Blitman Construction Corp. v. Insurance of North America

Order of the Supreme Court, New York County (Alan Saks, J.), entered on November 25, 1983, which denied defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion, is affirmed, with costs and disbursements. In denying defendant’s motion for summary judgment, Special Term held that, based upon the carrier’s conduct following expiration of the 12-month limitation period contained in the policy of insurance, factual questions were presented as to the issues of waiver and estoppel. Although it is undisputed that contractual limitations periods are enforceable (Kassner & Co. v City of New York, 46 NY2d 544), the law is well established that “ ‘if, in any negotiations or transactions with the insured, after knowledge of the forfeiture, it [the insurer] recognizes the continued validity of the policy, or does acts based thereon, or requires the insured by virtue thereof to do some act or incur some trouble or expense, the forfeiture is as matter of law waived’.” (Frank Corp. v Federal Ins. Co., 91 AD2d 31, 34.) In the instant situation, the theft of plumbing supplies for which plaintiff seeks compensation occurred on March 30,1981. Thus, the 12-month time period within which plaintiff was obliged to commence an action expired on March 30, 1982. Thereafter, defendant’s attorneys sent plaintiff a request to appear for examination under oath at counsel’s office and to bring all relevant documents. This communication also enclosed formal proof-of-loss forms and directed that they be filed with the insurance company. Plaintiff was specifically advised that its failure to appear might prejudice its claim. As of the date of this letter, some two months following the expiration of the limitation period, plaintiff still had no knowledge of whether or not defendant intended to pay the claim. Plaintiff had complied 614 with all of defendant’s prior requests for information, and defendant’s conduct indicated that it was still engaged in a review of the records of plaintiff’s accounts in order to ascertain the nature and extent of the loss involved. Indeed, defendant did more than simply continue to carry on an investigation of the claim after the 12-month period had passed, but “with full knowledge of the facts pertaining to the loss, the carrier, inconsistent with its attempt to void the policy at trial, had caused the insured to fill out proofs of loss, to produce his books and to furnish information, which the insurer knew involved time, trouble and expense to obtain.” (Frank Corp. v Federal Ins. Co., supra, at p 35.) In support of its argument that the insurer’s conduct following the expiration of the limitations period did not constitute a waiver or estoppel, defendant refers to the nonwaiver agreement which was executed by itself and plaintiff shortly after the 12 months had elapsed. However, while this document would appear to provide defendant with some protection, the letter in which defendant asked that plaintiff execute and return its proposed enclosed nonwaiver agreement stated that: “This request is without prejudice to any rights which may have heretofore accrued to your corporation or to the insurer and is not to be construed as an admission or denial of liability.” In addition, the agreement itself asserted that: “It is also understood that by the execution of this agreement the insured does not waive any rights under any policy or binder upon which a claim is based.” Even more compelling is defendant’s notification to plaintiff that its nonattendance at the examination under oath could prejudice its claim. Consequently, there are sufficient factual issues raised herein as to whether there was a waiver or estoppel on the part of defendant such as would preclude granting summary judgment. Concur — Kupferman, Fein and Milonas, JJ.