Metropolitan Property and Casualty Insurance Company v. Sarris et al
MEMORANDUM-DECISION AND ORDERED, that Met P&Cs motion for summary judgment and judgment on the pleadings (Dkt. No. 65) is GRANTED in part as to the dismissal of the Sarrises counterclaims alleging violations of New York General Business Law section 3 48, New York Insurance Law section 2601, and New York insurance regulations, and DENIED in all other respects; and it is further ORDERED, that the Sarrises cross-motions for summary judgment (Dkt. Nos. 74, 78) are GRANTED in part as to the Schillaci actions triggering Met P&Cs duty to defend, and DENIED in all other respects. Signed by Senior Judge Lawrence E. Kahn on July 28, 2017. (Copy served via regular)(sas)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
METROPOLITAN PROPERTY AND
CASUALTY INSURANCE COMPANY,
GEORGE R. SARRIS, et al.,
MEMORANDUM-DECISION AND ORDER
Plaintiff Metropolitan Property and Casualty Insurance Company (“Met P&C”)
commenced this action against defendants George and Joy Sarris, Theresa Schillaci, and Robert
Newell, seeking a declaration that it is not obligated to defend or indemnify the Sarrises in
connection with an ongoing lawsuit between the Sarrises and Schillaci and Newell. Dkt. No. 1
(“Complaint”). The Sarrises likewise seek, among other things, a declaration that Met P&C has a
duty to defend and indemnify them in connection with the lawsuit. Dkt. No. 8 (“Joy Sarris
Answer”) ¶¶ 129, 132; Dkt. No. 16 (“George Sarris Answer”) ¶¶ 129, 134. Presently before the
Court are Met P&C’s motion for summary judgment and judgment on the pleadings, Dkt. No. 65
(“Met P&C Motion”); see also Dkt. No. 65-33 (“Met P&C Statement of Material Facts”); Dkt.
No. 65-34 (“Met P&C Memorandum”); Dkt. No. 82 (“Met P&C Responsive Statement of
Material Facts”); Dkt. No. 83 (“Met P&C Response”), Joy Sarris’s cross-motion for summary
judgment, Dkt. No. 74 (“Joy Sarris Motion”); see also Dkt. No. 74-1 (“Joy Sarris Responsive
Statement of Material Facts”); Dkt. No. 74-2 (“Joy Sarris Statement of Material Facts”); Dkt. No.
77 (“Joy Sarris Memorandum”); Dkt. No. 90 (“Joy Sarris Reply”), and George Sarris’s crossmotion for summary judgment, Dkt. No. 78 (“George Sarris Motion”); Dkt. No. 91 (“George
Sarris Reply”). For the reasons that follow, Met P&C’s Motion is granted in part and denied in
part, and George and Joy Sarris’s Motions are granted in part and denied in part.
A. Factual Background
1. The Policies
In December 1999, the Sarrises bought a piece of real property located at 11 Woodside
Drive in Clifton Park, New York. Met P&C SMF ¶ 1; Joy Sarris Responsive SMF ¶ 1.1 Four
years later, Met P&C issued the Sarrises a homeowners insurance policy; the policy was renewed
a year later, and it covered the period from December 2004 to December 2005. Met P&C SMF
¶¶ 79–80; Joy Sarris Responsive SMF ¶¶ 79–80. The policy stated that Met P&C would “pay all
sums for bodily injury and property damage to others for which the law holds you responsible
because of an occurrence to which this coverage applies.” Dkt. No. 65-23 (“Homeowners
Policy”) at 28 (emphasis omitted). The policy defined “you” as “the person or persons named in
the Declarations[,] and if a resident of the same household[,] the spouse of such person or
persons,” and it provided that “the responsibilities, acts and failures to act of a person defined as
you will be binding upon another person defined as you.” Id. at 7–8 (emphasis omitted). It also
The parties’ statements of material facts say that the property was located at 1
Woodside Drive, but that appears to be an error. In their answers, George and Joy Sarris state that
the property they purchased was located at 11 Woodside Drive, George Sarris Answer ¶ 15; Joy
Sarris Answer ¶ 15, and other documents filed with the pending motions confirm this, see, e.g.,
Dkt. No. 65-18 (“Joy Sarris Deposition”) at 9:14–16 (“Q: And where do you reside? A: My
permanent address is at 11 Woodside Drive, Clifton Park, New York . . . .”).
defined “occurrence” as “an accident, including continuous or repeated exposure to substantially
the same general harmful conditions during the term of the policy.” Id. at 8. Several types of
losses were excluded from coverage under the policy. For example, the policy did not cover
“bodily injury or property damage which is reasonably expected or intended by [the policyholder]
or which is the result of [the policyholder’s] intentional and criminal acts or omissions.” Id. at 28
Under the policy, Met P&C was not required to provide coverage for an occurrence if the
Sarrises failed to “[p]romptly notify [Met P&C] or [its] representative, in writing, stating: 1. [the
policyholder’s] name and policy number; 2. the date, place and circumstances of the accident; 3.
the name and address of anyone who might have a claim against [the policyholder]; and 4. the
names and addresses of any witnesses.” Id. at 34. Coverage for an occurrence was also contingent
on the Sarrises immediately sending Met P&C “any legal papers relating to the accident.” Id.
The Sarrises purchased a personal excess liability policy (“PELP”) from Met P&C as
well. Met P&C SMF ¶¶ 91–92; Joy Sarris Responsive SMF ¶¶ 91–92. This policy “provide[d]
liability coverage in excess of the ‘retained limit’ for damages to others caused by an
‘occurrence’ and to which the policy applies.” Met P&C SMF ¶ 93; Joy Sarris Responsive SMF
¶ 93; see also Dkt. No. 65-25 (“PELP”) at 6. Like the Homeowners Policy, the PELP defined
“occurrence” as “an accident, including continuous or repeated exposure to the same condition
that results during the policy period in personal injury or property damage,” and it imposed “joint
In the remainder of this Memorandum-Decision and Order, the Court, in quoting from
the Sarrises’ policies, often replaces “you” with “policyholder” and “us” with “Met P&C.”
obligations on all persons defined as you.” PELP at 6, 10 (emphasis omitted). The PELP
excluded coverage for “personal injury or property damage” caused by “any intentional act
committed by an insured or at the direction of any insured.” Id. at 7 (emphasis omitted). And the
PELP required the Sarrises to “notify [Met P&C] or any authorized agent as soon as practicable
of an occurrence that may be covered by th[e] policy.” Id. at 8 (emphasis omitted).
2. Schillaci v. Sarris
On April 28, 2005, Schillaci and Newell, neighbors of the Sarrises, commenced litigation
against the Sarrises in New York State Supreme Court, Saratoga County. Met P&C SMF ¶ 29;
Joy Sarris Responsive SMF ¶ 29. The complaint in this case alleged that Schillaci and Newell
had lived in their home on Woodside Drive for fourteen years. Dkt. No. 74-4 (“Schillaci
Complaint”) ¶ 1. Before the Sarrises moved into an adjacent property in 1999, Schillaci and
Newell had “enjoyed the use and quiet enjoyment of their property.” Id. ¶¶ 2, 6. Unfortunately,
that changed soon after the Sarrises arrived. The Sarrises’ property contained a pond that George
relocated and expanded. Id. ¶¶ 8, 10–11. George’s pond modifications, to which Schillaci and
Newell did not consent, id. ¶¶ 14–15, “altered the water flow and run-off such that” the pond was
“diverted onto Schillaci and Newell’s property,” id. ¶ 12. This in turn led to flooding in Schillaci
and Newell’s basement. Id. ¶ 7.
The Schillaci Complaint further alleged that George “began raising ducks and geese in
the family room of the [Sarrises’] dwelling.” Id. ¶ 18. He also “began to entice both native and
domesticated ducks and geese onto his property by putting out feed for these fowl.” Id. ¶ 19. As a
result of George’s efforts, the number of waterfowl on the Sarrises’ property “increased
exponentially,” and this “escalat[ion]” in the “fowl population” “began to interfere increasingly
with Schillaci and Newell’s quiet enjoyment of their property.” Id. ¶¶ 20–21. Specifically, the
large population of waterfowl on the Sarrises’ property “increased the noise which began at dawn
or before . . . to the point [that] it disturbed both Schillaci and Newell’s sleep and the use of their
property.” Id. ¶ 22. Another unfortunate consequence of George’s “intentional actions” in raising
waterfowl on his property was an “increase[ in] the amount of guano from the birds which was
naturally deposited on [Schillaci and Newell’s] house, lawn, cars and other possessions.” Id. ¶¶
23, 25. Eventually, “the noxious odor and manure” coming from the waterfowl prevented
Schillaci and Newell from “us[ing] the exterior of their home or their yard during the warmer
weather.” Id. ¶ 26.
