SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

214 

CA 16-00989 

PRESENT: PERADOTTO, J.P., CARNI, LINDLEY, CURRAN, AND SCUDDER, JJ. 

 

RYAN NICASTRO, PLAINTIFF-APPELLANT, 

V MEMORANDUM AND ORDER

NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY, 

DEFENDANT-RESPONDENT. 

MARCUS & CINELLI, LLP, WILLIAMSVILLE (DAVID P. MARCUS OF COUNSEL), FOR

PLAINTIFF-APPELLANT. 

RUPP BAASE PFALZGRAF CUNNINGHAM LLC, BUFFALO (ANTHONY G. MARECKI OF

COUNSEL), FOR DEFENDANT-RESPONDENT. 

 

Appeal from an order of the Supreme Court, Erie County (Diane Y.

Devlin, J.), entered December 16, 2015 in a breach of contract action. 

The order denied the motion of plaintiff for partial summary judgment

and granted the cross motion of defendant for partial summary

judgment. 

It is hereby ORDERED that the order so appealed from is

unanimously modified on the law by granting the motion in part and

dismissing defendant’s seventh affirmative defense, and by denying the

cross motion, and reinstating plaintiff’s claim for full replacement

cost, and as modified the order is affirmed without costs. 

Memorandum: Plaintiff commenced this breach of contract action

seeking, inter alia, a determination that he is entitled to full

replacement cost coverage under the liability policy issued to him by

defendant for the loss sustained when a property that he owned was

destroyed by a fire. Three days after the fire, plaintiff, through

his agent, advised defendant that he “elect[ed] to exercise any

replacement cost options, which are or may become available.” 

Plaintiff moved for partial summary judgment seeking, inter alia,

dismissal of defendant’s seventh affirmative defense, that plaintiff

is not entitled to replacement cost value because he did not make a

claim for replacement costs within 180 days of the loss and thus that

any claim would be untimely, and that the terms of the policy do not

entitle plaintiff to full replacement cost value. Defendant crossmoved for partial summary judgment dismissing the complaint to the

extent that plaintiff alleges that he is entitled to full replacement

cost value of the property. Supreme Court denied plaintiff’s motion

in its entirety and granted defendant’s cross motion. We conclude

that the court erred in denying that part of plaintiff’s motion

seeking dismissal of defendant’s seventh affirmative defense and in
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CA 16-00989 

granting defendant’s cross motion, and we therefore modify the order

accordingly. 

We agree with plaintiff that the provision requiring that a claim

for indemnification of costs of repair or replacement be made within

180 days is ambiguous and therefore must be construed against

defendant (see White v Continental Cas. Co., 9 NY3d 264, 267;

Harrington v Amica Ins. Co., 223 AD2d 222, 228, lv denied 89 NY2d

808). “If an ambiguity exists, the insurer bears the burden of

establishing that the construction it advances is not only reasonable,

but also that it is the only fair construction . . . , viewed through

the eyes of the average [person] on the street” (Harrington, 223 AD2d

at 228 [internal quotation marks omitted]; see Lachs v Fidelity & Cas.

Co. of N.Y., 306 NY 357, 364, rearg denied 306 NY 941). Section five

of the replacement cost provision of the policy provides: “You may

make a claim for the actual cash value amount of the loss before

repairs are made. A claim for any additional amount payable under

this provision must be made within 180 days after the loss.” The term

“claim” is not defined in the policy. Plaintiff contends that he made

a claim in compliance with the replacement cost provision by advising

defendant three days after the loss that he would seek replacement

costs for the premises. Defendant contends that plaintiff did not

comply with that provision because it required that plaintiff make a

“bona-fide” claim by “actually replacing and actually spending money

in excess of the actual cash value within 180 days of the loss.” We

conclude that defendant failed to establish as a matter of law that

its interpretation of the replacement cost provision of the policy is

the “only fair construction” of the provision (Harrington, 223 AD2d at

228). 

We further agree with plaintiff that, because he sustained a

total loss rather than a partial loss, the coinsurance provisions in

the policy providing for full replacement cost value only in the event

that “the limit of liability on the damaged building is at least 80

percent of its replacement cost at the time of loss” do not apply. 

Instead, we agree with our colleagues in the Third Department in Magie

v Preferred Mut. Ins. Co. (91 AD3d 1232, 1235, quoting New York Life

Ins. Co. v Glens Falls Ins. Co., 184 Misc 846, 849, affd 274 App Div

1045, affd 301 NY 506), that, “in New York, a coinsurance clause

‘results in reducing the recovery in case of a partial loss, though in

case of a total loss, the insurer is liable for the amount named in

the policy.’ ” As the Court of Appeals explained with respect to a

coinsurance clause, “[w]here either the loss or the insurance equals

or exceeds 80 per cent of value, the clause has no effect, but when

both are less, the insured and the insurer bear the loss in certain

proportions. The amount of the insurance is not the variable factor,

but the amount of loss. The amount of insurance is at all times the

same, but when the loss is partial the insurer stands only a part,

unless the insurance is for the full percentage, whereas if the loss

is total, the insurer stands all, not exceeding the limit stated in

the policy” (Farmers’ Feed Co. of N.J. v Scottish Union & Natl. Ins.

Co., 173 NY 241, 247). 

 
-3- 214 

CA 16-00989 

Entered: March 31, 2017 Frances E. Cafarell

Clerk of the Court