Allstate Insurance Company v. Weiner

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

ALLSTATE INSURANCE COMPANY, MEMORANDUM & ORDER

Plaintiff, 19-CV-0499 (NGG) (CLP)

-against-

ERIC WEINER, ARTHUR WEINER AND DIANE

FENNER,

Defendants.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Allstate Insurance Company (“Allstate”) filed a Com-

plaint initiating a declaratory judgment action against Eric

Weiner and Arthur Weiner (collectively, the “Weiner Defend-

ants” or the “Putative Insureds,” and individually, “Defendant

Eric Weiner” and “Defendant Arthur Weiner”) and against Diane

Fenner. (Compl. (Dkt. 1).} In the Complaint, Plaintiff seeks a dec-

laration that no insurance coverage is available to the Weiners

with regard to claims arising from a slip and fall accident which

allegedly caused injuries to Fenner and that Allstate is therefore

under no obligation to indemnify the Weiners or defend them in

a state court action initiated by Fenner. {id. at 1) On July 20,

2020, this court DENIED PlaintifPs motion for judgment on the

pleadings pursuant to Federal Rule of Civil Procedure 12{c).

(M&O regarding Mot. For J. on the Pleadings (“2020 M&O”)

(Dkt. 25).) Before this court is Plaintiffs Motion for Summary

Judgment purstiant to Federal Rule of Civil Procedure 56. (Mot.

For S.J. (“Mot.”) (Dkt. 42-3).) For the reasons stated below, the

motion is GRANTED in part and DENIED in part.

I, BACKGROUND

A. Facts

On July 18, 2013, Beatrice Weiner, mother of Arthur and Eric

Weiner, entered into an insurance policy contract with Allstate

for a term of one year, until July 18, 2014. (PI's R. 56.1 Stmt.

(Dkt. 42-2) {{ 29-31; Weiner Defs.’ R. 56.1 Stmt. (Dkt. 42-21) {4

29-31; Def. Fenner’s R. 56.1 Stmt. (Dkt. 42-25) 29-31). On

October 16, 2013, in the middle of that policy’s one-year term,

Beatrice Weiner died. (Pl’s R. 56.1 Stmt. { 16; Weiner Defs.’ R.

56.1 Stmt. 4 16; Def. Fenner’s R. 56.1 Stmt. § 16). On February

22, 2017, Defendant Diane Fenner allegedly slipped and fell

while lawfully at 2209 East 59" Place, Brooklyn, New York

11234 (the “Subject Premises,”) where Arthur Weiner and

Beatrice Weiner had both lived prior to her death, and where

Arthur Weiner had continued to live after her death. (Pl’s R. 56.1

Stmt. 12; Weiner Defs.’ R. 56.1 Stmt. 412; Def. Fenner’s R. 56.1

Stmt. 712). On May 9, 2018, Fenner brought a state court action

for damages based on the injuries resulting from her 2017 fall at

the Subject Premises (the “Underlying Action”). (P?s R. 56.1

Stmt. {] 13-14; Weiner Defs.’ R. 56.1 Stmt. | 13-14; Def.

Fenner’s R. 56.1 Stmt. 9 13-14). In the state court action, Fenner

alleges that there was an “inherently dangerous latent defect and

condition” within the Subject Premises and that one or both of

the Weiners caused that defect or had actual or constructive

knowledge of it. (PI's R. 56.1 Stmt. 7 14; Weiner Defs,’ R. 56.1

Stmt. € 14; Def. Fenner’s R. 56.1 Stmt. 4 14.)

The insurance policy in question stated, at the time that it was

issued to Beatrice Weiner, that an “Insured Person(s)” under the

policy includes “[the named insured] and, if a resident of [the

named insured’s] household: (a) any relative; ‘and (b) any

dependent person in [the policyholder’s] care.” (PPs R. 56.1

Stmt. {4 18, 20; Weiner Defs.’ R. 56.1 Stmt. 18, 20; Def.

Fenner’s R. 56.1 Stmt. 49 18, 20; 2013-14 Allstate Policy (Dkt.

44-1) at ECF 27). The policy further included a requirement that

“lthe named insured] must ... inform [Allstate] of any change in

title, use or occupancy of the residence premises” and “[the named

insured] may not transfer this policy to another person without

[Allstate’s] written consent.” (PI’s R. 56.1 Stmt. 4 21; Weiner

Defs.’ R. 56.1 Stmt. 21; Def, Fenner’s R. 56.1 Stmt. 4 21; 2013-

14 Allstate Policy at ECF 29).

In a sub-section titled “Continued Coverage After Your Death,”

the policy stated that “{i]f [the named insured] dic[s], coverage

will continue until the end of the premium period for: (1) [the

named insured’s] legal representative while acting as such, but

only with respect to the residence premises and property covered

under this policy on the date of [the named insured’s] death. (2)

An insured person, and any person having proper temporary

custody of [the named insured’s] property until a legal

representative is appointed and qualified.” (Pl’s R. 56.1 Stmt. {

22; Weiner Defs.’ R. 56.1 Stmt. 4 22; Def. Fenner’s R. 56.1 Stmt.

{ 22; see also 2013-14 Allstate Policy at ECF 30.)

According to Allstate, the policy terminated upon the end of the

premium period following the October 16, 2013 death of

Beatrice Weiner, the named insured, as Allstate was not informed

of her death until after Fenner’s 2017 fall and no written consent

was provided for a transfer of the policy to another person. (PI's

R. 56.1 Stmt. 29-32.) Both the Weiner Defendants and

Defendant Fenner dispute this version of events, with the Weiner

Defendants arguing that Arthur Weiner did in fact notify Allstate

of Beatrice Weiner’s death. (Weiner Defs.’ R. 56.1 Stmt. 30-

32; Def. Fenner’s R. 56.1 Stmt. "| 30-32.)

All parties agree that the policy was renewed after the death of

Beatrice Weiner, and that Allstate continued to write policies for

the property in the name of Beatrice Weiner over that period.

