying casualty insurancepolicy referable to the year 2008/2009 remained in full force and effect on the date of theplaintiffs' loss, and substituting therefor a provision, upon searching the record,amending the order dated January 13, 2013, so as to add a provision thereto awardingsummary judgment to the plaintiffs declaring that the underlying policy of casualtyinsurance referable to the year 2009/2010 was in full force and effect on the date of theirloss; as so modified, the order dated May 29, 2013, is affirmed insofar as appealed from,without costs or disbursements, and the matter is remitted to the Supreme Court,Rockland County, for the entry of a judgment, inter alia, declaring that the subjectendorsement to the policy of casualty insurance referable to the year 2008/2009 and theunderlying policy of casualty insurance referable to the year 2009/2010 were in full forceand effect as of the date of the plaintiffs' loss.
The plaintiffs' home was destroyed by fire on October 16, 2010. The plaintiffs hadpurchased a homeowners' casualty insurance policy from the defendant Quincy MutualFire Insurance Company (hereinafter Quincy), procured for them by an insurance broker,the defendant Tim Sheridan, doing business as Tim Sheridan Insurance, doing businessas Sheridan Associates. An endorsement to the insurance policy allowed the plaintiffs torecover full replacement costs of their real and personal property when certain terms andconditions were met and the policy was renewed each year.
In 2009, Quincy applied to the New York State Department of Insurance (hereinafterthe Insurance Department) for permission to substitute the "replacement cost" provisionof its homeowners' insurance policy endorsements with a new provision that, in essence,only permitted recovery of an additional 25% above the total coverage. With thepermission of the Insurance Department, Quincy then allegedly sent an advisory noticeregarding the change in the policy terms to Sheridan, as the plaintiffs' insurance broker,along with the policy renewal for the year 2009/2010 year. Quincy did not send theadvisory notice directly to the plaintiffs. The plaintiffs assert that they never received thenotice, and were not aware, until after the fire, that a material term of their policy hadchanged.
The plaintiffs commenced this action against both Quincy and Sheridan, alleging,inter alia, causes of action to recover damages for breach of contract, violation ofGeneral Business Law § 349, violation of Insurance Law§ 3425 (d), and broker negligence in the procurement of the insurancepolicy. Quincy asserted a cross claim against Sheridan for common-law indemnification.Following discovery, all of the parties moved or cross-moved for summaryjudgment.
In an order dated January 31, 2013, the Supreme Court concluded that Quincyviolated Insurance Law § 3425 (d) by failing to directly notify the plaintiffsof the policy change. The court thus concluded that the replacement cost coverageendorsement remained in effect on the date [*3]of theloss. Accordingly, the court granted the plaintiffs' motion for summary judgment on thecomplaint, but only to the extent of declaring that the replacement cost coverageendorsement was in full force and effect on the date of loss. The court denied that branchof the plaintiffs' motion which was for summary judgment declaring that they wereindeed entitled to full replacement costs and that Quincy was obligated to pay thosecosts. The court determined that there were triable issues of fact as to whether theplaintiffs had met the terms and conditions that would entitle them to full replacementcosts under the endorsement to the policy for the year 2008/2009. The Supreme Courtalso granted that branch of Quincy's cross motion which was for summary judgmentdismissing the General Business Law § 349 cause of action. Finally, theSupreme Court denied Sheridan's motion in its entirety.
The plaintiffs and Sheridan moved for leave to reargue their respective motions. TheSupreme Court granted reargument and adhered to its prior determinations, including thedetermination that the endorsement to the 2008/2009 policy remained in full force andeffect on the date of loss. However, upon searching the record, the court amended itsprior order by awarding summary judgment to Quincy declaring that the underlying2008/2009 insurance policy, rather than the underlying 2009/2010 policy—whichwas apparently more favorable to the plaintiffs—was in force and effect on thedate of the loss. We modify.
