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Mark R. Laskowski et al v. Liberty Mutual Fire Insurance Company

June 11, 2012


The opinion of the court was delivered by: Gary L. Sharpe Chief Judge


I. Introduction

Plaintiffs Mark R. Laskowski and Richard Hall commenced this diversity action against defendant Liberty Mutual Fire Insurance Company under 28 U.S.C. § 1332 claiming, among other things, breach of a fire insurance policy. (See Compl., Dkt. No. 1.) Pending is Liberty's motion for summary judgment. (See Dkt. No. 48.) For the reasons that follow, the motion is denied.

II. Background

A. Facts*fn1

On January 10, 2010, a second home owned by Laskowski and Hall,*fn2 and its contents, which included valuable antiques, were damaged in a fire. (See Def.'s Statement of Material Facts (SMF) ¶¶ 1-2, Dkt. No. 50; Dkt. No. 54, Attach. 1 ¶ 3.) In February 2010, Laskowski and Hall submitted claims for their losses to Liberty, which insured both the residence and its contents. (See Dkt. No. 49, Attachs. 6, 7.) The prevailing fire insurance policy provided that, after a loss, the insureds, Laskowski and Hall, were required to cooperate with Liberty by submitting to an examination under oath (EUO) "[a]s often as [Liberty] reasonably require[d]."*fn3 (Dkt. No. 48, Attach. 2 at 18.) Consistent with that condition of cooperation, in April 2010, Liberty, which had already "determined that the fire in question was other than natural or accidental in origin," demanded that Laskowski and Hall appear for an EUO. (Dkt. No. 49, Attach. 8.) Laskowski and Hall appeared as required in May 2010 and, for two days, answered questions posed by Liberty regarding their loss. (See Dkt. No. 49, Attachs. 9-13.) At the conclusion of the EUOs, Liberty's counsel stated: "That will conclude today's examination under oath. We're going to continue, of course, as soon as we get the transcripts to you and reviewed and we receive the claim documentation, which hopefully will be forthcoming shortly." (Dkt. No. 49, Attach. 13 at 191.)

In July 2010, Liberty made a another demand on Laskowski and Hall that they appear for additional EUOs. (See Dkt. No. 49, Attach. 14.) Laskowski and Hall objected, claiming that more EUOs would be unreasonable because the initial examinations were "lengthy and thorough" and "fully explored" the relevant issues. (Dkt. No. 49, Attach. 15 at 3.) Laskowski and Hall also requested that Liberty inform them of what other subject areas it felt were "necessary to explore so that [they could] further consider whether [the] request for further EUOs [wa]s reasonable." (Id.) In September 2010, Liberty made an additional demand; Laskowski and Hall again objected and reiterated their request regarding the topic areas to be explored in follow-up examinations. (See Dkt. No. 49, Attachs. 16, 17.)

Liberty made yet another demand in October 2010 and also advised Laskowski and Hall that their continued failure to submit to its request "may result in a forfeiture of their rights under the policy." (Dkt. No. 49, Attach. 18.) Laskowski and Hall responded by explaining that they viewed further EUOs on previously covered topics as unreasonable; however, they agreed to answer questions "on subject matters not previously covered." (Dkt. No. 49, Attach. 19 at 2.) Liberty interpreted Laskowski and Hall's response as a refusal to submit to EUOs as required by the policy. (See Dkt. No. 49, Attach. 20.) One last time, Laskowski and Hall offered to appear, but, again, only for questioning on topics that were not previously covered. (See Dkt. No. 49, Attach. 21.) On January 11, 2011, Liberty notified Laskowski and Hall that it was rejecting their claims because they violated the policy by: (1) failing to "appear for a continued [EUO]"; (2) engaging in concealment and fraud; and (3) intentionally causing their loss. (Dkt. No. 48, Attach. 3.)

B. Procedural History

Laskowski and Hall commenced the instant action, which was transferred to this District from the Southern District of New York, on February 16, 2011. (See Compl.; Dkt. No. 9.) Liberty thereafter moved for partial dismissal of the Complaint, and this court granted that motion in its entirety, leaving only a claim for breach of contract. (See Dkt. Nos. 13, 34.) Liberty joined issue and asserted a counterclaim against Laskowski and Hall, which has gone unanswered,*fn4 for indemnification in the event that it is determined that Laskowski and Hall caused their loss and Liberty has to pay a mortgagee pursuant to the policy's terms. (See Dkt. No. 36.)

III. Standard of Review

The standard of review pursuant to Fed. R. Civ. P. 56 is well established and will not be repeated here. For a full discussion of the standard, the court refers the parties to its decision in Wagner v. Swarts, No. 1:09--cv--652, 2011 WL 5599571, *4 (N.D.N.Y. Nov. 17, 2011).

IV. Discussion

In support of its argument for summary judgment, Liberty asserts that Laskowski and Hall's refusal to submit to further EUOs-except to answer questions on topics not previously covered-constitutes a breach of the policy, which entitled them to deny the claims. (See Dkt. No. 51 at 3-9.) Liberty also contends that, should the court deny its motion based on the foregoing argument, Laskowski and Hall should be estopped from recovering more than "50% of claimed personal property losses" because Hall excluded both the antique collection and other jointly-owned personal property, ...

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