(Pl’s R. 56.1 Stmt. 4] 33-34; Weiner Defs.’ R. 56.1 Stmt. {4 33-

34; Def, Fenner’s R. 56.1 Stmt. 4 33.) After Beatrice Weiner’s

death, Arthur and Eric Weiner became co-owners of the Subject

Premises by operation of law. (Pl’s R. 56.1 Stmt. € 12; Weiner

Defs.” R. 56.1 Stmt. 12; Def. Fenner’s R. 56.1 Stmt. 4 12; Eric

Weiner Resp. to Interrogatories (Dkt. 42-16) at ECF 24.) Arthur

Weiner, who had lived on the property while their mother was

alive, continued to live at the Subject Premises until 2018, the

year it was sold. (PI’s R. 56.1 Stmt. 56; Weiner Defs.’ R. 56.1

Stmt. { 56; Def. Fenner’s R. 56.1 Stmt. § 56; Eric Weiner Resp.

to Interrogatories at ECF 24; Arthur Weiner Depo. (Dkt. 42-11)

at ECF 33-34.) Eric Weiner did not reside at the Subject Premises

during any of the years in question. (Eric Weiner Resp. to Inter-

rogatories at ECF 24; Eric Weiner Depo (Dkt. 42-12) at ECF 13.)

B. Procedural History

On January 25, 2019, the instant declaratory judgment action

was brought based on diversity jurisdiction, as Plaintiff is a citi-

zen of Illinois, Defendants are citizens of New York and/or New

Jersey, and the amount in controversy is greater than $75,000.

(Ps R. 56.1 Stmt. {9 1-7; Weiner Defs.’ R. 56.1 Stmt. {4 1-7; Def.

Fenners R. 56.1 Stmt. 1-7). Shortly thereafter, Plaintiff

brought a Motion for Judgment on the Pleadings. (Dkt. 20.) This

court DENIED that Motion on July 20, 2020, stating that

“falccepting as true the factual allegations within Defendants’ af-

firmative defenses, genuine issues of material fact remain[ed]

that prevent[ed] Allstate from obtaining judgment as a matter of

law.” (2020 M&O at 7.) The parties conducted discovery before

Chief Magistrate Judge Cheryl L. Pollak from October 2020

through January 2022. (See Oct. 28, 2020 Minute Entry; Jan. 26,

2022 Minute Entry.) After discovery was complete, Defendant

Allstate sought and was granted leave to file a Motion for Sum-

mary Judgment. (See Dkt. 37; May 27, 2022 Minute Entry.)

Allstate’s fully briefed Motion for Summary Judgment was filed

on September 16, 2022. (See Dkt. 42.) On September 29, 2022,

in response to the court’s September 23, 2022 order, Allstate fur-

ther filed the complete, true, and accurate Allstate Insurance

Company Deluxe Policy that had been in piace for Beatrice

Weiner from July 18, 2013 to July 18, 2014. (See Sept. 23, 2022

Text Order; 2013-14 Allstate Policy (Dkt. 44-1).)

Il. STANDARD OF REVIEW

The court's role on a motion for summary judgment “is not to

weigh the evidence and determine the truth of the matter but to

determine whether there is a genuine issue for trial.” Lionel v.

Target Corp., 44 F'. Supp. 3d 315, 318 (E.D.N.Y. 2014) (quoting

Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158,

162 (2d Cir. 2006)). Summary judgment is appropriate when the

movant shows “that there is no genuine dispute as to any mate-

rial fact, and the movant is entitled to judgment as a matter of

law.” Am. Empire Surplus Lines Ins. Co. v. Certain Underwriters at

Lloyd's London, No. 16-CV-5664 (AMD) (JO), 2018 WL

10456838, at *4 (E.D.N.Y. July 23, 2018) (quoting Fed. R. Civ.

P. 56(a)). “Where the record taken as a whole could not lead a

rational trier of fact to find for the non-moving party, there is no

genuine issue of fact.” Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 587 (1986). A genuine issue of fact cannot

he established by “[c]onclusory allegations, conjecture, and spec-

ulation.” Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir. 1998).

“(T]he party opposing summary judgment must identify specific

facts and affirmative evidence that contradict those offered by

the moving party to demonstrate that there is a genuine issue for

trial.” Certain Underwriters, 2018 WL 10456838, at *4. If the non-

movant is unable to establish that each element is at least rea-

sonably disputed based on the evidentiary record, the motion

should be granted.

Il. DISCUSSION

A. Parties’ Apparent Disagreement About the “Burden”

The parties’ briefing implies a disagreement as to who bears the

burden with regard to proving coverage, or lack thereof, at the

summary judgment stage. The court believes this issue is well-

settled and fears the Weiner Defendants may be confusing the

issue.

Plaintiff cites to Consolidated Edison Co. of New York y. Allstate

Insurance Co, for the duai propositions that (1) the burden is on

“the insured to establish coverage and for the insurer to prove

that exclusion in the policy applies to defeat coverage;” and (2)

the question of whether the dispute is about coverage or exclu-

sion should be answered by examining the insurance policy's

language. (Mot. at 5-6 (citing 98 N.Y.2d 208, 218, 221-22

(2002).) Plaintiff correctly asserts that the issue in this case is

an issue of whether there is coverage, and that the burden is

therefore on the “putative insured” to establish coverage. (Id. at

6.) Defendants counter that the well-known burden on proof

for movants at summary judgment should, in effect, supersede

this insurance-specific burden allocation doctrine. (Weiner Opp.

(Dkt. 42-20) at 6 (citing Blair v. Allstate Indem. Co., 998

N.Y.S.2d 754, 754-55 (4th Dep’t 2015) (“Generally, an insured

seeking to recover for a loss under an insurance policy has the

burden of proving that a loss occurred and also that the loss

was a covered event within the terms of the policy. An insurer

moving for summary judgment, however, has the initial burden

of coming forward with admissible evidence establishing that

the loss was not a covered loss or that the loss was excluded

from coverage.”)).) Defendants are wrong to think that there is

a tension between these two controlling rules of burden alloca-

tion. It is the moving party’s burden to prove that there is no

issue of fact on summary judgment, which here, happens to be

an insurance company. Separately, the burden to prove cover-

age falls to the insured. In the view of this court, those two

requirements are fully reconcilable and their interplay needs no

further discussion.

