Tien Wen Yuan v. State Farm Fire & Cas. Co.

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TIEN WEN YUAN, Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

No. 19-CV-4921 (LDH)

United States District Court, E.D. New York

September 30, 2022

MEMORANDUM AND ORDER

LASHANN DEARCY HALL, UNITED STATES DISTRICT JUDGE

Tien Wen Yuan (“Plaintiff”) filed this action against State Farm Fire and Casualty Company (“Defendant”) for breach of an insurance coverage policy. Defendant moves pursuant to Federal Rule of Civil Procedure 56 to dismiss the complaint in its entirety.

BACKGROUND^[1]

Plaintiff and her daughter each own a 50% interest in property located on 48-01 216^th Street, Queens, New York (“the Property”). (Pl.'s Resp. 56.1 ¶ 4 ECF No. 32-1; see also Ex. F. (“Deed”) Mule Decl., ECF No. 34-6.) Beginning on or about June 19 2013, Defendant issued Plaintiff a homeowner's insurance policy (the “Policy”) for the Property. (Pl.'s Resp. 56.1 ¶ 6; Ex. C, Mule Decl., ECF No. 49-3.) The Policy renewed annually. (Pl.'s Resp. 56.1 ¶ 6.) For the coverage period between June 19, 2018, through June 19, 2019, the Policy covered an “insured location,” which was defined as, among other things, “the residence premises,” “the part of any other premises, other structures and grounds used by [Plaintiff] as a residence,” and “any part of a premises not owned by an insured but where an insured is temporarily residing.” (Ex. G (the “Policy”) at 2,^[2] Mule Decl., ECF No. 34-7.) The Policy stated that Defendant would “cover the dwelling used principally as a private residence on the residence premises shown in the Declarations.” (Id. at 25.) Moreover, the Policy defined “residence premises” as “the one, two, three or four-family dwelling, other structures and grounds; or that part of any other building; where [Plaintiff] reside[s] and which is shown in the Declarations [appended to the Policy].” (Id. at 24.)

On March 30, 2018, the City of New York Department of Buildings issued a vacate order to the “OWNERS, LESSEES, TENANTS [and] OCCUPANTS” of the “ENTIRE” Property because “there [was an] imminent danger to life or public safety or safety of the occupants or to property,” resulting from Plaintiff “[i]llegally convert[ing]” the “1 Family house into 10 SRO [single room occupancy] units with key locks, without providing required means of egress, fire alarm, and sprinkler systems, [r]endering it unsafe to occupy.” (Ex. J, Mule Decl., ECF No, 3410.) A fire occurred at the Property on September 26, 2018, and, as a result, Plaintiff claimed a total loss of the Property to Defendant under the Policy. (Pl.'s Resp. 56.1 ¶ 3.) On May 28, 2019, Defendant disclaimed coverage and denied Plaintiff's claim on three grounds: (i) the Property did not constitute a “residence premises” within the meaning of the Policy because Plaintiff did not reside there; (ii) the Property was not a “dwelling” within the meaning of the Policy because it was not “used principally as a private residence on the residence premises”; and, (iii) Plaintiff concealed material facts and made material misrepresentations in the presentation of her claim in violation of the concealment or fraud provision of the Policy. (Pl.'s Resp. 56.1 ¶ 10).

STANDARD OF REVIEW

Summary judgment must be granted when 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). A genuine dispute of material fact exists “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). The movants bear the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Feingold v. New York, 366 F.3d 138, 148 (2d Cir. 2004). Where the non-movant bears the burden of proof at trial, the movants' initial burden at summary judgment can be met by pointing to a lack of evidence supporting the non-movant's claim. See Celotex Corp., 477 U.S. at 325. Once the movants meet their initial burden, the non-movant may defeat summary judgment only by adducing evidence of specific facts that raise a genuine issue for trial. See Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 250;

Davis v. New York, 316 F.3d 93, 100 (2d Cir. 2002). The Court is to believe the evidence of the non-movant and draw all justifiable inferences in his favor, Anderson, 477 U.S. at 255, but the non-movant must still do more than merely assert conclusions that are unsupported by arguments or facts, Bellsouth Telecomms., Inc. v. W.R. Grace & Co., 77 F.3d 603, 615 (2d Cir. 1996).

DISCUSSION

Defendant raises several independent reasons why it contends coverage was properly disclaimed here, including that the Policy did not cover the loss because (1) Plaintiff did not reside at the Property at the time of the fire, (2) the Property was not a one, two, three or four-family dwelling at the time of the fire, (3) the Property was not used principally as a private residence, and (4) Plaintiff made a material misrepresentation when she presented her claim.

