Bulger v. Tri-Town Agency, Inc.

• Decision Date: 29 June 1989
• Docket Number: TRI-TOWN
• Parties: Evelyn B. BULGER, Individually and as Executrix of the Estate of James P. Bulger, Deceased, Respondent, v.AGENCY, INC., et al., Defendants, and Dryden & Groton Co-Op Fire Insurance Company, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 217

543 N.Y.S.2d 217

148 A.D.2d 44

Evelyn B. BULGER, Individually and as Executrix of the Estate of James P. Bulger, Deceased, Respondent, v. TRI-TOWN AGENCY, INC., et al., Defendants, and Dryden & Groton Co-Op Fire Insurance Company, Appellant.

Supreme Court, Appellate Division,

Third Department.

June 29, 1989.

Thaler & Thaler (Richard T. John, of counsel), Ithaca, for appellant.

John W. Young (Alfred Paniccia, Jr., of counsel), Binghamton, for respondent.

Before KANE, J.P., and WEISS, MIKOLL, LEVINE and MERCURE, JJ.

KANE, Justice Presiding.

On December 3, 1985, the mobile home in which plaintiff and her husband (hereinafter collectively referred to as the Bulgers) resided was destroyed by fire. At the time, a written fire insurance policy for the property had not yet been issued. Claiming that a valid oral contract for such insurance existed, plaintiff sought coverage from defendants Dryden & Groton Co-op Fire Insurance Company (hereinafter Dryden) and Tri-Town Agency, Inc. (hereinafter Tri-Town). Upon their refusal to issue a written policy, plaintiff commenced this action. ^* Discovery procedures ensued from which the following facts were elicited. In September 1985, the Bulgers contacted Tri-Town for the purpose of securing a homeowner's policy on their mobile home. According to Janice Ives, an employee of Tri-Town, she informed the Bulgers that she would attempt to find a company to insure them. Ives stated at her examination before trial that it was Dryden she contacted and that she provided Dryden with certain additional information at its request. By memorandum dated November 19, 1985, Dryden informed Tri-Town that a policy could be issued. Ives testified that on November 25, 1985 she telephoned the Bulgers and told them that a policy could be issued. She also stated that she made it clear there would be no coverage until the Bulgers made a downpayment and signed the application. Plaintiff denied ever receiving this call. Ives also testified that on December 2, 1985, she again called the Bulgers and repeated what she had told them in the first call. Plaintiff admitted receiving this call, but denied that Ives had conveyed any information other than that they were covered. Thus, the fire which took place the next day occurred without the signing of the application or a downpayment being made.

Based on the above, Dryden moved for summary judgment dismissing the complaint arguing that plaintiff's property was never insured. Plaintiff's complaint alleged two causes of action; the first claiming breach of contract and the second alleging negligence for not obtaining coverage prior to the loss. Supreme Court granted Dryden's motion with respect to the negligence claim but denied it as to the breach of contract claim. Dryden has appealed.

In New York, oral contracts for insurance are valid as long as all of the elements essential for such a contract are satisfied (see, 68 N.Y.Jur.2d, Insurance, §§ 580, 584, at 687-688, 690; see also, Bersani v. General Acc. Fire & Life Assur. Corp., 36 N.Y.2d 457, 460, 369 N.Y.S.2d 108, 330 N.E.2d 68). Here, Dryden does not dispute that the usual requirements for a contract were satisfied (see, 68 N.Y.Jur.2d, Insurance, § 671, at 778-779). However, it argues that its agent, Tri-Town, had further preconditions before a contract could be formed; namely, the downpayment and signing of the application. Therefore, since these did not occur, there was no enforceable contract (see, TBS Enters. v. Dime Sav. Bank of N.Y., 55 A.D.2d 910, 910-911, 390 N.Y.S.2d 581 affd. 45 N.Y.2d 859, 410 N.Y.S.2d 291, 382 N.E.2d 1154). It is true that Tri-Town's underwriting requirements specify that a downpayment be made before there is a contract and that Ives claimed that she informed the Bulgers of the preconditions. However, plaintiff claimed that she and her husband were never informed of these preconditions. Therefore, in our view, there is a question of fact as to whether the preconditions were ever communicated to the Bulgers. Therefore, Supreme Court properly denied Dryden's motion with respect to the breach of contract cause of action. In reaching this conclusion, we note that on a motion for summary judgment the facts are to be construed in a light most favorable to the nonmoving party and should be denied where there is any significant doubt whether a material issue of fact exists or if there is even arguably such an issue ( Bershaw v. Altman, 100 A.D.2d 642, 643, 473 N.Y.S.2d 72).

We also reject Dryden's claim that Insurance Law § 2324 prohibits insurance coverage without prior payment. That statute permits temporary insurance contracts "if the premium applicable to the insurance shall be due and shall be paid for the time during which the insurance is in force" (Insurance Law § 2324[d]. Contrary to Dryden's arguments, the statute does not state that a payment must actually be made before a contract is formed. Rather, the quoted...