| N.Y. App. Div. | Jan 9, 1995
In an action, inter alia, to recover the proceeds of a homeowner’s insurance policy, the defendant Pioneer Insurance Company appeals from an order of the Supreme Court, Rockland County (Stolarik, J.), dated June 21, 1993, which denied its motion for summary judgment dismissing the complaint insofar as asserted against it, and granted the plaintiffs’ cross motion for summary judgment on the issue of liability.
On February 8, 1989, the defendant Juda Daskal purchased a single-family residence in Monsey, New York. Daskal’s purchase of the premises was financed by a $166,500 mortgage loan from the plaintiffs’ predecessor in interest, Fairmont Funding Ltd. As required by the terms of the mortgage, Daskal obtained a $200,000 homeowner’s policy from the codefendant Pioneer Insurance Company (hereinafter Pioneer), which contained a mortgage clause obligating Pioneer, in the event of loss, to pay the mortgagee and the insured "as interests appear”.
On January 7, 1990, the insured premises was damaged by fire, and Daskal thereafter submitted a timely claim to Pioneer and retained a public adjuster to negotiate a settlement on his behalf. Daskal did not, however, inform the plaintiff mortgagees of the fire, and he continued to make his monthly mortgage payments until March 1991. Meanwhile, in April 1990, when Pioneer remitted a $101,456.55 check jointly payable to Daskal and the predecessor of the plaintiff mortgagees to Daskal’s insurance broker for distribution, Daskal allegedly forged the mortgagees’ endorsement on the check and converted the proceeds. It is undisputed that Pioneer never advised the plaintiff mortgagees of the loss, or of its issuance of a settlement check to Daskal. It is also undisputed that the plaintiff mortgagees did not learn that fire had destroyed the premises until June 1991, one and one-half years after the loss.
On appeal, Pioneer concedes that the $101,456.55 check made jointly payable to Daskal and the plaintiff mortgagees cannot be deemed payment to the plaintiff mortgagees, and that Pioneer thus failed to fulfill its contractual obligations to the plaintiff mortgagees. Pioneer nevertheless contends, however, that the Supreme Court erred in denying its motion for summary judgment dismissing the complaint because the plaintiff mortgagees failed to commence this action within two years after the date of the loss, as is purportedly required by its policy of insurance. We disagree.
It has long been held that "the liability of an insurance company to a mortgagee is quite different from its liability to the owner, and * * * the provisions of the policy with respect to presentation of proof of loss, and with respect to the short Statute of Limitations, do not apply to the mortgagee” (Salomon v North British & Mercantile Ins. Co., 150 App Div 728, 730; Heilbrunn v German Alliance Ins. Co., 140 App Div 557,