According to the Schillaci Complaint, Schillaci and Newell tried to work things out with
George, but he “did nothing to abate the continuing nuisance.” Id. ¶¶ 28–29. The Schillaci
Complaint detailed George’s efforts to seek a variance from the Clifton Park zoning code so that
he could raise waterfowl on the residential portion of his property. Id. ¶ 32. In August 2003,
George applied for the variance, id., and a public hearing was held on the application around
September 2, 2003, id. ¶ 33. Schillaci and Newell spoke at the hearing and “presented the Zoning
Board of Appeals with a Petition signed by over fifty of Sarris’[s] neighbors opposing
the . . . [a]pplication for a variance.” Id. The next month, the Zoning Board of Appeals denied
George’s application for a variance and gave him “sixty . . . days . . . to remove the domestic
ducks and geese.” Id. ¶ 34. The Schillaci Complaint went on to describe George’s refusal to obey
this order, noting that he was fined in 2004 for his noncompliance. Id. ¶¶ 35–37. According to
Schillaci and Newell, George’s defiance showed that he “fully intend[ed] to continue to maintain
his private nuisance and thereby interfere with Schillaci and Newell’s right to the quiet
enjoyment of their property.” Id. ¶ 43.
The Schillaci Complaint contained three causes of action: private nuisance resulting from
the “rais[ing] and feed[ing] of both domestic and wild fowl on [the Sarrises’] property,” trespass
caused by the noise and guano coming from the waterfowl, and trespass “in the form of water
appearing in [Schillaci and Newell’s] basement for the first time in . . . fifteen years.” Id.
¶¶ 44–54. Schillaci and Newell requested an injunction ordering the Sarrises to “cease operating
a feeding station and raising both domestic and wild ducks and geese,” $250,000 in damages, and
attorney’s fees. Id. at 8.3
Though it began over a decade ago, the Schillaci litigation appears to be ongoing. See
Dkt. No. 75 (“George Sarris Declaration”) ¶ 86 (“Of utmost importance to me as a defendant is
that the underlying Schillaci matter is still ongoing and unadjudicated.”). The parties have
engaged in extensive pretrial motion practice. The details are irrelevant to the pending motions,
but in March 2009, Justice Stephen A. Ferradino denied the parties’ motions for summary
judgment, see Dkt. No. 65-12 (“May 2009 Hearing Transcript”) at 1:1–4 (“This case has been
sitting for an awfully long time, and I recently in March issued a decision denying both parties[’]
motions for summary judgment.”), and in October 2012, Justice Thomas D. Nolan, Jr. (to whom
the case had been reassigned) dismissed the trespass claim relating to the flooding of the
The Sarrises devote a significant portion of their motion papers to rebutting the version
of events offered in the Schillaci Complaint. E.g., Joy Sarris SMF ¶¶ 19–37. Since the Court
need not go beyond the four corners of the Schillaci Complaint in order to find that it triggered
Met P&C’s duty to defend the Sarrises, there is no need to give the Sarrises’ side of the story.
And while Met P&C and the Sarrises recount in great detail the history of the litigation between
George Sarris and Clifton Park, e.g., id. ¶¶ 38–58; Met P&C SMF ¶¶ 20–28, this story also has
no bearing on the Court’s resolution of the parties’ motions.
basement, Dkt. No. 65-14 (“October 2012 Decision”) at 11–12. But Justice Nolan declined to
grant summary judgment on Schillaci and Newell’s other causes of action, id. at 14, and the
Appellate Division affirmed that ruling in November 2014, Schillaci v. Sarris, 997 N.Y.S.2d 504,
509 (App. Div. 2014).
3. The Sarrises’ Interactions with Met P&C
George Sarris received service of the Schillaci lawsuit on May 11, 2005. George Sarris
Decl. ¶ 57. He says that “within days of May 11, 2005,” he informed “MetLife Agent Vincent
DeMidio of the underlying Schillaci lawsuit.” Id. ¶ 58. George and DeMidio allegedly met for
over an hour, and George gave him “a copy of the underlying suit, which . . . DeMidio copied
and returned to me.” Id. ¶ 59. DeMidio told him that “MetLife would provide defense and
coverage on the Schillaci suit,” id. ¶ 60, and he left DeMidio’s office thinking that he had
fulfilled his obligation to provide notice of the lawsuit to his insurer, Dkt. No. 65-16 (“George
Sarris Deposition”) at 60:11–15. DeMidio, for his part, testified that he could not recall George
Sarris providing him a copy of the complaint and summons in the Schillaci case. Dkt. No. 65-19
(“DeMidio Deposition”) at 35:4–11. DeMidio did recall George visiting him in his office on
several occasions, id. at 35:12–15, and he remembered George mentioning “some problem with
the town,” id. at 36:1, but he insisted that he had no recollection of George talking about his
neighbors suing him over the waterfowl on his property, id. at 45:8–11. George says that, per
DeMidio’s instructions, he “routinely notified DeMidio of the progress of the underlying lawsuit
over the next six years, . . . [and] would provide DeMidio with the latest papers in
the . . . lawsuit.” George Sarris Decl. ¶ 120.
DeMidio explained at his deposition that his practice was to tell customers who wanted to
file a claim that they “ha[d] to call claims to make [a] claim, because I only represent the
company. I don’t represent claims.” DeMidio Dep. at 76:19–77:3. DeMidio also said that he
would typically tell such a customer that if she did not file her claim through “the claims
reporting procedure,” Met P&C could deny coverage for lack of timely notice. Id. at 77:5–13.
According to DeMidio, he “always left [customers attempting to make claims] a card with [a]
customer service number” so that they could call Met P&C and report their claims, and he never
reported claims on behalf of customers. Id. at 78:9–20. Again, DeMidio testified that he could
not recall telling George or Joy Sarris that he would report the claim on their behalf.
Id. at 78:21–79:6.
After DeMidio retired in 2011, id. at 6:22–7:1, George claims he met with MetLife agent
Kevin Eberz to discuss the Schillaci lawsuit, George Sarris Dep. at 74:3–14. George apparently
“needed the big guns of Met-Life” because he “couldn’t reason with the judges” and “it was a
very complex case and not everybody understands or appreciates the subtleties of the law.” Id.
at 75:2–3, 75:11–13.4 According to George, Eberz “didn’t know who to contact, but he was
going to have them call me, somebody from legal call me.” Id. at 75:14–16. A month went by
and George had yet to receive a call from legal, so he went back to the MetLife office. Id.
at 75:17–18. But Eberz was not there, and George had to speak to someone else at the office,
who took a copy of recent papers related to the Schillaci case and told George that “legal [would]
Until August 2005, George was represented by David Pentowski in the Schillaci case.
George Sarris Dep. at 79:8–12, 80:3–7. From September 2005 to 2008, George and his wife were
represented by Peter Henner. Id. at 80:9–12, 82:21–25. George has proceeded pro se in the
Schillaci case since then, id. at 83:6–13, and he proceeds pro se in this action as well.
contact [him].” Id. at 75:18–76:4. Again, nobody from legal contacted him, and in November
2012, he wrote a letter to Eberz “memorializing the prior contact [he] had with [Eberz].” Id.
at 77:2–5, 78:4–12. Eberz testified that he could not remember talking with George about the
Schillaci case or receiving the letter. Dkt. No. 65-20 (“Eberz Deposition”) at 13:18–23,
Met P&C claims that it did not receive notice of the Schillaci case until December 23,
2014, when George Sarris called the “MetLife 1-800 claim reporting number.” Dkt. No. 65-21
(“Burnep Affidavit”) ¶¶ 9–10. And Met P&C allegedly did not receive the complaint and
summons in the Schillaci case until December 29, 2014, when Joy Sarris sent the two documents
in an email. Id. ¶ 11. On January 1, 2015, George sent Met P&C a “thumb-drive containing a
3,000+ page Record on Appeal evidencing the protracted, and at that time ten-year, litigation
history in the Schillaci Action.” Id. ¶ 12. On January 23, 2015, Cynthia J. Burnep, a senior claim
adjuster at Met P&C, wrote a letter to the Sarrises informing them that Met P&C would not
provide coverage for the Schillaci case because it was “not given timely notice of this loss as
required by both the Policy and PELP.” Dkt. No. 65-28 (“January 23, 2015 Letter”) at 1. One
month later, Burnep sent another letter to the Sarrises, this time to let them know that it would
not provide coverage because, in addition to the lack of timely notice, “the alleged ‘property
damage,’ if any, was not caused by any ‘occurrence’ as that term is defined,” and the intentional
act exclusion barred coverage. Dkt. No. 65-29 (“February 2015 Letter”) at 7.5
The Sarrises take pains to establish that Burnep’s investigation was a “sham,” Joy
Sarris Mem. at 24; see also, e.g., Joy Sarris SMF ¶¶ 130–36, but the adequacy of Met P&C’s
investigative efforts in 2015 is not relevant to the pending motions.
