GREGORY H. WOODS, United States District Judge:
In the early morning of January 1, 2015, Plaintiff's home in Scarsdale, NY went up in flames. With it—Plaintiff claims—went the prototype of his "El Hydro" system, a device that uses hydrogen, extracted from water, to greatly increase the efficiency of internal combustion engines, and which was the subject of a recent $300 million contract. So too went over a million dollars of Plaintiff's personal property, which he says comprised—among other things—hundreds of thousands of dollars' of artwork (including "maybe a Picasso") and an extensive collection of precious stones.
When Defendants—who each issued a homeowner's insurance policy on Plaintiff's home just weeks before the fire occurred—investigated Plaintiff's claims,
The Court views the facts in the light most favorable to the non-moving party. See Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012). Unless otherwise indicated, the following facts are undisputed.
This legal saga began innocuously in June 2005, when Plaintiff—along with two other buyers
In April 2007, Plaintiff and his co-borrowers defaulted on the mortgage for 12 Inverness. Id. at ¶ 20; Declaration of Eric D. Freed, Dkt. No. 89 ("Freed Decl."), Ex. 9 at 14:17-24. Accordingly, the Mortgagee Bank initiated foreclosure proceedings in the Supreme Court of the State of New York, Westchester County in 2008 and obtained a judgment of foreclosure and sale on March 25, 2009.
After Plaintiff engaged in several more unsuccessful attempts to forestall the foreclosure sale,
Shortly thereafter, in July 2013, a suspicious motion was filed in the Westchester County foreclosure action—purportedly by counsel for the Mortgagee Bank—which stated that the bank had voluntarily elected to discontinue the action. Id. at ¶¶ 34-35. However, soon after, the Mortgagee Bank attorney who supposedly filed this motion indicated in a sworn affirmation that the motion was "an unauthorized forgery," and that her signature and those of other employees at her firm had been "forged/traced/affixed to the Vacatur Motion from other documents filed in this and/or other related proceedings." Id. at ¶ 37. Before any substantive inquiry could be conducted as to the origins of this apparently fraudulent filing, Plaintiff filed a second bankruptcy petition pro se on August 22, 2013, which once again stayed the state court foreclosure proceedings. Id. at ¶¶ 38, 52, 185.
In filings related to this second bankruptcy petition, Plaintiff indicated that his monthly income was zero, that "no increase or decrease" of his income was expected,
On November 8, 2013, attorney Kim D'Souza entered an appearance on behalf of Plaintiff in the August 2013 bankruptcy action. 56.1 Stmt. at ¶¶ 53, 196. On December 8 and December 11, 2013, Mr. D'Souza filed new versions of several of the schedules that were originally filed by Plaintiff on August 22, 2013. Id. at ¶¶ 54, 196. Those schedules repeated virtually all the information that Plaintiff had included in his August 22, 2013 filing, including the representation that 12 Inverness had a current value of $525,000, that Plaintiff's personal property was worth a total of $13,000, that Plaintiff had zero income, and that Plaintiff was not in possession of any property belonging to others. Id. at ¶¶ 197-98. Based on Plaintiff's representations, the bankruptcy court granted Plaintiff a discharge on December 18, 2013. Id. at ¶ 55.
Mr. D'Souza's December 2013 filings also included a motion requesting that the Mortgagee Bank's lien on 12 Inverness be avoided. Id. at ¶¶ 56, 200. Plaintiff's motion to avoid the Mortgagee Bank's lien remained pending for almost a year, until the bankruptcy court issued a ruling on October 30, 2014. Id. at ¶¶ 57, 202; Freed Decl., Ex. 24. Finding that it lacked jurisdiction to provide the requested relief, the bankruptcy court denied Plaintiff's motion, thereby leaving the March 2009 judgment of foreclosure and sale undisturbed. 56.1 Stmt. at ¶¶ 57, 202; Freed Decl., Ex. 24.
After the 2006 fire at 12 Inverness, Plaintiff's homeowner's insurance policy was cancelled and the property remained uninsured during the ensuing years until, in late 2014, Plaintiff obtained the two homeowner's insurance policies at issue in this action. 56.1 Stmt. at ¶ 88.
