Blitman Const. Corp. v. Insurance Co. of North America

• Decision Date: 14 November 1985
• Citation: 66 N.Y.2d 820,498 N.Y.S.2d 349,489 N.E.2d 236
• Parties: , 489 N.E.2d 236 BLITMAN CONSTRUCTION CORP., Respondent, v. INSURANCE COMPANY OF NORTH AMERICA, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 349

498 N.Y.S.2d 349

66 N.Y.2d 820, 489 N.E.2d 236

BLITMAN CONSTRUCTION CORP., Respondent, v. INSURANCE COMPANY OF NORTH AMERICA, Appellant.

Court of Appeals of New York.

Nov. 14, 1985.

Maureen Rothschild DiTata, New York City, for appellant

Stephen R. Sugrue, New York City, for respondent.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 108 A.D.2d 613, 485 N.Y.S.2d 70 should be reversed, with costs, defendant's motion for summary judgment granted and the certified question answered in the negative.

Plaintiff does not, as indeed it could not, suggest that the 12-month limitation period of the policy is invalid (Kassner & Co. v. City of New York, 46 N.Y.2d 544, 551, 415 N.Y.S.2d 785, 389 N.E.2d 99; see, Insurance Law § 3404, lines 157-161). It argues rather that, by reserving to itself 12 months to investigate, the carrier made it "illogical" and "commercially unreasonable" for it to institute action while the carrier was still investigating. The short answer is that there is no inconsistency between the two clauses, for an insured is bound by the terms of the contract whether read or not (Pimpinello v. Swift & Co., 253 N.Y. 159, 170 N.E. 530) and can protect itself by either beginning an action before expiration of the limitation period or obtaining from the carrier a waiver or extension of its provision.

Nor is there here a triable issue concerning waiver or estoppel. It is not claimed that the carrier waived by any act prior to expiration of the 12-month period and everything done thereafter was done after execution by plaintiff of a nonwaiver agreement. The validity of such agreements has long been recognized (Proc v. Home Ins. Co., 17 N.Y.2d 239, 270 N.Y.S.2d 412, 217 N.E.2d 136; see, C.F.C. Realty Corp. v. Empire Fire & Mar. Ins. Co., 110 A.D.2d 508, 487 N.Y.S.2d 47; Soltex Thread Co. v. Rueff Bros., 111 A.D.2d 84, 489 N.Y.S.2d 210). That the nonwaiver agreement referred not only to the insurer but also said that "the INSURED does not waive any rights under any policy or binder upon which a claim is based" cannot have misled plaintiff as to the limitation provision which had already expired. The same is true of the statement in the cover letter accompanying the agreement that the request for its execution was "without prejudice to any rights which may have heretofore accrued to your corporation". The prejudice to plaintiff's rights results from its failure to institute action prior to expiration of the 12-month limitation period, not from its execution thereafter of the nonwaiver agreement.

Plaintiff is on no stronger ground with respect to estoppel. It was the carrier which some 10 months after the loss called plaintiff's attention to the necessity of filing a claim. Its request for further documentation made thereafter and prior to expiration of the limitation period cannot have misled plaintiff to its prejudice (Kaufman v. Republic Ins. Co., 35 N.Y.2d 867, 363 N.Y.S.2d 951, 323 N.E.2d 189; Proc v. Home Ins. Co., supra; Fotochrome v. American Ins. Co., 23 N.Y.2d 889, 298 N.Y.S.2d 89, 245 N.E.2d 816, affg. 26 A.D.2d 634, 272 N.Y.S.2d 446; Duke Plastics Corp. v. New York Prop. Ins. Underwriting Assn., 86 A.D.2d 818, 447...