New York Law Review

Tag: Proof of Loss

  • Panepinto v. New York Life Ins. Co., 90 N.Y.2d 717 (1997): Interpreting ‘Termination of Disability’ in Insurance Policy Limitations Periods

    90 N.Y.2d 717 (1997)

    In disability insurance policies, the limitations period for commencing a lawsuit begins to run upon the actual termination of the insured’s disability, not upon the insurer’s termination of benefits.

    Summary

    Maria Panepinto sued New York Life Insurance Company to reinstate disability payments. New York Life argued the suit was time-barred based on a three-year contractual limitations period triggered by their termination of benefits. The New York Court of Appeals held that the limitations period began upon termination of the disability itself, not the termination of benefits, interpreting policy language requiring proof of loss within 90 days of “termination of any period of disability.” Because a factual issue existed as to whether Panepinto’s disability had terminated, summary judgment for New York Life was inappropriate.

    Facts

    Maria Panepinto filed a disability claim with New York Life in 1984, citing allergic rhinitis preventing her from working with wool. New York Life paid disability benefits for three years and waived premiums. In 1986, New York Life terminated benefits, based on their doctor’s assessment that Panepinto was no longer disabled, and notified her in October 1986. Panepinto sued to reinstate benefits in June 1990, approximately 3.5 years after the notice of termination.

    Procedural History

    The Supreme Court granted summary judgment to New York Life, holding the action was time-barred by the insurance policy’s three-year limitations period. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the three-year limitations period in the disability insurance policies began to run when New York Life terminated disability benefits, or when the insured’s disability actually terminated.

    Holding

    No, because the policy language requires proof of loss within 90 days after “termination of any period of disability,” which refers to the objective termination of the medical condition causing the disability, not the insurer’s decision to cease benefit payments.

    Court’s Reasoning

    The court focused on the policy language requiring proof of loss within 90 days of “termination of any period of disability.” The court reasoned that this phrase refers to the actual end of the disabling condition, not the insurer’s decision to stop payments. The court rejected New York Life’s argument that the limitations period began upon termination of benefits, stating this would require rewriting the policy. The court also rejected the argument that the limitations period ran independently for each monthly installment, finding this inconsistent with the policy’s overall structure, particularly provisions for a “Maximum Benefit Period” and the distinction between monthly benefits and the continuous period of liability. The court cited the principle of practical construction, noting that New York Life initially made payments for three years without requiring monthly proof of loss. The court noted “[t]he practical construction put upon a contract by the parties to it, is sometimes almost conclusive as to its meaning”. The Court stated “reading ‘any period of disability for which the Company is liable’ to mean monthly payment periods is inconsistent with the policy language when read as a whole” and that the policy clearly distinguishes between monthly benefits from the continuous period of liability. The Court stated further “we adopt the interpretation which most closely comports to the literal terms of the policies and hold that the proof of loss requirements, and, by extension, the three-year limitations period in the policies, commence upon the termination of the disability as an objective, medical fact.”

  • Ball v. Allstate Ins. Co., 81 N.Y.2d 22 (1993): “Furnish” Under Insurance Law Means Mailing, Not Receipt

    Ball v. Allstate Ins. Co., 81 N.Y.2d 22 (1993)

    Under New York Insurance Law § 3407, an insured “furnishes” proofs of loss to an insurer when the proofs are placed in the mail within the specified timeframe, not when they are received by the insurer.

    Summary

    Plaintiffs suffered a loss from a burglary and sought indemnification from their insurer, Allstate. Allstate sent a written demand for proofs of loss, requiring them to be furnished within 60 days. Plaintiffs mailed the proofs of loss 58 days after receiving the demand, but Allstate didn’t receive them until 64 days after the demand. Allstate argued that the plaintiffs failed to comply with Insurance Law § 3407 because the proofs were not *received* within the 60-day period. The New York Court of Appeals held that “furnish” means mailing, not receiving, thereby protecting insureds from forfeitures due to postal delays, aligning the interpretation with the statute’s remedial purpose.

    Facts

    Plaintiffs’ home was burglarized, resulting in losses exceeding $128,000.
    Plaintiffs had an insurance policy with Allstate.
    Allstate, through its counsel, sent a written demand for proofs of loss to the plaintiffs on March 13, 1989, via certified mail.
    The demand required the completed and executed Sworn Statement in Proof of Loss to be furnished within 60 days of receipt of the notice.
    Plaintiffs executed and mailed the proofs of loss via certified mail on May 10, 1989, which was 58 days after they received the demand.
    Allstate received the proofs of loss on May 16, 1989, 64 days after the plaintiffs received the demand.

