Weintraub v. Great Northern Insurance Company

Background

Philip Weintraub and Jamelia Weintraub sought insurance coverage for about $1.5 million in artwork they discovered was missing from a storage space in August 2019. Great Northern Insurance Co., also identified as Chubb, investigated the claim and denied coverage in July 2021. Chubb relied on three grounds: the Weintraubs allegedly failed to notify Chubb of the loss as soon as possible; they allegedly failed to provide a sworn proof-of-loss statement within 60 days of Chubb’s request; and they failed to establish that the loss occurred during the 2019 policy period.

The court had previously held, after a limited bench trial, that Chubb could not deny coverage based on the 2019 policy’s as-soon-as-possible notice requirement because the pages containing that requirement were not included in the policy delivered to the Weintraubs or available to them online. The parties then agreed that no further discovery was needed, that damages would be $1,491,805 if the Weintraubs established liability, and that two issues remained: the sworn-proof-of-loss defense and whether the loss occurred during the 2019 coverage period. Both sides moved for summary judgment, which is a ruling entered when no genuine dispute of important facts requires a trial and one side is entitled to judgment under the law.

Coverage Period

The 2019 policy covered August 18, 2019, through August 18, 2020. The Weintraubs discovered the artwork was missing on August 25, 2019, but Philip Weintraub had last observed the artwork intact in October 2018. The court found no evidence showing when, between those dates, the loss occurred.

Applying New York law, the court held that the insured bears the burden of showing that a loss occurred during the relevant policy period. The court rejected the Weintraubs’ arguments that the 2019 policy’s coverage dates were unenforceable, that an all-risk policy eliminated their obligation to show when the loss occurred, and that Chubb waived its policy-period defense. The court explained that an all-risk policy may not require proof of the precise circumstances of a mysterious disappearance, but the insured must still show that a covered loss occurred during the policy period.

The court also rejected the argument that the Weintraubs’ continuous insurance coverage automatically protected the claim under either the 2019 or 2018 policy. Although the court believed a claim under the 2018 policy likely would not be barred by that policy’s two-year suit limitation, the 2018 policy included the requirement that the insured notify Chubb of a loss as soon as possible. The court had previously held that the Weintraubs’ 91-day delay in notifying Chubb was unreasonable as a matter of law.

Waiver of the Late-Notice Defense

The court considered whether Chubb had waived its late-notice defense. At an earlier stage, the Weintraubs had plausibly alleged that Chubb abandoned the defense by investigating the claim for an extended period, requesting burdensome information, and representing that it would resolve the claim in good faith and on the merits. At summary judgment, however, the Weintraubs offered no evidence that Chubb made such a representation.

The stipulated facts showed that Chubb reserved its rights on the late-notice issue in its first communication with the Weintraubs and continued to do so in later communications. The court also found that substantial portions of the investigation’s delay resulted from the Weintraubs’ requests, delays involving examinations under oath, Philip Weintraub’s reported head injury, and the COVID-19 pandemic. The court therefore concluded that the Weintraubs had not established, or raised a genuine factual dispute about, waiver of the late-notice defense.

Disposition

Judge Jed S. Rakoff granted Chubb’s motion for summary judgment and denied the Weintraubs’ motion for summary judgment. The court directed the Clerk to enter final judgment in favor of Chubb and close the parties’ motions and the case. Because the court resolved the claim on the policy-period and late-notice grounds, it did not address Chubb’s alternative defense that the Weintraubs failed to submit a timely sworn proof of loss.