Met P&C attempts to bolster its version of events by providing an affidavit from MetLife
associate general counsel Charles Cavas. Dkt. No. 65-32 (“Cavas Affidavit”). Cavas notes that
MetLife’s legal department uses a management system named “Law Manager,” in which a file is
created if legal “receives any requests for legal advice, inquiries into any substantial issues, or
notices of significant litigation.” Id. ¶¶ 6–7. In February 2015, the legal department searched Law
Manager “using the name ‘Sarris,’ the claim number, and the policy number,” and was unable to
“find any file or record evidencing any inquiries made by George or Joy Sarris or any prior
communication had as between the MetLife Legal Department and George or Joy Sarris.” Id.
B. Procedural History
Met P&C filed its Complaint in this action on June 25, 2015. Compl. It seeks a
declaratory judgment that it has no obligation to defend or indemnify the Sarrises in connection
with the Schillaci case. Id. at 14. In their answers, the Sarrises brought counterclaims against Met
P&C seeking a declaration that Met P&C in fact has a duty to defend and indemnify them in the
Schillaci action. Joy Sarris Answer ¶¶ 129, 132; George Sarris Answer ¶¶ 129, 134. Joy Sarris
also brought counterclaims against Met P&C for violations of New York General Business Law
section 349, New York Insurance Law section 2601, and New York insurance regulations. Joy
Sarris Answer ¶¶ 135–143. George Sarris brought counterclaims for breach of the implied duty
of good faith and fair dealing and violations of New York Insurance Law section 2601 and New
York insurance regulations. George Sarris Answer ¶¶ 126–40.
On February 6, 2017, Met P&C moved for summary judgment and for judgment on the
pleadings. Met P&C Mot. Met P&C argues that the Schillaci action did not trigger its duty to
defend or indemnify the Sarrises under the Homeowners Policy or the PELP. Met P&C Mem.
at 4–10, 13. It also argues that the intentional loss exclusion in the Homeowners Policy and the
intentional act exclusion in the PELP preclude coverage for the Schillaci action. Id. at 10–13.
Met P&C next claims that coverage was defeated by the Sarrises’ failure to provide timely notice
of the Schillaci action. Id. at 14–18. Finally, Met P&C moves for judgment on the pleadings,
seeking dismissal of the Sarrises’ counterclaims alleging violations of New York state law. Id.
Joy and George Sarris separately cross-moved for summary judgment on May 15, 2017.
Joy Sarris Mot.; George Sarris Mot. Nonetheless, the Sarrises’ briefs in support of their crossmotions are substantively identical. Compare Joy Sarris Mem., with Dkt. No. 78-3 (“George
Sarris Memorandum”). The Sarrises argue that the Homeowners Policy and the PELP provide
coverage for the Schillaci action, and that Met P&C in fact received timely notice of the lawsuit.
Joy Sarris Mem. at 2–23. They also argue that Met P&C’s request for a declaration that it has no
duty to indemnify is “not ripe for summary judgment.” Id. at 1. Tacked onto the end of the
Sarrises’ briefs are requests that the Court, among other things, “[f]ind that plaintiffs’ complaint
is barred by the statute of limitations” and “find that Melife [sic] breached their [sic] implied
duty of good faith and fair dealing.” Id. at 23–24. The Sarrises do not attempt to support these
requests with arguments or citations to relevant authority.
A. Motion for Summary Judgment
Rule 56 of the Federal Rules of Civil Procedure instructs courts to grant summary
judgment if “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). Although “[f]actual disputes that are
irrelevant or unnecessary” will not preclude summary judgment, “summary judgment will not lie
if . . . the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Taggart v. Time, Inc., 924
F.2d 43, 46 (2d Cir. 1991) (“Only when no reasonable trier of fact could find in favor of the
nonmoving party should summary judgment be granted.”).
The party seeking summary judgment bears the burden of informing the court of the basis
for the motion and of identifying those portions of the record that the moving party claims will
demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). Similarly, a party is entitled to summary judgment when the nonmoving party
carries the ultimate burden of proof and has failed “to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id.
In attempting to repel a motion for summary judgment after the moving party has met its
initial burden, the nonmoving party “must do more than simply show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). At the same time, a court must resolve all ambiguities and draw all
reasonable inferences in favor of the nonmoving party. Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150 (2000); Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 164 F.3d 736,
742 (2d Cir. 1998). Thus, a court’s duty in reviewing a motion for summary judgment is
“carefully limited” to finding genuine disputes of fact, “not to deciding them.” Gallo v.
Prudential Residential Servs., Ltd. P’ship, 22 F.3d 1219, 1224 (2d Cir. 1994).
B. Motion for Judgment on the Pleadings
A party may move for judgment on the pleadings under Federal Rule of Civil Procedure
12(c) any time after the close of pleadings but before trial. E.g., Calingo v. Meridian Res. Co.,
No. 11-CV-628, 2013 WL 1250448, at *2 (S.D.N.Y. Feb. 20, 2013). Rule 12(c) motions for
judgment on the pleadings are decided by the same standard as Rule 12(b)(6) motions to dismiss
for failure to state a claim. Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). Thus, to
survive a Rule 12(c) motion, a pleading “must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court must accept as
true the factual allegations contained in a pleading and draw all inferences in favor of the nonmoving party. Allaire Corp. v. Okumus, 433 F.3d 248, 249–50 (2d Cir. 2006). Plausibility,
however, requires “enough fact[s] to raise a reasonable expectation that discovery will reveal
evidence of [the alleged misconduct].” Twombly, 550 U.S. at 556. The plausibility standard
“asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S.
at 678 (citing Twombly, 550 U.S. at 556). “[T]he pleading standard Rule 8 announces does not
require ‘detailed factual allegations,’ but it demands more than an unadorned, the-[plaintiff]unlawfully-harmed-me accusation.” Id. (quoting Twombly, 550 U.S. at 555). Where a court is
unable to infer more than the mere possibility of the alleged misconduct based on the pleaded
facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to
dismissal. Id. at 678–79.
A. Duty to Defend
“In New York, an insurer’s duty to defend is ‘exceedingly broad’ and distinct from the
duty to indemnify.” Euchner-USA, Inc. v. Hartford Cas. Ins. Co., 754 F.3d 136, 140 (2d Cir.
2014) (quoting Auto. Ins. Co. of Hartford v. Cook, 850 N.E.2d 1152, 1155 (N.Y. 2006)).6 “The
insured party bears the burden of establishing that the claimed loss falls within the scope of the
policy.” Mount Vernon Fire Ins. Co. v. Munoz Trucking Corp., 213 F. Supp. 3d 594, 601
(S.D.N.Y. 2016). “The duty of an insurer to defend its insured arises whenever the allegations
within the four corners of the underlying complaint potentially give rise to a covered claim, or
where the insurer ‘has actual knowledge of facts establishing a reasonable possibility of
coverage.’” Frontier Insulation Contractors, Inc. v. Merchs. Mut. Ins. Co., 690 N.E.2d 866, 868
(N.Y. 1997) (quoting Fitzpatrick v. Am. Honda Motor Co., 575 N.E.2d 90, 93 (N.Y. 1991)).
Accordingly, “[t]he insurer’s duty to defend the entire action is triggered even if only one claim
is potentially covered by the insurance policy.” Mass. Bay Ins. Co. v. Penny Preville, Inc., No.
95-CV-4845, 1996 WL 389266, at *4 (S.D.N.Y. July 10, 1996). In evaluating the underlying
complaint, a court must look to its “factual allegations . . ., and not its legal characterizations of
the underlying events.” Dodge v. Legion Ins. Co., 102 F. Supp. 2d 144, 150 (S.D.N.Y. 2000).
“Any doubt as to whether the allegations state a claim within the coverage of the policy must be
resolved in favor of the insured and against the carrier.” JD2 Envtl., Inc. v. Endurance Am. Ins.
Since the parties’ briefs assume that New York law applies, the Court need not engage
in a choice-of-law analysis. See Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 514 n.4 (2d Cir.
