The U.S. District Court for the Eastern District of New York has dismissed a breach of contract action brought by a homeowner whose property was damaged by Superstorm Sandy against her insurance carrier, ruling that the action was untimely because it had not been filed within two years from the date of loss as required by the homeowner's insurance policy.
The Case
Tsilia Nikchemny alleged that her property in Brighton Beach, in Brooklyn, New York, suffered a “covered loss … on or about October 29, 2012” as a result of Superstorm Sandy. She said that she submitted a claim to her insurer, Allstate Insurance Company, which Allstate denied on January on January 30, 2013.
Ms. Nikchemny sued Allstate for breach of contract on January 11, 2016.
Thereafter, the insurer moved to dismiss the complaint, asserting that Ms. Nikchemny's claim was time-barred because she had failed to file the action within two years of the date that her Brighton Beach property had been damaged.
The Allstate Policy
The Allstate policy provided:
Suit Against UsThe District Court's DecisionNo suit or action may be brought against us unless there has been full compliance with all policy terms. Any suit or action must be brought within two years after the inception of loss or damage.
The district court granted Allstate's motion.
In its decision, the district court first found that the policy's contractual limitations provision applied to Ms. Nikchemny's action. It observed that the default rule in New York was that an action for breach of contract must be commenced within six years of the breach, but that parties could contract to a shorter period as long as the shortened term was “prescribed by written agreement.”
New York courts, the district court continued, “have consistently enforced provisions prescribing two year, and even one year,” limitations periods in breach of contract actions.
The district court noted that the “unambiguous terms” of the policy provided that, “[a]ny suit or action must be brought within two years after the inception of loss or damage.” This provision was “plainly enforceable” and a two year limitations period applied to Ms. Nikchemny's action, the district court ruled.
The district court then decided that the limitations period had begun on October 29, 2012, and that, accordingly, Ms. Nikchemny's lawsuit was untimely. It concluded by pointing out that she had not argued that Allstate had been responsible for her delay in bringing her action, and that, as a result, there was no basis to apply the principles of waiver or estoppel.
The case is Nikchemny v. Allstate Ins. Co., No. 1:16-CV-00407 (NGG) (CLP) (E.D.N.Y. Oct. 17, 2016). Attorneys involved include: Mikhail Usher, Usher Law Group, Brooklyn, NY, for Plaintiff; Daniel C. Fleming, Wong Fleming, Princeton, NJ, for Defendant.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].