Schunk v. New York Cent. Mut. Fire Ins. Co.

• Decision Date: 14 March 1997
• Citation: 237 A.D.2d 913,655 N.Y.S.2d 210
• Parties: James M. SCHUNK and Gloria F. Schunk, Respondents, v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY and Allied Claims Services, Inc., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 210

655 N.Y.S.2d 210

237 A.D.2d 913

James M. SCHUNK and Gloria F. Schunk, Respondents, v. NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY and Allied

Claims Services, Inc., Appellants.

Supreme Court, Appellate Division,

Fourth Department.

March 14, 1997.

Hodgson, Russ, Andrews, Woods & Goodyear, L.L.P. by Michael Deming, Buffalo, for appellants.

Lustig & Brown, L.L.P. by David Fretz, Buffalo, for appellant.

Brian W. Downey by Brian Downey, Williamsville, for respondents.

Before DENMAN, P.J., and GREEN, BALIO, BOEHM and FALLON, JJ.

MEMORANDUM:

On January 29, 1992, plaintiffs' barn and its contents were destroyed by fire. The barn and its contents were insured by defendant New York Central Mutual Fire Insurance Company (New York Central) under a policy providing coverage of $10,200 on the barn and $71,400 on the contents. Defendant Allied Claims Services (Allied) was retained by New York Central to adjust plaintiffs' claim. After receiving timely sworn proofs of loss, New York Central paid plaintiffs $10,200 on the structure claim, $700 on a boat parts claim and $1,500 on a boat motor claim. Thereafter, Allied made various offers of settlement on plaintiffs' contents claim, none of which was accepted. On June 9, 1993, Allied sent a certified letter to plaintiffs requesting that the enclosed proof of loss forms on the contents claim be completed, signed, sworn to and returned within 60 days. Allied sent a copy of that letter to plaintiffs' attorney. A separate letter reiterating New York Central's demand that a sworn proof of loss be submitted by plaintiffs was hand-delivered to plaintiffs' attorney on June 10, 1993. No proofs of loss were ever received by New York Central, and on October 6, 1993, New York Central sent plaintiffs a letter denying their contents claim on the grounds that plaintiffs had failed to submit proofs of loss and had committed fraud by grossly exaggerating the extent and value of the contents destroyed in the fire.

On April 28, 1995, plaintiffs commenced this action alleging breach of the insurance contract against New York Central and violation of General Business Law § 349, fraud breach of the implied covenant of good faith and fair dealing, and defamation against both defendants. Only Allied interposed an answer. New York Central moved to dismiss the complaint on the grounds that plaintiffs had failed to submit timely proofs of loss and all of the causes of action in the complaint were barred by the limitations period in the policy. Allied cross-moved for summary judgment on the same grounds and, inter alia, on the further ground that Allied was a "disclosed agent" and thus had no contractual liability to plaintiffs. Supreme Court denied both motions. We reverse.

The failure of plaintiffs to provide timely proofs of loss on their contents claim is a complete defense to the breach of contract cause of action against New York Central. "When an insurer gives its insured written notice of its desire that proof of loss under a policy of fire insurance be furnished and provides a suitable form for such proof, failure of the insured to file proof of loss within 60 days after receipt of such notice, or within any longer period specified in the notice, is an absolute defense to an action on the policy, absent waiver of the requirement by the insurer or conduct on its part estopping its assertion of the defense" (Igbara Realty Corp. v. New York Prop. Ins. Underwriting Assn., 63 N.Y.2d 201, 209-210, 481 N.Y.S.2d 60, 470 N.E.2d 858). Plaintiffs concede that they failed to provide sworn proofs of loss within 60 days of New York Central's demand, but contend that there is a triable issue of fact whether New York Central waived its right to require sworn proofs of loss. There is no support in the record for that contention. New York Central's intent to require proofs of loss is established by Allied's letters of June 9th and 10th demanding that they be furnished (see, Scifo v. New York Prop. Ins. Underwriting Assn., 170 A.D.2d 256, 566 N.Y.S.2d 6, lv. denied 78 N.Y.2d 856, 574 N.Y.S.2d 938, 580 N.E.2d 410; cf., Glazer v. Home Ins. Co., 190 N.Y. 6, 10-11, 82 N.E. 727).

The breach of contract cause of action is also barred by the provision in the policy requiring that an action be commenced within two years after the date of the loss. Such limitations periods are enforceable (see, Blitman Constr. Corp. v. Insurance Co. of N. Am., 66 N.Y.2d 820, 822, 498 N.Y.S.2d 349, 489 N.E.2d 236; Kassner & Co. v. City of New York, 46 N.Y.2d 544, 551, 415 N.Y.S.2d 785, 389 N.E.2d 99). The contention of plaintiffs that New York Central waived the...