The opinion of the court was delivered by: Townes, United States District Judge
In October 2004, Paul Fabozzi and his daughter, Annette (collectively, "the Fabozzis" or "Plaintiffs"), commenced this diversity action, alleging that defendant Lexington Insurance Company ("Defendant" or "Lexington") breached the terms of a homeowner's insurance policy covering the Fabozzis' home in Staten Island by failing to pay for property damage that was discovered on or before May 13, 2002. Lexington now moves for summary judgment, principally arguing that this action was filed more than two years after the "date of loss" and is, therefore, barred by a two-year limitation period set forth in the policy. Although Plaintiffs contend that the limitation period did not begin to run until all conditions precedent to recovery under the policy were satisfied and that Lexington should be estopped from enforcing the limitation because Plaintiffs' insurance broker assured them that Lexington would pay their claim, this Court concludes that this action is time-barred. Accordingly, Lexington's motion for summary judgment is granted and this action is dismissed.
Sometime in the early 1990's, Paul Fabozzi and Annette's former husband, James D. Gavrity, purchased a wooden-framed waterfront home at 140 Nicolosi Drive, on the southeastern shore of Staten Island, for approximately $1.5 million (Plaintiffs' Response to Moveant's [sic] Statement of Facts, dated Sept 5, 2006 ("Pl. Resp.") at ¶ 19; Defendant's Response to Plaintiffs' Counter Statement of Facts ("Def. Counterstatement") at ¶ 19; Declaration of Brian J. Bolan, Esq., in Support of Defendant Lexington Insurance Company's Motion for Summary Judgment ("Bolan Declaration"), Ex. H at ¶ 15, and Ex. K at 10, 65). That purchase was financed, at least in part, by the former owners, Francis and Marguerite Coppa (collectively, "the Coppas"), who then took a mortgage on the property (Bolan Declaration, Ex. H at ¶¶ 8-15, and Ex. K at 10). Under the terms of their agreement with the Coppas, Messrs. Fabozzi and Gavrity were required to maintain insurance on the property (Bolan Declaration, Ex. K at 66).
To obtain the required insurance, Mr. Fabozzi contacted the Welsh Agency, Inc. ("Welsh"), a Staten Island insurance broker with whom he had dealt in the past (Bolan Declaration, Ex. K at 63). According to Mr. Fabozzi, insurance companies were initially eager to insure the property, but proved reluctant to insure the beachfront property for long (Id. at 64-66). As a result, the property was insured by a series of companies before Lexington became involved (Id.).
At some juncture, Welsh obtained insurance for the Fabozzis through Lexington by contacting Quaker Special Risk, a company which specializes in obtaining insurance for those having "difficulty finding coverage" (see Bolan Declaration, Ex. C at cover page (entitled, "HO3 Homeowner Declarations Page"); http://www.qsr-insurance.com). The parties agree that during the period between April 1, 2001, and April 1, 2003, the property was insured by Lexington (Pl. Resp. at ¶ 5; Bolan Declaration, Ex. C). A copy of the Lexington homeowners insurance policy (the "Policy") is attached to the Bolan Declaration as Exhibit C.
For purposes of this opinion, this Court need not describe the terms of the Policy in great detail. It suffices to note that the Policy provided coverage "for direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more" of certain enumerated causes (Policy (HO 00 03 04 91) at 5 of 16 (emphasis added)).*fn1 These causes included not only common "Perils Insured Against" -- such as fire, wind damage, explosions, vandalism and theft -- but also "Hidden Decay, ... Hidden insect or vermin damage; ... Weight of rain which collects on a roof; ... [and] Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation" (Id.). However, the Policy disclaimed coverage for physical loss due to the collapse of a building or any part of a building due to causes other than those enumerated (Id. at 6 of 16). In addition, the Policy expressly stated that it did not insure for loss caused by, inter alia, "Wear and tear, marring, deterioration; ... Inherent vice, latent defect, mechanical breakdown; ... Settling, shrinking, bulging or expansion, including resultant cracking, of pavements, patios, foundations, walls, floors, roofs or ceilings" (Id. at 7 of 16).
The Policy placed certain duties upon persons seeking to make a claim. It required, inter alia, that "[i]n case of a loss to covered property," an insured "[g]ive prompt notice to [Lexington] or [its] agent" (Id. at 9 of 16). The Policy also placed a time limitation on lawsuits arising under the policy, stating:
No action can be brought unless the policy provisions have been complied with and the action is started within two years after the date of loss.
(Id. (HO 01 31 08 00) at 4 of 6). The terms "loss" and "date of loss" were not specifically defined in the Policy.
At some point between September 2001 and May 2002, the Fabozzis became aware that their waterfront home had serious structural problems. The parties disagree as to when these problems were discovered. Plaintiffs allege that in September or October 2001, they arranged to have a contractor make certain home improvements, including repairs to a window which did not close properly (Pl. Resp. at ¶8; Bolan Declaration, Ex. C, at 15-18). However, Plaintiffs claim that they did not realize that their home was on the verge of collapse until April 2002, after the renovations revealed the structural problems (Pl. Resp. at ¶21; Bolan Declaration, Ex. C, at 38).
Defendant, on the other hand, asserts that Plaintiffs knew of the problems as early as June 2001 (Def. Counterstatement at ¶ 21). In support of this assertion, Defendant principally relies on a letter dated June 21, 2002, from David L. Businelli, an architect, to Fred A. Barbieri, an engineer (Bolan Declaration, Ex. F). In that letter, Mr. Businelli states that, when "contacted in September of 2001 by the owner to design a small renovation project," he was "also made aware of some structural problems with the house such as sagging window headers [and] humps in the floors ..." (Id. at 1). Mr. Businelli further states that, "[u]pon visiting the house," he saw serious structural problems:
I observed that the rear exterior wall at the 3rd floor was leaning towards the rear several inches. I also observed many cracks in the walls and that the floors were pitched towards the rear of the house. I also observed deterioration of the exterior walls conceivably due to water infiltration behind the EIFS cladding. (Id.).*fn2 Mr. Businelli's letter implies that he informed the owner of the problems, stating that he "was retained in October of 2001 ... to identify the problems with the house and to rectify them" (Id.).
By mid-May 2002, the structural problems were so severe as to force the Fabozzis to leave the home. Plaintiffs retained counsel who, on May 13, 2002, wrote a letter to Quaker Special Risk, making a claim on Mr. Fabozzi's behalf (Bolan Declaration at Ex. D). That letter stated that the house at 140 Nicolosi Drive was "about to collapse due to hidden decay and other issues," and that Mr. Fabozzi was making a claim for coverage under the provisions of the Policy which insured against "collapse" (Id.).
According to Mr. Fabozzi, a Lexington representative visited his home on May 23, 2002 (Affidavit of Paul Fabozzi, dated Aug. 10, 2006 (Ex. A. to Declaration of Eric R. Breslin, Esq., in Support of Plaintiffs' Opposition to Defendant's Motion for Summary Judgment ("Breslin Declaration")) at ¶ 9). Mr. Fabozzi recalled that the Lexington representative "assured [him] that his claim for damages would be covered under the Lexington Homeowner Policy" (Id.). However, Mr. Fabozzi ...