On October 30, 2014—the same day that the bankruptcy court denied Plaintiff's request
Eleven days later, on November 10, 2014, Plaintiff contacted Richard Signorelli, the owner of AZBY Insurance Agency in the Bronx, through whom he had previously obtained auto insurance. Id. at ¶ 93. Plaintiff informed Mr. Signorelli that he had just completed building or renovating an 8,000 square foot single family home at 12 Inverness and that he was ready to insure the home. Id. at ¶ 94. Mr. Signorelli proceeded to fill out an insurance application form using information provided by Plaintiff, who was present at Mr. Signorelli's office while the form was completed. Id. at ¶ 103. One of the questions on the form was "[h]as applicant had a foreclosure, repossession, bankruptcy, judgment or lien during the past five years?" to which Plaintiff answered "[n]o." Id. at ¶ 104. Plaintiff applied for building coverage in the amount of $2 million and contents coverage of $500,000. Id. at ¶ 106. Mr. Signorelli testified that he had determined $500,000 to be an adequate amount of contents coverage based on Plaintiff's indication that, although he was living in the home, he was still getting settled and didn't "have much personal furnishings in the house yet." Id. After reviewing the application form, Plaintiff signed it in Mr. Signorelli's presence on November 29, 2014. Id. at ¶ 107.
Thereafter, Plaintiff's insurance application form was submitted to Defendant Great Northern Insurance Company ("Great Northern"), which indicated that it would insure 12 Inverness if Plaintiff provided a central station alarm certificate. Id. at ¶¶ 109-11. Plaintiff gave a certificate to Mr. Signorelli showing that a central station burglar and fire alarm had been installed in 12 Inverness by ADT, and
On December 5, 2014, Plaintiff called GEICO from Jamaica in order to verify that his AIG policy was active, and asked GEICO to change the effective date of the policy to December 7, 2014. Id. at ¶¶ 126, 132. Although this request was granted, there was a delay while the change was being approved, during which time Plaintiff called GEICO from Jamaica three additional times—on December 8, 15, and 18, 2014—to check whether the effective date change had been accomplished. Id. at ¶¶ 129-32. Eventually, the AIG policy was reissued with Plaintiff's requested inception date of December 7, 2014, and a new policy number of 0021164966. Id. at ¶¶ 126, 131. As had occurred with the Great Northern policy, the check Plaintiff later submitted to AIG on January 26, 2015 for the policy premium was returned for insufficient funds. Id. at ¶ 133.
The Great Northern and AIG policies issued to Plaintiff each contain analogous provisions regarding circumstances in which coverage may be disclaimed, as well as dictating the duties of the insured in the process of making a claim. See id. at ¶¶ 85-86, 327-28. The Great Northern policy states, in pertinent part:
Id. at ¶¶ 85, 327; Freed Decl., Ex. 124 at Y1, Y5. Likewise, the relevant portions of the AIG policy are as follows:
56.1 Stmt. at ¶¶ 86, 328; Freed Decl., Ex. 125 at AIG000019-20.
Less than a month after the two homeowner's insurance policies became effective, 12 Inverness caught fire during the early morning hours of January 1, 2015. 56.1 Stmt. at ¶¶ 69, 74. By the time firefighters arrived on the scene, the structure was fully engulfed in flames and burning so hot that the firefighters feared the two adjacent homes would catch fire. Id. at ¶ 69. After the fire, only one room in the house remained—a bedroom protected by the remnants of sheetrock walls. Id. at ¶¶ 165-66. During the ensuing investigation, empty gasoline cans were discovered in that bedroom and fire department canines "hit" on flammable liquids in several locations of the burned-out structure. Id. at ¶¶ 70-72. Lab testing confirmed the presence of ignitable liquids in at least three locations, and fire department investigators issued a report which determined that the fire had been incendiary in origin. Id. at ¶¶ 73-74. At his deposition, Yonkers Fire Investigator Frank Phillips testified
At the time of the fire, Plaintiff was abroad in Jamaica. Id. at ¶ 68. Upon his return to New York several days later, he was interviewed by Yonkers Police Detective Scott Griffith. Id. at ¶ 76. Detective Griffith later recounted that this interview "raise[d] the hairs up on [his] neck as to what's going on here," and explained that Plaintiff's refusal to engage in any further interviews or to otherwise cooperate with the investigation made Plaintiff a "person of interest." Id. at ¶¶ 77-79. Detective Griffith testified that his suspicions were further aroused when he was contacted by insurance company investigators and learned that, at the time of the fire, Plaintiff held two different homeowner's insurance policies on 12 Inverness. Freed Decl., Ex. 49 at 51:11-24.