B. Duty to Indemnify

At the summary judgment stage, a plaintiff is entitled to a declar-

atory judgment that it has no duty to indemnify if it can prove

that there is no material question of fact as to whether there was

coverage. Plaintiff has provided a copy of an insurance policy,

and a recounting of facts, that it asserts prove, when taken to-

gether, that there was no coverage for the Putative Insured at the

time of the claim in question and there are no remaining ques-

tions of fact as to whether Plaintiff has a duty to indemnify the

Putative Insureds in the Underlying Action. (Mot. at 20.) Defend-

ants in turn raise various legal theories of coverage. (Weiner Opp.

at 6-13; Fenner Opp. at 3-9.) If any one of these theories is found

to apply to the facts at issue and Plaintiff fails to establish a lack

of genuine dispute of material fact with regard to one such the-

ory, Plaintiff will have failed to meet its burden. To ascertain

whether there are triable issues of fact for the jury as to whether

either Putative Insured had coverage under an Allstate insurance

policy at the time of Defendant Fenner’s accident, the court will

address each of the Defendants’ theories in turn.

1. Coverage Under the Plain Language of the Policy

Plaintiff argues first that the “Allstate policy clearly and unam-

biguously provides that when the named insured dies, coverage

will only be provided until the end of the premium period follow-

ing their death,” (Mot. at 6), that the named insured on the 2013-

14 Allstate Policy (Beatrice Weiner) had already passed away at

the time of the disputed insurance claim, and that the premium

period following her death had long since ended. (Id. at 1.) The

Defendants seek to raise an issue of fact as to whether coverage

was in effect for the Putative Insureds at the time of the claim, by

arguing that the plain language of the policy “does not require a

finding that there was no coverage for ARTHUR WEINER and

ERIC WEINER.” (Weiner Opp. at 7.)

The Weiner Defendants first argue that because the policy an-

nexed to Allstate’s Motion for Summary Judgement as Exhibit F

was not a copy of the policy in effect at the time of the death of

Beatrice Weiner in 2013 but was instead a copy of the policy in

effect at the time of Defendant Fenner’s accident, a question re-

mains as to what the policy terms were in 2013 and whether that

policy might have dealt differently with death of the named in-

sured. (See id at 7.) The Weiner Defendants are correct that the

dispute must be decided based on the terms of the 2013-14 All-

state Policy. However, at the request of this court, Allstate filed

the complete, true, and accurate Allstate Insurance Company

Deluxe Policy that was in place for Beatrice Weiner from July 18,

2013 to July 18, 2014. (Sept. 23, 2022 Text Order; 2013-14 All-

state Policy.) The court has reviewed both policies and finds that

the provisions central to the instant dispute are the same in the

2013-14 Allstate Policy, (2013-14 Allstate Policy at ECF 2'7-30),

as in the 2016-17 Allstate Policy, (2016-2017 Allstate Policy

(Dkt. 432-9) at ECF 30-33),

Plaintiff is correct that under the plain language of the policy

there was no coverage for either Arthur or Eric Weiner after the

end of the premium period following Beatrice Weiner’s death.

(See Mot. at 2; Pl’s R. 56.1 Stmt. 4] 24-27.) Arthur Weiner may,

while the 2013-14 Allstate Policy was in effect, have been an “in-

sured person” under the policy, based on his status as a “relative”

of the named insured who was also a resident of the household.!

! Although in his deposition Arthur Weiner describes the home as a two-

family house, (Arthur Weiner Depo, at ECF 12-14), other statements

throughout the record indicate that he and his mother were part of a single

household while she was alive, (see, e.¢., Eric Weiner Depo. at ECF 15;

Arthur Weiner Depo. at ECF 33.) Although the question of whether the

(Weiner Opp. at 3; 2013-14 Allstate Policy at ECF 27; Arthur

Weiner Depo at ECF 12-14, 33.) As an “insured person,” Arthur

Weiner would have continued to benefit from the 2013-14 All-

state Policy’s coverage until the end of the premium period

following Beatrice Weiner’s death under the “Continued Cover-

age After Your Death” section. (Id.; 2013-14 Allstate Policy at

ECF 30; Arthur Weiner Depo at ECF 33-34.) Eric Weiner, though

not a resident of the household, may also have been covered by

the 2013-14 Allstate Policy for the period between Beatrice

Weiner’s death and the end of the premium period following that

death, due to his status as “legal representative” or “Administra-

tor” of Beatrice Weiner’s estate. (id. at 3-4; 2013-14 Allstate

Policy at ECF 30; Eric Weiner Interrogatories at ECF 24.) But the

premium period following Beatrice Weiner’s death ended July

18, 2014, and Ms. Fenner’s accident is not alleged to have taken

place until February 22, 2017, two-and-a-half years later. (PPs R.

56.1 Stmt. {J 12, 29-31; 2013-14 Allstate Policy at ECF 1.) As it

is undisputed that neither Arthur nor Eric Weiner received writ-

ten consent to transfer the 2013-14 Allstate Policy after the death

of Beatrice Weiner, it is clear to this court that pursuant to its

plain language, the 2013-14 Allstate Policy was no longer in ef-

fect at the time of Ms. Fenner’s accident. Moreover, the

subsequent renewals could not have been effective as to Beatrice

Weiner, as it is not possible for a deceased person to enter into a

contract. De Kovessey v. Coronet Properties Inc., 69 NY2d 448, 456

(N.Y. 1987); see also David v. Westfield Insurance Company, No.

21-CV-2797, 2022 WL 767156, at *2 (6th Cir. 2022).

Finally, the Weiner Defendants argue that the proper interpreta-

tion of the plain language calls for liberal construal, and for “any

ambiguity [in the text] [] to be resolved in favor of the insured.”

mother and son were living as a single houschold or as residents of two

separate units within a single house while she was alive is an open one, it

need not be answered here as it is not wtimately outcome determinative.

