Rudder v. Broome Co-Operative Ins. Co.
| Decision Date | 20 March 2023 |
| Docket Number | Index No. EFCA2022001548 |
| Citation | 2023 NY Slip Op 30879 (U) |
| Parties | BELINDA RUDDER, Plaintiff, v. BROOME CO-OPERATIVE INSURANCE COMPANY, Defendant. |
| Court | New York Supreme Court |
Unpublished Opinion
COUNSEL FOR PLAINTIFF: GALLAGHER LAW OFFICE BY: BRIAN R GALLAGHER, ESQ.
DECISION AND ORDER
Defendant Broome Co-Operative Insurance Company ("Broome") brought the instant motion to dismiss the Complaint pursuant to CPLR 3211(a)(1), (3), (5) and/or (7). The motion . has been opposed by Plaintiff Belinda Rudder ("Rudder"). Oral argument was conducted and the attorneys for both parties were present. After due deliberation, this constitutes the Court's Decision and Order.
The basic facts of this case can be easily summarized. Rudder owned an 11-acre parcel of land in Hallstead, Pennsylvania, which contained standing timber. In September 2015, Rudder entered into a logging agreement with Kevin Decker d/b/a Timber Management ("Decker") for logging services on Rudder's land. Decker is not a party to this action. The logging agreement contained a clause that Decker was to provide Rudder with a certificate of liability insurance of $3 million, and that Decker would hold Rudder harmless for any injury or damages done to neighbors by logging. On the same date, Decker and Rudder also entered into a second contract relating to Decker transporting timber cut from adjacent properties across Rudder's land. That contract provided that Decker "shall indemnify and defend [Rudder] against any loss, claim, action, damage or expense which [Rudder] may incur by reason of' Decker's negligence in connection with the logging activities.
In September 2015, Decker obtained a liability policy from Broome which listed Rudder as the certificate holder.[1] On October 14,2015, Rudder sent a letter to Decker claiming that she had not been properly compensated for the timber Rudder had removed from her property. She advised Decker that he was in breach of the logging agreement.
On October 26, 2015, Rudder filed a claim with Broome to recover for property damages because stumps were left standing and because the roadway was left with ruts.[2] On August 19, 2019, Broome issued a letter to Rudder denying the claim and disclaiming coverage for this loss. On October 16,2019 Rudder sent correspondence to Broome claiming that Broome was barred from disclaiming coverage because it had waited too long to raise disclaimer.
Plaintiff commenced this action by the filing of a Summons and Complaint on August 18, 2022. Among other things, the Complaint alleges that Broome violated New York Insurance Law § 3420(d), and also alleges bad faith claims under Pennsylvania law. Despite the fact that the actions complained of were performed by Decker, Plaintiff did not sue Decker, and has not provided any explanation for not doing so.
Broome brought this pre-Answer motion to dismiss contending that there is no privity of contract between Rudder and Broome, and that Rudder was not a named or additional insured of Broome, so she could have no claim against Broome. Broome also argues that New York Ins. Law § 3420 does not permit a direct action against an insurance company until there has been a judgment entered against the insured, and there has been no judgment entered against Rudder (or Decker for that matter). Further, Broome also argues that NY Ins. Law § 3420(d) does not apply to claims for property damage; and that even if it did, it would not apply to accidents occurring outside of New York State. Next, Broome contends that the action is barred by the Statute of Limitations under the terms of the contract which require an action to be brought within 2 years, or under the general 6-year Statute of Limitations for breach of contract claims. Lastly, Broome argues that Plaintiff has no viable bad faith claim.
In opposition, Plaintiff claims that she was not provided with the insurance contract prior to the motion to dismiss and should be entitled to discovery. Plaintiff also argues that Defendant should be estopped from raising lack of capacity to sue because of Defendant's long delay in disclaiming coverage. With respect to the Statute of Limitations, Plaintiff argues that either the date of Broome's denial letter (August 19,2019) or the date of last negotiations between Rudder and Broome (October 23, 2019) are both within 3 years of the filing of the action (August 18, 2022), which would make the action timely. Plaintiff also disputes the 2-year Statute of Limitation language in the contract as the contract has not been authenticated. Plaintiff acknowledges that NY Ins. Law § 3420(d) may not be the proper basis for her argument on the untimeliness of Broome's disclaimer but falls back on principles of common law estoppel. Lastly, Plaintiff argues that there is a viable claim for bad faith under Pennsylvania law. Plaintiff alternatively seeks leave of court to amend her complaint to include a bad faith claim under New York law.
Broome filed a reply affirmation which responds to Plaintiff's arguments. Plaintiff then filed a Sur-Reply affirmation.
