Our clients were an immigrant family from China. They immigrated from China in 1994 to live the American dream. True to their dream, they worked a host of menial jobs, saved every scrap of their money, and ultimately, purchased a large, multi-use commercial property in Queens, New York. Their future seemed bright and secure. Like any competent and risk adverse business owners, our clients secured comprehensive coverage on their multi-use commercial property which included an Italian Restaurant, a Cell-Phone store, and residential apartments.
Unfortunately for our clients, a freak fire destroyed a substantial portion of their residential property. Our clients provided prompt notice of claim. Predictably, the insurance company found a way to avoid its promises to reimburse our clients for their losses. In denying the claim, the insurance company actually argued that the our client’s claim should be denied based on a fully-computerized, check-a-box, application form wherein our clients freely admitted that there was an Italian restaurant making pizza, bread, pasta and clams but denied that there was no “open flame cooking.” For anyone who has visited the Northeast in the past century, it is well known that Italian restaurants in the area don’t cook pasta or prepare meat sauce in a microwave.
The insurance company found that the claim would have been payable except for the fact, it alleged, that our client made a representation on a “check-a-box” application form that there was no “open flame cooking.” The insurance company declined coverage and actually offered to refund the substantial premiums paid by our client in furtherance of its goal to avoid a substantial liability. This is a favorite insurance company defense known as rescission. Rescission is legal term whereby one of the signatories on an insurance contract argues “oh, had we only known the truth, we would have never entered into such a contract.”
Led by lead trial counsel, Michail Hack, Schwartz Conroy & Hack visited the site of the fire multiple times, interviewed witnesses, conducted multiple depositions, secured compelling affidavits and engaged experts to demonstrate that the insurance company not only knew about the “open flame” condition at the time of contracting but, also, took steps to hide that fact during discovery.
As a result of the foregoing, the United States District Court for the Eastern District of New York, unequivocally denied Defendant’s motion for summary judgement forcing it to settle with our client on very favorable terms on the eve of trial.
(Holly Realty, LLC v. Union Mut. Fire Ins. Co., No. 20-CV-5938 (FB) (RML), 2023 U.S. Dist. LEXIS 59190, at *1 (E.D.N.Y. Apr. 4, 2023)
