Krupp v. Aetna Life & Cas. Co.

• Decision Date: 04 September 1984
• Citation: 479 N.Y.S.2d 992,103 A.D.2d 252
• Parties: Robert KRUPP, Plaintiff; Mary Krupp, Respondent, v. AETNA LIFE & CASUALTY CO., a/k/a Aetna Casualty & Surety Co., Appellant.
• Court: New York Supreme Court — Appellate Division

Page 992

479 N.Y.S.2d 992

103 A.D.2d 252

Robert KRUPP, Plaintiff; Mary Krupp, Respondent, v. AETNA LIFE & CASUALTY CO., a/k/a Aetna Casualty & Surety Co., Appellant.

Supreme Court, Appellate Division Second Department.

Sept. 4, 1984.

Whitman & Ransom, New York City (Joseph V. McCarthy and Frederick R. Mindlin, New York City, of counsel), for appellant.

Blumberg, Fitzgibbons & Blumberg, Riverhead (Cruser, Hills, Hills & Besunder, Riverhead, Harvey B. Besunder, Riverhead, of counsel), for respondent.

Before MOLLEN, P.J., and MANGANO, THOMPSON and BOYERS, JJ.

BOYERS, Justice.

On December 29, 1980, a fire occurred in the two-story wood frame house owned by plaintiffs Robert and Mary Krupp, husband and wife, as tenants by the entirety, causing substantial damage. At the time of the loss, the dwelling and its contents were insured under a standard homeowners' insurance policy issued by defendant, the Aetna Casualty and Surety Company (hereinafter Aetna). The policy provided, inter alia, for coverage for fire loss or damage to the insured premises in the sum of $70,000, the "named insured" being denominated as "Robert and Mary Krupp".

Aetna, as insurer, was notified of the loss, and in response to its demand, on June 4, 1981, Mary Krupp executed a "Sworn Statement in Proof of Loss" wherein she described the cause and origin of the loss as "Arson". Thereafter, pursuant to the terms of the Aetna homeowner's policy, both Mary and Robert Krupp were examined under oath by Aetna's representative. During the examination, conducted August 6, 1981, Robert Krupp, upon the advice of counsel, declined to answer various questions propounded by Aetna's attorney. Mary Krupp's testimony was sparse, being limited in the main to augmenting her husband's testimony that he, his wife and two of their children commenced an automobile trip to Chicago on December 23, 1980 and did not return until after the conflagration. In response to an inquiry as to the basis for her determination that the fire was caused by arson, Mary Krupp explained that a sign in front of the house had stated "Under Arson Investigation". She was never interviewed by the arson squad, and denied any knowledge as to who started the fire. The proof of loss sworn to by Mary Krupp delineated three outstanding encumbrances on the premises which were acknowledged by Robert Krupp at the examination under oath to represent a mortgage of the property in 1973 at the time the house was purchased and security for two separate subsequent home improvement loans. Robert Krupp complied with his attorney's direction that he not respond to questioning about repayments on the loans secured by mortgages on the house. Mary Krupp denied knowledge of whether repayments on the three secured loans were current on the date of the fire, explaining that her husband paid all the bills. The transcript of the examination under oath of both Robert and Mary Krupp, including a recitation of appearances, amounted to some 27 pages. It is also worthy of note that the transcript of Mary Krupp's examination under oath is neither signed by her as examinee nor notarized.

Aetna declined to make any payment on the policy, and, on December 7, 1981, Mary Krupp commenced this action against Aetna to recover proceeds under the homeowners' policy. At the examination under oath prior to commencement of this action, Robert Krupp stated that he was not making a claim under the policy; however, by stipulation entered into after commencement of the action, and prior to joinder of issue, the caption was amended to make Robert Krupp a party plaintiff.

Demanded in the complaint are insurance proceeds in the sum of $108,885, consequential damages, "treble and punitive damages" in the amount of $326,655, and attorneys fees of $15,000, together with interest, costs and disbursements.

By its answer, served July 21, 1982, Aetna asserted arson as a first affirmative defense. More specifically, it was alleged that:

"the fire on the insured premises was wilfully and maliciously set or caused to be set be the plaintiffs, or with their privity, knowledge or consent, and with the intent to defraud and deceive * * * defendant".

As a second affirmative defense, Aetna alleged that plaintiffs could not maintain their action because, pursuant to the terms and conditions of the insurance policy, it demanded that plaintiffs appear for examination under oath and upon their appearing, "plaintiffs wilfully refused to answer certain material and relevant questions". By way of two counterclaims, Aetna sought to recover $4,500 advanced on the policy, and asserted that in the event Aetna was required to make payment to Mary Krupp, it should have "judgment over against * * * Robert Krupp * * * by reason of the wrongful acts alleged in the first affirmative defense".

