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Matos v. Peerless Insurance Co.

United States District Court, W.D. New York

February 2, 2017

YANCY MATOS, Plaintiff,


          H. KENNETH SCHROEDER, JR. United States Magistrate Judge.

         Pursuant to 28 U.S.C. § 636(c), the parties have consented to the assignment of this matter to the undersigned to conduct all proceedings in this case, including the entry of final judgment. Dkt. #13.

         Yancy Matos, d/b/a Certified Enterprises, LLC, seeks reimbursement pursuant to an insurance policy for damages to his business premises and contents following an alleged burglary and fire at 1054 Broadway, Buffalo, New York, on September 23, 2011. Dkt. #1-1, p.2.

         Currently before the Court is: (1) defendant Peerless Insurance Company's (“Peerless'”), motion to compel (Dkt. #18); (2) plaintiff's motion for partial summary judgment seeking liability on his breach of contract claim and to compel compliance with discovery demands (Dkt. #19); and (3) defendant's motion for partial summary judgment. Dkt. #26. For the following reasons, defendant's motion to compel Mr. Powers' deposition (Dkt. #18), is granted; plaintiff's motion for partial summary judgment (Dkt. #19), is denied; plaintiff's motion to compel (Dkt. #19), is granted in part and defendant's motion for summary judgment (Dkt. #26), is granted in part.


         Plaintiff purchased the building at 1054 Broadway Street, Buffalo, New York, on March 4, 2009 for $60, 000. Dkt. #22-2, p.7 & Dkt. #31-10, ¶ 9. Plaintiff purchased the lot in 2010 for $825. Dkt. #31-10, ¶ 9. Plaintiff and his girlfriend, Anita Rodriguez, operated a custom printing business, Certified Enterprises, Inc., at the premises. Dkt. #19-8, ¶ 3. Plaintiff improved the premises by renovating the first floor for the printing business, replacing two furnaces and two hot water heaters, installing ductwork to heat the third floor, running water to the third floor, and installing a shower on the second floor. Dkt. #31-10, ¶ 9. The first floor of the building, which was the largest, was utilized for the printing business; the second floor is used for personal storage; and the third floor was utilized by kids from the neighborhood to hang out so that they were off the streets. Dkt. #19-17, pp.5-7.

         Peerless issued a business owners policy to plaintiff insuring the property under policy number 8599022, from January 27, 2011 to January 27, 2012. Dkt. #19-7, ¶ 4. The limit of insurance for the building (replacement cost) is $703, 040.00 Dkt. #23-4. Plaintiff avers that the insurance agent chose the coverage amount. Dkt. #30-5, ¶ 2.

         Plaintiff avers that, at approximately 1:30 am on September 23, 2011, as he was locking the back door of the premises, two individuals came up from behind him and put a gun to his head. Dkt. #19-8, ¶ 5. The individuals forced plaintiff back inside the building and one individual demanded that plaintiff lie face down on a couch while the other individual took possession of two laptop computers and a Play Station 3. Dkt. #19-8, ¶ 6. The individuals smashed the surveillance equipment, poured gasoline on the floor, started a fire and ran away. Dkt. #19-8, ¶ 7. Plaintiff called 911 and emergency personnel arrived to extinguish the fire and investigate the incident. Dkt. #19-8, ¶ 8. Plaintiff arrived home at approximately 5:00 am. Dkt. #19-8, ¶ 9.

         At approximately 8:00 am on September 23, 2011, plaintiff received a telephone call at his home from NFA manager Angelo Puccio advising that another fire had been started with gasoline at the back entrance to the building. Dkt. #19-8, ¶ 10. Mr. Puccio advised that the firefighters extinguished the flames, but failed to sufficiently secure the entrance after knocking down the door to check inside the building for flames, allowing thieves to take a television and penny jar and to break open an empty cash register. Dkt. #19-8, ¶¶ 10-11.

         By email dated October 21, 2011, Christian Waddington, Senior Investigator in the Special Investigations Unit of Liberty Mutual, Peerless' parent company, advised Donald Tolhurst, Senior Claims Specialist in the Commercial Insurance Claims Department for Liberty Mutual Insurance, that

My investigation at this point is complete. I am waiting on Buffalo fire to get the surveillance from inside. They are in process of accessing that and will call me. That is the only hold up. I agree that the circumstances are very odd, but at the moment, we cannot refute his statement unless he says something contrary to Buffalo fire, but they are not going to interview him until they see the surveillance. Bottom line, at this point we are waiting on Buffalo fire. Just want you to know that so you can decide if that is cause enough to hold up his claim.

         Dkt. #30-2, p.10.

         On February 15, 2012, plaintiff submitted a claim for damages in the amount of, inter alia, $76, 863.30 for the building and $52, 459.99 for business personal property. Dkt. #18-2, p.41 & Dkt. #19-8, p.8. An adjuster assigned by National Fire Adjustment Co., Inc. (“NFA”), Angelo Puccio, avers that in cases of partial building losses, such as the instant case, the insurance company

owes the lesser of the amount of insurance; the actual cash value of the building; or the cost of repair with material of like kind and quality within a reasonable time after such loss. In this particular case, since it was a partial building loss and not a total, and the actual cash value of the building and the amount of insurance exceeds the cost to repair, the limiting factor is the cost to repair which is $76, 863.30, not the cost to repair less depreciation of the repairs.

         Dkt. #31-11, ¶ 9.

         Defendant calculated the replacement cash value of the building at $49, 688.16, the actual cash value of damage to the building at $43, 876.14 and the actual cash value of damage to the building's contents at $33, 701.11. Dkt. #30-2, p.13 & Dkt. #31-5, pp.24 & 26.

         The insurance policy provides that Peerless will, at its option, either: (1) pay the value of lost or damaged property; (2) pay the cost of repairing or replacing the lost or damaged property; (3) take all or any part of the property at an agreed or appraised value; or (4) repair, rebuild or replace the property with other property of like kind an quality. Dkt. #23-4, p.68. The policy provides that Peerless will determine the value of Covered Property as follows:

d. (1) At replacement cost without deduction for depreciation, subject to the following:
* * *
(a) You may make a claim for loss or damage covered by this insurance on an actual cash value basis instead of on a replacement cost basis. In the event you elect to have loss or damage settled on an actual cash value basis, you may still make a claim on a replacement cost basis if you notify us of your intent to do so within 180 days after the loss or damage.
(b) We will not pay on a replacement cost basis for any loss or damage:
(i) Until the lost or damaged property is actually repaired or replaced; and
(ii) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage.
(c) We will not pay more for loss or damage on a replacement cost basis than the least of:
(I) The cost to replace, on the same premises, the lost or damaged property with other property:
i. Of comparable material and quality; and
ii. Used for the same purpose; or
(ii) The amount you actually spend that is necessary to repair or replace the lost or damaged property.

Dkt. #23-4, pp.68-69.

         By email dated April 27, 2012, Mr. Waddington advised Mr. Tolhurst of the completion of plaintiff's Examination Under Oath and opined that there are

no findings or evidence that the insured set the fire. At least not based on his testimony. We still do not have the surveillance from ATF. It appears that he was the victim of a hit. We highly suspect that he was into drugs and might have been a target of a rival, but cannot prove that he is ...

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