EVIDENCE DID NOT ESTABLISH AS A MATTER OF LAW THAT THE INSURED’S WATER-DAMAGE CLAIM WAS FRAUDULENTLY INFLATED; INSURER WAS NOT ENTITLED TO SUMMARY JUDGMENT DISCLAIMING COVERAGE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the defendant insurer (Allegany) did not present sufficient evidence an inflated water-damage claim to warrant disclaiming coverage. The insurer’s summary judgment motion should not have been granted:

Allegany failed to meet its initial burden on its motion of establishing as a matter of law that the claim was inflated … . A policy may be voided if the insured ” ‘willfully and fraudulently placed in the proofs of loss a statement of property lost which [the insured] did not possess, or has placed a false and fraudulent value upon the articles which [the insured] did own’ ” … . “Incorrect information is not necessarily tantamount to fraud or material misrepresentation as the insurer must tender ‘proof of intent to defraud—a necessary element to the defense’ ” … . ” ‘[U]nintentional fraud or false swearing or the statement of any opinion mistakenly held[, however,] are not grounds for vitiating a policy’ ” … .

… [A]lthough Allegany’s submissions in support of its motion demonstrate a disparity between the estimates of plaintiff’s contractor and Allegany’s assessor of the amount of damage and loss … , the submissions fail to establish fraudulent intent on the part of plaintiff … . Plaintiff’s proof of loss statement did not include duplicative items, unincurred expenses, or substantial sums of money that were unaccounted for … , and the disparity between the damage estimate of plaintiff’s contractor and the estimate of Allegany’s assessor is not “so grossly excessive as to constitute false swearing and misrepresentation” … . Magnano v Allegany Co-Op Ins. Co., 2020 NY Slip Op 05339, Fourth Dept 10-2-20