Following the fire, Plaintiff hired a public adjuster to help him in submitting his insurance claims. 56.1 Stmt. at ¶ 207. With the adjuster's assistance, Plaintiff submitted a signed "Sworn Statement in Proof of Loss" to Great Northern, which sought payment in the amount of $2,000,000 for the dwelling, $1,000,000 for the contents of the dwelling, and $500,000 for "other structure." Freed Decl., Ex. 113. Plaintiff also submitted a Sworn Statement in Proof of Loss to AIG, which sought payment in the amount of $2,500,000 for the dwelling, $1,250,000 for the contents of the dwelling, and $500,000 for "other structure." Id. at Ex. 114. At some later point—although the exact dates are not clear from the record
On January 15, 2015, Plaintiff gave a recorded statement to Great Northern representative and investigator Fred White. See 56.1 Stmt. at ¶¶ 89, 95, 135, 138. During that interview, Plaintiff told Mr. White that "he had done nothing to have the AIG policy put in force on 12 Inverness," and that "after he was told that GEICO would obtain a quote from one of their companies that underwrites `high end homes,' there were no further conversations with GEICO." Id. at ¶ 138.
On February 18, 2015, AIG noticed Plaintiff of its intent to take his Examination Under Oath ("EUO"), as required by his homeowner's insurance policy. Freed Decl., Ex. 53. Great Northern provided a similar notice to Plaintiff on February 23, 2015. Id. at Ex. 54. AIG's EUOs of Plaintiff eventually occurred on June 24, 2015,
Plaintiff's first Great Northern and AIG EUOs took place on May 19, 2015 and June 24, 2015, respectively. Much of the questioning at those EUOs related to Plaintiff's sources of income and financial status. For instance, Plaintiff testified during his Great Northern EUO that he did not earn any income in 2014 but had made approximately $200,000 to date in 2015. Id. at ¶ 340. He referred to all the contents of the house—which he valued at over $1,000,000—as "his property." Id. at ¶ 215. He also told the Great Northern examiner that he had not filed tax returns since 2010. Id. at ¶ 334. At the AIG EUO, Plaintiff testified somewhat conflictingly that he did not know when he stopped filing tax returns and could not recall his income. Id. at ¶ 343.
During his Great Northern EUO, Plaintiff also testified that he did not realize that he had purchased a policy from AIG until after the fire at 12 Inverness, that at the time he learned about the fire, he believed that he did not have any insurance on the home, and that he could not recall having any conversations with GEICO about changing the inception date of the AIG policy. Id. at ¶¶ 135, 141-42. He similarly testified to AIG that he never accepted a quote for insurance from GEICO, that he never paid any deposit, and that he never did anything affirmatively to open the AIG policy. Id. at ¶ 145.
When asked about the condition of 12 Inverness at the time of the fire, Plaintiff testified during his AIG EOU that the house was "95-98% finished" and that "the house was complete."
The second and third Great Northern EUOs were held on December 10, 2015 and January 8, 2016. Freed Decl., Exs. 66, 28. The second AIG EUO was held on January 6, 2016. Id. at Ex. 64.
During the second Great Northern EUO, Plaintiff reiterated his previous claim that he did not know that he had a homeowner's insurance policy from AIG until after the fire. 56.1 Stmt. at ¶ 136. He explained that his large jewelry claim was the result of his "investments" in precious metals, diamonds, and luxury watches. Id. at ¶ 220. He also claimed that in July 2015 he had signed a $300 million contract to deliver El Hydro to a company in the Dominican Republic. Id. at ¶ 332. Under the contract, Plaintiff was allegedly entitled to $5 million immediately upon signing and an additional $15 million five months later when he began marketing the product in the Dominican Republic. Id.
During this EUO, when pushed for information that would corroborate his income and finances at the time of his loss, Plaintiff refused to provide details, as demonstrated by the following exchange:
Id. at ¶ 339.
During the second AIG EUO—which took place on January 6, 2015—Plaintiff again referred to the personal property that was the subject of the Great Northern and AIG claims as his property. See id. at
During the second AIG EUO, Plaintiff was questioned for the first time about the discrepancies between the $13,000 of personal property he had listed in his 2013 bankruptcy filings and the over $1 million worth of personal property he listed in his 2015 insurance claims. Id. at ¶¶ 295-97. When confronted, Plaintiff testified as follows:
Freed Decl., Ex. 64 at 141:15-143:16.
