Schinitsky v. Pacific Indemnity Company

Background

Susan Schinitsky held a Masterpiece Insurance Policy issued by Pacific Indemnity Company. The policy covered her home and contents, including specified jewelry. It provided $1,344,849 in coverage for itemized jewelry and limited coverage for an individual piece not on the itemized list to $50,000. Schinitsky claimed that jewelry worth $1,974,263 went missing during July and August 2020.

The policy required an insured, after a loss, to submit a signed and sworn proof of loss identifying the time and cause of the loss, ownership interests and liens, and other insurance that might cover the loss. The policy required the proof within 60 days after Pacific requested it. The policy also required an inventory of lost property and, if requested, an examination under oath.

On September 8, 2020, Pacific’s attorneys sent Schinitsky a letter requesting sworn proofs of loss and enclosing blank forms. The letter also requested records and information about the jewelry and scheduled an examination under oath for October 9, 2020. Schinitsky received the letter but did not provide all requested documents by the requested date, did not attend the October 9 examination, and did not submit sworn proofs of loss within 60 days.

Pacific sent additional requests and examination notices between October 2020 and October 2021. Schinitsky provided some, but not all, requested information. She appeared for examinations under oath on May 27 and August 10, 2021, but those examinations were continued while she was expected to provide more information. She did not appear for the examination scheduled for October 27, 2021. On November 17, 2021, Pacific denied coverage based on her failure to provide the requested records, attend an examination under oath, and submit sworn proofs of loss.

Procedural History

Schinitsky began the action in New York County Supreme Court on June 29, 2022. Pacific removed the case to federal court based on diversity jurisdiction. Schinitsky later filed a second amended complaint naming only Pacific. Judge Oetken previously granted Pacific’s motion to dismiss Schinitsky’s claim under New York General Business Law § 349 and denied the motion as to her breach-of-contract claims. After discovery ended, Pacific moved for summary judgment on the remaining breach-of-contract claim.

Summary-Judgment Standard

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court viewed the facts in the light most favorable to Schinitsky, but she could not defeat the motion with unsupported or conclusory allegations.

Proof-of-Loss Requirement

The court applied New York law because the parties’ briefs assumed that New York law governed. Under that law, an insured’s failure to submit a required proof of loss within the specified time is an absolute defense to an action on the policy unless the insurer waived the requirement or is prevented from asserting it by its conduct. The insurer must have requested the proof in writing and provided suitable blank forms.

The court held that the undisputed record showed Schinitsky did not submit sworn proofs of loss within the policy’s 60-day deadline. Pacific clearly requested the proofs and supplied blank forms. Schinitsky did not substantively dispute that she failed to comply. Instead, she argued that Pacific had enough information to evaluate the claim.

The court rejected that argument. It found that the police reports, photographs, reported statement, and other materials identified by Schinitsky did not provide the necessary information. The record did not contain photographs of the jewelry, and it was unclear whether some of the reports concerned the claimed losses. A public adjuster’s April 7, 2021 report describing 13 pieces of jewelry was not a sworn statement by Schinitsky, did not include all information required by the policy, and was submitted nearly six months after the deadline. The court concluded that Schinitsky had not even substantially complied with the proof-of-loss requirement.

Under New York law, the court explained, failing to submit the required proofs after a written request is a material breach of the insurance contract and, if not excused, prevents recovery under the contract. The court found no indication that Pacific excused or waived the requirement.

Waiver and Estoppel

Schinitsky argued that Pacific waived the proof-of-loss requirement or should be prevented from relying on it because Pacific investigated the claim, requested documents, and conducted examinations under oath. The court rejected both arguments.

For estoppel—which can prevent a party from asserting a right based on its statements or conduct—the court said Schinitsky needed evidence that Pacific led her to believe it would cover the claim despite the missing proofs, that she relied on Pacific’s conduct in failing to submit them, and that her reliance was justified. The court found no evidence of those circumstances. Pacific repeatedly reserved its rights, including the right to rely on Schinitsky’s failure to submit sworn proofs of loss.

Waiver means the voluntary and intentional surrender of a known right. The court found that Pacific’s repeated reservations of its rights contradicted any claim that it intentionally gave up the proof-of-loss requirement. The court also rejected Schinitsky’s argument that Pacific repudiated the policy, reasoning that Pacific investigated the claim and gave her opportunities to comply before denying coverage.

Disposition

Judge Margaret M. Garnett granted Pacific Indemnity Company’s motion for summary judgment. The court entered judgment for Pacific and directed the clerk to close the case.