The opinion of the court was delivered by: SAND
These five actions were brought by plaintiff-insureds to recover on insurance policies issued by defendants on property located in Liberia. Prior to the commencement of these actions, defendants served plaintiffs with notices to examine pursuant to a standard provision found in each policy which reads:
"The insureds, as often as may be reasonably required, shall exhibit to any person designated by this Company all that remains of any property herein described, and submit to examinations under oath by any person named by this Company, and subscribe the same; and, as often as may be reasonably required, shall produce for an examination all books of account, bills, invoices and other vouchers or certified copies thereofif the originals be lost, at such reasonable time and place as may be designated by this Company or its representative, and shall permit extracts and copies thereof to be made."
Plaintiffs failed to comply with this request and defendants move for summary judgment pursuant to F.R.Civ.P. 56 on the grounds that such failure constitutes a material breach of the policy. Azeem v. Colonial Assurance Co., 62 N.Y.2d 951, 479 N.Y.S.2d 216, 468 N.E.2d 54 (1984); Lentini Bros. Moving & Storage Co. v. N. Y. Property Ins. Underwriting Ass'n, 53 N.Y.2d 835, 440 N.Y.S.2d 174, 422 N.E.2d 819 (1981).
New York law, which governs these actions, indeed strictly enforces an insurer's right to conduct such examinations and summary judgment is granted by both state and federal courts where the insured's failure to comply is not adequately explained or excused. Bulzomi v. N.Y. Central Mutual Fire Ins. Co., 92 A.D.2d 878, 459 N.Y.S.2d 861 (2d Dept. 1983); Do-Re Knit, Inc. v. National Union Fire Ins. Co., 491 F. Supp. 1334 (E.D.N.Y. 1980).
Plaintiffs seek to escape this strict rule of New York law by offering a variety of excuses and explanations for their non-compliance. We first discuss these issues on their merits and then proceed to deal with the more troublesome question whether plaintiffs' failure to comply was "wilfull" and "unexcused."
1. Plaintiffs submitted th preliminary interviews in Liberia prior to the filing of proofs of loss. They claim that these interviews either satisfied their examination obligations or constituted sufficient partial performance so that an unconditional dismissal of their complaints is not warranted. But these interviews were sketch and not the type of thorough examination, after filing of a proof of loss, to which the insurer is entitled. Moreover, the policy explicitly gives the insured the right to conduct more than one examination. As for plaintiffs' contentions that the preliminary interview entitled them to come within the scope of Pogo Holding Corp. v. N.Y. Property Ins. Co., 73 A.D.2d 605, 422 N.Y.S.2d 123 (2d Dept. 1979) and thus avoid an unconditional dismissal by now submitting to an examination, two observations are appropriate. First, the continued validity of Pogo is dubious in the light of Lentini. Second, in any event the extent of partial performance in Pogo far exceeds that of plaintiffs in this action.
2. Plaintiffs urge that the defendants had already determined to deny liability prior to the requested examinations and thereby waived their right to conduct the examinations. Beckley v. Otsego County Farmers Co-Op., 3 A.D.2d 190, 159 N.Y.S.2d 270 (3d Dept. 1952). Plaintiffs, having been granted leave to conduct and, in fact, having conducted considerable discovery on this point have failed to present a material issue of fact on this question. The evidence discloses that it was not until plaintiffs failed to appear for the scheduled examinations that defendants disclaimed liability as to these plaintiffs. Plaintiffs claim that the defendants' institution of proceedings with respect to certain similarly situated insureds shortly after those claimants in fact appeared for examinations was a sufficient indication that defendants would reject all such claims. Plaintiffs were not entitled to rely on any such reasoning to defect the terms of the policy. Thus, plaintiffs' allegations that they believed that the insurance companies intended to deny their claims do not present a factual issue which warrants denial of summary judgment. Do-Re Knit, Inc. v. National Union Fire Ins. Co., supra.
3. Those plaintiffs who were insured by Continental allege that they did not receive a copy of the policy jacket which contains the examination provision. This contention is without merit. The policy, together with its jacket, was delivered to the insureds' broker, who for these purposes serves as plaintiffs' agent. Thus, plaintiffs were legally on notice of the requirement of the policy. Moreover, having received notice to appear for the examination, they cannot disclaim an obligation to comply on the grounds of a lack of awareness of this requirement.
4. Equally spurious is plaintiffs' claim that the notice to be examined wa untimely and therefore invalid. The alleged delay of approximately one month after filing of the proof of loss is requesting the examination is adequately explained by the defendants based on logistical considerations and would in any event not negate the defendants' right to examine. Far greater delays have been held not to constitute a waiver of this right. Lentini Bros. Moving & Storage Co. v. N.Y. Property Ins. Underwriting Ins. Assn., supra.
5. Plaintiffs contend that New York was not a reasonable place to hold the examination since the situs of the loss, as well as the plaintiffs' residence and place of business, was in Monrovia, Liberia. The authority cited for this contention, however, is extremely old and clearly not controlling in this case. For example, Pierce v. Globe & Rutgers Fire Ins. Co., 107 Wash. 501, 182 P. 586 (Wash. 1919), a case cited once in the last 55 years, held that the proper place to hold an examination was the place where the loss occurred when the contract was silent as to where the examination should take place. These policies, in contrast, explicitly state that the insured shall appear at such reasonable time and place as may be designated by the insurer. Surely, Monrovia, Liberia, is not the only reasonable location at which these examinations could have been held. Indeed, as defendants urge, local conditions in Liberia, including lack of facilities and political unrest, provide further reason why its suitability as a location for the examinations was questionable.
We hold as to those plaintiffs who actually came to New York, or agreed to come, for whatever purposes after the alleged loss, that New York was not an unreasonable site for the examination. We deal infra with the one plaintiff, Hasan Ezzeddine, who neither came, nor agreed to come, to New York.
6. The remaining question which gives us greatest pause is whether under all the circumstances of these cases, the plaintiffs had sufficient basis for believing in good faith that there was no obligation to submit to an examination, so that one could not characterize their conduct as "unexcused and wilfull refusal to comply." Lentini, supra, 53 N.Y.2d at 837, 440 N.Y.S.2d at 175. If plaintiffs in good faith failed to comply, either because of the circumstances noted above or because they relied on alleged communications with defendants seeking adjournments or other relief, the New York courts would grant summary judgment conditionally, giving plaintiffs an opportunity now to submit to examination. Catalogue Service of Westchester, Inc. v. Insurance Co. of North America, 74 A.D.2d 837, 425 N.Y.S.2d 635 (2d Dept. 1980). If the non-compliance is unexcused or wilfull, the dismissal is unconditional. Lentini, Azeem, supra.
We conclude that the totality of circumstances present here warrant the conclusion that plaintiffs' failure to submit to examination was not such an unconditional dismissal. We note that in Azeem, the New York State Court of Appeals emphasized the dilatory tactics of plaintiff's counsel and the lack of any excuse for non-appearance after two previously scheduled examinations had been adjourned. In ...