After the AIG examiner explained to Plaintiff that the purpose of the questioning was to determine how he had amassed enough cash to acquire $1.3 million in personal property from the date of his bankruptcy to the date of the fire, Plaintiff testified: "I'm going to stipulate to the whole document [the August 22, 2013 Chapter 7 bankruptcy petition] and now we can move on.... I'm stipulating to the whole document." 56.1 Stmt. at ¶ 298. However, when the examiner began to question Plaintiff about specific items on the bankruptcy schedules, Plaintiff refused to answer the examiner's questions:
Id. at ¶ 351.
Although he had initially testified that all of the property in 12 Inverness belonged to him and that some of it—such as the grand piano and the paintings and artwork—had been acquired as early as a decade prior, after being confronted with his bankruptcy filings and warned that a failure to answer questions about them could constitute a failure to cooperate under the policy, Plaintiff explained that the property "was gifted to [him] after [his] bankruptcy, so that's how [it] w[as] [his]." Id. at ¶¶ 295-300. For instance, when he was presented with certain discrepancies regarding the value of his art collection, he explained:
Id. at ¶ 383.
Plaintiff also evaded AIG's questions about his accumulation of more than $200,000 in diamonds and luxury watches in the thirteen months following his bankruptcy filing:
Id. at ¶ 228. In his errata sheet, Plaintiff corrected his answer to this question to read, "I represented that I did not own, not that I possessed no jewelry. Id. at ¶ 232.
Plaintiff also claimed that the tools he included in his contents report were given to him after his bankruptcy.
Id. at ¶ 384; see also id. at ¶ 261. In his errata, Plaintiff claimed the tools were purchased for a friend, Bevon Spence. Id. at ¶ 262.
Id. at ¶¶ 303, 366. Plaintiff also testified that the artwork which was included his claim was given to him after his bankruptcy.
When asked about his net worth after his bankruptcy, Plaintiff told the examiner, "[g]ood. I'm a little bit over half-a-billion dollars. Please, woman. My invention alone, I don't have time to stop." Id. at ¶ 331. Plaintiff repeated his claim regarding the $300 million contract for "El Hydro" and testified that he had access to $1.7 million at the time the fire occurred. Id. at ¶¶ 332, 341. However, when pushed to provide proof of those assets, Plaintiff testified as follows:
Id. at ¶ 342; Freed Decl., Ex. 28 at 668:16-25.
During his third Great Northern EUO, Plaintiff once again gave conflicting and evasive testimony regarding the condition of 12 Inverness before the fire. He first testified that only two rooms at 12 Inverness were furnished at the time of the fire—a guest room and his bedroom, but then changed his testimony in his errata sheet to say that the entire home was furnished and "was not unfinished." 56.1 Stmt. at ¶¶ 168-69. When asked to detail the specific renovations or changes that had occurred at 12 Inverness between the September 2013 appraisal and the date of the fire, Plaintiff said he "ha[d] no recollection" of what exactly had been done, but that anyone who entered the home could "attest it was complete." Id. at ¶¶ 170-71.
On February 23, 2016—approximately a month and a half after he was first questioned about the discrepancies between his bankruptcy filings and his insurance claim, and two years after he received a discharge from the bankruptcy court— Plaintiff, through his attorney Kim D'Souza, submitted additional amended filings to the bankruptcy court in connection with his August 2013 bankruptcy. Id. at ¶ 304. Mr. D'Souza acknowledged at his deposition that the impetus behind these amended filings was his discovery of the discrepancies between Plaintiff's bankruptcy filings and the contents insurance claim. Id. at ¶ 305. The amended bankruptcy filing—which Plaintiff again swore to under penalty of perjury—indicated that the over $1 million in personal property detailed in Plaintiff's insurance claims, rather than belonging to Plaintiff, belonged to others, and had been entrusted to Plaintiff's "care, custody and control" at the time of the fire. Id. at ¶¶ 307, 309.
During his fourth and final Great Northern EUO on May 19, 2016, Plaintiff reiterated the statements he had made in his amended bankruptcy filing, claiming that the personal property which was the subject of his insurance claims was the property of others, and had been entrusted to his "care, custody and control" at the time of the fire. Id. at ¶ 307. He also attempted to explain discrepancies in the evidence regarding the presence of sheetrock in 12 Inverness by asserting for the first time in his errata sheet that "[t]he house was built with the open concept style that involved minimizing hallways, rooms that flow into one another, design[ed] for long lines of site [sic]," and which employed "columns rather than full walls." See id. at ¶¶ 172, 396.
Additionally, Plaintiff used his errata sheets for the fourth Great Northern EUO to direct personal comments towards the Great Northern EUO examiner, including notes such as:
Id. at ¶ 398.