"In the context of a CPLR 3211 motion to dismiss, the pleadings are necessarily afforded a liberal construction". Goshen v. Mutual Life Ins. Co., 98 N.Y.2d 314, 326 (2002), see Leon v Martinez, 84 N.Y.2d 83, 88 (1994). The Court must "accept the facts as alleged in the complaint as true, accord plaintiff[] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory". Goldman v. Metropolitan Life Ins., 5 N.Y.3d 561, 570-571 (2005); see Leon v. Martinez, supra. The "ultimate criterion is whether the proponent of the pleading has a cause of action, not whether he [or she] has stated one." Schmidt &Schmidt, Inc. v. Town of Charlton, 68 A.D.3d 1314,1315 (3rd Dept. 2009) (quoting Leon v. Martinez, 84 N.Y.2d 83, 88).
To prevail on a motion to dismiss pursuant to CPLR 3211(a)(1), the movant must demonstrate that "the documentary evidence utterly refutes plaintiffs factual allegations, conclusively establishing a defense as a matter of law." R.I. Is. House, LLC v. North Town Phase II Houses, Inc., 51 A.D.3d 890, 893 (2nd Dept. 2008), quoting Goshen v. Mutual Life Ins. Co., 98 N.Y.2d at 326; see HSBC Bank USA, N.A. v. Decaudin, 49 A.D.3d 694, 695 (2008); Kolchins v. Evolution Mkts., Inc., 31 N.Y.3d 100 (2018); see, Fontanetta v. John Doe 1, 73 A.D.3d 78 (2nd Dept. 2010); see also, Leon v. Martinez, supra at 88. "Materials that clearly qualify as documentary evidence include documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable." Ganje v. Yusuf, 133 A.D.3d 954, 956-957 (3rd Dept. 2015); citing Midorimatsu, Inc. v. Hui Fat Co., 99 A.D.3d 680, 682 (3rd Dept. 2012), Iv dismissed 22 N.Y.3d 1036 (2013) (internal quotation marks and citations omitted).
The distinction between CPLR 3211(a)(1) and (a)(7) can become blurred in some situations. "When documentary evidence is submitted by a defendant, 'the standard morphs from whether the plaintiff stated a cause of action to whether it has one.'" Basis Yield Alpha Fund (Master) v. Goldman Sachs Group, Inc., 115 A.D.3d 128, 135 (1st Dept. 2014), quoting John R. Higgitt, CPLR 3211 [a][7] and [a] [7] Dismissal Motions-Pitfalls and Pointers, 83 NY St. BJ 32,33 (2011). That is because the documentary evidence is being used to conclusively establish that no cause of action exists. See, e.g. Maldonado v. DiBre, 140 A.D.3d 1501 (3rd Dept. 2016).
An insurance contract is the type of document that may support dismissal under CPLR 3211(a)(1). See, Goldman v. Metro. Life Ins. Co., 5 N.Y.3d 561; Zeligfeld v. Phoenix Life Ins. Co., 39 Misc.3d 1213(A) (Sup. Ct., Kings County 2013). Here, contrary to Plaintiffs contention, the Declarations document was properly authenticated. Jackie Boeltz, a claims representative with Broome, submitted an affidavit stating that she was fully familiar with the underlying facts of this action and the contents of the claims file. She stated that Broome issued a Commercial Insurance policy to Decker covering the period from September 15,2015 to September 15,2016. She attached the Policy Declaration sheet as an Exhibit to her affidavit. The information was sufficient to authenticate the insurance Policy Declarations. See, Calhoun v. Midrox Ins. Co., 165 A.D.3d 1450 (3rd Dept. 2018); Hefter v. Elderserve Health, Inc., 134 A.D.3d 673 (2nd Dept. 2015).
Plaintiff seeks the opportunity to obtain discovery and investigate the authenticity of the Declarations document. However, Rudder only indicates that she has not seen that document prior to this motion despite requesting it; but she does not offer any information or evidence to call into question the authenticity of the document. Her unsubstantiated allegations and assertions are insufficient to raise a question on the motion. See, First Interstate Credit Alliance, Inc. v. Sokol, 179 A.D.2d 583 (1st Dept. 1992); Calhoun v. Midrox Ins. Co., 165 A.D.3d 1450; Hefter v. Elder serve Health, Inc., 134 A.D.3d 673. Therefore, the Declarations document authenticated by Boeltz, is admissible and can be used to support the motion to dismiss.
The Declarations document attached to the Boeltz affidavit also refers to form SF-20 (Edition 1/88) as part of the agreement. SF-20 was attached to the affirmation of Mark Goris, Esq. and although he may not have had personal knowledge with respect to that document, it simply supplements the Declarations document...
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