(Weiner Opp. at 7.) In this vein, the Weiner Defendants point to

Lumbermen’s Mutual Gasualty Co. v. Brown, in which the court

chose to liberally construe an auto insurance policy which pro-

vided coverage for a “person having temporary custody of the

vehicle until the appointment and qualification of a legal repre-

sentative” after the death of the named insured as covering “the

alternate executor [of] the name[d] insured and the person to

whom ownership of the car eventually passed” in the name of

public policy. (Id. at 8 (citing 20 N.Y.2d 542, 545 (1967)).) That

case is clearly distinguishable from the matter at bar, where the

plain language of the Beatrice Weiner’s homeowner's liability

policy did not allow for any coverage to persons beyond one pre-

mium period after the death of the named insured. See 2013-14

Allstate Policy at ECF 30.

For the reasons stated above, there is no genuine issue of mate-

rial fact as to whether the Weiner Defendants are entitled to

establish coverage by the plain language of the 2013-14 Allstate

Policy. Under the terms of the express policy contract, no cover-

age existed for either of the Putative Insureds (Arthur and Eric

Weiner) after the death of the named insured (Beatrice Weiner).

2, Equitable Relief

The Weiner Defendants and Defendant Fenner make a set of ar-

guments that essentially boil down to the following: by the date

of Ms. Fenner’s accident, either (1) Allstate was estopped from

rescinding or refusing coverage because of failure to do so at an

earlier date; (2) an implied contract had formed, under which

Allstate was bound; or (3) equitable principles demand that the

contract be reformed to reach this outcome. (Weiner Opp. at 10-

12; Fenner Opp. (Dkt. 42-23) at 4.) There is precedent for such

forms of equitable relief. Some New York state courts, as well as

courts in other circuits, looking to general principles of contract

interpretation, have been willing to find contracts implied in fact,

find that an insurer is estopped from rescinding coverage, or find

10

that the contract should be reformed, even where the plain lan-

guage of the contract does not support either result and there is

no ambiguity in the text. Below the court addresses each of these

equitable remedies.

a. Equitable Estoppel

In some instances, courts have been willing to estop insurers

from denying coverage based on evidence that the insurer had

previously been notified of the event or facts which would have

allowed it to rescind the policy. “Under New York law, waiver is

the voluntary and intentional relinquishment of a known right.

Waiver requires evidence of a clear manifestation of intent, and

cannot be lightly inferred. Intent is established if the insurer had

‘sufficient information’ regarding the grounds for rescission but

chose to not exercise its right to rescind.” Am. Gen. Life Ins, Co. v.

Salamon, No. 09-CV-5428 (KAM) (SMG), 2011 976411 at *3

(E.D.NLY. Mar. 16, 2011), affd, 483 F. App'x 609 (2d Cir. 2012).

Cases on equitable estoppel have turned on when insurers gained

knowledge of “events which allow[] for cancellation,” and their

actions thereafter. Hydell v. N. Atl. Life Ins. Co., 667 N.Y.S.2d 391,

393 (2d Dep’t 1998).

Cases in which courts have found waiver or estoppel under New

York law have consistently involved some sort of fraud or mis-

representation on behalf of the insured coming to light. See, e.g.,

Cont'l Ins. Co. v. Helmsley Enters., Inc., 622 N.Y.S.2d 20, 20 (ist

Dep't 1995) (“[PJlaintiff waived its right to seek rescission of the

contract of insurance when it knowingly accepted premium pay-

ments for several months following discovery of the alleged

misrepresentations [regarding the insured’s loss history] upon

which it claimed to have relied when it issued the policies”);

Scalia v. Equitable Life Assurance Soc’y of the U.S., 673 N.Y.S.2d

730, 730-31 (2d Dep’t 1998) (noting that the defendant “waived

its right to rescind the disability income insurance policy, by con-

tinuing to accept premium payments after it gained sufficient

11

knowledge of the alleged misrepresentations upon which it

claims to have relied when issuing the policy”); Chi. Ins. Co, v.

Kreitzer & Vogelman, 265 F.Supp.2d 335, 343-44 (S.D.N.Y.

2003) (discussing whether an insurer had waived its right to re-

scind a policy in the context of material misrepresentations by an

attorney); Sec. Mut. Life Insur. Co. v. Rodriguez, 880 N.Y.S.2d

619, 625 (1st Dep't 2009) (“Plaintiffs acceptance of premiums

from Mobarak after learning of the alleged fraud allowing for

cancelation of the policies constituted a waiver of (or more

properly an estoppel against) its right to cancel or rescind the

policies”); 5512 OEAAJB Corp. v. Hamilton Ins. Co., 138 N.Y.5.3d

555, 1137-38 (2d Dep’t 2020) (finding an insurer waived the

right to rescind by renewing the policy after learning that the in-

sured had made a misrepresentation regarding the presence of

an on-site sprinkler system in their initial application for insur-

ance).

All of the above cases rested not only on the insurers’ failures to

rescind policies after becoming aware of their right to, but also

on findings that the insurers continued to accept premium pay-

ments, in effect re-ratifying the contract. Bible v. John Hancock

Mut. Life Ins. Co., 256 N.Y. 458, 462 (1931) (‘In the absence of

warranty or warning, the delivery of the policies by the insurer,

and the keeping of the premiums with knowledge of a then ex-

isting breach of the conditions ... gave rise to a waiver or, more

properly, an estoppel.”); U.S. Life Ins. Co, in City of N.Y. v. Blu-

menfeld, 938 N.Y.S.2d 84, 86 (2012) (“{A]n insurer that accepts

premiums after learning of facts that it believes entitles it to re-

scind the policy has waived the right to rescind.”).

It is undisputed that Arthur Weiner continued to pay, and Allstate

continued to accept, premium payments on Beatrice Weiner’s in-

surance policy after her death. However, the cases cited by

Defendants and discussed above all involve a fraudulent repre-

sentation being discovered during the contract term and the

12

insurer gaining the right to rescind the policy in question,

though the term had not yet ended. The case at bar must be dis-

tinguished from that factual paradigm. This is not a case where

fraud was discovered, giving the insurer the right to rescind. In-

stead, this is a case where the policyholder died and the policy

expired, see, ¢.g., Green v. Allstate Ins. Co., No. 14-CV-794 (ELR),

2015 WL 11233460, at *5 (N.D. Ga. May 5, 2015), but the in-

surer continued to accept auto-paid premiums and send

renewals, despite purported notification of that death to an All-

state agent.

