Stradford v. Zurich Insurance Co.

2002 WL 31027517 (S.D.N.Y. 2002)

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Nature of the Case

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Facts

Northern (D) issued an insurance policy on Stradford’s (P) dental office effective August 18, 1999. The premises were insured until August 19, 2000. P failed to pay the required insurance premiums, and D canceled the policy from October 10, 1999, to December 13, 1999. On December 6, 1999, P submitted a no claims letter certifying that he had no losses from October 19, 1999, to that date. P also resumed paying premiums and D reinstated the policy on or about December 14, 1999. P was notified of the reinstatement on or about January 9, 2000. Ten days later, P filed a claim on the policy and notified D that on January 17, 2000, he returned to his office and found water dripping from frozen pipes and extensive water damages. P submitted a claim under the policy for $151,154,74, and D made payments to him in that amount. After getting the payments, P submitted a revised claim for $1,385,456.70 for $168,000 in property damage and $1,209,456.70 in business interruption. D seriously investigated the losses and concluded that the damage had occurred during the period when the insurance had lapsed. P then sued D seeking $1,234,301.96. D counterclaimed for fraud and false pretenses, seeking the return of the monies paid and punitive damages. P moved to dismiss the fraud claims in that they were not pled with sufficient particularity under Rule 9(b).