Sirob Imports, Inc. v. Peerless Insurance Company, 2013 U.S. Dist. LEXIS 109014 (E.D. NY, 8/2/13)

Defendant’s motion to dismiss was granted where the case was not ripe for adjudication and the court lacked subject matter jurisdiction over the action.

The plaintiff sued the defendant for breach of contract based on a fire insurance policy. The plaintiff asserted that the defendant had unlawfully refused to pay for repairs to damaged portions of the plaintiff’s property following a fire. The defendant filed a motion to dismiss, contending that the court lacked subject matter jurisdiction over the case since the claim was not ripe for adjudication. The defendant also argued that the plaintiff had breached one of the conditions of the policy and, as a result, was precluded from recovering. Because the property had not been repaired within two years of the damages, as required by a condition precedent in the policy, the defendant argued that the plaintiff was precluded from recovering. The plaintiff opposed the motion, arguing that the defendant had committed an anticipatory breach of the policy when it expressed its refusal to pay the replacement costs unless repairs were completed within two years. The plaintiff also argued that the policy did not contain a two-year deadline to complete the reconstruction. The court agreed with the defendant and ruled that the plaintiff was required to complete repairs or reconstruction within two years of the date of the fire before the defendant was required to provide replacement cost coverage. The plaintiff conceded that it had not yet completed repairs or reconstruction of the premises; as a result, the plaintiff had failed to satisfy the condition precedent of the policy and the defendant had not breached the contract. Furthermore, until the plaintiff has actually completed the replacement, the court ruled that it would be merely advisory for it to render a decision as to whether the defendant had breached an obligation to pay replacement costs. As a result, the court lacked subject matter jurisdiction over the case, and the defendant’s motion to dismiss was granted.

Case Law Alerts, 4th Quarter 2013