Place v. Preferred Mut. Ins. Co.

Decision Date28 January 2021
Docket Number530273
Citation141 N.Y.S.3d 528,190 A.D.3d 1208
Parties Laura E. PLACE, Respondent—Appellant, v. PREFERRED MUTUAL INSURANCE COMPANY, Appellant—Respondent, and Upstate Agency, LLC, Respondent.
CourtNew York Supreme Court — Appellate Division

190 A.D.3d 1208
141 N.Y.S.3d 528

Laura E. PLACE, Respondent—Appellant,
v.
PREFERRED MUTUAL INSURANCE COMPANY, Appellant—Respondent,
and
Upstate Agency, LLC, Respondent.

530273

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

Calendar Date: January 11, 2021
Decided and Entered: January 28, 2021


Mura & Storm, PLLC, Buffalo (Scott D. Mancuso of counsel), for appellant-respondent.

Law Offices of Gustave J. DeTraglia Jr., Utica (Michele E. DeTraglia of counsel), for respondent-appellant.

McPhillips Fitzgerald & Cullum, LLP, Glens Falls (Eric C. Schwenker of counsel), for respondent.

Before: Lynch, J.P., Clark, Mulvey, Pritzker and Colangelo, JJ.

MEMORANDUM AND ORDER

Mulvey, J.

In 2010, plaintiff acquired a residential property located in Essex County (hereinafter the property). With the assistance of defendant Upstate Agency, LLC, an insurance broker, plaintiff obtained a homeowners' insurance policy issued by defendant Preferred Mutual Insurance Company (hereinafter PMIC). At the end of August 2016, plaintiff purchased a new primary residence and moved into that new residence shortly thereafter. On February 17, 2017, plaintiff discovered significant water damage at the property. Plaintiff filed a claim with PMIC to recover for her damages, which PMIC denied. Plaintiff commenced the present action alleging that PMIC improperly denied coverage and that Upstate negligently failed to obtain appropriate insurance coverage for the property. PMIC moved for summary judgment dismissing the complaint

141 N.Y.S.3d 531

against it. Plaintiff cross-moved for summary judgment against both defendants and for leave to amend her complaint. Supreme Court denied both motions. PMIC appeals and plaintiff cross-appeals.

Supreme Court properly denied plaintiff's and PMIC's motions for summary judgment. "Before an insurance company is permitted to avoid policy coverage, it must satisfy" its burden of establishing that the policy does not cover the loss or that an exclusion or exemption applies, and that the policy provisions are clear and "subject to no other reasonable interpretation" ( Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704, 708, 955 N.Y.S.2d 817, 979 N.E.2d 1143 [2012] [internal quotation marks, brackets and citations omitted]; accord Wickline v. New York Cent. Mut. Fire Ins. Co., 163 A.D.3d 1238, 1239, 80 N.Y.S.3d 702 [2018] ). "Policy provisions must be interpreted according to common speech and consistent with the reasonable expectation of the average insured, and ambiguities are to be construed against the insurer" ( Wickline v. New York Cent. Mut. Fire Ins. Co., 163 A.D.3d at 1239, 80 N.Y.S.3d 702 [internal quotation marks, brackets, ellipsis and citations omitted]; see Matter of Mostow v. State Farm Ins. Cos., 88 N.Y.2d 321, 326–327, 645 N.Y.S.2d 421, 668 N.E.2d 392 [1996] ; Broome County v. Travelers Indem. Co., 125 A.D.3d 1241, 1242, 6 N.Y.S.3d 300 [2015], lv denied 25 N.Y.3d 908, 2015 WL 2237286 [2015] ). A provision's meaning "must be determined upon consideration of the policy as a whole" and the "contract should not be read so that some provisions are rendered meaningless" ( Broome County v. Travelers Indem. Co., 125 A.D.3d at 1242, 6 N.Y.S.3d 300 [internal quotation marks and citation omitted] ).

In its denial letter, PMIC stated that it was denying coverage for the claim because plaintiff "had vacated the home and therefore the home does not meet the definition of insured premises as defined by [plaintiff's] policy." The letter also stated that the policy "excludes against freezing unless heat is maintained or the system is drained," and "[h]eat was not maintained due [to a] broken window." Under the definition of insured premises, the insurance policy states that "[i]f ‘you’ own and reside in the ‘residence’ shown on the ‘declarations’ as the described location, the ‘insured premises’ means: 1) that ‘residence’; and 2) related private structures and grounds at that location." Residence is defined to include "a one- to four-family house ... used mainly for family residential purposes." Coverage A under the policy says that " ‘[w]e’ cover the ‘residence’ on the ‘insured premises.’ " Under Coverage C, the policy states that " ‘[w]e’ cover personal property owned by or in the care of an ‘insured.’ Coverage for personal property usually on residential premises of an ‘insured’ other than the ‘insured premises’ is limited to 10% of the Coverage C ‘limit.’ " An exclusion in the policy for both Coverage A and C states that " ‘[w]e’ do not pay for loss caused by freezing or the resulting discharge, leakage, or overflow from any plumbing, heating, air-conditioning or automatic fire protective sprinkling system; water heater; or domestic appliance if the ‘residence’ is vacant, unoccupied, or under construction and unoccupied. This exclusion does not apply if ‘you’ take reasonable care to: a. maintain heat in the building or mobile home; or b. shut off the water supply and completely empty liquids from such system, heater, or appliance."

PMIC failed to demonstrate that there is only one reasonable interpretation of the policy and exclusion and, under that single interpretation, plaintiff's loss was unambiguously not covered by the policy (see

141 N.Y.S.3d 532

Wickline v. New York Cent. Mut. Fire Ins. Co., 163 A.D.3d at 1240, 80 N.Y.S.3d 702 ; compare Superhost Hotels Inc. v. Selective Ins. Co. of Am., 160 A.D.3d 1162, 1163–1164, 75 N.Y.S.3d 124 [2018] ). Though the definition of "[i]nsured premises" specifies that the insured must reside at the premises, the policy...

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