Iannucci v. Allstate Ins. Co.
| Decision Date | 03 December 2018 |
| Docket Number | 1:16-cv-00357 (BKS/DJS) |
| Citation | 354 F.Supp.3d 125 |
| Parties | Robert T. IANNUCCI, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of New York |
For Plaintiff: Derek J. Spada, Basch & Keegan, LLP, 307 Clinton Avenue, P.O. Box 4235, Kingston, NY 12402.
For Defendant: Daniel C. Fleming, Wong Fleming, P.C., 300 East 42nd Street, 14th Floor, New York, NY 10017.
Plaintiff Robert T. Iannucci commenced this action in the Supreme Court of the State of New York, Ulster County, on February 12, 2016, alleging breach of contract after Defendant Allstate Insurance Company ("Allstate") denied his claim for coverage of the roof collapse of his building located at 221 Catherine Street in Kingston, New York. (Dkt. No. 2). On March 30, 2016, Allstate removed this action to the United States District Court for the Northern District of New York based on diversity of citizenship under 28 U.S.C. § 1332. (Dkt. No. 1). On June 19 and 20, 2018, the Court held a two-day bench trial in Albany, New York, at which six fact witnesses and four expert witnesses testified. (Dkt. Nos. 94–95). Both parties have submitted proposed findings of fact and conclusions of law. (Dkt. Nos. 96, 97, 99, 101). The Court has carefully considered the trial record, the credibility of the witnesses at trial, and the submissions of the parties. In accordance with Rule 52(a) of the Federal Rules of Civil Procedure, the Court makes the following findings of fact and conclusions of law.
In 2005, Plaintiff purchased a parcel of land together with a building located at 221 Catherine Street in Kingston, New York. (T. 96–97). The three-story building was a multi-family residential brick structure, built in approximately 1870, with a wood-framed gable roof topped with asphalt shingles. (Ex. P-3, at 1; D-12, at 000536; Ex. D-35, at 2). Plaintiff testified that he paid $125,000 for the property. (T. 96, 391). No one resided in the building at the time Plaintiff purchased the property or afterward; Plaintiff testified that he intended to use the building as an anchor structure for a larger residential project. (T. 97, 103–104, 139). Plaintiff disconnected the building from electric, gas, and water utility lines; removed the bathrooms and kitchens; and boarded up the first-story doors and windows. (T. 97, 106, 151).
The building was not well maintained. (See, e.g. , T. 100–03, 190, 206; Ex. D-28(a)–(c) ). Plaintiff testified that, other than occasional exterior inspections and lawn work, he did not perform or have any work performed on the building between 2005 and 2014. (T. 113, 141, 150–151). One long-time neighbor described the building as "abandoned," "condemned," and deteriorating. (T. 190). Photos of the property from 2012, obtained from Google Street View, show damage to the bricks, mortar, gutters, and fascia of the building, as well as a small tree growing at the roofline.2 (Ex. D-28(a)–(c) ). Between 2011 and 2013, the Kingston Fire Department (the "KFD") issued multiple zoning/ordinance violation notices ordering Plaintiff to make various improvements to the building and property. (See, e.g. , Exs. D-11; D-12 (May 23, 2012 violation notice stating that building was "abandoned and [no] work being done to maintain the building" and that "[t]here is a tree growing out of the roof"); D-13 (May 6, 2011 violation notice stating that the "entire exterior of the building is in need of repairs including the siding, soffits, fascias, windows and doors") ).3
One such violation notice, issued on October 17, 2013, stated that "the roof on your house needs to be replaced" and warned Plaintiff that "[f]ailure to begin work" to remedy the violation would result in a fine. (Ex. D-11). Plaintiff responded by writing to KFD Deputy Fire Chief David Allen, explaining that he had "done nothing to the property" since receiving the notice and that he believed there were "good reasons to allow the property to remain in its present condition." (Ex. D-18).
Plaintiff testified that, shortly after receiving the notice, he contacted Ian Horowitz of J & A Roofing to inspect the roof. (T. 111).
