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STROHEIM & ROMANN, INC. v. ALLIANZ INSURANCE COMPANY

March 27, 2003

STROHEIM & ROMANN, INC., PLAINTIFF,
v.
ALLIANZ INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge

ORDER

Plaintiff Stroheim & Romann ("Plaintiff") brings this action to recover under an insurance policy issued by defendant Allianz Insurance Company ("Defendant") for losses suffered as a result of damage to Plaintiff's premises at 31-11 Thompson Avenue, Long Island City, New York (the "Building"). The Building was insured by Defendant under Policy No. CLP 1032174, which was in effect from July 1, 1998 to July 1, 1999 (hereinafter the "Policy").

Before the Court is Defendant's motion for summary judgment. Defendant also has moved to strike Plaintiff's references to a 1994-1995 insurance policy and to strike Plaintiff's 56.1 Statement of Facts.

The Court has considered thoroughly all of the submissions related to these motions. For the reasons set forth below, Defendant's motion to strike is denied. Defendant's motion for summary judgment is also denied.

BACKGROUND

The following factual recitation is based on the parties' statements of material facts pursuant to Local Rule 56.1 and affidavits submitted in connection with the motion for summary judgment. The facts outlined below are undisputed except as otherwise noted.

Plaintiff is the lessee and beneficial owner of the Building. Plaintiff alleges that the Policy was a comprehensive all risk policy which insured the Building against all risks of direct physical loss or damage, except as expressly excluded by the Policy's terms and conditions.

In the Spring of 1999, while Plaintiff performed routine facade work at its facilities, cracks were discovered in the Building's concrete support columns. Plaintiff alleges that, as the facade work progressed, it discovered that (a) the Building's structural concrete frame had deteriorated; (b) its supporting columns had suffered severe damage; and (c) the damage was not localized.

In July 1999, Plaintiff notified Defendant of the damage to the Building. After completing an investigation of the loss, Defendant declined Plaintiff's claim stating in a letter, dated July 25, 2001, that "the cause of the damage were [sic] design and construction defects during the original construction . . . [s]pecifically, there were no vertical expansion joints, which allowed long-term moisture and thermal movement of the brick masonry veneer." Letter from Def. to Haber, dated July 25, 2001, Ex. 6 to Wolosky Decl.

Plaintiff filed this action on September 4, 2001.

DISCUSSION

Motion to Strike 1994-1995 Policy Defendant moves to strike portions of Plaintiff's brief and of the Wolosky Declaration filed in opposition to Defendant's motion. Specifically, Defendant argues that the Court should strike references to a 1994-95 insurance policy issued by Defendant, which is appended to the Wolosky Declaration and cited in Plaintiff's memorandum. Defendant argues that Plaintiff did not produce a copy of the this policy in response to Defendant's January 2002 request for the production of, among other things, all "historical policy materials" in the possession of Defendant as well as any documents which support its claims. Defendant argues that Plaintiff never produced the 1994-95 policy document in discovery.

Defendant's motion to strike references to the 1994-95 policy is denied. Even if the 1994-95 policy document was within the scope of Defendant's requests, the extreme sanction of precluding proffer of the evidence is not warranted because no prejudice has been shown and Defendant has not even represented that it was unaware of existence of this policy.

Precluding evidence "that was not disclosed in discovery is a drastic remedy and will apply only in situations where the failure to disclose represents a flagrant bad faith and callous disregard for the rules," Johnson Electric North America, Inc. v. Mabuchi Motor America Corp., 77 F. Supp.2d 446, 458 (S.D.N.Y. 1999); McNerney v. Archer Daniels Midland Co., 164 F.R.D. 584, 587 (W.D.N.Y. 1995), and is a matter within the trial court's discretion, Johnson Electric North America, Inc., 77 F. Supp.2d at 458; Ventra v. United States, 121 F. Supp.2d 326, 332 (S.D.N.Y. 2000). Here, because there is no evidence of bad faith on Plaintiff's part in failing to ...


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