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GOULD INVESTORS, L.P. v. GENERAL INS.

March 28, 1990

GOULD INVESTORS, L.P., PLAINTIFF,
v.
THE GENERAL INSURANCE COMPANY OF TRIESTE & VENICE, DEFENDANT.



The opinion of the court was delivered by: Stewart, District Judge:

  MEMORANDUM DECISION ORDER

In this diversity action, plaintiff Gould Investors, L.P. ("Gould"), sued defendant, The General Insurance Company of Trieste and Venice ("General Insurance"), for an alleged breach of an insurance contract. Defendant now moves for summary judgment dismissing the complaint pursuant to Rule 56 of the Federal Rules of Civil Procedure.

Factual Background

The plaintiff entered into a General Insurance fire insurance contract bearing number GP2038 (the "Policy") against casualties occurring at 370 Lexington Avenue ("370 Lexington") in New York City. The Policy was for a term to run from September 30, 1987 until September 30, 1988. Plaintiff's coverage under the Policy was subject to a $1,000,000 limit per occurrence with a $10,000 deductible.

The genesis of the instant lawsuit lies in water damage to electrical equipment caused by a broken pipe at 370 Lexington on July 15, 1988. Gould claimed damages under the Policy amounting to $379,359. Defendant's calculations of plaintiff's damages only amounted to $6,300.

The Policy contained provisions required by section 3404 of the New York State Insurance Law.*fn1 In particular, the Policy stated that:

  The insured, as often as may be reasonably
  required, shall . . . submit to examinations
  under oath by any person named by this company .
  . . and as often as may be reasonably required,
  shall produce for examination all books of
  account, bills, invoices and other vouchers . . .
  at such reasonable time and place as may be
  designated by this company or its representative.

Further, the Policy stated that no suit on the Policy could be sustained unless the requirements of the Policy were satisfied.

By letter dated January 26, 1989 (the "January 26th letter") defendant's adjusters, RJS Adjustment Corporation, advised plaintiff's adjuster, Brokers Adjustment Company, that since there was a wide discrepancy between the figures, "[u]nder the circumstances, we can give no consideration to your claim presentation unless you wish to provide a more detailed itemized presentation as to how your electrician arrived at $379,359."

On February 17, 1989, defendant requested by letter that plaintiff appear for an examination under oath on March 10, 1989. The letter also consisted of a detailed and lengthy request for documents, including tax returns for the four previous years and any documents relating to any other insurance claims over the previous five years.

Plaintiff requested an adjournment of the examination under oath until April 12, 1989. In addition, plaintiff requested a copy of defendant's expert's report. Defendant agreed to the request and adjournment. The agreement was confirmed by a letter signed by the parties on March 6, 1989. However, the examination under oath did not take place on April 12th because plaintiff did not appear. Plaintiff's in-house counsel, Leon Sena, alleges that on April 10, 1989, he advised the office of defendant's then counsel, Richard Realmuto, that plaintiff would not be able to attend the examination. Sena alleges that he was told by Realmuto's office that Realmuto would return his call when Realmuto returned to the office. Realmuto denies that Sena called his office. In any event, it is undisputed that no return call was made by Realmuto agreeing to adjourn the April 12th examination.

On July 13, 1989 plaintiff initiated this action by service on defendant of a summons and complaint. Defendant answered on July 31, 1989. On July 14, 1989, allegedly unaware that plaintiff had instituted an action, defendant's then counsel, Richard Realmuto, scheduled another examination under oath for August 2, 1989. Plaintiff refused to attend that scheduled examination upon advice of counsel.

Defendant argues that the only issue before the court relating to the instant motion is whether plaintiff's "wilful defaults" constitute a material breach of the Policy and a failure of a condition precedent to bring an action under the Policy.

Plaintiff contends that the only issue before the court is whether defendant is entitled to hold an examination ...


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