During his final AIG EUO—which took place on May 23, 2016—Plaintiff refused to answer any questions about the ownership of the jewelry which was included in his claim, asserting that the answer to that question was "proprietary stuff." Id. at ¶ 233. During this EUO, Plaintiff was also questioned regarding how no remnants of the cast iron components in the grand piano survived the fire. Id. at ¶ 243. Plaintiff addressed this question in his errata sheets:
Id.
In June 2016, the Mortgagee Bank filed another notice of foreclosure sale, scheduling an auction of 12 Inverness for July 22, 2016. Id. at ¶ 59. On July 20, 2016, Plaintiff filed a third bankruptcy case in the United States Bankruptcy Court for the Southern District of New York, again staying the sale of 12 Inverness. Id. at ¶¶ 60-61. On December 28, 2016, Plaintiff commenced an adversary proceeding in the bankruptcy court against Great Northern and AIG, asserting claims for breach of contract and breach of the implied covenant of good faith and fair dealing in connection with Defendants' failure to pay his claims resulting from the January 2015 fire. Dkt. No. 1-1. After the adversary proceeding was filed, Great Northern moved on February 23, 2017 for withdrawal of the reference from the Bankruptcy Court to this Court pursuant to 28 U.S.C. § 157(d). Dkt. No. 1. The Court granted that motion on April 17, 2017. Dkt. No. 16.
On June 21, 2018, Judge Alison J. Nathan of the Southern District of New York entered an order affirming the bankruptcy court's findings of fact and conclusions of law, denying Plaintiff's request for a declaratory judgment that the mortgage on 12 Inverness had been paid in full and denying Plaintiff's demand that the 2009 judgment of foreclosure and sale be voided. 56.1 Stmt. at ¶ 62. On July 31, 2018, Defendants moved for summary judgment
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ("[S]ummary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" (quoting former Fed. R. Civ. P. 56(c))). A genuine dispute exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," while a fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id.
The movant bears the initial burden of demonstrating "the absence of a genuine issue of material fact," and, if satisfied, the burden then shifts to the non-movant to present "evidence sufficient to satisfy every element of the claim." Holcomb v. Iona Coll., 521 F.3d 130, 137 (2d Cir. 2008) (citing Celotex, 477 U.S. at 323, 106 S.Ct. 2548). To defeat a motion for summary judgment, the non-movant "must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting former Fed. R. Civ. P. 56(e)). "The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252, 106 S.Ct. 2505. Moreover, the non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (citations omitted), and she "may not rely on conclusory allegations or unsubstantiated speculation," Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 428 (2d Cir. 2001) (internal quotation marks and citation omitted).
In determining whether there exists a genuine dispute as to a material fact, the Court is "required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson, 680 F.3d at 236 (internal quotation marks and citation omitted). The Court's job is not to "weigh the evidence or resolve issues of fact." Lucente v. Int'l Bus. Machs. Corp., 310 F.3d 243, 254 (2d Cir. 2002) (citation omitted); see also Hayes v. N.Y. City Dep't of Corr., 84 F.3d 614, 619 (2d Cir. 1996) ("In applying th[e] [summary judgment] standard, the court should not weigh evidence or assess the credibility of witnesses."). "Assessments of credibility and choices between conflicting versions of the events are matters for the jury, not for the court on summary judgment." Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005) (citation omitted).
Defendants argue that their motion for summary judgment on Plaintiff's claims for breach of contract should be granted because Plaintiff's repeated, intentional false statements to both AIG and Great Northern during the claim investigations violated the policies' "concealment or fraud provisions" and therefore vitiated Plaintiff's coverage under the policies. Defendants point to four categories of alleged lies, arguing that any one of these false statements should void the insurance policies as a matter of law: (1) Plaintiff's assertions that he did not know he had obtained a homeowner's insurance policy from AIG; (2) Plaintiff's claim that the construction and renovations on 12 Inverness were complete; (3) Plaintiff's claim that 12 Inverness was filled with over $1 million in personal property; (4) Plaintiff's statements regarding his financial condition at the time of the fire. Defendants' motion for summary judgment based on Plaintiff's breach of the "concealment or fraud" provisions is granted.
