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1303 Webster Avenue Realty Corp. v. Great American Surplus Lines Insurance

63 N.Y.2d 227 Court N.Y. Decision date 1984-10-23 English

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1303 Webster Avenue Realty Corp., Appellant, v Great American Surplus Lines Insurance Company et al., Respondents.
Argued September 4, 1984;
decided October 23, 1984
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POINTS OF COUNSEL
Ira M. Myers for appellant.
I. Special Term was correct in finding that the statutorily shortened limitation of time was waived by defendants. The court below erred in its reversal. (Conte v Yorkshire Ins. Co., 5 Misc 2d 670 ; Bowen v Preferred Acc. Ins. Co., 82 App Div 458 ; Aktieholaget Malareprovinsernas Bank v Hanover Fire Ins. Co., 211 App Div 608 , 241 NY 551 ; Godwin v Continental Ins. Co., 436 F2d 712 .) II. The court below improperly determined as a legal question the factual issue of whether even the one-year limitations provision was in the policy of Great American. (Di Menna & Sons v City of New York, 301 NY 118 ; Barrett v Jacobs, 255 NY 520 ; Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439 .)
Daniel J. Friedman for respondents.
I. The action brought to recover under a fire insurance policy delivered in the State, commenced more than two years after inception of the loss, was untimely and should have been dismissed. (Hinkle v Globe & Rutgers Fire Ins. Co., 246 App Div 737 , 271 NY 585 ; Zurich Ins. Co. v Martinez, 24 Misc 2d 437 , 14 AD2d 754 ; McNamara v Allstate Ins. Co., 3 AD2d 295 ; Helfaer v John Hancock Mut. Life Ins. Co., 51 Misc 2d 869 , 30 AD2d 102 , 26 NY2d 699 ; Backus v Nationwide Mut. Ins. Co., 56 AD2d 724 ; Franklin v John Hancock Mut. Life Ins. Co. 298 NY 81 ; Godwin v Continental Ins. Co., 436 F2d 712 ; Frank Corp. v Federal Ins. Co., 91 AD2d 31 ; Bargaintown, D. C. v Bellefonte Ins. Co., 78 AD2d 206 , 54 NY2d 700 .) II. Plaintiff-appellant has failed to set forth sufficient facts in the record to establish the existence of a material and triable question of fact as to whether the one-year period of limitation was contained in the insurance policy issued by Great American. (Sutton v East Riv. Sav. Bank, 55 NY2d 550 ; Zuckerman v City of New York, 49 NY2d 557 ; Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065 ; Philips v Kantor & Co., 31 NY2d 307 ; Indig v Finkelstein, 23 NY2d 729 ; Esa v New York Prop. Ins. Underwriting Assn., 89 AD2d 865 .) III. Defendants-respondents did not waive the operative two-year period of limitations; nor are the facts contained in the record sufficient to raise in issue whether defendants-respondents should be estopped from relying upon the statutory limita
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tion within which an action should have been commenced. (Proc v Home Ins. Co., 17 NY2d 239 ; Skylark Enterprises v American Cent. Ins. Co., 13 AD2d 707 ; Fotochrome, Inc. v American Ins. Co., 26 AD2d 634 , 23 NY2d 889 ; Rosenthal v Reliance Ins. Co., 25 AD2d 860 , 19 NY2d 712 ; Kaufman v Republic Ins. Co., 35 NY2d 867 .)

OPINION OF THE COURT

In this action on two policies of fire insurance, defendants moved to dismiss the complaint pursuant to CPLR 3211 (subd [a], par 5) on the ground that the action was not brought within two years from the date of the loss for which recovery is sought. Both plaintiff and defendants submitted affidavits and other evidentiary proof in connection with the motion. It is not disputed that plaintiff did not commence this suit within the two-year limitations period prescribed by subdivision 5 of section 168 of the Insurance Law.

Special Term denied defendants’ motion, stating that the insurance policy issued by each defendant failed to conform with subdivision 5 of section 168 in that each policy required that an action to recover the proceeds of the policy be brought within one year of the date of loss rather than within two years, the limitations period required to be set forth in a fire insurance policy by subdivision 5 of section 168. Special Term held that the insurers waived the benefit of the two-year limitations period due to the failure of the policies to conform with section 168 and that therefore the general Statute of Limitations of six years for an action on a contract would apply.

The Appellate Division reversed and dismissed the complaint as to both defendants. The Appellate Division apparently accepted Special Term’s finding that both policies contained a one-year Statute of Limitations period, and held that in such a case the policies were enforceable as if they contained the two-year limitations period. Accordingly, the Appellate Division found the complaint untimely as to both defendants.

The Appellate Division was correct in holding that where a policy of fire insurance provides for a shorter

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period of limitations than permitted by the standard fire insurance policy contained in subdivision 5 of section 168 the policy is enforceable as if it conformed with the statutory standard (Insurance Law, § 143, subd 1; Bersani v General Acc. Fire & Life Assur. Corp., 36 NY2d 457 , 460). The inclusion of. an express period of limitations, even though erroneous, precludes a determination that the insurer intended to waive any but the general statutory six-year period with respect to actions upon a contractual obligation (CPLR 213, subd 2). As it is undisputed that the policy issued to plaintiff by defendant Illinois Employers’ Insurance Company of Wausau contained a one-year limitations period, the complaint as it relates to that policy must be dismissed.

If, however, an insurance company issues a policy of fire insurance without any Statute of Limitations provision it is not entitled to the benefit of the two-year period of section 168, and the general Statute of Limitations of six years for an action on a contract applies (Medical Facilities v Pryke, 62 NY2d 716 , 717). The holding in Pryke is premised on the fact that in the absence of any provision in the policy as to the limitations period for commencing suit, the insured has no notice that there is a shortened Statute of Limitations and is thus entitled to rely on the general six-year provision for contract actions. In effect the insurer has waived any period of limitations other than the general statutory six-year period.

The papers submitted by plaintiff in opposition to defendant Great American Surplus Lines Insurance Company’s motion to dismiss raise a material question of fact as to whether the policy issued by that defendant contained a reference to a limitations period for commencing suit. Plaintiff’s action against Great American would be timely if the six-year Statute of Limitations were applicable — i.e., if the policy had no such reference and thus the motion to dismiss the complaint as it relates to the Great American policy must be denied.

Accordingly, the order of the Appellate Division should be modified so as to deny defendants’ motion to dismiss the complaint as untimely insofar as it is based on the insurance policy issued to plaintiff by defendant Great American Surplus Lines Insurance Co., and otherwise affirmed.

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Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Meyer, Simons and Kaye concur in Per curiam opinion.

Order modified, without costs, by denying defendants’ motion to dismiss the complaint insofar as it is based on the insurance policy issued by defendant Great American Surplus Lines Insurance Company and, as so modified, affirmed.

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