AMVS, Inc. v. Mt. Hawley Insurance Company
- Edgardo Ramos
- 1:22-cv-10782
- U.S. District Court · Southern District of New York
- 13
In AMVS v. Mt. Hawley, Judge Ramos granted Mt. Hawley summary judgment, finding AMVS gave untimely notice and could not recover bad-faith litigation expenses.
AMVS, Inc. lost its breach-of-contract claim and its request for attorneys’ fees or other litigation expenses. Mt. Hawley Insurance Company received summary judgment, and the court directed that judgment be entered in its favor and the case closed.
What happened
AMVS, Inc. v. Mt. Hawley Insurance Company involved an insurance dispute over damage that AMVS said a windstorm caused to its motel. The policy required prompt notice of damage and selected New York law. AMVS reported the October 22, 2021 loss on January 12, 2022.
Mt. Hawley denied the claim, finding that the covered damage was below the policy’s deductible and that AMVS had reported the loss too late. AMVS argued that the policy allowed up to one year to report wind damage and that its representative had notified an insurance agent earlier. AMVS also sought attorneys’ fees under Texas and New York law.
Judge Ramos granted Mt. Hawley’s motion for summary judgment. He ruled that New York law applied, that AMVS’s 82-day delay violated the policy’s prompt-notice requirement, and that AMVS’s unsupported testimony about an earlier call did not create a trial-worthy factual dispute. He also rejected AMVS’s request for litigation expenses because Mt. Hawley had a reasonable basis for denying coverage.
The detailed version
- AMVS, Inc. v. Mt. Hawley Insurance Company · No. 1:22-cv-10782
- Edgardo Ramos
- Jan. 23, 2025
Background
AMVS, Inc., doing business as Super 8 Motel, sued Mt. Hawley Insurance Company for breach of an insurance contract and violation of the Texas Insurance Code. The dispute concerned a commercial property policy covering a motel in Harlingen, Texas, during a policy period running from December 14, 2020, through December 14, 2021. The policy required AMVS to give Mt. Hawley prompt notice of loss or damage. A windstorm and hail addendum also required prompt notice and stated that a claim could not be filed more than one year after the loss.
AMVS said a windstorm damaged the motel’s roof, stucco, windows, and interior on October 22, 2021. Its corporate representative, Vijay Jhaveri, was at the property and observed damage. AMVS, through its attorney, reported the claim on January 12, 2022. Jhaveri testified that he had called an insurance agent about the damage earlier, but he had no records of the call. Mt. Hawley’s investigation concluded that the only covered damage attributable to the storm was twenty-six detached roof shingles, which would not exceed the policy’s $25,000 deductible. Mt. Hawley denied the claim on June 23, 2022, citing both the deductible and late notice.
Choice of law
The policy stated that New York law governed matters concerning the policy. The court held that New York law applied. It relied on New York’s statute allowing certain contracts involving at least $250,000 to select New York law and on New York decisions requiring courts to honor such a choice-of-law provision without conducting a separate conflicts analysis.
Breach-of-contract claim
Under New York law, a policyholder’s compliance with a prompt-notice provision is a condition that must be satisfied before the insurer has coverage obligations. When a policy requires notice as soon as possible, the policyholder must provide notice within a reasonable time under the circumstances.
The court rejected AMVS’s interpretation that the windstorm addendum allowed it to wait up to one year before giving notice. The court read the addendum as imposing two separate requirements: prompt notice within a reasonable time after the policyholder should have recognized the possibility of a claim, and an absolute one-year deadline for filing the claim.
Because Jhaveri saw damage on the date of the windstorm, the court found that the possibility of a claim was apparent that day. The court also found that Jhaveri’s vague statement that he had called an insurance agent “way ahead” of January 12, 2022, without records or other supporting evidence, was insufficient to create a genuine dispute of material fact. The court concluded that AMVS’s 82-day delay was untimely as a matter of law and relieved Mt. Hawley of its coverage obligations. It therefore granted Mt. Hawley’s motion for summary judgment on the breach-of-contract claim.
Request for attorneys’ fees and expenses
AMVS initially sought attorneys’ fees under the Texas Insurance Code and later argued that it could recover expenses under New York law. The court held that the Texas-law request could not succeed because New York law governed the action.
Under New York law, an insured generally cannot recover the expenses of suing an insurer over coverage. An exception may apply if the insurer acted in bad faith, meaning that there was more than a reasonable dispute about coverage and no reasonable insurer would have denied the claim on the facts presented. The court found that AMVS did not overcome the strong presumption against finding bad faith. Mt. Hawley had a reasonable basis for denial because AMVS gave untimely notice, regardless of the insurer’s separate assessment that the covered damage was below the deductible. The court therefore granted summary judgment on AMVS’s claim for expenses.
Disposition
The court granted Mt. Hawley’s motion for summary judgment, directed the clerk to enter judgment for Mt. Hawley, and ordered the case closed.
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.