Sunrise One, LLC v. Harleysville Ins. Co. of N.Y.

• Decision Date: 28 March 2018
• Docket Number: No. 15–CV–0242 (JFB)(GRB),15–CV–0242 (JFB)(GRB)
• Parties: SUNRISE ONE, LLC and Sunrise One Operating LLC d/b/a Rockville Centre Inn, Plaintiffs, v. HARLEYSVILLE INSURANCE COMPANY OF NEW YORK, Defendant.
• Court: U.S. District Court — Eastern District of New York

293 F.Supp.3d 317

SUNRISE ONE, LLC and Sunrise One Operating LLC d/b/a Rockville Centre Inn, Plaintiffs,

v.HARLEYSVILLE INSURANCE COMPANY OF NEW YORK, Defendant.

No. 15–CV–0242 (JFB)(GRB)

United States District Court, E.D. New York.

Signed March 28, 2018

Plaintiffs are represented by Jason Marc Cieri, Phillip N. Sanov, and Javier Delgado of Merlin Law Group, 100 Park Avenue, New York, New York 10017.

Defendant is represented by Pejman Nassi and Benjamin R. Messing of Kaufman Dolowich & Voluck LLP, 1777 Sentry Parkway West, Blue Bell, Pennsylvania 19422.

MEMORANDUM AND ORDER

JOSEPH F. BIACO, United States District Judge

Sunrise One, LLC and Sunrise One Operating LLC, doing business as the Rockville Centre Inn, (collectively, "Sunrise" or "plaintiffs") bring this action against Harleysville Insurance Company of New York ("Harleysville" or "defendant") for breach of an insurance contract. Plaintiffs own and operate a hotel called the Rockville Centre Inn, located in Nassau County, New York. According to plaintiffs, the Rockville Centre Inn sustained wind and rain damage during Hurricane Sandy in October 2012. After inspecting the hotel, however, Harleysville determined that Hurricane Sandy did not cause damage to the Rockville Centre Inn, and denied coverage for damage to the hotel, as well as for business income losses resulting from that damage. This lawsuit eventually resulted.

Presently before the Court are motions for partial summary judgment. In its motion, Harleysville argues that it is entitled to summary judgment on (1) Sunrise's claim for business income losses; (2) Sunrise's claim for consequential damages; and (3) Sunrise's claim for attorney's fees and costs. Harleysville additionally seeks summary judgment on Sunrise's attempt to use its Third Estimate of Damages, and instead, seeks to limit Sunrise to the damages sought in its Second Estimate. Sunrise's motion, in turn, argues that Sunrise is entitled to summary judgment on Harleysville's third through fourteenth affirmative defenses, and that Harleysville's third through eleventh affirmative defenses should be stricken as redundant under Federal Rule of Civil Procedure 12(f).

For the reasons that follow, the Court grants summary judgment to Harleysville on (1) Sunrise's claim for business income losses; (2) Sunrise's claim for consequential damages; and (3) Sunrise's claim for attorney's fees and costs. The Court denies Harleysville's motion for summary judgment on plaintiffs' Third Estimate of Damages because there are disputed issues of fact that preclude summary judgment on the issue of whether the Third Estimate of Damages was timely under the at-issue insurance contract. Finally, the Court denies Sunrise's motion for summary judgment and motion to strike.

I. BACKGROUND

A. Facts¹

At all times relevant to this litigation, non-parties Thomas Morash, Sr., Rosemary Morash, Thomas Morash, Jr., and Michael Morash ("the Morash Family") owned three hotels in Nassau County: The Five Towns Motor Inn, the Holiday Inn Express, and the Rockville Centre Inn. (Pls. 56.1 ¶ 180.) Although Harleysville insures all three properties (Def. 56.1 ¶ 20), only the Rockville Centre Inn is the subject of this litigation. The Rockville Centre Inn is an approximately 40,000 square foot, five-story hotel, with 68 guest rooms. (Id. ¶ 76.) Plaintiff Sunrise One LLC owns the Rockville Centre Inn property (id. ¶ 21), and plaintiff Sunrise One Operating LLC operates the hotel (id. ¶ 22).