There is a genuine factual dispute as to whether that notification

to an agent took place.* Gf. Diaz v. Allstate Ins. Co., 2017 WL

2 In his deposition, Arthur Weiner stated that two weeks after his mother

passed away, he “called and spoke to a girl from Allstate on Avenue N, and □

told her ,.. that she passed away, and tell me what we have to do next.”

(Arthur Weiner Depo at 16-17.) Arthur Weiner testified that the person

he spoke with from Allstate on Avenue N “said [she would] call [him] back,

and never did.” (id. at 17.) Because “[t]he money continued to be removed

month after month... [he] figured, okay” and “kept on paying it.” Ud.)

Although Arthur Weiner could not remember the Allstate representative’s

name, he did remember some identifying details, and explained that he

called that specific Allstate because he “knew that that was where [his

mom] did her Allstate business.” (Id.) In Defendant Arthur Weiner’s re-

sponse to Plaintiffs Interrogatories, he stated “ARTHUR WEINER called

and spoke to the female ALLSTATE agent 2 to 3 weeks after the death of

BEATRICE WEINER and told her about the death of BEATRICE WEINER,”

and furthermore that “Arthur Weiner was told that ALLSTATE would take

eare of it and get back to Arthur Weiner.” (Arthur Weiner Resp. to Inter-

rogatories at ECF 14-15.) (See also Weiner Defs.’ R. 56.1 Stmt. 4 41, 44

45.)

Relevant deposition testimony of a defendant and/or a defendant's re-

sponses to interrogatories can be sufficient evidence to give rise to an issue

of material fact at summary judgment, as “if there is any evidence in the

record from any source from which a reasonable inference could be drawn in

favor of the nonmoving party, summary judgment is improper.” St. Pierre

v, Dyer, 208 F.3d 394, 404 (2d Cir. 2000) (emphasis added).

13

4927179, at *1 (Sup. Ct. Queens Gnty., Oct. 24, 2017) (“LI]t is

uncontested that defendant was first notified of [the named in-

sured’s] death ... when a claim was submitted for the fire

damage to the premises”) (emphasis added); Green, 2015 WL

11233460, at *1; Disco Inc. v. Travelers Indem. Co. of Am., No. 16-

CV-1403 (GBL) (JFA), 2017 WL 11501877, *5 (E.D.V.A. Mar.

22, 2017) (“[Blecause the record contained no indication that the

insurer had notice of the named insured’s death and contained

no facts to support a finding of an implied-in-fact contract, there

was no genuine issue of material fact that the Policy was not valid

at the time of the fire loss.”) (emphasis added); see also Wells

Fargo Bank, N.A. v. Allstate Ins. Co., No. 14-CV-01379, 2016 WL

1182724, at *4-5 (N.D. Ohio Mar. 28, 2016). And the existence

of a genuine dispute as to a material fact would bar an award of

summary judgment for Allstate. But this genuine factual issue is

not material for the purposes of determining whether Allstate is

estopped from denying coverage. Under the terms of the 2013-

14 Allstate Policy, in order for coverage to be in place after the

premium period following the policyholder’s death, either (1) a

new contract would have to have been created with the new

property owner, or (2) the policy would have had to have been

transferred in writing to the new property owner. (See PPs R. 56.1

Stmt. (21-22; Weiner Defs.’ R. 56.1 Stmt. ] 21-22; Def. Fen-

ner’s R. 56.1 Stmt. 4 21-22.) Here, there was no failure to

rescind. Instead, there was a failure to take the affirmative step

of insuring Arthur Weiner. Accordingly, an equitable estoppel ar-

gument is inapplicable.

While Arthur Weiner may have a negligence claim against the

agent with whom he spoke for failing to affirmatively insure, see

Despite Plaintiffs stated position that “no one informed Allstate that Be-

atrice Weiner had passed away until after the subject accident,” (Pl’s R.

56.1 Stmt. 9 32), the above-mentioned deposition testimony and

interrogatory responses could, if put to a jury, create a reasonable inference

against the Plaintiffs position.

14

Sawyer v. Rutecki, 937 N.Y.S.2d 811, 812 (4th Dep’t 2012) (not-

ing that insurance agents “have no continuing duty to advise,

guide or direct a client to obtain additional coverage” except in

“le]xceptional and particularized situations” such as when “there

was some interaction regarding a question of coverage, with the

insured relying on the expertise of the agent”); Gatto v. Allstate

Indem. Co., 173 A.D.3d 1711, 1712 (2019) (asserting that there

was no “common-law duty to advise, guide, or direct [a dece-

dent’s survivor] to obtain insurance coverage” when “there was

no interaction [between the agent and the decedent’s survivor]

regarding questions of coverage”), his purported notification can-

not, as a matter of law, be said to have estopped Allstate from

refusing coverage under the original policy.* Additionally, there

3 All parties rely heavily on the Southern District of Ohio and Sixth Circuit

decisions in Ramsey v. Allstate Ins. Co., No, 09-CV-207, 2009 WL 10679766

(S.D. Ohio Dec. 28, 2009} (“Ramsey P’), Ramsey v. Allstate Ins. Co., 416 F.

App’x 516 (6th Cir. 2011) (‘Ramsey IP’), Ramsey y. Allstate Ins. Co., No. 09-

CV-207, 2011 WL 5520644 (S.D. Ohio Nov. 14, 2011) (“Ramsey HF’), and

Ramsey v. Allstate Ins. Co., 514 F. App’x 554 (6th Cir. 2013) (“Ramsey IV”)

when discussing equitable estoppel. (See Mot. at 8-10; Weiner Opp. at 8-

9; Fenner Opp. at 3-4.) Despite the closely overlapping issues at play, the

Ramsey line of cases does not ultimately reach the issue of whether contin-

uing to renew and accept payments on an insurance policy after putative

notification of the death of the named insured estops an insurer from deny-

ing coverage. In Ramsey I, the district court granted summary judgment for

Allstate based on facts similar to those at bar. See generally 2009 WL

10679766. In Ramsey I, the Sixth Circuit, holding that “the district court

failed to consider whether Allstate is estopped from denying coverage be-

cause it received constructive notice of [the named insured’s] death,”

