Posted on: June 10, 2016

NEW YORK, Feb. 27, 2014 | PRNewswire |

Jaroslawicz & Jaros has been litigating insurance cases for more than 30 years. As a result of their extensive experience in this field, the firm has been involved in many cases and appeals decided by higher courts. Many of these cases have helped shape and define New York's insurance laws. It comes as no surprise then, that the firm's New York City lawyers recently secured a favorable decision in the State's highest court regarding unreasonable insurance provisions.

The firm's case centered on two conflicting provisions common in New York "replacement cost" insurance policies-one stating that lawsuits to force an insurance company to pay the costs of replacement after a building is damaged by fire must be filed within two years after the fire; the other stating that a policyholder must replace the damaged property before filing the lawsuit. Although this policy language seems counterintuitive to many, insurance companies have used it for years as an excuse to avoid paying replacement costs to many owners of homes and commercial buildings, even though these policyholders paid premiums for this insurance. This particular case — Executive Plaza v. Peerless Insurance Company — involved a building that had experienced fire damage.

After an Executive Plaza building in Island Park was destroyed by fire in February 2007, Peerless Insurance refused to cover the replacement cost of new construction. Peerless claimed that because Executive Plaza failed to finish rebuilding after the fire within the two-year period stipulated on its $1 Million policy, the company lost the right to demand payment for the costs it had to spend to rebuild. Executive Plaza filed suit against Peerless Insurance in 2009, before the two years was up, but Peerless argued that the lawsuit was brought too soon because construction was still in progress-and the case was dismissed.

When the company finished construction and sued for replacement costs again, Peerless again refused to pay, this time asserting that the suit was brought too late because it was not filed within two years after the fire-and the case was again dismissed. Executive Plaza then retained Jaroslawicz & Jaros, who appealed, and the case came before the State Court of Appeals. Jaroslawicz & Jaros argued to protect the rights of policyholders who cannot reasonably replace damaged property within two years.

Attorneys David Jaroslawicz and David Tolchin at Jaroslawicz and Jaros-argued successfully on behalf of Executive Plaza, ultimately securing a decision from the Court that the time restrictions that insurance company attempted to hide behind were unreasonable in situations where repairs are time-consuming, such as in Executive Plaza's situation. The decision paves the way for Executive Plaza to receive the coverage it paid for, and will likely play a role in protecting future policyholders from unfair New York insurance practices.

SOURCE: Jaroslawicz & Jaros, LLC