2001) (“The parties’ briefs assume that New York substantive law governs the issues of contract
interpretation and statute of limitations presented here, and such implied consent is, of course,
sufficient to establish the applicable choice of law.”).
Co., No. 14-CV-8888, 2017 WL 751157, at *3 (S.D.N.Y. Feb. 27, 2017) (quoting Euchner-USA,
Inc., 754 F.3d at 141). Moreover, “[t]he duty [to defend] remains ‘even though facts outside the
four corners of [the] pleadings indicate that the claim may be meritless or not covered.’”
Cumberland Farms, Inc. v. Tower Grp., Inc., 28 N.Y.S.3d 119, 122 (App. Div. 2016) (third
alteration in original) (quoting Fitzpatrick, 575 N.E.2d at 90); see also Cont’l Cas. Co. v. JBS
Constr. Mgmt., Inc., No. 09-CV-6697, 2010 WL 2834898, at *3 (S.D.N.Y. July 1, 2010) (“[I]n
purchasing a policy containing a duty to defend, the insured is contracting for the insurer to bear
the costs of defending lawsuits—including ‘groundless’ lawsuits—as long as the allegations in
those lawsuits, however unfounded, would, if proven true, give rise to a duty to indemnify.”).
An insurer may use a policy exclusion to avoid its duty to defend by “demonstrat[ing] that
the allegations of [the] underlying complaint place that pleading solely and entirely within the
exclusions of the policy and that the allegations are subject to no other interpretation.” Gen. Star
Indem. Co. v. Driven Sports, Inc., 80 F. Supp. 3d 442, 450 (E.D.N.Y. 2015) (quoting CGS
Indus., Inc. v. Charter Oak Fire Ins. Co., 720 F.3d 71, 77 (2d Cir. 2013)). In other words, “[w]hen
an exclusion clause is relied upon to deny coverage, ‘the burden rests upon the insurance
company to demonstrate that the allegations of the complaint can be interpreted only to exclude
coverage.’” Village of Piermont v. Am. Alt. Ins. Corp., 151 F. Supp. 3d 438, 448 (S.D.N.Y.
2015) (quoting Town of Massena v. Healthcare Underwriters Mut. Ins. Co., 779 N.E.2d 167, 170
(N.Y. 2002)). Moreover, an insurer cannot rely on a policy exclusion to disclaim coverage unless
it “establish[es] that the exclusion is stated in clear and unmistakable language, is subject to no
other reasonable interpretation, and applies in the particular case and that its interpretation of the
exclusion is the only construction that could fairly be placed thereon.” James River Ins. Co. v.
Power Mgmt., Inc., 55 F. Supp. 3d 446, 453 (E.D.N.Y. 2014) (quoting Parks Real Estate
Purchasing Grp. v. St. Paul Fire & Marine Ins. Co., 472 F.3d 33, 42 (2d Cir. 2006)).
1. Was There an Occurrence?
Met P&C argues that the Schillaci Complaint did not trigger its duty to defend the
Sarrises because that pleading failed to allege an “occurrence” as required by the Homeowners
Policy. Met P&C Mem. at 8. Met P&C also suggests that “documentary evidence” it has
provided to the Court shows that its duty to defend was not triggered. Id. According to Met P&C,
these two sources “establish that the injuries alleged [in the Schillaci action] were caused by the
intentional and purposeful acts of the Sarrises,” thereby defeating coverage. Id. at 9. The Sarrises,
for their part, argue that the Schillaci Complaint triggered Met P&C’s duty to defend because
they “did not intend to cause the articulated damages of guano [and] excessive noise.” Joy Sarris
Mem. at 15. Under the Sarrises’ policy, Met P&C agreed to provide coverage for “property
damage to others for which the law holds [the policyholder] responsible because of an occurrence
to which this coverage applies.” Homeowners Policy at 28 (emphasis omitted).7 The policy
defined “occurrence” as “an accident, including continuous or repeated exposure to substantially
the same general harmful conditions during the term of the policy.” Id. at 8. While the policy did
not define “accident,” that term has a well-settled meaning in New York insurance law.
“The term ‘accident’ is broadly defined in our jurisprudence, utilizing an average person
standard.” Agoado Realty Corp. v. United Int’l Ins. Co., 733 N.E.2d 213, 215 (N.Y. 2000). “In
Met P&C does not appear to dispute that the interference with Schillaci and Newell’s
use and enjoyment of their property alleged in the Schillaci Complaint qualifies as “property
damage” under the policies. And for good reason: the policies defined “property damage” to
include “loss of use” of the property in question, Homeowners Policy at 8; PELP at 11, which
certainly encompasses the injuries described in the Schillaci Complaint.
deciding whether a loss is the result of an accident, it must be determined, from the point of view
of the insured, whether the loss was unexpected, unusual and unforeseen.” Allegany Co-op Ins.
Co. v. Kohorst, 678 N.Y.S.2d 424, 425 (App. Div. 1998). “It is well settled that an injury may be
accidental even though it results from an intentional act.” Dodge, 102 F. Supp. 2d at 151
(collecting cases). This reflects the principle that “[i]nsurance policies must . . . be read
‘narrowly, barring recovery only when the insured intended the damages.’” Gen. Accident Ins.
Co. v. Zazynski, 645 N.Y.S.2d 220, 220 (App. Div. 1996) (quoting Cont’l Cas. Co. v. RapidAmerican Corp., 609 N.E.2d 506, 510 (N.Y. 1993)). Thus, “damages arising from an intended
act may . . . be deemed accidental, so long as they arise out of ‘a chain of
unintended . . . [subsequent] events.’” Commercial Union Assurance Co. v. Oak Park Marina,
Inc., 198 F.3d 55, 59 (2d Cir. 1999) (second and third alterations in original) (quoting City of
Johnston v. Bankers Standard Ins. Co., 877 F.2d 1146, 1150 (2d Cir. 1989)). Put differently,
“[a]ccidental results can flow from intentional acts. The damage in question may be unintended
even though the original act or acts leading to the damage were intentional.” Salimbene v.
Merchants Mut. Ins. Co., 629 N.Y.S.2d 913, 915–16 (App. Div. 1995); see also Brooklyn Law
Sch. v. Aetna Cas. & Sur. Co., 849 F.2d 788, 789 (2d Cir. 1988) (“New York courts interpreting
the meaning of an ‘occurrence,’ . . . have determined that liability coverage depends upon
whether the alleged injury was intentionally caused or was an unintended, although foreseeable,
result of the alleged intentional conduct.”).
Nevertheless, when the conduct alleged in the underlying complaint “is such
that . . . harm to the victim is inherent in the nature of the acts alleged, . . . courts have had little
difficulty in finding that the resulting harm was expected or intended by the insured.” Jubin v. St.
Paul Fire & Marine Ins. Co., 653 N.Y.S.2d 454, 455 (App. Div. 1997) (collecting cases). Harm is
“‘inherent in the nature’ of an act when the act is so exceptional that ‘cause and effect cannot be
separated; that to do the act is necessarily to do the harm which is its consequence; and that since
unquestionably the act is intended, so also is the harm.’” Progressive N. Ins. Co. v. Rafferty, 793
N.Y.S.2d 618, 619–20 (App. Div. 2005) (quoting Allstate Ins. Co. v. Mugavero, 589 N.E.2d 365,
369 (N.Y. 1992)). For example, in Pennsylvania Millers Mutual Insurance Co. v. Rigo, 681
N.Y.S.2d 414, 415 (App. Div. 1998), the insured, believing his victim had made “an obscene
gesture at him,” “approached him without warning and struck him in the jaw with a closed fist.”
Although the insured argued that he did not intend to injure his victim, the court found that the
insurer had no duty to defend because “it [wa]s clear that [the victim’s] injuries flowed directly
from [the insured’s] purposeful act.” Id. at 416. “The general rule remains[, however,] that ‘more
than a causal connection between the intentional act and the resultant harm is required to prove
that the harm was intended.’” Slayko v. Sec. Mut. Ins. Co., 774 N.E.2d 208, 210 (N.Y. 2002)
(quoting Mugavero, 589 N.E.2d at 369).