(See generally Def.'s Mem., ECF No. 52.) Moreover, Defendant contends that, even if fact issues remain regarding coverage, it is entitled to judgment that Plaintiff has only a one-half insurable interest in the Residence.

I. Terms of the Policy

A. Residence

Defendant argues that the Property was not a “residence premises” under the Policy for which coverage was extended. (Id.) On this ground, Plaintiff contends that whether she resided at the Property is a “question of fact to be determined at [a] hearing.” (Pl.'s Opp'n. at 12, ECF No. 57.)

The Court agrees. Under New York law,^[3] an insurance contract is construed in the same manner as any other contract and should be “interpreted to give effect to the intent of the parties as expressed in the clear language of the [Policy].” Parks Real Est. Purchasing Grp. v. St. Paul Fire & Marine Ins. Co., 472 F.3d 33, 42 (2d Cir. 2006). Courts must interpret unambiguous contract provisions according to their “plain and ordinary meaning.” Bullseye Rest., Inc. v. James River Ins. Co., 387 F.Supp.3d 273, 280 (E.D.N.Y. 2019). “[A] contract is ambiguous if its terms could suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.” Chesapeake Energy Corp. v. Bank N.Y. Mellon Tr. Co., N.A., 773 F.3d 110, 114 (2d Cir. 2014) (quotation marks and citation omitted). Conversely, contractual terms are unambiguous if they have “‘a definite and precise meaning, unattended by danger of misconception . . . and concerning which there is no reasonable basis for a difference of opinion.'” Met. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990) (quoting Breed v. Ins. Co. N. Am., 385 N.E.2d 1280, 1282 (N.Y. 1978)). “Whether a contract term is ambiguous is a question of law.” Curry Rd. Ltd. v. K Mart Corp., 893 F.2d 509, 511 (2d Cir. 1990).

Plaintiff contends that the Policy does not define “reside” and thus must be “interpreted against [Defendant].” (Pl.'s Opp'n at 2.) Not quite. Only ambiguities in a policy are to be construed against the insurer. See ExxonMobil Oil Corp. v. TIG Ins. Co., 44 F.4th 163, 175 (2d Cir. 2022); see also White v. Cont'l Cas. Co., 878 N.E.2d 1019, 1021 (N.Y. 2007) (“If the terms of a policy are ambiguous, however, any ambiguity must be construed in favor of the insured and against the insurer”). An unambiguous term, conversely, is to “be given its plain, ordinary, and popularly understood sense.” Covic v. Allstate Indem. Co., No. 16-cv-00050, 2017 WL 5054743, at *4 (N.D.N.Y. Sept. 25, 2017) (quoting Canfield v. Peerless Ins. Co., 262 A.D.2d 934, 934-35 (4th Dep't 1999)).

Here, the Policy covers only “the dwelling used principally as a private residence on the residence premises,” which the Policy does define. (Policy at 25.) Indeed, “residence premises” is defined as “the one, two, three or four-family dwelling, other structures and grounds; or that part of any other building; where [Plaintiff] reside[s].” (Id.) While the Policy does not define the term “residence,” the term is far from elusive. Indeed, residence means “[t]he place where one actually lives.” Residence, Black's Law Dictionary (11th ed. 2019); see also Residence, Merriam-Webster, available at https://www.merriam-webster.com/dictionary/residence (“the act or fact of dwelling in a place for some time” or “the place where one actually lives”); Covic, 2017 WL 5054743, at *5 (residence refers to “something more than temporary or physical presence and requires at least some degree of permanence and intention to remain, although not necessarily the intent to make that place a ‘fixed and permanent home,' i.e., a domicile” (quoting N.Y. Cent. Mut. Fire Ins. Co. v. Kowalski, 195 A.D.2d 940, 941 (3d Dep't 1993) and Yaniveth R. ex rel. Ramona S. v. LTD Realty Co., 51 N.E.3d 521 (N.Y. 2016))).

Against this backdrop and considering the Policy as a whole, the Court concludes that the Policy unambiguously covers only the location where Plaintiff actually lived. The Court's conclusion is consistent with both federal and state courts that have considered similar policy language. See e.g., Covic, 2017 WL 5054743, at *5 (collecting cases holding that insurance policy with similar language covered the location where the insured lived); D'Amico v. Pa. Millers Mut. Ins. Co., 420 N.E.2d 88, 88 (N.Y. 1981) (affirming summary judgment for insurer where “the homeowner's policy . . ., by its expresses terms, would cover . . . insured only if he were a resident of his parents' household”); Metro. Prop. & Cas. Ins....