MICHAEL STOPANI AND WENDY STOPANI PLAINTIFFS RESPONDENTS v. ALLEGANY CO OP INSURANCE COMPANY DEFENDANT APPELLANT (2011)

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 ninth affirmative defense is reinstated.

Memorandum:  In this breach of contract action involving a dispute over fire insurance coverage, plaintiffs moved to dismiss the ninth affirmative defense alleging that defendant insurer properly disclaimed coverage based on plaintiffs' failure to submit sworn proof of loss within the time limit set forth in the insurance policy.   We agree with defendant that Supreme Court erred in granting the motion.   Pursuant to CPLR 3211(b), a plaintiff may move to dismiss a defense on the ground that it has no merit (see Fireman's Fund Ins. Co. v. Farrell, 57 AD3d 721, 723).   When reviewing a motion to dismiss an affirmative defense, “all of defendant's allegations must be deemed to be true and defendant is entitled to all reasonable inferences to be drawn from the submitted proof” (Grunder v. Recckio, 138 A.D.2d 923, 923).   The motion must be denied if there is any doubt with respect to the availability of a defense (see Nahrebeski v. Molnar, 286 A.D.2d 891).

Here, pursuant to the insurance policy, plaintiffs were required to submit proof of loss within 60 days of defendant's demand for such proof.   Defendant submitted evidence in support of the motion establishing that plaintiffs received its demand for proof of loss in the mail on March 6, 2009.   Specifically, defendant's claims manager averred in an affidavit that plaintiff Michael Stopani called her on that day and acknowledged receipt of the demand letter, which was sent by defendant two days earlier via regular first class mail.   On March 9, 2009, plaintiffs received another copy of the demand letter sent to them by certified mail.   It is undisputed that plaintiffs did not submit proof of loss to defendant until May 8, 2009, which was more than 60 days from their alleged receipt of the first letter but fewer than 60 days from their admitted receipt of the second letter.

As a general rule, “[w]hen 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” (Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 N.Y.2d 201, 209–210;  see Turkow v. Erie Ins. Co., 20 AD3d 649, 649–650).   Where, as here, the insurer's demand for proof of loss is sent by two different methods on the same day, the 60–day period should be measured from the date the insured first receives the demand letter.   This rule is consistent with the reciprocal principle that “the moment from which the timeliness of an insurer's disclaimer is measured is the date on which it first receives information that would disqualify the claim” (2540 Assoc. v. Assicurazioni Generali, 271 A.D.2d 282, 283 [emphasis added] ).   If the rule were otherwise, an insured could extend indefinitely the time within which he or she is required to submit proof of loss by simply refusing to accept the demand letter sent by certified mail.   Because defendant alleged that plaintiffs failed to submit proof of loss within 60 days of their first receipt of the demand letter, it cannot be said that defendant's ninth affirmative defense lacks merit.

With respect to the court's conclusion that, even if the 60–day period is measured from plaintiffs' first receipt of the demand letter on March 6, 2009, the delay is “de minimis and excusable under contract law,” we agree with defendant that such a conclusion is contrary to the rule that the failure to comply with a demand for proof of loss within 60 days serves as “an absolute defense to an action on the policy” (Igbara Realty Corp., 63 N.Y.2d at 210).

Patricia L. Morgan

Clerk of the Court