    Procedural History

    The case originated in a trial court, where Allstate likely moved for summary judgment based on the late receipt of the proofs of loss.
    The Appellate Division must have ruled in favor of Allstate.
    The New York Court of Appeals reviewed the Appellate Division’s decision.

    Issue(s)

    Whether, under New York Insurance Law § 3407, the requirement to “furnish proofs of loss within sixty days” is satisfied when the insured places the proofs in the mail within 60 days, but the insurer does not receive them until after the 60-day period has expired.

    Holding

    Yes, because the term “furnish” in Insurance Law § 3407 requires only that the insured place the proofs of loss in the mail within 60 days of receiving the demand, not that the insurer receive them within that timeframe. To hold otherwise would create a trap for the unwary and conflict with the statute’s remedial purpose.

    Court’s Reasoning

    The Court of Appeals reasoned that while the term “furnish” is not unambiguous, its interpretation must align with the legislative intent behind Insurance Law § 3407. The statute aims to protect insureds from unknowingly forfeiting their claims due to oversight or neglect. Requiring actual receipt within 60 days would create a trap for insureds who diligently mail their proofs of loss, only to have their claims denied due to postal delays beyond their control.

    The court distinguished its prior holding in Peabody v. Satterlee, which required actual “rendering” of proof of loss within a specified time. The court noted that Peabody was decided before the enactment of Insurance Law § 3407 and addressed a contractual term, not a remedial statutory provision.

    The court emphasized the importance of construing statutes in a way that avoids unintended forfeitures, stating that to add a requirement of actual receipt would be incompatible with the modern commercial environment, where the mails are heavily relied upon. The court explicitly overruled Peabody v. Satterlee to the extent that it conflicted with this holding. The court quoted that the Legislature sought to “protect ‘the insured from the consequences of * * * oversight or neglect in complying with one of the conditions precedent to a recovery under the policy’”.

  • Anthony Marino Construction Corp. v. INA Underwriters Insurance Company, 69 N.Y.2d 798 (1987): Enforcing Proof of Loss Requirements in Insurance Claims

    Anthony Marino Construction Corp. v. INA Underwriters Insurance Company, 69 N.Y.2d 798 (1987)

    An insured’s failure to file sworn proofs of loss within the contractually required time after a demand from the insurer constitutes a complete defense to an action on the insurance policy, unless the insurer’s conduct justifies estoppel or waiver of the requirement.

    Summary

    This case addresses the strict enforcement of proof of loss requirements in insurance contracts. Anthony Marino Construction Corp. failed to submit sworn proofs of loss within 60 days of INA Underwriters Insurance Company’s demand. The court held that this failure was a complete defense to Marino’s action to recover under the policy. The court rejected Marino’s arguments for estoppel or waiver based on the content of the demand letter and the insurer’s examination of an employee, reinforcing the importance of timely compliance with policy conditions.

    Facts

    INA Underwriters Insurance Company issued an insurance policy to Anthony Marino Construction Corp.

    Marino sustained a loss covered under the policy and sought to recover from INA.

    INA demanded that Marino submit sworn proofs of loss, providing proof of loss forms.

    Marino failed to file the sworn proofs of loss within 60 days of receiving INA’s demand.

    INA’s demand letter did not specify a date by which the proofs had to be filed.

    INA, through its attorney, examined one of Marino’s employees under oath regarding the claim, and the untimely proofs of loss were utilized during the examination, with the attorney reserving the right to assert the untimeliness defense.

    Procedural History

    Marino sued INA to recover under the insurance policy.

    The lower court ruled in favor of INA, citing Marino’s failure to comply with the proof of loss requirement.

    The Appellate Division affirmed the lower court’s decision.

    The case was appealed to the New York Court of Appeals.

    Issue(s)

    Whether an insured’s failure to file sworn proofs of loss within 60 days of the insurer’s demand, as required by the insurance policy and Insurance Law § 3407(a), constitutes a complete defense to an action on the policy.

    Whether the insurer should be estopped from relying on the proof of loss condition because the demand letter did not specify a filing deadline and included a demand for an examination under oath.