"To void a policy for concealment, misrepresentation, or fraud by the insured ..., an insurer must show that the statements in question were (1) false, (2) willfully made, and (3) material to the insurer's investigation of the claim." Mon Chong Loong Trading Corp. v. Travelers Excess & Surplus Lines Co., No. 12-cv-6509 (CM), 2014 WL 406542, at *1 (S.D.N.Y. Jan. 30, 2014) (quoting Fine v. Bellefonte Underwriters Ins. Co., 758 F.2d 50, 52 (2d Cir. 1985)). "Where, as here, the policy contains a clause to the effect that a claim is void if an insured intentionally conceals or misrepresents a material fact concerning a claim under the policy, `it is clear that good faith and fair dealing are the norms by which proofs of loss are to be measured.'" Admiral Indem. Co. v. Bouley Int'l Holding, LLC, No. 02-cv-9696 (HB), 2003 WL 22682273, at *4 (S.D.N.Y. Nov. 13, 2003) (quoting Kaffalos, Inc. v. Excelsior Ins. Co., 105 A.D.2d 957, 482 N.Y.S.2d 96, 98 (3rd Dep't 1984)) (internal alterations omitted). "The insurer must prove fraud by clear and convincing evidence." Id. (quoting Varda, Inc. v. Insurance Co. of N. Am., 45 F.3d 634, 639 (2d Cir. 1995)).
"Although `actual intent' to defraud is rarely sufficiently proven to warrant summary judgment, summary judgment may be granted where `no reasonable trier of fact could infer anything other than knowing intent to defraud,'" D'Andrea v. Encompass Ins. Co. of Am., No. 15-cv-467 (MJR), 2018 WL 4095098, at *4 (W.D.N.Y. Aug. 28, 2018) (quoting Maersk, Inc. v. Neewra, Inc., 687 F.Supp.2d 300, 323 (S.D.N.Y. 2009)). Similarly, "[t]he question of materiality is typically one of fact for resolution at trial, but `where the evidence concerning the materiality is clear and substantially uncontradicted, the matter is one of law for the court to determine.'" Scottsdale Ins. Co. v. Priscilla Properties, LLC, 254 F.Supp.3d 476, 482 (E.D.N.Y. 2017) (quoting Chicago Ins. Co. v. Kreitzer & Vogelman, No. 97-cv-8619 (RWS), 2000 WL 16949, at *7 (S.D.N.Y. Jan. 10, 2000)).
Although the Court recognizes that the bar for granting summary judgment on the basis of fraud is a high one—having sifted through the morass of conflicting and obfuscating statements made by Plaintiff over the course of Defendants' investigations —the Court agrees that at least two statements within the categories of Plaintiff's alleged lies identified by Defendants were, as a matter of law, false, willfully made, and material to the insurers'
First, Plaintiff repeatedly told both Great Northern and AIG that he was not aware that he had a homeowner's insurance policy through AIG. On January 15, 2015, Plaintiff told Great Northern investigator Fred White that "he had done nothing to have the AIG policy put in force on 12 Inverness." 56.1 Stmt. at ¶ 138 (emphasis added). He repeated his claim that he was unaware of the AIG policy at the time of the fire during his first Great Northern EUO on May 19, 2015. Id. at ¶¶ 135, 141-42. During his first AIG EUO on June 24, 2015, he again testified that he "never did anything affirmatively to open the AIG policy." Id. at ¶ 145.
The undisputed evidence in the record proves that these statements were false. Plaintiff contacted GEICO directly on October 30, 2014 and provided GEICO with information about his home. Id. at ¶ 119. After another conversation with Plaintiff, GEICO issued the AIG policy with an effective date of November 7, 2014. Id. at ¶ 123. Plaintiff admits that on December 5, 2014, he called GEICO from Jamaica in order to verify that his AIG policy was active, and that he asked GEICO to change the effective date of the policy to December 7, 2014. Id. at ¶¶ 126, 132. Plaintiff then called GEICO three additional times to confirm whether the effective date change had been completed. Id. at ¶¶ 129-32. Plaintiff's statements that he did nothing to open the AIG policy were thus clearly untrue, and Plaintiff does not argue that they were not. Instead, he claims that Defendants have failed to carry their burden of demonstrating that these statements were willfully made and material to the investigation. That argument—which Plaintiff fails to support with any analysis of the record evidence—is wholly unpersuasive.
