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COHEN v. FIA

November 12, 1986

BENJAMIN COHEN, Plaintiff,
v.
FEDERAL INSURANCE ADMINISTRATION et alia, Defendants


Charles P. Sifton, United States District Judge.


The opinion of the court was delivered by: SIFTON

MEMORANDUM AND ORDER

CHARLES P. SIFTON, United States District Judge

 This is an action to recover on an insurance policy issued under the Federal Crime Insurance Program ("FCIP") for losses allegedly sustained in a burglary of plaintiff's premises on or about January 31, 1981. The matter is now before the Court on plaintiff's motion for an order striking defendants' affirmative defenses pursuant to Rule 12(h) of the Federal Rules of Civil Procedure and granting summary judgment in plaintiff's favor pursuant to Rule 56(a). Defendants have cross-moved for summary judgment in their favor. The parties' motions are based on stipulated facts filed in lieu of a Local Rule 3(g) statement.

 This action was originally assigned to Judge Altimari before his appointment to the Second Circuit Court of Appeals. In a Memorandum and Order dated June 8, 1983, Judge Altimari denied defendants' motion to dismiss for failure to timely file a proof of loss claim and plaintiff's motion to strike defendants' affirmative defenses. Cohen v. Federal Insurance Administration, 565 F. Supp. 823 (E.D.N.Y. 1983). Thereafter, the parties submitted a stipulation of facts to Judge Altimari, and prior to judgment the case was transferred to the undersigned.

 Plaintiff, relying on the standards set forth in Judge Altimari's decision for determining whether an insured may recover on a policy after filing an untimely proof of loss, asserts that, although his broker filed the proof of loss 24 days late, defendants were not prejudiced by the delay, and, therefore, he is entitled to recover under the policy. In response, defendants argue that courts are bound to give effect to the unambiguous terms of the policy and since plaintiff filed a proof of loss beyond the sixty days allowed by the policy, plaintiff should be denied any relief.

 The terms of the Residential Crime Insurance Policy ("RCIP") make timely filing of proof of loss a condition precedent to recovery on a claim:

 
"Upon knowledge of loss or of an occurrence which may give rise to a claim for loss, the insured shall (a) give notice thereof as soon as practicable to law enforcement authorities and to the insurer through any of its authorized agents, and (b) file detailed proof of loss, duly sworn to, with the insurer through its authorized agents within sixty (60) days after the discovery of the loss.
 
* * * *
 
"No action shall lie against the insurer unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this policy."

 In the earlier decision in this case, Judge Altimari ruled that plaintiff's delivery of proof of loss to the broker who sold the policy, although within the 60 day notice period, did not constitute a proper filing, since the broker was not the FCIP's authorized agent for purposes of receiving proof of loss claims from the insured. 565 F. Supp. at 826-27. Having determined that plaintiff failed to file proof of loss with the FCIP within 60 days, the court nevertheless denied defendants' motion to dismiss on the ground that factual questions remained as to whether plaintiff's untimely filing excused defendants' obligation to pay on the policy. Id. at 827-28. While plaintiff is content to rest on Judge Altimari's decision, the defendants now ask this Court to reconsider Judge Altimari's determination that there are circumstances in which an untimely filing of proof of loss does not bar recovery under a RCIP. Plaintiff responds that this Court is bound by Judge Altimari's decision by the doctrine of the law of the case.

 The law of the case applies to all issues decided expressly or by necessary implication, Fogel v. Chestnutt, 668 F.2d 100, 108 (2d Cir. 1981), and, therefore, applies to Judge Altimari's basis for denying defendants' motion to dismiss. The purpose of the doctrine is to further judicial economy, for when "litigants have once battled for the court's decision, they should be neither required nor, without good reason, be permitted to battle for it again." Zdanok v. Glidden Company, Durkee Famous Foods Division, 327 F.2d 944, 953 (2d Cir.), cert. denied, 377 U.S. 934, 84 S. Ct. 1338, 12 L. Ed. 2d 298 (1964).

 It is well established in this Circuit however that the law of the case is, at best, a doctrine of discretionary which "does not constitute a limitation on the court's power. " United States v. Birney, 686 F.2d 102, 107 (2d Cir. 1982), quoting Dictograph Products Co. v. Sonotone Corp., 230 F.2d 131, 134 (2d Cir. 1956). "The only limitation placed upon a trial judge's decision to disregard a previous ruling by a judge of coordinate jurisdiction is that prejudice not ensue to the party seeking the benefit of the doctrine." Id. at 107. First National Bank of Hollywood v. American Foam Rubber Corp., 530 F.2d 450, 453 n.3 (2d Cir.), cert. denied, 429 U.S. 858, 50 L. Ed. 2d 135, 97 S. Ct. 157 (1976). It is with this standard in mind that the Court entertains defendants' motion to dismiss.

 In his decision, Judge Altimari recognized that "the courts have almost invariably denied recovery where the claimant failed to comply with proof of loss requirements found in insurance policies issued under Federal programs." 565 F. Supp. at 827, quoting Cross Queen, Inc. v. Director, Federal Emergency Management Agency, 516 F. Supp. 806, 809 (D.V.I. 1980); Pavone, Inc. v. Secretary of HUD, 547 F. Supp. 230 (D. Conn. 1982); Zeil Realty Corp. v. Director, FEMA, 1982 Fire & Cas. (CCH) 253 (S.D.N.Y. 1981); Harper v. National Flood Insurers Assoc., 516 F. Supp. 725 (M.D.Pa. 1981); Continental Imports, Inc. v. Macy, 510 F. Supp. 64 (E.D.Pa. 1981). Moreover, the Court recognized that, despite the application of the doctrine of waiver in private insurance cases, waiver does not apply when the insurer is an agency of the United States government. 565 F. Supp. at 828, citing Williamsburgh Doll & Novelty Corp. v. Giuffrida, 560 F. Supp. 84 (E.D.N.Y. 1982); Cross Queen, Inc. v. Director, supra, 516 F. Supp. at 809.

 The Court, however, also cited several cases which have held that proof of loss does not bar recovery. See Beck v. Director, FEMA, 1982 Fire & Cas. (CCH) 483 (N.D.Ohio 1981); Brennan v. FEMA, 1981 Fire & Cas. (CCH) 841 (D.Mass. 1981); DelBoring Tire Service v. FEMA, 496 F. Supp. 616 (W.D.Pa. ...


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