2015 Freeman LLC v. Seneca Specialty Ins. Co.
Summary of the case 2015 Freeman LLC v. Seneca Specialty Ins. Co.
The Appellate Division, First Department, affirmed the lower court's decision denying Seneca Specialty Insurance Company's motion to dismiss or for summary judgment on 2015 Freeman LLC's claim of bad faith denial of insurance coverage. The court applied Ohio law, as the insured properties were located in Ohio, and found that the defendant's documentary evidence did not conclusively justify the denial of coverage. The plaintiffs are entitled to proceed with discovery, including on their claims for punitive damages and attorneys' fees.
Key Issues of the case 2015 Freeman LLC v. Seneca Specialty Ins. Co.
- Conflict of laws between Ohio and New York
- Bad faith denial of insurance coverage
Key Facts of the case 2015 Freeman LLC v. Seneca Specialty Ins. Co.
- The insured properties are located in Ohio.
- The defendant's documentary evidence did not justify the denial of coverage.
Decision of the case 2015 Freeman LLC v. Seneca Specialty Ins. Co.
Affirmed
Impact of the case 2015 Freeman LLC v. Seneca Specialty Ins. Co.
The decision emphasizes the application of the law of the state where the insured risk is located, potentially affecting future cases involving multi-state insurance disputes.
Opinions
| 2015 Freeman LLC v Seneca Specialty Ins. Co. |
| 2016 NY Slip Op 01133 |
| Decided on February 16, 2016 |
| Appellate Division, First Department |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and subject to revision before publication in the Official Reports. |
Decided on February 16, 2016
Mazzarelli, J.P., Friedman, Sweeny, Manzanet-Daniels, JJ.
250 653519/14
v
Seneca Specialty Insurance Company, Defendant-Appellant.
Ken Maguire & Associates, PLLC, Garden City (Kenneth R. Maguire of counsel), for appellant.
Marc Scollar Law Office, Staten Island (Marc Scollar of counsel), for respondents.
Order, Supreme Court, New York County (Cynthia S. Kern, J.), entered April 16, 2015, which denied defendant's motion to dismiss, or for summary judgment dismissing, plaintiffs' claim of bad faith denial of insurance coverage, and granted plaintiffs' cross motion for a declaration that Ohio law applies to this action, unanimously affirmed, with costs.
The motion court correctly resolved the conflict of laws by applying Ohio, not New York, law. Where, as here, each commercial property insurance policy at issue insured a building located solely in Ohio, the governing law is Ohio (Zurich Ins. Co. v Shearson Lehman Hutton, 84 NY2d 309, 318 [1994]). The location of the insured risk will be given greater weight than other factors where, as here, the insured risks are located in one state (see Appalachian Ins. Co. v General Elec. Co., 20 Misc 3d 1122[A], 2008 NY Slip Op 51585[U], *3-4 [Sup Ct, NY County 2008], affd sub nom. Appalachian Ins. Co. v Di Sicurata, 60 AD3d 495 [1st Dept 2009]).
In order to prevail on its pre-answer motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence submitted by defendant must conclusively establish as a matter of law that its denial of insurance coverage was reasonably justified (see McCurdy v Hanover Fire & Cas. Ins. Co., 964 F Supp 2d 863, 874 [ND Ohio 2013] [applying Ohio law]; see generally Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc., Inc., 120 AD3d 431, 433 [1st Dept 2014]). The documentary evidence submitted by defendant failed to establish its defense as a matter of law, and plaintiffs are entitled to proceed with discovery. Further discovery is also warranted with respect to plaintiffs' request for punitive damages and attorneys' fees. Plaintiffs may recover such damages and fees, even though their claim of bad faith denial of insurance coverage arises from their breach of contract claims (see Zoppo v Homestead Ins. Co., 71 Ohio St 3d 552, 558, 644 NE2d 397, 402 [1994] [applying Ohio law]).
We have considered defendant's remaining contentions, including its request for partial summary judgment, and find them
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: FEBRUARY 16, 2016
CLERK