On January 7, 1983, nearly six months after joinder of issue, Robert Krupp, who had been charged with arson in the third degree (see Penal Law, § 150.10) based upon the December, 1980 fire damage to his home, pleaded guilty to the class A misdemeanor of attempted arson in the fourth degree (see Penal Law, §§ 110.00; 150.05). The Assistant District Attorney described Robert Krupp's activities: Robert Krupp secured several gasoline cans, filled them with gasoline, left them in the basement of his home and provided another individual with the keys to his home. He then left the jurisdiction and the house was burned by the individual with whom the keys were left, the motive being to collect insurance proceeds.

By motion returnable February 22, 1983, Aetna sought a preclusion order based upon plaintiffs' failure to furnish a bill of particulars in response to Aetna's demand. That motion was subsequently withdrawn based upon service of a responsive bill; however, in the meantime, Mary Krupp cross-moved, inter alia, for partial summary judgment in her favor.

In support, counsel for Mary Krupp submitted his own affidavit, together with the recently served bill of particulars, the homeowners' policy sued upon, the statement in proof of loss sworn to by Mary Krupp, and an estimate of the fire damage sustained and repair costs totaling $79,555. Assuming, arguendo, that Robert Krupp was in some manner responsible, counsel urged, since Mary Krupp was sans culpability for the fire and its effects, she was entitled to recover her portion of the insurance policy proceeds. As foundation for the proposition that Mary Krupp was not involved in any wrongful act, her attorney asserted that there was not a "scintilla of evidence, nor even a claim, that * * * Mary Krupp, was in any way culpable or involved directly or indirectly in the fire which occurred and the resulting damages", that no criminal charges had been laid against her after an extremely thorough and complete investigation by the arson squad, and his (the attorney's) own investigation indicated no willful or malicious conduct on her part.

In opposition to Mary Krupp's cross motion, Aetna submitted the affirmation of counsel, a certified Suffolk County Police Department "Offense Report" indicating that the fire was of a deliberate nature, the use of an accelerant being evident, a copy of the transcript of the proceeding at which Robert Krupp pleaded guilty to attempted arson in the fourth degree, and a copy of the transcript of the examinations of Robert and Mary Krupp under oath.

By his affirmation in opposition, counsel for Aetna contended that it was hard to believe that Mary Krupp was unaware of the plaintiffs' financial condition or that she "did not observe her spouse obtaining and placing four five gallon gasoline cans" in the marital home prior to the couple's departure for Chicago. While it was possible that Mrs. Krupp was a victim of naivete, counsel noted the question was one of credibility, and accordingly, should be resolved by the trier of fact rather than by way of a motion for summary judgment. Counsel further asserted that the papers in support were insufficient inasmuch as the cross motion was predicated upon an attorney's affidavit rather than upon the affidavit of an individual with knowledge of the facts.

By way of reply affirmation, counsel for Mary Krupp argued that the testimony of Robert and Mary Krupp at their examinations under oath clearly established that Mrs. Krupp did not and could not have been possessed of "any knowledge of her husband's intentions and plans in connection with the fire"; further, Mary Krupp had not been charged with any criminal offense, and if the appropriate law enforcement authorities had failed to " 'point a finger' " at her, how could Aetna expect to do so?

Special Term granted Mary Krupp's cross motion for partial summary judgment on the issue of liability, stating, inter alia:

"Mary Krupp seeks partial summary judgment on her cause of action for monies due her as a co-insured under a fire insurance policy issued by defendant on her home which she owned as a tenant by the entirety with plaintiff, Robert Krupp. Defendant alleges that Mary Krupp may have participated in her husband's activities which may have contributed or caused the fire in their home. Defendant has submitted proof that plaintiff, Robert Krupp, pleaded guilty to attempted arson in the fourth degree for his part in setting fire to their home but has not submitted any proof beyond mere allegations that Mary Krupp was involved. The misconduct of one co-insured may not be imputed to the other so as to prevent the innocent insured from collecting under the policy. Winter v. Aetna Casualty & Surety, 96 Misc.2d 497 Mere allegations are insufficient to defeat a motion for summary judgment. Defendant must submit proof. Although the movant has failed to submit an affidavit as to the facts underlying this action, she has submitted a copy of a deposition in which she denied having any knowledge as to who set fire to the house and other sufficient proof to allow the Court to grant partial summary judgment on the...