In a significant legal victory, Thomas H. Curran Associates (THCA), representing the Plaintiff-Appellant, successfully overturned a trial court summary judgment ruling in a long-running insurance dispute stemming from a 2014 commercial property damage incident. The New York Supreme Court, Appellate Division, First Department, issued a decision in favor THCA’s client, reversing summary judgment and reviving the claims against Public Service Mutual Insurance Company (Defendant-Appellee).
The dispute originated in January 2014, when a fire sprinkler system burst at a commercial property formerly operated by Carmen Anthony Restaurant Group (“Carmen Anthony’s”). The sprinkler system – designed as a “dry system” to withstand cold temperatures – malfunctioned, causing extensive water damage to the property exceeding $400,000.00
At the time, Carmon Anthoney’s held a commercial property and casualty insurance policy with Public Service Mutual Insurance Company. Following the incident, the insurer denied coverage, citing, among other things, a vacancy clause that allegedly excluded claims for damages unless preventative measures, such as heating to avoid freezing pipes, were in place.
Through assignment, the Plaintiff, ARCPE1, acquired the property, and all rights in the insurance policy and claims thereunder, and as such they pursued legal action for a coverage determination and to enforce their rights under the contract.
In the New York Supreme Court, (the “Trial Court”) the Defendant moved for summary judgment, asking for dismissal of the case without trial. THCA opposed the motion, arguing that the motion was untimely and that genuine issues of material fact existed regarding the issue of whether the premises was properly maintained and protected during the time of the incident.
On April 18, 2023, the Honorable Sabrina Kraus granted the Defendant’s motion for summary judgment, dismissing the Plaintiff’s claim.
Undeterred, THCA filed an appeal, on May 18, 2023, before the Appellate Division, First Department. During oral arguments on October 9, 2024, THCA focused on two key points:
- The Defendant failed to show “good cause” for its late summary judgment motion, and
- Competing expert testimony created several triable issues of fact regarding the maintenance and protection of the sprinkler system, and the premises.
Under the de novo standard of review (where the appellate court reassesses the case from the ground up) the Appellate Division found merit in the Plaintiff’s position.
In a critical reversal, the Appellate Division determined that a genuine issue of fact existed: as to whether the restaurant had sufficiently protected the sprinkler system from freezing as required under the policy’s exception clause.
The appellate court concluded that the Defendant had not met its burden to demonstrate the lack of any material factual disputes at issue and it reversed the lower court’s ruling.
This appellate victory is a testament to THCA’s meticulous and tenacious advocacy and underscores the importance of such in commercial civil litigation. It also reaffirms the principle that factual disputes, especially involving expert testimony and witness credibility, should ultimately be resolved by the fact finder.
The case was returned to the trial court for a jury trial, and the case settled through court mediation.