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MZM Real Estate Corp. v. Tower Ins. Co. of N.Y., 2017 N.Y. Slip Op. 30691(U), 2017 WL 1330494, 2017 N.Y. Misc. LEXIS 1292 (Sup. Ct. [N.Y. Co.] April 7, 2017)

In this case, the Insured sued to enforce an appraisal award arising out of Superstorm Sandy.  The parties disagreed on the extent of wind damage from the storm, and as a result, an appraisal was demanded by the Insured.  The appraisal began about a year after the loss; however, the process was not concluded until over two years after the loss.  Once the appraisal award was issued, MCWG client, Tower Ins. Co. of N.Y. (“Tower”),  rejected it because the award included flood damage, which the insurance policy excluded from coverage. The award also had other defects that prevented Tower from applying the Policy’s provisions to it.  Tower also rejected the award because the Insured’s appraiser was not impartial.

Thereafter, the Insured sued to enforce the appraisal award.  In the litigation that followed, the Insured moved for summary judgment to enforce the award and Tower cross-moved to dismiss because suit was commenced after the policy’s two-year suit limitation period had expired.  The Insured contended that it was prevented from suing until the appraisal was concluded because appraisal was a condition precedent to coverage and, in any event, Tower waived the suit limitation provision by continuing to participate in the appraisal after the suit limitation period had expired.  The court disagreed with the Insured’s arguments and granted summary judgment to Tower, holding that the completion of an appraisal is not a condition precedent and the record contained no evidence of a clear manifestation of the carrier’s intent to waive the two-year limitation period.  Therefore, the provision was enforceable.

This decision was reported in PLRB Frontlines, May 10, 2017, case 9726; Law360 Insurance on April 13, 2017; Mealey’s Litigation Report, Catastrophic Loss, May 11, 2017; and The Harris Martin Superstorm Sandy Insurance Coverage Litigation Report, April 19 2017.

For inquiries about this decision, please contact partner Kevin F. Buckley or associate Bradley Small.