Mr. Horowitz did not testify at trial.4 Mr. Horowitz testified at deposition that he inspected the roof in October 2013 by climbing a ladder to check the condition of the shingles and by accessing the attic to view the supporting elements beneath. (Ex. P-17, at 15–17). He testified that the asphalt shingles of the roof were loose and worn, but that, as viewed from the attic, the underlying structure—the decking, joists, and rafters—were sound with no sagging, bent, or rippling areas in the ceiling. (Id. at 17, 21–23). That testimony is not consistent with the photographic evidence and the credible testimony of the Defendant's engineer, its claims adjuster, and its architectural and roofing expert. (See T. 256–57, 269–70, 337–38, 377–79). The Court, therefore, does not credit Mr. Horowitz's testimony regarding the state of the roof in October 2013.
Plaintiff testified that, as a result of Mr. Horowitz's inspection, he intended to replace the shingles—but not the rafters, decking, or other underlying structural elements of the roof—at the end of the winter "when the weather would be more friendly." (T. 112). Before any such work was performed, however, the roof collapsed during a snowstorm on February 21, 2014. (Ex. P-1, at 000355; Ex. D-16, at 001399–401).
From the time he purchased the Catherine Street building in 2005, Plaintiff insured the property under Allstate's "New York Landlords Package Policy" (the "Policy"). (Ex. D-1, at 000677). The Policy provides a maximum of $103,000 in dwelling protection coverage and up to an additional 5% of that amount, or $5,150, for debris removal following a covered loss. (Ex. D-1, at 000645–46, 000682). The Policy states that "[l]oss to property insured by this policy ... will be settled on an actual cash value basis," and specifies, in relevant part, that "[p]ayment will not exceed the smallest of: (a) the actual cash value of the damaged [or] destroyed ... property at the time of loss; (b) the amount necessary to repair or replace the damaged [or] destroyed ... property with other of like kind and quality." (Id. at 000663; T. 225–26).
The Policy under which the Catherine Street property was insured contains both "all-risk" coverages—meaning coverage for any loss or cause of loss, except those expressly excluded from coverage—and named-peril coverages that extend protection only to losses caused by specific risks. (T. 227–29). To that end, "Coverage A"—the all-risk section of the Policy—extends coverage to an insured's "dwelling, including attached structures, at the residence premises."5 (Ex. D-1, at 000674). The Policy states that Allstate "will cover sudden and accidental direct physical loss" to such structures, "except as limited or excluded" in the Policy. (Id. at 000675). Under the heading "Losses We Do Not Cover Under Coverages A and B," the Policy lists twenty-three exclusions, and explains that Allstate does "not cover loss ... consisting of, or caused by," inter alia :
(Id. at 00675–78). Subsection 24 of the "Losses We Do Not Cover" exclusion section contains a predominant cause exclusion, which states that, in the event that "there are two or more causes of loss to the covered property" and the "predominant cause(s) of loss is (are) excluded," Allstate will not cover the loss. (Id. at 000678).
In addition to all-risk coverage subject to specified exclusions, the Policy also contains a "Section I—Additional Protection" section listing named-perils covered beyond those encompassed by Coverages A, B, and C. (Id. at 000682). These "Additional Protection[s]" include, for example, the cost of removing debris resulting from a covered loss and certain specified collapses. (Id. ; T. 227). The collapse provision in the "Additional Protection" section ("Additional Protection 6") provides that Allstate "will cover: (a) the entire collapse of a covered building structure; (b) the entire collapse of part of a covered building structure; and (c) direct physical loss to covered property caused by (a) or (b) above." (Ex. D-1, at 000682). For such coverage to apply, however, the Policy specifies that any such collapse must "be a sudden and accidental direct physical loss caused by one or more" of six named causes. (Id. ). In relevant part, these causes include "(b) hidden decay of the building structure [or] ... (e) weight of rain or snow which collects on a roof." (Id. at 000682–83).
On March 3, 2013, the KFD issued a "violation notice and order to remedy," directing Plaintiff to demolish the Catherine Street building because the "roof ha[d] collapsed[,] causing an unsafe environment to the safety of the public." (Ex. D-16, at 001403). Multiple documents in the City of Kingston's "street file" on the Catherine Street property indicated that the collapse of the roof was caused by "heavy accumulation of snow," (id. at 001399), or "accumulation of heavy snow," (id. at 001401).7
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