Here, the Schillaci Complaint alleged that George Sarris’s decision to raise waterfowl on
his property harmed Schillaci and Newell by “increas[ing] the noise which began at dawn or
before” and “increas[ing] the amount of guano . . . which was . . . deposited on the Plaintiffs’
[property].” Schillaci Compl. ¶¶ 22–23. The complaint suggested that “the massive increase in
fowl population [was] caused by Sarris’[s] intentional actions.” Id. ¶ 25. And it emphasized that
even though Schillaci and Newell had informed George of the problems allegedly caused by the
waterfowl, he “did nothing to abate the continuing nuisance.” Id. ¶¶ 24–25. But the Schillaci
Complaint failed to provide any factual allegations suggesting that the Sarrises intended to injure
Schillaci and Newell by “carpet[ing] their lawn, property and possessions [with guano]” and
subjecting them to the “acrimonious din [of the waterfowl].” Id. ¶¶ 26–27. True, the complaint
suggested that George acted intentionally in raising the waterfowl, but it is well established that
“[t]he damage in question may be unintended even though the original act or acts leading to the
damage were intentional.” Salimbene, 629 N.Y.S.2d at 915–16. And a fair reading of the
complaint is that the injuries to Schillaci and Newell “ar[ose] out of a chain of unintended though
expected or foreseeable events that occurred after an intentional act.” Brooklyn Law Sch., 849
F.2d at 789 (quoting Cont’l Ins. Co. v. Colangione, 484 N.Y.S.2d 929, 930 (App. Div. 1985)).
That is enough to establish that the Schillaci Complaint triggered Met P&C’s duty to defend. See
Fitzpatrick, 575 N.E.2d at 92 (“[A]n insurer’s duty to defend is at least broad enough to apply
when the “four corners of the complaint” suggest the reasonable possibility of coverage.”
Met P&C cannot defeat coverage by claiming that the conduct described in the Schillaci
Complaint “is such that . . . harm to the victim is inherent in the nature of the acts alleged.”
Jubin, 653 N.Y.S.2d at 455. This exception applies only to “a narrow class of cases,” Slayko, 774
N.E.2d at 210, and the causal connection between George’s conduct and the harm suffered by
Schillaci and Newell is not strong enough to trigger it. Consider, for example, Barry v.
As Met P&C points out, Met P&C Mem. at 7, in County of Broome v. Aetna Casusalty
& Surety Co., 540 N.Y.S.2d 620, 622 (App. Div. 1989), the court suggested that coverage may
be denied if “if the actor knew or should have known there was a substantial probability that a
certain result would take place.” Yet as the Second Circuit correctly noted, if County of Broome
is read to stand for the proposition that conduct is not accidental when it leads to “damage that
[i]s, objectively speaking, substantially probable, that interpretation appears to conflict with
[established New York precedent].” City of Johnstown, 877 F.2d at 1151 n.1; see also
Harleysville Worcester Ins. Co. v. Paramount Concrete, 123 F. Supp. 3d 282, 298 n.24 (D. Conn.
2015) (“Although County of Broome is a New York case, it applies New York law incorrectly.”).
Romanosky, 538 N.Y.S.2d 14, 15 (App. Div. 1989), in which the insured was ejected from a club
after “an altercation with several bouncers.” The insured returned to the club with a twelve-gauge
shotgun and “fired a round of buckshot at the front door of the club, injuring the [victim] who
was inside.” Id. The insured testified that “he only intended to damage the door of the
discotheque and that he did not think that anyone would be injured.” Id. The court found that
because the insured “did not intend or expect to cause the injury,” the insurer was obligated to
provide coverage for the incident. Id. at 16. Similarly, in Kohorst, 678 N.Y.S.2d at 425, the
insured set fire to a property he owned in order to collect the insurance proceeds. Someone
“sustained burn injuries” as a result of the fire, and the insurer attempted to argue that coverage
was not triggered because the injuries did not stem from an accident. Id. The court rejected that
argument on the ground that “physical and/or emotional harm to another person is not the
inherent result of an arson committed for insurance purposes, but may be the unexpected or
unintended result of an intentional act.” Id. The causal connection between conduct and injury in
these cases was at least as strong as that alleged in the Schillaci Complaint. Thus, the Court
cannot say that because George intended to raise waterfowl on his property, he necessarily
intended to harm Schillaci and Newell.
Alternatively, one might infer an intent to harm from the warnings Schillaci and Newell
gave the Sarrises about the problems allegedly caused by the waterfowl. According to the
Schillaci Complaint, George learned that his neighbors believed the waterfowl were making their
lives miserable, yet he refused to do anything about it. Schillaci Compl. ¶¶ 28–29. The trouble is
that courts have rejected the notion that an intent to cause injury can be gleaned from an
insured’s decision to persist in potentially harmful conduct in the face of warnings about its
negative consequences. For instance, in City of Johnstown, 877 F.2d at 1147, the underlying
complaint alleged that the city allowed “sewage sludge” to be dumped in a landfill it owned.
After “evidence . . . emerged that . . . certain wastes leaking from the dump may have polluted
the surrounding groundwaters,” New York state sued the city. Id. The city’s insurer attempted to
disclaim coverage on the ground that the city had received several warnings over the years that
“the landfill apparently was contaminating the local groundwaters.” Id. at 1152. The Second
Circuit disagreed and held that “proof of warnings of possible physical damages is not enough to
show that as a matter of law the damages ultimately incurred were expected or intended.” Id.
More specifically, while “the City was aware of potential contamination, . . . [there was no
indication] . . . that the City intended the resulting damage, nor that the City, intending harm,
knew that the extensive damages alleged in the . . . complaint would flow directly and
immediately from the City’s intentional acts.” Id.
Here, Schillaci and Newell undoubtedly made the Sarrises aware of the potential for harm
resulting from the waterfowl on their property. The Sarrises thus “took a calculated risk” in
continuing to raise the ducks and geese despite their neighbors’ complaints, but such a decision
does not establish an intent to cause the resulting harm. Id.; see also 670 Apartments Corp. v.
Agric. Ins. Co., No. 96-CV-1464, 1996 WL 559942, at *1, 5 (S.D.N.Y. Oct. 2, 1996) (finding a
covered occurrence where the underlying complaint alleged that the insured, after installing a
boiler underneath the victims’ apartment, received several complaints from the victims about
“excessive noise and vibration” from the boiler, did not remove the boiler, and was later sued by
the victims); McGroaty v. Great Am. Ins. Co., 329 N.E.2d 172, 173–75 (N.Y. 1975) (finding that
an insurer’s duty to defend was triggered by a complaint alleging that the insured, despite
receiving warnings from the victim that the insured’s construction “methods threatened [the
victim’s garage wall],” continued its construction and caused the damage warned of by the
victim). Accordingly, the warnings received by the Sarrises cannot defeat Met P&C’s duty to
Met P&C appears to argue that this case is on all fours with Central Mutual Insurance Co.
v. Willig, 29 F. Supp. 3d 112 (N.D.N.Y. 2014). Met P&C Mem. at 5–8. The Court disagrees. In
Willig, the underlying complaint described an “unrelenting battle” between the insured and the
victim over an easement owned by the victim. 29 F. Supp. 3d at 115. The insured allegedly
“undertook several actions to impede [the victim’s] use of his easement.” Id. For example, the
insured destroyed the victim’s dock, prevented the victim from accessing the dock area,
“alter[ed] the grade, pitch, and size of the northerly easement so that the [victim’s] easement was
rendered unusable,” and “block[ed] the easement and dock with boards containing nails
protruding upward and his vehicle.” Id. The victim eventually brought a tort suit against the
insured. Id. at 116. The court in Willig had to decide whether the conduct just described
constituted an accident triggering the insurer’s duty to defend. Id. at 119. After noting that
“certain intentional acts, which actually cause their intended consequences, are not considered
‘accidents,’” the court held that the underlying complaint did not trigger the duty to defend
because it failed to allege an accident as required by the policy. Id. (emphasis added). That
conclusion rested on the fact that the underlying complaint described “a continuous course of
conduct that was designed to remove [the victim] from [the insured’s] property, even at the cost
of bodily injury or property damage.” Id. at 120.
The allegations in the Schillaci Complaint, by contrast, do not suggest that the Sarrises
intended to harm Schillaci and Newell. Unlike the complaint in Willig, which alleged a scheme
designed to injure the victim, the Schillaci Complaint alleged at most indifference to Schillaci
and Newell’s well-being. That may suggest an unfortunate lack of manners, but New York law is
clear that an injury that is “an unintended, although foreseeable, result of . . . alleged[ly]
intentional conduct” does not foreclose coverage. Brooklyn Law Sch., 849 F.2d at 789.
