Hayden Asset VIII, LLC v. Public Service Mut. Ins. Co., No. 161751/2014, 2020 WL 1275533 (N.Y. Sup. Ct. Mar. 11, 2020)

In this case, the insured made a claim for water damage as a result of a frozen sprinkler rupture. After the loss, the insured sold the property. A primary issue in the litigation was the amount of the insured’s damages. The insurer filed a motion to compel after the insured failed to response to discovery demands.

The court granted the insurer’s motion in a reasoned decision, which is uncommon in the context of motions to compel discovery. In particular, “[t]he discovery defendants seek involves information and documents regarding the specific amount of plaintiff’s alleged damages, the amount spent on repairs before the subject property was sold, the date the property was first listed for sale, whether the sale price was negatively impacted by the alleged loss, and if so, the dollar amount of the impact, whether plaintiff hired anyone to quantify the impact of the alleged loss on the sale price, the persons that calculated its damages, and the documents that support plaintiff’s alleged damages.”

The decision underscores the importance of damages discovery, an often overlooked issue, and the rights of insurers to obtain specific information and documentation going to the insured’s damages. This case provides guidance on the discovery that is “material and necessary” in the defense of a property insurance coverage dispute.

Public Service Mutual Insurance Company was represented by partners Kevin F. Buckley and Daniel M. O’Connell.