The Supreme Court erred in granting that branch of Quincy's cross motion whichwas for summary judgment dismissing the General Business Law § 349cause of action. The elements of a cause of action to recover damages for deceptivebusiness practices under General Business Law § 349 are that the defendantengaged in a deceptive act or practice, that the challenged act or practice wasconsumer-oriented, and that the plaintiff suffered an injury as a result of the deceptive actor practice (see Stutman v Chemical Bank, 95 NY2d 24, 29 [2000]; OswegoLaborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995];Air & Power Transmission,Inc. v Weingast, 120 AD3d 524 [2014]). " 'Intent to defraud andjustifiable reliance by the plaintiff are not elements of the statutory claim' " (Wilner v Allstate Ins. Co., 71AD3d 155, 162 [2010], quoting Small v Lorillard Tobacco Co., 94 NY2d43, 55 [1999]). Conduct has been held to be sufficiently consumer-oriented to satisfy thestatute where it constituted a standard or routine practice that was "consumer-oriented inthe sense that [it] potentially affect[ed] similarly situated consumers" (OswegoLaborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d at 27; see North State Autobahn, Inc. vProgressive Ins. Group Co., 102 AD3d 5, 12 [2012]; Wilner v Allstate Ins.Co., 71 AD3d at 164).
Here, Quincy's submissions failed to demonstrate, prima facie, that its failure tocomply with the notice requirements set forth in Insurance Law § 3425 (d)did not constitute a deceptive business practice. Quincy, in its submissions, admitted thatit sought to change and reduce coverage by eliminating a particular endorsement to itsNew York homeowners' insurance policies, including the plaintiffs' insurance policy.Upon the plaintiffs' renewal of the policy, Quincy eliminated the endorsement, but failedto notify those insureds of that change in the manner prescribed by the Insurance Law.Moreover, the plaintiffs, who continued to seek full replacement costs in relation to thefire that destroyed their home, were clearly injured by the lack of notice that they wereunderinsured. Accordingly, Quincy failed to demonstrate its prima facie entitlement tojudgment as a matter of law dismissing the cause of action pursuant to General BusinessLaw § 349 and, thus, that branch of its cross motion should have beendenied.
Additionally, the Supreme Court erred in denying that branch of Sheridan's motionwhich was for summary judgment dismissing the cross claim asserted against him byQuincy for common-law indemnification. Sheridan established his prima facieentitlement to judgment as a matter of law dismissing the cross claim by demonstratingthat, under Insurance Law § 3425 (d), Quincy had the sole obligation andresponsibility to notify its insureds directly of a change in their policy terms. To defeatsummary judgment, Quincy was required to raise a triable issue of fact as to whetherSheridan owed it a duty of reasonable care independent of its contractual obligations, orthat Sheridan owed a duty to the plaintiffs directly to properly notify them of theelimination of the replacement cost coverage endorsement from their insurance policy,and that a breach of that duty contributed to the plaintiffs' alleged injuries (see generally Guerra v St.Catherine of Sienna, 79 AD3d 808, 809 [2010]). Since Quincy did not opposethat branch of Sheridan's motion, it failed to raise [*4]atriable issue of fact in this regard, and the court should have granted that branch ofSheridan's motion.
Since proper notice of a change in the coverage was not provided to the plaintiffs,the plaintiffs were entitled to the benefit of the eliminated coverage that was providedpursuant to the endorsement to the 2008/2009 policy, as well as the terms of theunderlying 2009/2010 policy, which was the policy in effect in October 2010, the time ofthe loss (see Bloom v St. PaulTravelers Cos., Inc., 57 AD3d 819, 820 [2008]; see also Janes v New YorkCent. Mut. Ins. Co., 281 AD2d 982 [2001]).
The parties' remaining contentions are without merit.
Since this action seeks declaratory relief, in part, we remit the matter to the SupremeCourt, Rockland County, for the entry of a judgment, inter alia, declaring that thereplacement cost coverage endorsement to the policy of casualty insurance referable tothe year 2008/2009 and the underlying policy of casualty insurance referable to the year2009/2010 were in full force and effect on the date of the plaintiffs' loss (see Lanza vWagner, 11 NY2d 317, 334 [1962]). Dillon, J.P., Dickerson, Leventhal and Hall, JJ.,concur.