“remandfed} for the district court to consider whether Allstate received

constructive notice of [the named insured’s] death and, ifit did, whether it

is estopped from denrying coverage to [the named insured’s son].” Ramsey H,

416 F. App’x at 520 (emphasis added.} On remand, the district court held

that Allstate had not received constructive notice, but did not reach the

question of whether Allstate would have been estopped from denying cov-

erage had it been given constructive notice but continued to renew the

policy and accept premium payments. Ramsey Hf, 2011 WL 5520644, at

*8, Lastly, the circuit court then affirmed the district court, also without

15 □

is no evidence whatsoever that Allstate should have been es-

topped from denying coverage to Eric Weiner.

b. Implied-in-Fact Contract

Related to but distinct from the issue of equitable estoppel is the

question of whether the parties, through their conduct, entered

into an implied-in-fact contract after the expiration of the policy

for which Beatrice Weiner was the named insured. “Under New

York law, the conduct of the parties may lead to the inference of

a binding agreement: A contract implied in fact may result as an

inference from the facts and circumstances of the case, although

not formally stated in words, and is derived from the presumed

intention of the parties as indicated by their conduct.” Brown v.

St. Paul Travelers Co., 331 F. App'x 68, 70 (2d Cir. 2009) (sum-

' mary order); see also Berlinger v. Lisi, 731 N.Y.S.2d 916, 917 (3rd

Dep’t 2001) (“[W]ith respect to implied-in-fact contracts, based

on the facts and circumstances surrounding the dispute as mani-

fested in the acts and conduct of the parties, there must be an

indication of a meeting of minds of the parties constituting an

agreement.”).

The elements of “[a]n implied-in-fact contract under New York

law,” to be proven through an examination of the attendant cir-

cumstances, are “consideration, mutual assent, legal capacity

and legal subject matter.” 828 Hamilton Inc. v. United Specialty

Ins. Co., No. 16-CV-5073 (ARR) (SMG), 2018 WL 5817155, at *9

(E.D.N.Y. Nov. 6, 2018). Finally, under New York law “[a] con-

tract cannot be implied in fact where there is an express contract

covering the subject matter involved.” Julien J. Studley, Inc. v.

N.Y. News, Inc., 70 N.Y.2d 628, 629 (1987).

Here, there is no question that the putative implied-in-fact con-

tract would have been about the legal subject matter —

reaching the second part of the issue. See generally Ramsey IV, 514 F. App’x

at 558.

16

homeowners’ insurance for the Subject Premises. The considera-

tion element was also easily met by Arthur Weiner making

payments to Allstate each month over the period in question. The

issues of legal capacity and mutual assent are thornier. Arthur

Weiner indisputably had legal capacity to enter into a contract

on his own behalf. Whether the woman at the “Allstate Agency”

Mr. Weiner purports to have spoken to would have had the legal

authority to enter into an implied-in-fact contract with Mr.

Weiner is a question of fact that would depend on the nature of

her relationship to Allstate (i.e., exclusive agent for the insurer

rather than a general insurance broker employed by the insured).

Similarly, the question of mutual assent is fact specific. In some

cases, New York courts have found that mutual assent existed

where payments were made and accepted on a regular basis, and

services were continually renewed. See, e.g., Fink y. Time Warner

Cable, 810 F. Supp. 2d 633, 645 (S.D.N.Y. 2011), affd, Fink v.

Time Warner Cable, 714 F. 3d 739 (2d Cir. 2013) (“Plaintiffs al-

lege that they paid for and received cable services on a monthly

basis from Defendant. This is sufficient to meet both the “mutual

assent” and “consideration” aspects of the alleged contract.”)

Here, insurance payments were made and accepted and contract

renewals continued to be offered. But other cases highlight that

“(mutual assent entails assent to the contract’s essential terms

and conditions, and if an agreement is not reasonably certain in

its material terms, there can be no enforceable legal contract,”

828 Hamilton, 2018 WL 5817155, at *9, and that “[tlo establish

mutual assent, a plaintiff must plausibly allege words or conduct

by the parties sufficiently clear to permit an infer[ence] that the

promise would have been explicitly made, had attention been

drawn to it.” Anjani Sinha Med. P.C. v. Empire HealthChoice As-

surance, Inc., No. 21-CV-138 (RPK) (TAM), 2022 WL 970771, at

*6 (E.D.N.Y. Mar. 31, 2022); see also Maas v. Cornell Univ., 94

N.Y.2d 87, 94 (1999). Knowledge of the identity of the counter-

party (ie, knowledge possessed by Allstate that it was insuring

17

Arthur Weiner not Beatrice Weiner) is undoubtedly an essential

term of an insurance contract, see e.g., Atai v. Dogwood Realty of

N.Y., Inc., 807 N.Y.S.2d 615, 697-98 (2d Dept. 2005), so the

question of mutual assent rests on the factual question of

whether notification of Beatrice’s Weiner death was, in fact,

made. Further, the “inference that the promise would have been

explicitly made, had attention been drawn to it,” Anjani Sinha

Med. P.C., 2022 WL 970771, at *6, can only fairly be drawn if

Mr. Weiner did, indeed, speak with an Allstate agent whose ac-

tions can be imputed to Allstate and who continued to provide

him with insurance contract renewals after he stated that his

mother had passed away.

For these reasons, there remains a genuine issue of material fact

as to whether or not an implied-in-fact contract was in place be-

tween Allstate and Arthur Weiner at the time of Ms, Fenner’s

accident. * That said, to the extent that Eric Weiner is also seek-

ing coverage under this theory, the court sees no evidence that

there could have been an implied-in-fact contract between All-

state and Eric Weiner at that time.°

c. Equitable Reformation

New York state courts have, under certain circumstances, equita-

bly reformed insurance policy contracts. “Where mutual mistake

_ exists, a court may reform an insurance policy to identify the

proper insured.” Prospect JV Dev. LLC v. IL Union Ins. Co., No. 18-

4 Ramsey IV's reversal of the district court on the issue of implied-in-fact

contract is instructive given its factual similarities, see 514 F. App’x at 558-

59, though the court notes that the implied-in-fact contract inquiry here

rests on New York State law, while the inquiry in Ramsey IV rested on Ohio

State law.