Accordingly, the Court holds that the Schillaci Complaint triggered Met P&C’s duty to defend
the Sarrises because it alleged an occurrence as required by the Homeowners Policy.9
2. The Intentional Loss Exclusion and the PELP
Met P&C argues that even if its duty to defend was triggered by the Schillaci Complaint,
the intentional loss exclusion bars coverage. Met P&C Mem. at 10–12. Under this exclusion, Met
P&C is not responsible for “bodily injury or property damage which is reasonably expected or
intended by [the policyholder] or which is the result of [the policyholder’s] intentional and
criminal acts or omissions.” Homeowners Policy at 28. According to Met P&C, the intentional
loss exclusion “bar[s] coverage not only for injury that was intended by the insured, but also
As noted above, Met P&C suggests that the Court may look beyond the four corners of
the Schillaci Complaint in determining whether that pleading triggered its duty to defend. Met
P&C Mem. at 8. Not so. Under New York law, “the insurer cannot rely on facts outside of the
four corners of the complaint to negate the duty to defend.” Greenberg v. Nat’l Chiropratic Mut.
Ins. Co., No. 96-CV-52, 1996 WL 374145, at *2 (S.D.N.Y. July 3, 1996); see also JBS Constr.
Mgmt., Inc., 2010 WL 2834898, at *3 (surveying New York law and concluding that insurers
may not use “extrinsic fact[s]” outside the four corners of the complaint to “curtail [the] duty to
defend”). Further, because the Court finds that coverage was triggered by the claims premised on
the problems allegedly created by the waterfowl, it need not address the claim based on the
flooding of Schillaci and Newell’s basement. See, e.g., Penny Preville, Inc., 1996 WL 389266,
at *4 (“The insurer’s duty to defend the entire action is triggered even if only one claim is
potentially covered by the insurance policy.”).
[for] . . . injury that the insured reasonably should have expected.” Met P&C Mem. at 11. But
courts construing similar policy exclusions have concluded that the analysis applicable to the
question whether a loss was accidental is the same as that conducted in analyzing the effect of the
exclusion. See, e.g., O’Connell v. State Farm Fire & Cas. Co., No. 03-CV-880, 2005 WL
1576793, at *4 (W.D.N.Y. July 1, 2005) (“Although the first disclaimer denies the existence of
coverage in the first instance, while the second relies upon an [intentional act] exclusion
[disclaiming coverage for injury expected or intended by the insured], the analysis is the same
because the exclusion is ‘nothing more than a restatement of the requirement that the harm be the
result of an accident for there to be coverage.’” (quoting Jubin, 653 N.Y.S.2d at 455)), adopted
by 2005 WL 2133600 (W.D.N.Y. Aug. 31, 2005); see also 1 M. Jane Goode, Law & Practice of
Insurance Coverage Litigation § 6:20 (2017) (“Many liability policy forms contain exclusions for
bodily injury ‘which is expected or intended by the insured.’ . . . Not surprisingly, the courts tend
to use substantially the same approach in interpreting the exclusion as they have in interpreting
the same or similar terms contained in the definition of occurrence. Indeed, it is sometimes
impossible to determine whether a court has based its decision concerning coverage on the
existence or nonexistence of an occurrence or on application of an intentional injury exclusion.”
Since the Court holds that the Schillaci Complaint alleged an occurrence under the
Homeowners Policy, Met P&C cannot rely on the intentional act exclusion to disclaim coverage.
See 670 Apartments Corp., 1996 WL 559942, at *5 n.3 (concluding that, because the underlying
complaint alleged a covered occurrence even though the insured received warnings about
potential harms resulting from its conduct before commencement of the underlying lawsuit, the
policy’s intentional loss exclusion did not bar coverage).
Met P&C also claims that it need not provide coverage to the Sarrises under the PELP.
Met P&C Mem. at 13. The PELP “provide[d] liability coverage in excess of the ‘retained limit’
for damages to others caused by an ‘occurrence’ and to which the policy applies.” PELP at 6.
And it defined “occurrence” as “an accident, including continuous or repeated exposure to the
same condition that results during the policy period in personal injury or property damage.” Id.
Since the Court holds that the identical provisions in the Homeowners Policy provide coverage
for the Schillaci action, the PELP also provide coverage unless an exclusion applies.
The PELP contained an exclusion for “personal injury or property damage” caused by
“any intentional act committed by an insured or at the direction of any insured.” Id. at 7. Met
P&C argues that this exclusion is so broad that “even if the resulting injury was unexpected,
coverage is barred.” Met P&C at 13. It cites no authority to support this interpretation, and at
least one New York court has analyzed an identical exclusion using the same framework
applicable to determining whether an occurrence has taken place. See N.Y. Cent. Mut. Fire Ins.
Co. v. Wood, 827 N.Y.2d 760, 761–62 (App. Div. 2007) (“[A] possible basis exists upon which
to find that [the insured] did not intend the resultant harm and, thus, Supreme Court properly
found the intentional act exclusion inapplicable as a matter of law . . . .”). Once again, since the
Court determines that the Schillaci Complaint alleged an occurrence triggering Met P&C’s duty
to defend, it also finds that the PELP’s intentional act exclusion does not preclude coverage.10
Because the Court concludes that the intentional act exclusions in the Homeowners
Policy and the PELP do not bar coverage, it need not address Met P&C’s argument that its
disclaimer of coverage premised on those exclusions applies to Joy Sarris. Met P&C Mem.
Although the Court holds that the Schillaci Complaint triggered Met P&C’s duty to
defend, that does not end the inquiry. “Under New York law, . . . timely notice is a condition
precedent to coverage.” Same Day Delivery Serv., Inc. v. Penn Star Ins. Co., 151 F. Supp. 3d
380, 385 (S.D.N.Y. 2015). “If an insured fails to provide timely notice as required by the
particular policy, then, absent a valid reason for the delay, the insurer is under no obligation to
defend or indemnify the insured.” Am. Ins. Co. v. Fairchild Indus., Inc., 56 F.3d 435, 438 (2d
Cir. 1995). “[W]here an insurance policy requires that a notice of an incident be given promptly,
notice must be given within a reasonable period of time given the facts and circumstances of the
case.” Seemann v. Sterling Ins. Co., 650 N.Y.S.2d 873, 874 (App. Div. 1996). The same standard
applies to policies that “require that notice of an occurrence be given ‘as soon as practicable.’”
Great Canal Realty Corp. v. Seneca Ins. Co., 833 N.E.2d 1196, 1197 (N.Y. 2005). “The test for
determining whether [a] notice provision has been triggered is whether the circumstances known
to the insured at that time would have suggested to a reasonable person the possibility of a
claim.” Abner, Herman & Brock, Inc. v. Great N. Ins. Co., 308 F. Supp. 2d 331, 337 (S.D.N.Y.
2004) (quoting Commercial Union Ins. Co. v. Int’l Flavors & Fragrances, Inc., 822 F.2d 267, 272
(2d Cir. 1987)). “[T]he question whether notice was given within a reasonable time may be
determined as a matter of law when (1) the facts bearing on the delay in providing notice are not
in dispute, and (2) the insured has not offered a legally valid excuse for the delay.” Prof’l Prod.
Research Inc. v. Gen. Star Indem. Co., 623 F. Supp. 2d 438, 445 (S.D.N.Y. 2008). “Moreover,
‘[w]here there is no excuse or mitigating factor, relatively short time periods of delay are deemed
unreasonable as a matter of law.’” Mt. Hawley Ins. Co. v. Abraham Little Neck Dev. Grp., Inc.,
825 F. Supp. 2d 384, 390 (E.D.N.Y. 2011) (quoting Cambridge Realty Co. v. St. Paul Fire &
Marine Ins. Co., 421 F. App’x 52, 57 (2d Cir. 2011)).11
The Sarrises and Met P&C offer conflicting accounts of when Met P&C received notice
of the Schillaci action. According to Met P&C, the Sarrises did not provide notice until
December 2014, almost ten years after the litigation began. Met P&C Mem. at 15. The Sarrises,
on the other hand, argue that George provided notice of the Schillaci case “within days of its
service upon the Sarris defendants” by providing a copy of the Schillaci Complaint and summons
to Vince DeMidio, his MetLife agent. Joy Sarris Mem. at 3, 6. These conflicting stories create a
genuine dispute of material fact that cannot be resolved via summary judgment.
Under the Sarrises’ Homeowners Policy, Met P&C did not have to provide coverage for
an occurrence unless the Sarrises “[p]romptly notif[ied] [Met P&C] or [its] representative, in
writing, stating: 1. [the policyholder’s] name and policy number; 2. the date, place and
circumstances of the accident; 3. the name and address of anyone who might have a claim against
[the policyholder]; and 4. the names and addresses of any witnesses.” Homeowners Policy at 34.
