Magnano v. Allegany Co-Op Ins. Co.

• Court: New York Supreme Court — Appellate Division
• Citation: Magnano v. Allegany Co-Op Ins. Co., 187 A.D.3d 1533, 132 N.Y.S.3d 196 (N.Y. App. Div. 2020)
• Decision Date: 02 October 2020
• Docket Number: 391,CA 19–01333
• Parties: Louis Michael MAGNANO, Plaintiff-Appellant, v. ALLEGANY CO-OP INSURANCE COMPANY, Defendant-Respondent, et al., Defendant.

187 A.D.3d 1533

132 N.Y.S.3d 196

Louis Michael MAGNANO, Plaintiff-Appellant,

v.ALLEGANY CO-OP INSURANCE COMPANY, Defendant-Respondent, et al., Defendant.

391

CA 19–01333

Supreme Court, Appellate Division, Fourth Department, New York.

Entered: October 2, 2020

HOGANWILLIG, PLLC, AMHERST (SCOTT MICHAEL DUQUIN OF COUNSEL), FOR PLAINTIFF-APPELLANT.

STUART B. SHAPIRO, KENMORE, FOR DEFENDANT-RESPONDENT.

PRESENT: WHALEN, P.J., CENTRA, PERADOTTO, WINSLOW, AND BANNISTER, JJ.

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is denied, and the complaint is reinstated against defendant Allegany Co-op Insurance Company.

Memorandum: Plaintiff commenced this action seeking damages for breach of a homeowner's insurance policy. In his complaint, plaintiff alleged that his home suffered extensive damage as a result of a water leak in the second floor master bathroom. Plaintiff had a homeowner's insurance policy through defendant Allegany Co-Op Insurance Company (Allegany), which included coverage for water damage. Plaintiff notified Allegany of the loss and submitted a sworn statement in proof of loss, which contained a description of the damage to the home and a contractor's estimate of the cost to repair the damage, and a claim of loss in the amount of $72,748. Allegany disclaimed coverage of plaintiff's claim on, inter alia, the grounds that the claim was inflated and that there was prior damage to the home that was not disclosed to Allegany. Supreme Court granted the motion of Allegany for summary judgment dismissing the complaint against it. Plaintiff appeals, and we reverse.

We agree with plaintiff that Allegany failed to meet its initial burden on its motion of establishing as a matter of law that the claim was inflated (see generally Zuckerman v. City of New York , 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ). A policy may be voided if the insured " ‘willfully and fraudulently placed in the proofs of loss a statement of property lost which [the insured] did not possess, or has placed a false and fraudulent value upon the articles which [the insured] did own’ " ( Saks & Co. v. Continental Ins. Co. , 23 N.Y.2d 161, 165, 295 N.Y.S.2d 668, 242 N.E.2d 833 [1968] ; see Domagalski v. Springfield Fire & Mar. Ins. Co. , 218 App. Div. 187, 190, 218 N.Y.S. 164 [4th Dept. 1926] ). "Incorrect information is not necessarily tantamount to fraud or material misrepresentation as the insurer must tender ‘proof of intent to defraud—a necessary element to the defense’ " ( Magie v, Preferred Mut. Ins. Co. , 91 A.D.3d 1232, 1233-1234, 937 N.Y.S.2d 452 [3d Dept. 2012], quoting Deitsch Textiles v. New York Prop. Ins. Underwriting Assn. , 62 N.Y.2d 999, 1001, 479 N.Y.S.2d 487, 468 N.E.2d 669 [1984] ; see Azzato v. Allstate Ins. Co. , 99 A.D.3d 643, 646, 951 N.Y.S.2d 726 [2d Dept. 2012] ; Kittner v. Eastern Mut. Ins. Co. , 80 A.D.3d 843, 847, 915 N.Y.S.2d 666 [3d Dept. 2011], lv dismissed 16 N.Y.3d 890, 924 N.Y.S.2d 319, 948 N.E.2d 926 [2011], 18 N.Y.3d 911, 940 N.Y.S.2d 558, 963 N.E.2d 1259 [2012] ). " ‘[U]nintentional fraud or false swearing or the statement of any opinion mistakenly held[, however,] are not grounds for vitiating a policy’ " ( Christophersen v. Allstate Ins. Co. , 34 A.D.3d 515, 516, 824 N.Y.S.2d 171 [2d Dept. 2006] ).

Here, although Allegany's submissions in support of its motion demonstrate a disparity between the estimates of plaintiff's contractor and Allegany's assessor of the amount of damage and loss (see generally Magie , 91 A.D.3d at 1233-1234, 937 N.Y.S.2d 452 ), the submissions fail to establish fraudulent intent on the part of plaintiff (cf. Azzato , 99 A.D.3d at 646, 951 N.Y.S.2d 726 ). Plaintiff's proof of loss statement did not include duplicative items, unincurred expenses, or substantial sums of money that were unaccounted for (cf. Latha Rest. Corp. v. Tower Ins. Corp. , 38 A.D.3d 321, 321, 831 N.Y.S.2d 411 [1st Dept. 2007], lv denied 9 N.Y.3d 803, 840 N.Y.S.2d 763, 872 N.E.2d 876 [2007], cert denied 552 U.S. 1010, 128 S.Ct. 545, 169 L.Ed.2d 373 [2007] ), and the disparity between the damage estimate of plaintiff's contractor and the estimate of Allegany's assessor is not "so grossly excessive as to constitute false swearing and misrepresentation" ( Pogo Holding Corp. v. New York Prop. Ins. Underwriting Assn. , 97 A.D.2d 503, 505, 467 N.Y.S.2d 872 [2d Dept. 1983], affd 62 N.Y.2d 969, 479 N.Y.S.2d 336, 468 N.E.2d 291 [1984] ; cf. Azzato , 99 A.D.3d at 646, 951 N.Y.S.2d 726 ).

To the extent that the court based its determination on its finding that plaintiff's inclusion "in his claim [of] cabinets to replace those not damaged by water in this event" vitiated the insurance policy and prohibited plaintiff's recovery under the policy,...