Saranac Lake Federal Sav. and Loan Ass'n v. Fidelity and Deposit Co. of Maryland

Citation553 N.Y.S.2d 229,159 A.D.2d 895
PartiesSARANAC LAKE FEDERAL SAVINGS AND LOAN ASSOCIATION, Respondent, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Respondent, and Granite State Insurance Company, Appellant.
Decision Date29 March 1990
CourtNew York Supreme Court Appellate Division

Bouck, Holloway, Kiernan & Casey (Mary Ann D. Allen, of counsel), Albany, for appellant.

Brooks & Meyer (Ricard B. Meyer, of counsel), Lake Placid, for Fidelity and Deposit Co. of Maryland, respondent.

Fischer, Hughes & Bessette (James P. Bessette, of counsel), Malone, for Saranac Lake Federal Sav. and Loan Ass'n, respondent.

Before WEISS, J.P., and MIKOLL, YESAWICH, MERCURE and HARVEY, JJ.

HARVEY, Justice.

Appeal from an order of the Supreme Court (Plumadore, J.), entered May 4, 1989 in Franklin County, which, upon reargument, denied defendant Granite State Insurance Company's motion for summary judgment dismissing all claims against it.

In January 1984, defendant Granite State Insurance Company (hereinafter Granite State) issued an insurance policy covering losses due to fire to the former owners of a parcel of land known as the Northwind Lodge Motel located in the Town of Wilmington, Essex County. The policy was later amended at various times to substitute the names of the present owners of the property as the insured and to name plaintiff, a savings and loan association, as the mortgagee. In January 1986, Granite State received a request to cancel the insurance policy from the original insurance agent due to nonpayment of premiums. Pursuant to this request, Granite State prepared a cancellation notice and allegedly mailed it on January 24, 1986.

On April 7, 1986 a portion of the Northwind Lodge Motel was destroyed by fire. Plaintiff promptly notified Granite State of the fire loss but Granite State refused to make payment pursuant to the insurance contract. Plaintiff also notified defendant Fidelity and Deposit Company of Maryland (hereinafter Fidelity) of its loss pursuant to an insurance policy issued to plaintiff in which Fidelity contracted to insure plaintiff against any loss resulting from lack or insufficiency of insurance. Fidelity, however, did not pay pursuant to the contract.

Plaintiff then commenced this action against both Granite State and Fidelity for breach of contract. In its answer, Granite State asserted the alleged cancellation of its insurance policy as an affirmative defense. Fidelity's answer also asserted affirmative defenses and cross-claimed against Granite State for negligence and breach of its contract to plaintiff (to which Fidelity claimed to be a third-party beneficiary). Although Granite State initially successfully moved for summary judgment, plaintiff subsequently served a notice of motion for reargument. Supreme Court granted the motion, vacated its earlier decision and denied Granite State's motion for summary judgment. This appeal by Granite State ensued.

Initially, we reject Granite State's contention that Supreme Court erroneously denied Granite State's motion for summary judgment dismissing the complaint against it. Summary judgment is a drastic remedy which should not be granted where there is any arguable doubt as to the existence of a triable issue (Passonno v. Hall, 125 A.D.2d 767, 509 N.Y.S.2d 189). When a party moves for summary judgment, the burden is on that party to present evidence in admissible form to warrant a court, as a matter of law, to direct judgment in favor of any party (CPLR 3212[b]; see, Piccolo v. De Carlo, 90 A.D.2d 609, 610, 456 N.Y.S.2d 171). Once that burden is met, it is incumbent upon the opposing party to come forward with evidence of a genuine triable issue of fact which would defeat summary judgment (see, Ferber v. Sterndent Corp., 51 N.Y.2d 782, 783, 433 N.Y.S.2d 85, 412 N.E.2d 1311).

Here, the question before this court is whether a genuine triable issue of fact exists regarding Granite State's assertion that it validly canceled the fire insurance policy covering the Northwind Lodge Motel. Notably, the burden of proving valid cancellation is upon the insurer disclaiming coverage on the basis of cancellation Holmes v. Utica Mut. Ins. Co., 92 A.D.2d 1045, 461 N.Y.S.2d 549). In the case at bar, it is our view that sufficient questions of fact have been presented so as to justify the denial of summary judgment dismissing the complaint. Granite State has never proffered the original insurance policy provision which authorizes it to cancel the policy. Therefore, a question of fact exists as to whether the alleged cancellation breached the insurance contract. The general rule is that an insurer must comply literally with the provisions of the policy and statutes when canceling an insurance...

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4 cases
  • State Farm Mut. Auto. Ins. Co. v. Cherian, 1
    • United States
    • New York Supreme Court Appellate Division
    • March 7, 1994
    ...demonstrating a valid cancellation is on the insurance company which disclaims coverage (see, Saranac Lake Fed. Sav. & Loan Assn. v. Fidelity & Deposit Co. of Md., 159 A.D.2d 895, 553 N.Y.S.2d 229; Federal Ins. Co. v. Kimbrough, 116 A.D.2d 692, 497 N.Y.S.2d 756; Holmes v. Utica Mut. Ins. Co......
  • State Farm Mut. Auto. Ins. Co. v. Morales
    • United States
    • New York Supreme Court Appellate Division
    • August 29, 1994
    ...434, 608 N.Y.S.2d 708; Berrios v. Lumbermens Mut. Cas. Co., 162 A.D.2d 365, 557 N.Y.S.2d 32; Saranac Lake Fed. Sav. & Loan Assn. v. Fidelity Deposit Co. of Md., 159 A.D.2d 895, 553 N.Y.S.2d 229; Federal Ins. Co. v. Kimbrough, 116 A.D.2d 692, 497 N.Y.S.2d 756), once the respondent Allstate I......
  • Kellogg v. Kellogg
    • United States
    • New York Supreme Court Appellate Division
    • January 10, 1991
    ...... as to the existence of a triable issue" (Saranac Lake Fed. Sav. & Loan Assn. v. Fidelity & . Page 633. Deposit Co. of Md., 159 A.D.2d 895, 896, 553 N.Y.S.2d ......
  • Washington v. St. Paul Surplus Lines Ins. Co.
    • United States
    • New York Supreme Court Appellate Division
    • January 18, 1994
    ...office practices creates questions of fact that cannot be decided on a summary judgment motion (see, Saranac Lake Federal Savings & Loan Assoc. v. FDIC, 159 A.D.2d 895, 553 N.Y.S.2d 229; cf., Nassau Ins. Co. v. Murray, 46 N.Y.2d 828, 414 N.Y.S.2d 117, 386 N.E.2d 1085; Smith v. Palmieri, 103......

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