    Whether the insurer’s examination of the insured’s employee under oath, and the utilization of untimely proofs of loss during the examination, constituted a waiver of the proof of loss condition.

    Holding

    Yes, because “Plaintiff’s failure to file sworn proofs of loss within 60 days after receiving a demand to do so by its insurer, accompanied by proof of loss forms, is a complete defense to plaintiff’s action on the insurance policy” as established in Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 216.

    No, because the demand letter’s failure to state a specific filing date and the inclusion of a demand for an examination under oath do not justify estopping the insurer, as per Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., supra; see also, Melendez v United States Fire Ins. Co., NYLJ, Jan. 2, 1987, p 15, col 2.

    No, because the examination of the insured’s employee under oath does not constitute a waiver, as per Maleh v New York Prop. Ins. Underwriting Assn., 64 NY2d 613, 614, and the insurer’s attorney reserved the right to assert the untimeliness of the proofs.

    Court’s Reasoning

    The court strictly applied the established precedent that failure to comply with the proof of loss requirement is a complete defense. It cited Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., emphasizing the statutory duty imposed on the insured under Insurance Law § 3407(a). The court rejected Marino’s estoppel argument, finding no basis to prevent the insurer from enforcing the policy terms simply because the demand letter did not explicitly state the filing deadline. Similarly, the court found no waiver, distinguishing the case from situations where an insurer’s conduct unequivocally indicates an intention to relinquish its right to enforce the proof of loss condition. The court emphasized that INA’s attorney had expressly reserved the right to assert the untimeliness defense, negating any implication of waiver. The court stated, “Plaintiff’s contentions that defendants should be estopped from relying on the proof of loss condition because their demand letter did not state the date by which the proofs had to be filed and because it also contained a demand that plaintiff appear for an examination under oath are without merit”. The decision reinforces the significance of adhering to contractual obligations in insurance policies and the limited circumstances under which an insurer may be estopped or deemed to have waived its rights.

  • Igbara Realty Corp. v. New York Prop. Ins. Underwriting Assn., 63 N.Y.2d 201 (1984): Enforcing Proof of Loss Requirements After Insurer Demand

    Igbara Realty Corp. v. New York Prop. Ins. Underwriting Assn., 63 N.Y.2d 201 (1984)

    When an insurer makes a written demand for proof of loss and provides suitable forms, the insured’s failure to file proof of loss within 60 days is an absolute defense for the insurer, absent waiver or estoppel.

    Summary

    This case clarifies the interpretation of Sections 168 and 172 of the New York Insurance Law regarding proof of loss requirements in fire insurance policies. The Court of Appeals held that when an insurer provides written notice and forms for proof of loss, the insured’s failure to comply within 60 days constitutes an absolute defense for the insurer, unless the insurer waives the requirement or is estopped from asserting it. The court also addressed whether an insurer waives the proof of loss defense by asserting other defenses in an answer filed before the 60-day period expires and clarified the procedure for motions regarding corporate capacity to sue.

    Facts

    Igbara Realty Corp., a dissolved corporation, purchased a fire insurance policy from New York Property Insurance Underwriting Association. After the insured property was destroyed by fire, Igbara filed a claim. The insurer sent a written demand for proof of loss. Igbara did not submit the proof of loss within 60 days. The insurer initially filed an answer denying liability but later sought to amend its answer to include the failure to file proof of loss and Igbara’s lack of capacity to sue as defenses. Bonus Warehouse, Syd’s Decorators and Trexler also had similar issues regarding failure to submit timely proofs of loss after a demand from their insurers.

    Procedural History

    In Igbara, the Supreme Court dismissed the complaint based on Igbara’s lack of capacity to sue. The Appellate Division reversed, denying the motion to dismiss but granting leave to assert the lack of capacity defense, while denying leave to assert the failure of proof of loss defense, finding the insurer had repudiated the policy. The Appellate Division granted leave to appeal. In Bonus Warehouse, Special Term denied the insurer’s motion for summary judgment, and the Appellate Division affirmed. In Syd’s Decorators, Special Term denied the insurer’s motion for summary judgment, but the Appellate Division reversed. In Trexler, Special Term denied both parties’ motions for summary judgment, but the Appellate Division modified by granting the insurer’s motion and dismissing the complaint. All cases were appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether failure to file proof of loss within 60 days after a Section 172 demand is an absolute defense for the insurer.
    2. Whether the defense of failure to file proof of loss is waived if the insurer files an answer alleging other defenses before the 60-day period expires.
    3. Whether, in Igbara, the complaint could be dismissed for lack of capacity to sue on motion papers that did not explicitly request dismissal on that ground but did seek summary judgment for failure to file proof of loss.