Sunrise obtained property insurance on the Rockville Centre Inn from Harleysville, effective from April 22, 2012 to April 22, 2013 ("the Insurance Policy").² (Def. 56.1 Ex. 7.) Under the Insurance Policy, Harleysville agreed to cover, inter alia , (1) "direct physical loss of or damage to" the Rockville Centre Inn and (2) "the actual loss of Business Income ... result[ing] from" such loss or damage, with limitations. (Id. ) In the event of any loss or damage to the Rockville Centre Inn, Sunrise agreed to, inter alia , (1) provide Harleysville "prompt notice of the direct physical loss or damage[,] includ[ing] a description of the property involved"; (2) "[a]s soon as possible, give [Harleysville] a description of how, when, and where the direct physical loss or damage occurred"; (3) "[a]t [Harleysville's] request, give [Harleysville] complete inventories of the damaged and undamaged property[,] includ[ing] quantities, costs, values and amount of loss claimed"; and (4) "cooperate with [Harleysville] in the investigation or settlement of the claim." (Id. )

In late October 2012, Hurricane Sandy made landfall on the east coast of the United States. Sunrise asserts that the rain and high winds resulted in substantial damage to the Rockville Centre Inn. (E.g. , Pls. 56.1 ¶¶ 180, 202–04.) According to plaintiffs, Michael Morash drove by all three Morash Family hotels on October 29, 2012, and "noted visible wind damage, water penetration issues, and various leaks at each property." (Id. ¶ 180.) Plaintiffs further assert that, on November 9, 2012, Michael Morash reported, via telephone, damage to all three hotels to the broker for all three insurance policies (id. ¶¶ 181–84), and that in January 2013, he submitted a claim via email (id. ¶ 187).³

Harleysville disputes that Michael Morash submitted a claim for damage to the Rockville Centre Inn on November 9, 2012, or in January 2013. (E.g. , Def. 56.1 ¶¶ 24–25, 29.) Harleysville further asserts that, based on an inspection conducted by its general adjuster, consulting engineer, and building consultant, Hurricane Sandy did not cause damage to the Rockville Centre Inn.⁴ (E.g., id. ¶¶ 82–85.)

B. Procedural History

The Court assumes familiarity with the lengthy procedural history of this case, and provides only a brief recitation here. Plaintiffs filed the original complaint in this action on January 15, 2015. Plaintiffs sought leave to amend the complaint on June 21, 2016, which the Court granted on July 29, 2016. Thereafter, on August 3, 2016, plaintiffs filed the first amended complaint. Defendant answered on August 10, 2016. On July 28, 2017, plaintiffs moved for partial summary judgment. On September 27, 2017, defendant moved for partial summary judgment. The parties filed oppositions on October 27, 2017 and replies on November 15, 2017. The Court heard oral argument on both motions on December 19, 2017. The Court has fully considered the parties' submissions and arguments.

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56(a), a court may grant a motion for summary judgment only if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Gonzalez v. City of Schenectady , 728 F.3d 149, 154 (2d Cir. 2013). The moving party bears the burden of showing that he or she is entitled to summary judgment. Huminski v. Corsones , 396 F.3d 53, 69 (2d Cir. 2005). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The court "is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments." Amnesty Am. v. Town of West Hartford , 361 F.3d 113, 122 (2d Cir. 2004) (quoting Weyant v. Okst , 101 F.3d 845, 854 (2d Cir. 1996) ); see Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (summary judgment is unwarranted if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party").

Once the moving party has met its burden, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts .... [T]he non-moving party must come forward with specific facts showing that there is a genuine issue for trial ." Caldarola v. Calabrese , 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). As the Supreme Court stated in Anderson , "[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." 477 U.S. at 249–50, 106 S.Ct. 2505 (citations omitted). Indeed, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Id. at 247–48, 106 S.Ct. 2505. The non-moving party may not rest upon conclusory allegations or denials but must set forth "concrete particulars" showing that a trial is needed. R.G. Grp., Inc. v. Horn & Hardart Co. , 751 F.2d 69, 77 (2d Cir. 1984) (quoting SEC v. Research Automation Corp. , 585 F.2d 31, 33 (2d Cir. 1978) ). Thus, it is insufficient for a party opposing summary judgment "merely to assert a conclusion without supplying supporting arguments or facts." BellSouth Telecomms., Inc. v. W.R. Grace & Co. , 77 F.3d 603, 615 (2d Cir. 1996).

Where, as here, the parties have filed cross-motions for summary judgment, "the court must consider each motion independently of the other and when evaluating each, the court must consider the facts in the light most favorable to the nonmoving party." Chartis Seguros Mexico, S.A. de C.V. v. HLI Rail & Rigging, LLC , 3 F.Supp.3d 171, 179 (S.D.N.Y. 2014) ; see also Heublein, Inc. v. United States , 996 F.2d 1455, 1461 (2d Cir. 1993) ("[T]he court must evaluate each party's motion on its...