The PELP required the Sarrises to “notify [Met P&C] or any authorized agent as soon as
“In 2008, the New York legislature amended New York Insurance Law to require the
insurer, in cases in which notice is given to the insurer within two years of the occurrence, to
show that it was prejudiced by the untimely notice.” Atl. Cas. Ins. Co. v. Value Waterproofing,
Inc., 918 F. Supp. 2d 243, 254 n.3 (S.D.N.Y. 2013), aff’d sub nom. Atl. Cas. Ins. Co. v.
Greenwich Ins. Co., 548 F. App’x 716 (2d Cir. 2013). But “[t]he amendment to the New York
Insurance Law applies to insurance policies that were issued or delivered after January 17, 2009,”
id., and since the policies at issue in this case were issued before then, Met P&C need not show
prejudice, see Mt. Hawley Ins. Co., 825 F. Supp. 2d at 395 (“[B]ecause the Policy was issued on
June 7, 2008, prior to Insurance Law § 3420(a)(5) taking effect on January 17, 2009, the Plaintiff
is not required to show that it was prejudiced by Abraham Little Neck’s untimely notice.”).
practicable of an occurrence that may be covered by th[e] policy.” PELP at 8. George Sarris says
that, within days of being served with the Schillaci Complaint and summons, he went to
DeMidio, told him about the lawsuit, and presented him with a copy of the summons and
complaint. George Sarris Decl. ¶¶ 58–59. Met P&C has admitted that DeMidio “was an agent of
[Met P&C]” from “2002 through February 2011.” Dkt. No. 76-22 (“Met P&C Admissions”) ¶ 1.
A reasonable jury could conclude from these facts that the Sarrises fulfilled their obligation under
the Homeowners Policy and the PELP to provide timely notice to Met P&C of the Schillaci
action. See, e.g., Gov’t Emps. Ins. Co. v. Blecker, 541 N.Y.S.2d 39, 39 (App. Div. 1989)
(describing the sending of “a copy of a summons and complaint” in the underlying action to the
insurer as “written notice of the occurrence”).12
Met P&C sees it differently. It argues that the Sarrises have failed to create a genuine
dispute of fact as to whether it received timely notice because they “offer nothing other than
George Sarris’s own testimony which has been directly contradicted by the testimony of Met
P&C and two-nonparty witnesses.” Met P&C Resp. at 13. And, according to Met P&C, George
Sarris made contradictory statements about whether he had contacted MetLife’s legal
department. Id. at 14. Met P&C appears to rely here on Jeffreys v. City of New York, 426 F.3d
549 (2d Cir. 2005), in which the Second Circuit created “a narrow exception to the general rule
The Sarrises do not make clear that they complied with each requirement of the notice
provision in the Homeowners Policy. For example, the policy required the Sarrises to provide in
writing “the names and addresses of any witnesses,” Homeowners Policy at 34, and the Sarrises
do not specify that they provided such information in writing after receiving service of the
Schillaci Complaint and summons. But Met P&C does not argue that George Sarris’s notice was
improper for this reason, so the Court need not address this issue. See Perry ex rel. Perry v.
Frederick Inv. Corp., 509 F. Supp. 2d 11, 15 n.5 (D.D.C. 2007) (“As the defendants do not make
this argument in the pending summary judgment motion, . . . the Court will not consider it at this
that assessments of credibility are the province of the jury,” Vazquez v. City of New York,
No. 10-CV-6277, 2014 WL 4388497, at *6 (S.D.N.Y. Sept. 5, 2014). But this case does not fit
the Jeffreys exception.
Jeffreys held that in the “rare circumstance where the [non-moving party] relies almost
exclusively on his own testimony, much of which is contradictory and incomplete,” a district
court may weigh the credibility of his version of events in determining whether to grant summary
judgment. 426 F.3d at 554. If the non-moving party’s account is so contradictory and incomplete
that no reasonable juror would credit it, and if the “moving party . . . meet[s] the difficult burden
of demonstrating that there is no evidence in the record upon which a reasonable factfinder could
base a verdict in the [non-moving party’s] favor,” then the court may enter summary judgment in
favor of the moving party. Id. at 554–55. As the Second Circuit later noted, “[t]he facts in
Jeffreys . . . were extreme.” Matheson v. Kitchen, 515 F. App’x 21, 23 (2d Cir. 2013). One of the
factual issues in dispute in Jeffreys was whether the plaintiff, in an attempt to evade capture by
the police, had jumped out of the third-floor window of a school building he was burgling, or
whether the police had pushed him out of the window. 426 F.3d at 551–52. The court
emphasized that “[t]he record confirms, and [the plaintiff] does not dispute, that on at least three
occasions he confessed to having jumped out of the third-story window of the school building.”
Id. at 552. Indeed, the plaintiff “first publicly stated that he had been thrown out of a window by
police officers in a conversation with Dr. Charles Bendheim of the Greenhaven Correctional
Facility nine months after the incident allegedly occurred.” Id.
George Sarris’s testimony does not come close to the level of implausibility on display in
Jeffreys. The key testimony offered by George is that within days of receiving service of the
Schillaci lawsuit, he went to DeMidio, told him about the case, and gave him a copy of the
summons and complaint. George Sarris Decl. ¶¶ 58–59. Met P&C has not pointed to any
evidence in the record suggesting that George has made statements inconsistent with this story.
At best, it has offered “minor inconsistencies” that are not “irreconcilable to the point of deeming
[George] to be incredible as a matter of law.” Laster v. Mancini, No. 07-CV-8265, 2013 WL
5405468, at *27 (S.D.N.Y. Sept. 25, 2013). And unlike the plaintiff in Jeffreys, George has not
“offered, for the first time in litigation, a version of events that directly contradicted the account
he had previously and consistently provided, and that was inconsistent with all other evidence in
the record.” Matheson, 515 F. App’x at 23. This is simply not one of those “extraordinary cases”
in which a court may disregard a party’s testimony on the ground of its implausibility. Rojas v.
Roman Catholic Diocese of Rochester, 660 F.3d 98, 106 (2d Cir. 2011). Accordingly, a
reasonable jury could believe George’s version of events and conclude that timely notice was
provided to Met P&C.
But a reasonable jury could also find that Met P&C did not receive notice until December
23, 2014, almost ten years after the Schillaci action began. Burnep Aff. ¶¶ 8–9. Such a delay
would, needless to say, be unreasonable as a matter of law. See, e.g., Same Day Delivery Serv.,
Inc., 151 F. Supp. 3d at 386 (“New York courts have routinely held that when an insurance
policy requires notice to be provided as soon as practicable, delays of as little as one to four
months were not within a reasonable period of time as a matter of law.” (collecting cases)); Eagle
Ins. Co. v. Zuckerman, 753 N.Y.S.2d 128, 129 (App. Div. 2003) (finding that an eighteen-month
delay in providing notice was unreasonable as a matter of law where the policy at issue required
First, DeMidio himself testified that he had no recollection of George Sarris ever
providing him with a copy of the summons and complaint in the Schillaci case. DeMidio Dep.
at 35:4–11. True, “[n]o issue of fact exists where . . . one witness has a recollection of an event,
while another actor in the same event has no recollection, ‘one way or the other.’” Creighton v.
City of New York, No. 12-CV-7454, 2017 WL 636415, at *40 (S.D.N.Y. Feb. 14, 2017)
(collecting cases); see also Faruki v. City of New York, No. 10-CV-9614, 2012 WL 1085533,
at *5 (S.D.N.Y. Mar. 30, 2012) (“Plaintiff’s statement that she did not recall whether Defendants
asked her to leave the store is insufficient to create a genuine dispute on that material issue.”),
aff’d, 517 F. App’x 1 (2d Cir. 2013). Yet DeMidio’s understandable lapse of memory—over ten
years passed between the alleged events in question and DeMidio’s deposition—is not the only
evidence Met P&C offers to establish that it did not receive notice until December 2014. For
example, according to MetLife associate general counsel Charles Cavas, a February 2015 search
of a database in MetLife’s legal system for “any files or records concerning George Sarris and
Joy Sarris” came up empty. Cavas Aff. ¶¶ 8–10. Cavas says that when the legal department
“receives any requests for legal advice, inquiries into any substantial issues, or notices of
significant litigation, a file is set up in [the database].” Id. ¶ 7. Given the lack of any records
related to the Sarrises in the legal department’s database, a reasonable jury might be hard pressed
to believe that the Sarrises actually provided notice before December 2014, when George called
the “MetLife 1-800 claim reporting number” and Joy sent the Schillaci Complaint and summons.
Burnep Aff. ¶¶ 10–11.