    Holding

    1. Yes, because when an insurer gives written notice and provides suitable forms for proof of loss, the insured’s failure to furnish proofs of loss within sixty days after receipt of the notice is an absolute defense.
    2. No, because an insurer does not waive the proof of loss defense by asserting other defenses in an answer filed before the 60-day period expires, as long as the insurer asserts the defense in an amended answer.
    3. No, because it was improper to grant summary judgment on the ground of incapacity when the motion did not clearly seek such relief and the opposing party had no reason to present opposition on that issue.

    Court’s Reasoning

    The Court reviewed the history of proof of loss requirements, emphasizing that prior to Section 172 of the Insurance Law, strict compliance was required. Section 172 modifies this strict rule only to the extent of requiring the insurer to make a written demand for proof of loss and provide blank forms. The Court stated that if the insurer makes such a demand, the insured must comply within 60 days to be deemed in compliance with the policy. The court emphasized that the language of the statute goes no further than to require that the insurer bring to the attention of the insured, by making written demand for proofs and providing blank forms, the necessity for filing such proofs.

    Regarding waiver, the Court held that the critical factor is whether the insurer’s actions are inconsistent with asserting the defense. Serving an answer asserting other defenses before the 60-day period expires is not such an inconsistency. The insurer must specifically and with particularity deny the insured’s failure to perform the condition precedent of filing proof of loss to preserve the defense. The Court noted, “Critical to the determination of waiver is whether the act said to constitute a repudiation of liability on the policy is inconsistent with assertion of the defense.”

    Finally, the Court held that Special Term erred in granting summary judgment on the issue of Igbara’s capacity to sue because it was not clear that the opponent of the motion had in fact put before the court all of its factual and legal contentions.

  • Pogo Holding Corp. v. New York Property Ins. Underwriting Assn., 61 N.Y.2d 969 (1984): Effect of False Swearing on Insurance Recovery

    Pogo Holding Corp. v. New York Property Ins. Underwriting Assn., 61 N.Y.2d 969 (1984)

    An insured’s intentional false swearing or misrepresentation of a material fact in a proof of loss or examination under oath, as required by a standard fire insurance policy, will bar recovery under the policy.

    Summary

    Pogo Holding Corporation sued to recover proceeds from fire insurance policies. The insurer, New York Property Insurance Underwriting Association, claimed Pogo willfully misrepresented the property’s value and provided false information during examinations. At trial, the insurer presented evidence that the property’s actual value was significantly lower than Pogo’s claimed value in the proof of loss. The jury initially found Pogo falsely swore or misrepresented a material fact. The trial court, however, rejected this verdict and submitted additional questions. After inconsistent answers, the court ordered a new trial. The Appellate Division reversed and reinstated the original verdict for the insurer. The New York Court of Appeals affirmed, holding that the trial court erred in rejecting the jury’s initial finding of false swearing, which, under the jury instructions, warranted a verdict for the insurer.

    Facts

    Pogo Holding Corporation owned two wood-frame buildings in Far Rockaway that sustained fire damage. Pogo had fire insurance policies with New York Property Insurance Underwriting Association totaling $55,000. In its proof of loss statements, Pogo claimed the value of the damaged property was $55,000. During examinations under oath, Pogo’s officer gave testimony about rental values that conflicted with lower figures in a prior letter to the insurer. The insurer’s real estate expert testified the property’s value before the fire was only $10,500. The insurance policies contained standard New York fire insurance policy language, stating that misrepresentation or false swearing would void the policy.

    Procedural History

    Pogo sued the insurance company to recover the policy proceeds. The insurer asserted affirmative defenses of willful misrepresentation of property value and false swearing. The trial court initially submitted interrogatories to the jury, who found Pogo falsely swore or misrepresented a material fact. The trial court refused to accept the verdict and submitted further questions. After inconsistent answers, the court ordered a new trial. The Appellate Division reversed and reinstated the original jury verdict for the insurer. Pogo appealed to the New York Court of Appeals.

    Issue(s)

    Whether the trial court erred in refusing to accept the jury’s initial finding that Pogo falsely swore or misrepresented a material fact, which, according to the jury instructions, mandated a verdict for the insurer.

