Serpe, Andree & Kaufman, Huntington, for plaintiff.
Russel B. Scarella, New York City, for defendant.
David Elliot, J.
Does the failure of an insurer to timely disclaim coverage within the time limitations set forth in 11 NYCRR 216.6, under a specific exclusion to an otherwise covered loss under a
homeowner's policy, preclude the insurer from denying coverage? For reasons that follow, the Court holds that it does.
The plaintiff, Sam Eveleno (hereinafter Eveleno), moves for summary judgment, and the defendant Colonial Penn Insurance Company (hereinafter Colonial) cross-moves for summary judgment dismissing the complaint.
In this action the plaintiff seeks to recover on a homeowner's insurance policy issued to plaintiff by defendant Colonial, for damage allegedly sustained to plaintiff's inground pool on January 7, 2000. Plaintiff alleges that he notified defendant of the claim on January 8, 2000, by telephone. Eveleno does not state whether documentation was required by Colonial, but states that an inspection of the pool was conducted on January 26, 2000, by an expert retained by Colonial. Plaintiff further states that Colonial did not issue a denial of claim until February 29, 2000, at which time they denied the claim, based upon an alleged exclusion in the policy. The denial was issued by letter from the defendant's claims examiner.
The denial letter states in pertinent part: " We have completed our investigation of your claim. Our investigation has determined that the damages to your pool were the result of adverse conditions of low water level and ground surface water. Please note on pages 12 & 13 of your policy under Additional Coverages #8. Collapse, loss to a swimming pool is not covered unless the loss is the direct result of the collapse of a building and caused by one of the named perils listed on page 13. Otherwise, the collapse must be caused by one of the 17 named perils listed on pages 13-16 of the policy. Also, on pages 17 & 18 under Section I Exclusions, 1. C. Water Damage, the policy excludes surface water below the surface of the ground."
Plaintiff does not take the position on his motion, or in his opposition to the cross motion, that Colonial was incorrect in its position that the claim was one excluded by the policy. Plaintiff's motion for summary judgment is based solely upon his position that the defendant had all information relative to the claim by January 26, 2000, and that the failure of Colonial to issue a denial of the claim until February 29, 2000 constituted a violation of the requirements of 11 NYCRR 216.6, entitled Standards for Prompt, Fair and Equitable Settlements. Plaintiff concludes that such alleged violation estops the defendant from denying the claim.
Defendant Colonial opposes the motion, and cross-moves for summary judgment. With regard to the alleged violation of 11 NYCRR 216.6, it is Colonial's position that the regulations do
not create a private right of action, and thus, plaintiff's claim must fall. Colonial also points to a " non-waiver agreement" dated January 11, 2000 and signed by the plaintiff and defendant's insurance adjuster, and alleges that said ...