Next, DeMidio testified that he typically told customers they “ha[d] to call claims to
make [a] claim, because I only represent the company. I don’t represent claims.” DeMidio Dep.
at 76:19–77:3. And while George now says this correspondence reflected a misunderstanding,
George Sarris Decl. ¶ 147, he and his wife sent a letter to Burnep in January 2015 stating that he
had in fact spoken to the legal department about his case, Dkt. No. 65-27 (“January 1, 2015
Letter). But, as the Court just noted, in February 2015 the legal department could not find any
“file or record evidencing any inquiries made by George or Joy Sarris.” Cavas Aff. ¶ 10. A
reasonable jury confronted with this evidence would be entitled to conclude that DeMidio told
George to call the claims department and that, for whatever reason, he failed to do so until
December 2014. Since the Court cannot resolve these conflicting narratives without making
factual findings, a genuine dispute of fact exists as to whether Met P&C received timely notice of
the Schillaci action, a condition precedent to coverage under the policies. Accordingly, the Court
is currently not in a position to issue a declaration that Met P&C must defend the Sarrises in the
C. Duty to Indemnify
While “the duty to defend is triggered by the filing of a lawsuit[, . . .] the duty to
indemnify is triggered by a determination of liability.” Value Waterproofing, Inc., 918 F. Supp.
2d at 261. Thus, a declaratory judgment action initiated to determine whether an insurer must
provide indemnification “is premature where . . . ‘the complaint in the underlying action alleges
several grounds of liability, some of which invoke the coverage of the policy, and where the
issues of indemnification and coverage hinge on facts which will necessarily be decided in that
underlying action.’” Scottsdale Ins. Co. v. United Indus. & Constr. Corp., 137 F. Supp. 3d 167,
179 (E.D.N.Y. 2015) (quoting Specialty Nat’l Ins. Co. v. English Bros. Funeral Home, 606 F.
Supp. 2d 466, 472 (S.D.N.Y. 2009)). In accordance with this principle, “[c]ourts considering
whether an insurer has a duty to indemnify on actions for declaratory relief generally decline to
rule on the issue of indemnity until liability is determined in the underlying personal injury
action.” Town Plaza of Poughquag, LLC v. Hartford Ins. Co., 175 F. Supp. 3d 93, 100 (S.D.N.Y.
2016); see also Bovis Lend Lease LMB, Inc. v. Cont’l Cas. Ins. Co., No. 02-CV-7674, 2004 WL
691395, at *4 (S.D.N.Y. Mar. 31, 2004) (“A determination of Continental’s duty to indemnify is
premature because a resolution of the facts in the underlying action has not yet been made.”);
Park Place Entm’t Corp. v. Transcon. Ins. Co., 225 F. Supp. 2d 406, 413 (S.D.N.Y. 2002) (“The
President suit is still in progress, so any decision as to indemnity would clearly be premature at
this juncture, as the actual basis of liability has yet to be determined.”).
Met P&C “seeks on [sic] order of summary judgment declaring that Met P&C has no
obligation to defend or indemnify” the Sarrises in the Schillaci case. Met P&C Mem. at 1. But as
noted above, the Schillaci case appears to be ongoing. See George Sarris Decl. ¶ 86 (“Of utmost
importance to me as a defendant is that the underlying Schillaci matter is still ongoing and
unadjudicated.”). Since Met P&C’s duty to indemnify the Sarrises depends on a liability
determination that has yet to be made, it would be premature for the Court to issue a declaration
on this issue. Thus, the Court denies Met P&C’s motion for summary judgment to the extent that
it seeks such a declaration.
D. The Sarrises’ Counterclaims
Met P&C moves for judgment on the pleadings with respect to the Sarrises’
counterclaims alleging various violations of New York law. Met P&C Mem. at 22–25. The
Sarrises brought counterclaims for violations of New York Insurance Law section 2601 and part
216 of the New York insurance regulations. Joy Sarris Answer ¶¶ 140–43; George Sarris Answer
¶¶ 137–40. These counterclaims cannot stand because “[i]t is well settled that no private cause of
action exists for a violation of Insurance Law § 2601 or for an alleged violation of part 216 of the
Insurance Regulations.” De Marinis v. Tower Ins. Co. of N.Y., 774 N.Y.S.2d 436, 437 (App.
Div. 2004) (collecting cases); accord, e.g., Harner v. Allstate Ins. Co., No. 11-CV-2933, 2012
WL 12326459, at *7 (S.D.N.Y. Sept. 7, 2012).
Joy Sarris also brought a counterclaim for violations of New York General Business Law
section 349. Joy Sarris Answer ¶¶ 135–39. That counterclaim is deficient as well, because “a
party must plead ‘consumer-oriented’ conduct in order to claim the benefit of Section 349,”
WorldHomeCenter.com, Inc. v. PLC Lighting, Inc., 851 F. Supp. 2d 494, 498 (S.D.N.Y. 2011),
and Joy has utterly failed to do that.
“Consumer-oriented conduct is ‘conduct that potentially affects similarly situated
consumers.’” Arroyo v. PHH Mortg. Corp., No. 13-CV-2335, 2014 WL 2048384, at *10
(E.D.N.Y. May 19, 2014) (quoting Kapsis v. Am. Home Mortg. Servicing Inc., 923 F. Supp. 2d
430, 449 (E.D.N.Y. 2013)). Private contract disputes that are unique to the parties “[do] not fall
within the ambit of [Section 349].” Id. (alterations in original) (quoting Oswego Laborers’ Local
214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741, 744 (N.Y. 1995)). The
problem for Joy is that she “has alleged only that [Met P&C] breached its obligations to her; she
has not alleged that anyone other than she [or George] has suffered injury or potential injury as a
result of [Met P&C’s] conduct.” Abraham v. Penn Mut. Life Ins. Co., No. 98-CV-6439, 2000
WL 1051848, at *3 (S.D.N.Y. July 31, 2000). This case is “essentially a ‘private’ contract
dispute over policy coverage and the processing of a claim which is unique to these parties, not
conduct which affects the consuming public at large.” N.Y. Univ. v. Cont’l Ins. Co., 662 N.E.2d
763, 771 (N.Y. 1995). Indeed, Joy appears to suggest that the factual foundation for this claim is
that Met P&C has “impaired” “the Sarrises[’] ability to negotiate a favorable settlement and/or
obtain a favorable judgment in the action by Schillaci and Newell.” Joy Sarris Answer ¶ 139.
Thus, there is no basis for her counterclaim premised on New York General Business Law
E. Improperly Raised Arguments
To the extent that Met P&C seeks dismissal of George Sarris’s counterclaim for breach of
the duty of good faith and fair dealing, Met P&C Mem. at 25, the Court need not address that
argument because it is completely undeveloped, see Herbert v. Architect of Capitol, 839 F. Supp.
2d 284, 298 (D.D.C. 2012) (“[T]he [defendant] has simply failed to support its argument with
any meaningful measure of factual or legal argument. Courts need not consider cursory
arguments of this kind, and the Court declines to do so here.”). Equally perfunctory are the
Sarrises’ requests that the Court, among other things, dismiss Met P&C’s Complaint on statuteof-limitations grounds, find that Met P&C breached the duty of good faith and fair dealing, and
“[s]ustain” George Sarris’s objections to various exhibits filed by Met P&C. Joy Sarris Mem.
at 23–24. Again, the Court will not address arguments raised without any attempt at providing
legal or factual support. Finally, in his reply brief, George Sarris asks the Court to grant summary
judgment on his claim for breach of the duty of good faith and fair dealing. George Sarris Reply
at 8. But it is well established that “a district court is free to disregard argument[s] raised for the
first time in reply papers, especially on a motion for summary judgment.” Am. Hotel Int’l Grp.,
Inc. v. OneBeacon Ins. Co., 611 F. Supp. 2d 373, 375 (S.D.N.Y. 2009). Thus, the Court need not
address this belatedly raised argument.
Accordingly, it is hereby:
ORDERED, that Met P&C’s motion for summary judgment and judgment on the
pleadings (Dkt. No. 65) is GRANTED in part as to the dismissal of the Sarrises’ counterclaims
alleging violations of New York General Business Law section 348, New York Insurance Law
section 2601, and New York insurance regulations, and DENIED in all other respects; and it is
ORDERED, that the Sarrises’ cross-motions for summary judgment (Dkt. Nos. 74, 78)
are GRANTED in part as to the Schillaci action’s triggering Met P&C’s duty to defend, and
DENIED in all other respects; and it is further
ORDERED, that the Clerk of the Court serve a copy of this Memorandum-Decision and
Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
July 28, 2017
Albany, New York
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