    Holding

    Yes, because the evidence was sufficient to support the jury’s initial finding of false swearing or misrepresentation, and the trial court should have accepted the verdict.

    Court’s Reasoning

    The Court of Appeals held the trial court erred in refusing to accept the jury’s initial finding. Under the charge given to the jury, which was not objected to, the evidence was sufficient to support the jury’s finding that Pogo falsely swore or misrepresented a material fact. The court emphasized that this was not a case where the jury’s initial answers to interrogatories were ambiguous or inconsistent. Therefore, there was no basis for resubmitting the issue to the jury. The court cited Marine Midland Bank v. Russo Produce Co., 50 N.Y.2d 31, 40-41, and Kennard v. Welded Tank & Constr. Co., 25 N.Y.2d 324, to support its decision. The court stated the inconsistent answers, reached only after the trial court improperly rejected the initial finding, could not serve as a basis for rejecting the jury’s initial interrogatory answer and the consequent general verdict, which were supported by the evidence at trial. The court referenced the principle that the charge to the jury, even if erroneous, becomes the law of the case if not objected to, citing Bichler v. Lilly & Co., 55 N.Y.2d 571, 584. As stated in the ruling, “Trial Term erroneously refused to accept the jury’s initial finding that appellant falsely swore or misrepresented a material fact, which, as stated on the jury verdict form, required a verdict in favor of respondent. Under the law governing this case as set forth in the charge, the evidence was sufficient to support the jury’s finding as to appellant’s false swearing or misrepresentation, and the verdict should have been accepted by Trial Term.”

  • Jonari Management Corp. v. St. Paul Fire & Marine Insurance, 58 N.Y.2d 412 (1983): Fraudulent Claims Void Insurance Policies

    Jonari Management Corp. v. St. Paul Fire & Marine Insurance, 58 N.Y.2d 412 (1983)

    An insured’s attempt to defraud an insurer by submitting altered documents as proof of loss can void the entire insurance policy if the intent to deceive is proven, but discrepancies alone do not automatically invalidate a claim if the jury finds no intent to defraud.

    Summary

    Jonari Management Corp. sought to recover losses from a fire under a policy with St. Paul Fire & Marine Insurance. After a fire damaged Jonari’s medical center, Jonari submitted a claim, including a lease with an added clause to bolster its claim for improvements and betterments. St. Paul denied the claim, alleging fraud due to the altered lease and duplicate claims. The jury found no intent to defraud. The Court of Appeals held that the jury’s finding of no fraudulent intent should not be disturbed but ordered a new trial on the issue of damages for loss of rent, finding insufficient evidence to support the jury’s award.

    Facts

    Jonari, a corporation formed to operate a medical center, leased premises from O’Brien Enterprises, Inc. The lease agreement involved O’Brien remodeling the space to Jonari’s specifications. St. Paul insured Jonari against fire loss, covering improvements and betterments, as well as lost rents. A fire occurred shortly after the medical center opened. Jonari submitted an insurance claim that included a copy of its lease with O’Brien. A second version of the lease, containing clause 45 (stating Jonari would repair fire damage using insurance proceeds), was later submitted. O’Brien later testified this clause was added after the fire. Jonari had also filed duplicate claims for the same equipment under separate policies.

    Procedural History

    After St. Paul denied Jonari’s claim, Jonari sued to recover the losses. St. Paul argued the policy was void due to Jonari’s fraudulent lease submission and misrepresentations. The jury found no fraud and awarded Jonari damages. The Appellate Division affirmed. St. Paul appealed to the Court of Appeals.

    Issue(s)

    1. Whether the submission of an altered lease agreement constitutes fraud sufficient to void an insurance policy, even if the jury finds no intent to defraud.

    2. Whether filing duplicate claims under multiple insurance policies automatically constitutes concealment and misrepresentation, entitling the insurer to a verdict.

    3. Whether the amount awarded for lost rent was supported by sufficient evidence.

    Holding

    1. No, because the jury’s finding that Jonari lacked the intent to defraud the insurer by submitting an altered lease agreement should stand, as there was evidence that the altered lease reflected the original intent of the parties.

    2. No, because filing duplicate claims, by itself, does not automatically constitute concealment and misrepresentation; intent to defraud must be proven.

    3. No, because the evidence presented was insufficient and speculative to justify the jury’s award for lost rent. A new trial was required to properly calculate the amount of damages the insured is entitled to recover for loss of rent.

