LLC v. Great American Insurance Company, Defendant. (2025)

Upon the following papers read on defendant's motion to compel appraisal, stay the litigation, and to dismiss pursuant to CPLR 3211 (a) (7); CPLR 2201; and Ins. Law § 3408 (C): NYSCEF documents 1 thru 50; it is hereby

ORDERED defendant's motion is denied in its entirety; and it is

ORDEREDthat the preliminary conference previously ordered for May 1, 2025, is advanced to March 3, 2025, in Part 70, 210 Center Drive, third floor, Riverhead, New York 11901 at 9:30 a.m. time certain.

On January 18, 2024 through January 18, 2025 the parties entered into an insurance contract with regard to risks for property located at 790-800 Grand Blvd., Deer Park, New York. Sadly, on June 28, 2024 an automobile crashed into a nail salon within the subject property killing four people and injuring nine others. The subject property, obviously, also suffered significant damage. Defendant, Great American Insurance Company, issued payment for $30,744.17, but refused to pay additional alleged damages and issued a denial letter on September 19, 2024. Plaintiff commenced this action by filing a summons and complaint on September 30, 2024.

Defendant answered on December 14, 2024. Plaintiff filed an amended complaint on December 17, 2024. Defendant's amended answer was filed on January 6, 2025. By Court Notice a preliminary conference was scheduled for May 1, 2025.

Defendant now moves to compel the appraisal process, stay this litigation, and dismiss that portion of plaintiff's complaint which claims loss of business income and fire/alarm/ordinance and law compliance (without prejudice). Defendant has also declined $25,000.00 in property coverage alleged "not subject to appraisal." In support of the motion, defendant submits, among other things, the pleadings, the insurance policy, an affirmation of Michael Nelson, defendant's senior claims specialist, various emails and letters, and a memorandum of law. In opposition, plaintiff submits an affirmation of counsel, various invoices, emails and letters. In reply, defendant submits an affirmation of counsel.

As to appraisal, the policy contains an appraisal loss condition and the procedure was demanded by Frank Siringo, plaintiff's public adjuster on August 29, 2024. Appraisal is favored under New York law over a trial on damages. Here, on September 19, 2024, defendant denied portions of plaintiff's claim, including improvements and betterments, and to an additional $25,000.00 claim. As defendant therein denied portions of plaintiff's claims, appraisal is not appropriate as it would result in prejudice to the insured party; that it is apparent defendant is not negotiating in good-faith over the valuation of the loss given that plaintiff initially demanded $466,263.92 and was offered $30,744.17; and that appraisal is not desirable or necessary because portions of plaintiff's claims cannot be resolved in the appraisal process. Accordingly, after defendant's denial letter of September 19, 2024 the demanded appraisal process is untimely and has been waived by defendant (Chainless Cycle Mfg. Co. of New Haven, 7 Bedell 304, 169 NY 304, (1901).

As to defendant's application for a stay, CPLR 2201 provides "except where otherwise prescribed by law, the court in which an action is pending may grant a stay of the proceeding in a proper case, upon terms which may be just." Here, a stay is not appropriate as this is not a proper case, as defendant acknowledges any appraisal process would not resolve all of plaintiff's claims and would result in litigation in the future. Accordingly, the application for a stay is denied.

Defendant also moves that portion of plaintiff's amended complaint that claims loss to business income and fire alarm/ordinance and law compliance pursuant to CPLR 3211 (7) [sic] "without prejudice." CPLR 3211 (a) (7) provides, "A party may move for judgment dismissing one or more causes of action asserted against [the party] on the ground that the pleading fails to state a cause of action" (CPLR 3211 [a] [7]). "On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction. We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every favorable inference, and determine only whether the facts as alleged fit into any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88, 614 NYS2d 972, 974 [1994]). In making a determination whether the complaint sets forth a cognizable claim, evidentiary material may be considered to "remedy defects in the complaint" (see Dana v Shopping Time Corp.,76 AD3d 992, 908 NYS2d 114 [2d Dept 2010]). Defendant's position is that Great American has been prejudiced as "it has not had an opportunity to investigate the claim." To the contrary, on August 29, 2024, Frank Siringo, of First Adjustment Group, Inc., plaintiff's public adjuster, notified Mike Nelson that plaintiff's claim included code and law enforcement and loss of rental income. Accordingly, it cannot be said that plaintiff's pleadings fail to state a cause of action, and defendant's motion to dismiss is denied.

E N T E R:

Hon. Paul M. Hensley

Justice of the Supreme Court

Date: February 25, 2025

Riverhead, New York

Paul M. Hensley, J.