5 Even if an implied-in-fact policy existed, its terms would have been the

same as the terms on the express Allstate Policy contracts, which require

an insured person to reside at the Subject Premises in order to be covered

by the policy. It is undisputed that Eric Weiner did not reside at the Subject

Premises during the period in question.

18

CV-5837 (WFK) (LB), 2021 WL 5066592, at *3 GE.D.NLY. Sept.

27, 2021). “Furthermore, when it is established that, through in- □

nocent mistake of an applicant for insurance, the nature of the

ownership of the property to be insured... is misdescribed, the

error is mutual for the purposes of reformation, even though the

insurer is not aware of the error.” Id. However, “courts will not

reform insurance policies to add additional insureds if that was

not the intent of the parties when the contract was formed.” Id.

at 4; see also Klapan v. Dryden Mut. Ins, Co., 701 N.Y.S.2d 192,

193 (4th Dep't 1999) (“A written instrument that accurately re-

flected the intention of the parties when it was executed is not

subject to reformation.”). There is no evidence that Beatrice

Weiner intended to insure Arthur Weiner—other than to the ex-

tent that relatives who happened to reside in her home while she

was alive would be automatically insured—or Eric Weiner—

other than to the extent that he was arguably covered as the ad-

ministrator of her estate for the remainder of the premium period

following her death—when she entered into the contract. Nor is

there evidence that she believed, incorrectly, that the insurance

contract independently covered either of her children. In fact,

there is no evidence of mutual mistake in any regard. Equitable

reformation of the 2013-14 Allstate Policy contract is thus una-

vailable for either Weiner Defendant.®

6 The Weiner Defendants and Defendant Fenner cite at length to Pratz v.

Wayne Coop. Ins. Co., 724 N.Y.S, 2d 293 (NY. Sup. Ct. 2001) in support of

their argument for equitable reformation. (See Weiner Opp. at 11-12; Fen-

ner Opp. at 6-7.) This court acknowledges that the facts in Pratz bear a

strong resemblance to the facts of the case at bar. See Pratz, 724 N.Y.S. 2d

at 294-95. However, this court is not persuaded by Pratz’s interpretation

of state law—that facts similar to these at bar could be construed as a mis-

take of misdescription, and equitable reformation of the contract was thus

available. Instead, the court holds that Beatrice Weiner’s choice to pur-

chase an insurance policy that did not cover her son after her death cannot

19

3. Failure to Timely Deny Coverage or Disclaim

Liability in the State Court Suit

Defendants also raise the question of whether Allstate failed to

timely deny coverage or disclaim liability in the lawsuit. Defend-

ants point to New York Insurance Law Sec. 3420(d)(2), (see

Weiner Opp. at 12), which states as follows:

If under a liability policy issued or delivered in this state, an

insurer shall disclaim liability or deny coverage for death or

bodily injury arising out of a motor vehicle accident or any

other type of accident occurring within this state, it shall give

written notice as soon as is reasonably possible of such dis-

claimer of liability or denial of coverage to the insured and

the injured person or any other claimant.

New York Insurance Law Sec. 3420(d)(2) (emphasis added).

But by its own terms, the above provision applies only to inju-

ries that arise “under a liability policy.” Id. In interpreting this

statute, New York state courts have made clear that if there was

no insurance policy in place to begin with, there was no need to

disclaim liability or deny coverage. See Roman Cath. Diocese of

Brooklyn v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 21 N.Y, 3d

139, 147 (2013) (“[A] notice of disclaimer is not required in the

event there is no insurance at all and, therefore, no obligation

to disclaim or deny... the notice requirement only applied to

situations in which a policy of insurance that would otherwise

cover the particular accident is claimed not to cover it because of

an exclusion in the policy.”) (emphasis in original). New York

properly be construed as a mistake of misdescription, as there is no indica-

tion that Beatrice Weiner intended for coverage to extend in such a

manner. Although the court does not agree with the Pratz court’s legal rea-

soning, it notes that the outcome in Pratz may have been correct, as it is

possible that—as here—coverage may have later been extended under an

implied-in-fact contract.

20

state courts have made similar conclusions regarding other stat-

utes. See Allstate Indem. Co. v. Nelson, 728 N.Y.S.2d 82, 83

(2001) (“Since the owner's insurance policy did not provide

coverage because the vehicle was operated without the owner's

consent, a prompt notice of disclaimer was not required.”); Lib-

erty Mut. Ins. Co. v. Allstate Ins. Co., 654 N.Y.S.2d 403, 404-05

(1997) (“Moreover, since Allstate's policy was never intended to

provide coverage to the vehicle involved in the underlying acci-

dent, coverage cannot be created on account of [Allstate's] late

service of a notice of disclaimer”); Zappone vy. Home Ins. Co.,

432 N.E.2d 783, 786 (1982) (“We conclude, however, that the

Legislature did not intend by its use of the words ‘deny cover-

age’ to bring within the policy a liability incurred neither by the

person insured nor in the vehicle insured[.]”).

At this stage, the court cannot squarely hold that there was or

was not an Allstate insurance policy in place at the time of Ms.

Fenner’s accident. But the question of whether Plaintiff can

fairly be said to have failed to timely deny or disclaim coverage

is one of little practical import. If there was no implied-in-fact

policy in place at the time of Ms. Fenner’s accident, Allstate was

under no obligation to timely deny or disclaim coverage under

the policy. If there was an implied-in-fact policy in place at the

time of Ms. Fenner’s accident, Allstate cannot properly disclaim

coverage for the accident, no matter whether their attempt to

do so is timely or delayed.

C. Duty to Defend

Allstate also seeks summary judgment on its claim for a declara-

tion that it has no duty to defend. (Mot. at 1.) In response, the

Weiner Defendants argue that there is a material! factual dispute

as to whether Allstate is estopped from withdrawing its legal de-

fense for the Weiner Defendants due to reliance interests

engendered by Allstate’s having begun this legal defense in the

first place. (Weiner Opp. at 9-10.) Pulling back support now, the

21

Weiner Defendants argue, would prejudice them in the Underly-

ing Action. (d.)