    Court’s Reasoning

    The Court reasoned that the jury’s determination of no fraudulent intent regarding the altered lease was supported by testimony suggesting the second lease accurately reflected the parties’ original agreement. Unlike the case of Sunbright Fashions v Greater N. Y. Mut. Ins. Co., where the insured admitted to fabricating documents, Jonari presented evidence that the lease alteration was to clarify the original intent. The Court emphasized that intent to defraud is a critical element in determining whether an insured has forfeited rights under an insurance policy due to fraud or false swearing. The Court cited the insurance law that requires a showing of willful concealment or misrepresentation of a material fact. Regarding the duplicate claims, the Court noted it is common practice to file multiple claims immediately after a loss, and doing so does not automatically imply fraudulent intent. The fact that the claims were filed through the same broker within a short period further suggested a lack of intent to defraud. The Court found the award for lost rent speculative, as the evidence regarding the time required to restore the property was insufficient. The Court rejected Jonari’s argument that the period for calculating lost rents should be extended due to the insurer’s resistance to payment, emphasizing the propriety of the insurer’s resistance given the jury’s reduction of the property claim and denial of the improvements claim. Jonari was required to establish its actual rent loss, considering reduction of rents and noncontinuing charges and expenses.

  • Auswin Realty Corp. v. Harleysville Ins. Co., 56 N.Y.2d 834 (1982): Insured’s Duty to Cooperate After Loss

    Auswin Realty Corp. v. Harleysville Ins. Co., 56 N.Y.2d 834 (1982)

    An insured cannot avoid its duty to cooperate with an insurer’s investigation by commencing an action before the insurer has repudiated liability; unexcused and willful refusal to comply with requests for proof of loss or examination warrants unconditional dismissal of the insured’s claim.

    Summary

    Auswin Realty Corp. sued Harleysville Ins. Co. on a fire insurance policy. The insurer demanded proof of loss and an examination of the insured, but the insured did not comply, claiming the demand was made too late (10 months after the loss) and after the insured had already filed suit. The New York Court of Appeals held that the insured’s unexcused and willful refusal to cooperate with the insurer’s investigation, by failing to provide proof of loss or submit to examination, warranted unconditional dismissal of the complaint because the insurer had not yet repudiated liability.

    Facts

    Auswin Realty Corp. sustained a loss covered by a fire insurance policy issued by Harleysville Ins. Co. Ten months after the loss, Harleysville demanded that Auswin provide proof of loss and submit to an examination as required by the policy. Auswin had already commenced an action against Harleysville to recover under the policy, believing this was necessary to protect itself against the policy’s 12-month limitation period (later shown to be a 2-year period based on state law). Auswin failed to comply with Harleysville’s demands.

    Procedural History

    Auswin Realty Corp. brought an action against Harleysville Ins. Co. to recover under a fire insurance policy. The lower court dismissed Auswin’s complaint due to its failure to file proof of loss or submit to an examination as requested by Harleysville. The Appellate Division affirmed. The New York Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether an insured’s unexcused failure to comply with an insurer’s demand for proof of loss and examination, made after the insured commenced an action on the policy but before the insurer repudiated liability, warrants unconditional dismissal of the insured’s claim.

    Holding

    Yes, because the insured cannot insulate itself against cooperation by commencing an action before the insurer has repudiated liability, and the insured offered no valid excuse for its noncompliance.

    Court’s Reasoning

    The Court of Appeals reasoned that while an insurer cannot create grounds for refusing to pay a claim by demanding compliance with policy provisions after repudiating liability, the insured also cannot avoid its duty to cooperate by filing suit before the insurer has repudiated liability. The court distinguished this case from cases where the insured had attempted to comply with the policy requirements but had fallen short due to minor omissions or defects. The court emphasized that Auswin offered no reason for its noncompliance with Harleysville’s demands. Citing Do-Re Knit v National Union Fire Ins. Co., the court stated that an insured cannot prevent cooperation by starting a lawsuit before there has been a repudiation of liability by the insurer. The court noted, “neither can the insured insulate itself against co-operation by commencing an action before there has in fact been repudiation of liability by the insurer.” Because there was no attempt to comply or valid excuse for noncompliance, the court found summary judgment dismissing the complaint unconditionally was appropriate. The Court distinguished the holding from other cases where there was partial compliance from the insured.