W was still in the White House, LinkedIn let users add a profile picture for the first time, and the original iPhone had just been released. In case those clues didn’t give it away, QBE Insurance Corporation had to wait almost 10 years for a favorable decision in a case with an uncomplicated fact pattern.
915 2nd Pub, Inc. v QBE Insurance Corporation is a cautionary tale for insurance company defendants served with a suit they believe is worthy of immediate dismissal based upon straightforward policy provisions. A review of the documents available online reveals that the parties, and the trial court, became mired in discovery-related issues that were of no consequence in the unanimous decision recently issued by the Appellate Division, First Department.
In a concise decision, the court laid out the applicable facts: (1) excavation performed on the adjacent property caused structural damage to plaintiffs’ building; (2) plaintiffs submitted an insurance claim to QBE and also negotiated a sale of its property to the adjacent property owner (who allegedly caused the damage); (3) the purchaser paid what he called a “crazy price for the property” to plaintiffs, hoping to dispose of any liability from the excavation; and (4) plaintiffs filed this lawsuit to recover under the QBE insurance policy.
The QBE insurance policy, like almost every other insurance policy, required plaintiff to cooperate with QBE’s investigation of the claim. However, immediately after the sale of the property, and before plaintiff and QBE had reached an agreement on the amount to be paid under the policy, the purchaser demolished the building. As a result, there was nothing left for QBE to investigate. The court found this to be a clear violation of the QBE insurance policy.
Moreover, the QBE insurance policy contained a fairly common provision that required plaintiff to do everything necessary to secure, and do nothing after the loss to impair, QBE’s subrogation rights. In selling the building to the entity that damaged it, plaintiffs clearly violated another straightforward policy provision.
Kudos to the First Department for resolving a nearly decade-old case in a couple of months.