1. Legal Framework

“'U|nder New York law, an insurer has a duty to defend when-

ever the allegations within the four comers of the complaint

potentially give rise to a covered claim or where the insurer had

actual knowledge of facts establishing a reasonable possibility

of coverage.” Roman Cath. Diocese of Rockville Ctr., N.Y. v. Ar-

rowood Indem. Co., No. 20-GV-11011 (VEC), 2022 WL 558182,

at *4 (S.D.N.Y. Feb. 23, 2022). Thus the “duty of an insurer to

defend is broader than its duty to pay.” Allianz Ins. Go. v. Lerner,

416 F.3d 109, 115 (2d Cir. 2005); see also U.S. Liab. Ins. Co. v.

WW Trading Co., No. 16-CV-3498 (CBA) (JO), 2018 WL

6344641, at *16 (E.D.N.Y. Sept. 28, 2018) (“Put another way,

the duty to defend perdures until it is determined with certainty

that the policy does not provide coverage.”) (quoting Hugo Boss

Fashions, Inc. v. Fed. Ins. Co., 252 F.3d 608, 620 (2d Cir.

2001))}.

Common law estoppel has been found by New York courts

where (1) there was an unreasonable delay in denying coverage

and (2) that delay caused prejudice to the insured. U.S, Under-

writers Ins. Co. v. Image By J & K, LLC, 335 F. Supp. 3d 321, 340

(E.D.N.Y. 2018); Bluestein & Sander v. Chi. Ins, Co., 276 F.3d

119, 122 (2d Cir. 2002). Where the insurer has initiated a de-

fense, “prejudice is often presumed” unless the insurer

“reserv[es] the privilege” to withdraw that defense. U.S. Under-

writers Ins. Co., 335 F. Supp. 3d at 340. This presumption

reflects the fact that an insured, in relying on the insurer's de-

fense, may “suffer[] the detriment of losing the right to control

its own defense.” Bluestein, 276 F.3d at 122.

22

2. Application

The Weiner Defendants argue that the “action by the insurer of

undertaking the defense causes prejudice to the insured by losing

the right to control its defense.” (Weiner Opp. at 10.) They allege

that “ALLSTATE by its own admission knew on July 12, 2017

that Beatrice Weiner died... [hJowever, ALLSTATE undertook

to represent defendants Weiner in the Underlying Action on June

25, 2018.” Ud.) Finally, they note that “[o]n November 13, 2018

Allstate sent a letter to the Estate of Beatrice Weiner” stating that

it was providing a defense to ERIC WEINER and ARTHUR

WEINER in the action commenced by DIANNE FENNER,” adding

that “the letter doesn’t reserve right to take away defense.” (Id. )

The information in the record belies this allegation. On July 13,

2017, Allstate sent a letter acknowledging receipt of Ms. Fenner’s

attomey’s letter of representation. (Ex. Q to Fenner Opp. (Dkt.

42-26) at ECF 6.) In that letter, Allstate explicitly stated that it

“does not waive any of its rights or defenses with regard to any

potential claims under the policy by any action previously taken

or by any action taken in the future. Rather Allstate reserves all

of its rights and possible defenses in any way relating to questions

raised by any such potential claims.” (Id.) Significantly, this letter

was sent before Allstate undertook any Defense on behalf of Ar-

thur and Eric Weiner. In a later letter, sent on November 13,

2018, Allstate made its reservation of rights more specific, stating

that “although [Allstate] is providing a defense to Eric Weiner

and Arthur Weiner in the underly inaction, it is reserving its right

to deny indemnification and to commence a declaratory judg-

ment action to determine the rights and obligations of the parties

pursuant to” the policy, as it “is Allstate’s position that there is no

coverage under the policy.”(Ex. X to Fenner Opp. (Dkt, 42-26) at

ECF 25.) Given Allstate’s consistent reservation of its rights, be-

ginning before litigation commenced, any potential prejudice to

23

the Weiner Defendants cannot be deemed sufficient to estop All-

state from denying a continued defense if the duty to indemnify

is not found.

Given this court’s holding that Eric Weiner was neither entitled

to coverage under an express policy or an implied policy and no-

tice of Allstate’s reservation of its rights was properly given,

Allstate has no duty to continue to defend Eric Weiner. At this

stage, however, stummary judgment in favor of a declaratory

judgment denying Arthur Weiner a defense in state court cannot

be granted. Allstate may continue to reserve its rights to later

deny him a defense. If, at trial, a jury finds that no implied-in-fact

contract was formed, and a judgment is entered declaring that

Allstate need not indemnify Arthur Weiner under any policy, All-

state need not continue to mount a defense. At this stage,

however, it has not yet been “deemed with certainty that the pol-

icy does not provide coverage,” United States Liab. Ins. Co., 2018

WL 6344641, at *16, and summary judgment for a declaration

denying Arthur Weiner a defense would be premature,

IV. CONCLUSION

For the reasons stated above, Allstate’s motion for summary judg-

ment is DENIED with regard to Allstate’s declaratory judgment

claims denying indemnification and defense to Arthur Weiner, as

a genuine issue of material facts exists with regard to a possible

implied-in-fact contract between Arthur Weiner and Allstate.”

Allstate’s motion for summary judgment is GRANTED with re-

gard to Allstate’s declaratory judgment claims denying

indemnification and defense to Eric Weiner. Accordingly, this

court issues a declaration that (1) Allstate is not contractually

7 In the event that a jury determines at a later date that no implied-in-fact

contract was in effect between Arthur Weiner and Allstate, this court in-

tends to enter an order requiring Allstate to reimburse Arthur Weiner for

all premium payments made after the death of Beatrice Weiner.

24

obligated to defend Eric Weiner in the Underlying Action, (2)

Allstate has no obligation to continue to pay for legal costs for

the defense of Eric Weiner in the Underlying Action, (3) counsel

retained by Allstate to defend Eric Weiner in the Underlying Ac-

tion can withdraw as counsel for Eric Weiner, and (4) Allstate is

not contractually obligated to indemnify Eric Weiner in the Un-

derlying Action.

SO ORDERED.

Dated: Brooklyn, New York

March 8, 2023

s/Nicholas G. Garaufis

NICHOLAS G. GARAUFIS

United States District Judge

29