Barely a month after Plaintiff contacted GEICO four separate times to confirm that his AIG policy was active and to make changes to that policy, Plaintiff told Great Northern that he did not know he had an AIG policy and that he had done nothing to put it in effect. Id. at ¶ 138. He later repeated this identical claim to AIG. Id. at ¶ 145. Although the Court recognizes that it is not Plaintiff's burden to prove that his misrepresentation was unintentional, it is worth noting that Plaintiff has not claimed that he made this false statement as the result of a mistake or misunderstanding. Indeed, he has offered no explanation for this misrepresentation whatsoever. In such circumstances—where the evidence of a claimant's knowledge of facts which entirely undermine the statements he made to his insurer is undisputed—courts in this state have found, as a matter of law, that the claimant made those statements willfully and with intent to defraud. See Rickert v. Travelers Ins. Co., 159 A.D.2d 758, 551 N.Y.S.2d 985, 986 (3rd Dep't 1990) (court granted summary judgment to insurer when insured failed to disclose past insurance claims at EUO, even when insured submitted an affidavit stating that his failure to disclose was the result of an imperfect recollection); D'Andrea v. Encompass Ins. Co. of Am., No. 15-cv-467 (MJR), 2018 WL 4095098, at *2 (W.D.N.Y. Aug. 28, 2018) (willful misrepresentation was established as a matter of law when, after deeding the insured property to his son, claimant testified at EUO that no one
Finally, the Court concludes that Plaintiff's false statements were material as a matter of law. "Courts routinely find that information concerning an insured's credibility or motive is material where the insurer reasonably suspects arson or fraud in connection with the claim." Eagley v. State Farm Ins. Co., No. 13-cv-6653, 2015 WL 5714402, at *10 (W.D.N.Y. Sept. 29, 2015) (citing Harary v. Allstate Ins. Co., 988 F.Supp. 93, 104 (E.D.N.Y. 1997)). Plaintiff does not dispute that AIG and Great Northern had reason to believe— based on the conclusions of the Yonkers fire investigators—that the fire at 12 Inverness was the result of arson. 56.1 Stmt. at ¶¶ 73-74. Nor does he dispute that the acquisition of two policies would be a "red flag" regarding the insured's intent, particularly in a case of suspected arson. See, e.g., Freed Decl., Ex. 55, at ¶ 7 (Declaration of Fred White). The Court therefore finds that Plaintiff's false statements regarding his knowledge of the AIG policy were false, willfully made, and material as a matter of law, and that Defendants are entitled to summary judgment based on these statements.
Second, the Court concludes that Plaintiff's conflicting statements about the ownership and acquisition of the over $500,000 in jewelry, art, and tools included in the claims he submitted to AIG and Great Northern were also, as a matter of law, false, willfully made, and material to Defendants' investigations. Plaintiff submitted a claim to both insurers for over $200,000 worth of jewelry, $275,000 of painting and artwork, and roughly $50,000 of tools and equipment. Freed Decl., Ex. 113 at GNIC_0030860, Ex. 126. During his initial EUOs, he repeatedly told Defendants that the property belonged to him, that he had "investments" in precious metals, diamonds, and luxury watches, that he was a "tool collector," who had purchased the tools included in his claim over an extended period stretching back at least five years, and that he had personally acquired the $275,000 worth of art which was included in his contents report "over a ten-year period." 56.1 Stmt. at ¶¶ 1215, 220, 257, 275. He even provided AIG with specific dates—both of which predated his 2013 bankruptcy—on which he had acquired a $45,000 diamond and an almost $50,000 Rolex watch. Id. at ¶¶ 229, 230. After being confronted with the discrepancies between these claims and his 2013 bankruptcy filings, Plaintiff told both insurers that the jewelry, art, and tools included in his claims were given to him after his bankruptcy. Id. at ¶¶ 302, 303, 383, 384. At his final Great Northern EUO, Plaintiff told Defendant that the personal property that was the subject of his claims actually belonged to other people, and had been entrusted to his "care, custody and control" at the time of the fire. Id. at ¶ 307.
The Court need not determine which of Plaintiff's many statements regarding the ownership and acquisition of the jewelry, artwork and tools included in his claims were false, because it is clear—based on the blatantly contradictory statements he admittedly made—that at least some of the statements he made to each insurer were untrue. Furthermore, these detailed
Defendants argue that they are also entitled to summary judgment on the alternative ground that Plaintiff breached the "cooperation" provisions contained within his homeowner's insurance policies. The Court agrees.
