Court Opinion

ID: 5852056
Source: CourtListenerOpinion
Date Created: 2022-01-13 00:05:34.978651+00
Date Added: 2024-06-11T08:44:07.572236
License: Public Domain

Judgment, Supreme Court, New York County (Scott, J.) entered May 13, 1980, upon a unanimous jury verdict in favor of the plaintiff in the sum of $51,856.25 for personal property damage and $96,000 for lost rental income, affirmed, with costs. The dissent fairly sets forth the facts upon which this action is based. Appellant, St. Paul Fire & Marine Insurance Co., contends that inasmuch as the plaintiff was not awarded the full amount claimed, a finding of fraud by the jury is established as a matter of law. We disagree. As long as there is a sound basis that the claim *541was made in good faith, with no intent to deceive, the disparity between the amount sued on and the amount awarded by the jury does not establish fraud. (See Saks & Co. v Continental Ins. Co., 23 NY2d 161,165.) The policy covering Jonari, the insured, contained the standard concealment and fraud clause mandated by section 168 of the Insurance Law. However, unintentional errors or omissions on the part of the insured would not trigger the clause and thus relieve the insurer of all liability. Materiality is the key threshold question in these situations. Without a material misrepresentation or misstatement, no action will lie for fraud or deceit. (24 NY Jur, Fraud and Deceit, § 129.) Likewise, no affirmative defense would be effective (see Sebring v Fidelity-Phenix Fire Ins. Co. of N. Y., 255 NY 382, 387), and the Trial Judge (Scott, J.) quite properly left this question to the jury. (Stecker v American Home Fire Assur. Co., 299 NY 1; Happy Hank Auction Co. v American Eagle Fire Ins. Co., 1 NY2d 534, 539.) Two questions were asked of the jury which are significant: (1) “Did the plaintiff wilfully and fraudulently place in the proof of loss, a statement of property it did not possess or did it place a false and fraudulent value upon the property?” (2) “Did the plaintiff materially alter the lease agreement with an intent to defraud the defendant and collect under the provisions of this policy?” To both these questions the jury unanimously replied “No.” Statements made by the insured during pretrial and trial proceedings are not relevant to the insurer’s defense of fraud and false swearing;-it is only material statements made prior to the institution of the action which must be looked to. (Halbreich v Travelers Fire Ins. Co., 238 App Div 841, 842; see American Paint Serv. v Home Ins. Co. of N. Y., 246 F2d 91.) Here, with the conflicting testimony and the contested claims properly before the jury, as a factual issue, the insurer’s defense was rejected. The disallowance of the claim for “Improvements and Betterments” does not weaken the basis of the factual determination by the jury of liability for other claims. It cannot be said that the jury could not have reached the conclusion they did upon a fair interpretation of the evidence. (Cf. Flynn v City of New York, 35 AD2d 936, affd 29 NY2d 715.) Nor was the jury’s award contrary to the weight of the evidence or without a rational basis. (Cf. Munz v Prestwick Press, 46 AD2d 682; Moorhead v Hummel, 36 AD2d 682.) In this action, the fire which caused the loss is well documented, and it is only the amount of lost rents and personal property destroyed which had to be determined (cf. Sunbright Fashions v Greater N. Y. Mut. Ins. Co., 34 AD2d 235, affd without opn 28 NY2d 563). In view of the jury’s careful consideration of Jonari’s entire claim, which resulted in a rejection of any claim for improvements and betterments and a reduction in the amount of “Personal Property Loss” from $72,480.25 claimed to $51,856.25, we cannot say the award is excessive. Concur •— Kupferman, Markewich and Lynch, JJ.