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GUCCIARDO v. RELIANCE INS. CO.

February 23, 2000

LINDA GUCCIARDO, PLAINTIFF,
V.
RELIANCE INSURANCE CO. AND MARINE UNDERWRITERS AGENCY, INC., DEFENDANTS.



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

MEMORANDUM DECISION AND ORDER

This diversity action concerns allegation by the Plaintiff that the Defendant, Reliance Insurance Co., breached its contract of insurance with the Plaintiff regarding payment for damages to her boat. The Defendants have moved for summary judgment under Fed.R.Civ.P. 56 on the grounds that the Plaintiff's case is untimely.

BACKGROUND

On or about August 4, 1996, the Plaintiff purchased an insurance policy on her boat from the Defendant Reliance Insurance Co. ("Reliance") through Reliance's agent, Defendant Marine Underwriters Agency ("Marine"), insuring the hull against damage up to $55,000. On October 16, 1996, the boat broke free of its moorings during a storm and suffered significant hull damage. The Plaintiff timely notified the Defendants of the damage, and on March 14, 1997, submitted a repair estimate in the amount of $19,880. A surveyor dispatched by the insurance company inspected the vessel in April 1997 and determined the damages to be approximately $8,212. The parties then exchanged a series of letters, including letters dated April 7 and May 21, 1997 from Reliance that reminded the Plaintiff that her policy contained a 12-month statute of limitations on lawsuits arising under the policy. On May 28, 1997, a second survey of the vessel by the insurance company resulted in an estimation of damages at $22,283. On June 5, 1997, Reliance tendered to the Plaintiff a check for $21,733 — the amount of the second estimate less the $550 policy deductible.

On June 10, 1997, the Plaintiff's former attorney wrote to Reliance, expressing dissatisfaction with Reliance's indication that the check was "final payment" on the claim, and threatened litigation. The Plaintiff insisted that Reliance warrant the repairs and leave the claim open in the event the re-launching of the boat revealed additional damage. Reliance refused to warrant the repairs, insisting that that was the function of the shop performing the repairs, not the insurance company. One month later, on July 9, 1997, the Plaintiff sent a fax to Reliance enclosing a Summons with Notice in a lawsuit against Reliance and its agent Marine in New York State Supreme Court, New York County. The summons, which indicated that the nature of the claim was "breach of contact, failure to resolve claim, unlawful business practices violations (sic) of New York State laws and regulations," demanded either $300,000 or $400,000 in economic and punitive damages, depending on which paragraph one reads. The summons was unsigned and did not bear an index number or any other indicia that it had been filed pursuant to CPLR 305(a).

Reliance re-surveyed the boat on March 27, 1998, and concluded that an additional $10,803 in damages existed. It does not appear that any payment by Reliance was made after this survey. The Plaintiff's former attorney wrote to Reliance's attorney on May 21, 1998, claiming that the Plaintiff was "doing everything possible to avoid costly litigation" and, in order to "prevent litigation," offered to settle the matter for an additional $17,500, plus any additional damages that might become evident when the boat is returned to the water. The May 21, 1998 letter also indicated that the Plaintiff was aware of Reliance's statute of limitations defense, but asserted that "there are many cases which prevent a carrier from raising that defense." Reliance rejected the Plaintiff's demand.

On July 17, 1998 a second summons, this time captioned in the Supreme Court, Suffolk County and bearing a 1998 index number, was sent to the Defendants, referencing similar causes of action to the first summons and demanding $300,000 in damages. It does not appear that the Defendants ever made a demand for the complaint upon receiving the Summons with Notice, and instead filed a general denial. On August 6, 1998, Reliance removed the case to this Court, citing both federal question jurisdiction under 28 U.S.C. § 1331 and 1441(b) — although the notice of removal merely stated that "this is an action of an admiralty and maritime nature under Rule 9(h) of the Federal Rules of Civil Procedure" and did not specify a specific federal statute the claims allegedly arose from — and diversity under 28 U.S.C. § 1332 U.S.C. § 1331.

On or about January 18, 1999, the Plaintiff filed an amended complaint in this Court, containing six causes of action. The first cause of action alleged that the Defendants breached the contract of insurance by not fully reimbursing the Plaintiff for damages up to the $55,000 policy limit; the second cause of action alleged breach of the insurance contract by not paying $7,500 in storage fees that were continuing to accumulate on the boat; the third cause of action alleged that the Defendants' breach of the policy caused the Plaintiff to suffer a continuing loss of use of the boat resulting in damages of $16,000 at the time of the complaint; the fourth cause of action alleged that Reliance violated N.Y. Insurance Law § 2601 by failing to resolve the claim fairly, but did not claim any specific damages; the fifth cause of action alleged that "the Plaintiff has been forced to or will incur legal expenses in an attempt to enforce her rights pursuant to the contract of insurance," but did not specify a particular damage amount; the sixth cause of action alleged that Defendant Marine was not licensed to sell insurance in New York State, and improperly collected premiums from the Plaintiff and others, but again, did not assert a specific damage claim. Reliance then filed the instant motion, seeking summary judgment based on the alleged untimeliness of the Plaintiff's case.

DISCUSSION

Before turning to the merits of Reliance's motion, the Court, sua sponte, questions whether subject matter jurisdiction exists in this case. Upon its initial review of the pleadings, it appears that neither federal question nor diversity, the two grounds cited in Reliance's notice of removal, are present in this case.

A. Federal question jurisdiction

Federal question jurisdiction exists when an action "aris[es] under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331, see also 28 U.S.C. § 1441(b) (providing for removal of cases "founded on a claim or right arising under the Constitution, treaties, or laws of the United States").

It is clear from reviewing the Plaintiff's amended complaint that no federal statute is implicated in any of the causes of action. While Reliance is correct that the claim involves damage to a boat, nothing in the amended complaint raises a question of admiralty or maritime law. Rather, the amended complaint alleges a straightforward breach of contract claim arising from an insurance policy under New York state common law, and two claims for alleged violations of New York State's Insurance law. The Court is at a loss to discern any federal statute implicated by the Plaintiff's amended complaint — or for that matter, ...


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