"Under New York law, it is well settled that the insured's cooperation is a condition precedent to coverage under an insurance policy and that summary judgment is appropriate where it is determined that an insured's conduct constitutes a breach of the policy's cooperation clause." Stradford v. Zurich Ins. Co., No. 02-cv-3628, 2002 WL 31819215, at *4 (S.D.N.Y. Dec. 13, 2002). "In New York, the scope of the duty a cooperation clause establishes is prescribed by statute. New York courts have made it clear that this duty is a broad one: an insured's duty to cooperate `is much broader than the right of discovery under the CPLR. By its terms the insured promises to render full and prompt assistance to discover the facts surrounding the loss and anything less results in a breach of contract.'" Harary v. Allstate Ins. Co., 988 F.Supp. 93, 102 (E.D.N.Y. 1997), aff'd, 162 F.3d 1147 (2d Cir. 1998) (quoting Dyno-Bite, Inc. v. Travelers Cos., 80 A.D.2d 471, 439 N.Y.S.2d 558, 560-61 (4th Dept. 1981)). "The insured's obligation to cooperate is not met by partial testimony or by promises of evidence to be supplied in some indefinite future." Id. (internal quotation marks omitted). "Under New York law, to deny insurance coverage on [the basis of a failure to cooperate], `an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the insurer were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction." Wingates, LLC v. Commonwealth Ins. Co. of Am., 21 F.Supp.3d 206, 217-18 (E.D.N.Y. 2014), aff'd, 626 F. App'x 316 (2d Cir. 2015) (quoting Allstate Ins. Co. v. United Int'l Ins. Co., 16 A.D.3d 605, 792 N.Y.S.2d 549, 550-51 (2d Dep't 2005)).
It is well established that the refusal to answer material questions during an EUO is a breach of an insured's duty to cooperate. See, e.g., Eagley, 2015 WL 5714402, at *8 ("A policyholder cannot satisfy his or her duty to cooperate, however, by attending an EUO but refusing to answer material questions."); Harary, 988 F. Supp. at 102 ("The insured's obligation to cooperate is not met by `partial testimony.'"); Allstate Ins. Co. v. Longwell, 735 F. Supp. at 1187, 1195 (S.D.N.Y. 1990) (refusal to answer material questions at EUO barred recovery under the policy); Country-Wide Ins. Co. v. Gotham Med., P.C., 50 Misc.3d 712, 20 N.Y.S.3d 861 (N.Y. Sup. Ct. 2015), aff'd, 154 A.D.3d 608, 63 N.Y.S.3d 349 (1st Dep't 2017) ("Dr. Scheer's failure to answer all relevant questions at the EUO, as required by the provisions of the applicable insurance policies, constitutes a material breach of contract, and precludes recovery by defendant.").
In cases of suspected arson, "it is well settled that questions regarding an insured's personal finances are material and relevant to the investigation." Harary, 988 F. Supp. at 101 (quoting Ashline v. Genesee Patrons Cooperative Ins. Co., 224 A.D.2d 847, 638 N.Y.S.2d 217, 219 (3d Dept. 1996)). And, as previously noted, it is also well settled that in such circumstances, information concerning the insured's credibility or motive is material to the investigation. Eagley, 2015 WL 5714402, at *10.
Here, it is undisputed that during multiple EUOs, Plaintiff repeatedly refused to answer questions regarding—among other things—his financial condition and his assets. When asked questions on these topics, he told the examiners to "move on," 56.1 Stmt. at ¶ 339; to "close your book, deny the claim, and let's go. We ain't got no time for this foolishness," id. at ¶ 351; "I'm done with the topic," id. at ¶ 342; and "You really don't want to go down that road with me." Id. During one of the EUOs, when asked to verify his assets, he launched a personal attack at the examiner, telling her "Your husband probably lives miserably. I don't know how one pleases you." Id. at ¶ 342. When asked how he acquired various assets, he consistently gave evasive and contradictory answers. See, e.g., id. at ¶ 366 ("Q. Did you buy it? Was it a gift? Did you find it in the street? Where did you get Item 22? A. I guess all of the above. Q. It can't be all of the above. A. It can be."). Given this undisputed testimony, the Court concludes that no reasonable jury could find that Plaintiff's refusal to answer these questions did not breach the cooperation clause in his policies. The Great Northern and AIG examiners repeatedly asked Plaintiff for information regarding his financial condition. That information was clearly material to the investigation of his claims, particularly because the insurers reasonably suspected that arson was the cause of the fire. And Plaintiff repeatedly and intentionally refused to answer the questions posed to him over the course of multiple EUOs,
For the reasons stated above, Defendants' joint motion for summary judgment is GRANTED. The Clerk of Court is directed to terminate the motion pending at Dkt. No. 84, to enter judgment for Defendants, and to close this case.
SO ORDERED.
Freed Decl., Ex. 63 at 134:12-135:15.
