92nd Street in Rockaway, Queens, after Hurricane Sandy (Dakine Kane/Flicker)
After an attorney sued her insurance carrier for failing to fully cover damages to her home from Hurricane Sandy, the carrier has been ordered to continue paying for her housing expenses during the litigation.
In Tumelty v. The Chubb Corp., 3207/14 Nassau County Supreme Court Justice Antonio Brandveen said Miriam Tumelty, a solo practitioner, has shown that dropping those benefits while the suit is pending might “result in irreparable harm to the plaintiff and the family.”
Tumelty sued Chubb and subsidiary Great Northern Insurance Co. in March 2014, seeking at least $746,270 in damages. She alleged Chubb breached the policy by failing to fully compensate her for policy-related losses at her home on the Rockaway Peninsula.
Tumelty, who practices under her maiden name at Miriam Jimenez & Associates, said in court papers that she stayed at her Belle Harbor home, which sits one block from the ocean, during the 2012 storm and saw sewage entering her house from the bathtub, toilets and sinks. Part of her front door blew off, rain blew in and sky lights popped, she said.
“I could see large chunks of roofing material flying off the house,” she said in an affidavit. “I could see and hear my car hitting the side of the house as it floated into the street.”
Her insurance contract with Chubb Corp. provided for a “reasonable” period of additional living expenses, or ALE, while her home was being repaired.
In November 2012, she, her husband and son moved into a temporary residence in Nassau County. Chubb, under the living expense benefits, paid her landlord directly for rent and paid for her furniture expenses, said her attorney, Shmuel Salman. Within six months, Chubb sought to end the living expense payments, he said.
At the time she sued Chubb, she also moved for a preliminary injunction to direct Chubb to continue paying rent during litigation to avoid being temporarily homeless and “needlessly endangering the ongoing health concerns” of her 7-year-old son, according to her court papers.
Chubb offered her $223,781 simultaneously with the cutoff of housing benefits “to pressure Ms. Tumelty to accept the insufficient amount that was offered,” Salman said in court papers. “Even if the offer was adequate, which it is not, it would take months to get the architectural plans, permits, and work performed and the home would remain uninhabitable during this time.”
Salman said the home must be demolished and rebuilt, at an estimated cost of about $1.1 million.
“After Sandy devastated the Tumelty home, the plaintiff was and still is in no position to commence with repairs until such time as their insurance company provides her with the full monies necessary to do so,” Salman said in court papers.
But Chubb maintained that Tumelty was not entitled to more coverage under the policy, which provides that additional living expense coverage is limited to “the reasonable amount of time” required for restoration of the home to a habitable condition.
“Chubb has compensated plaintiff for ALE for a period of … 18 months, for a loss that was initially estimated to take five weeks to repair, while no work whatsoever has been performed to date to restore the home to a habitable condition,” the insurer said. “ALE coverage under the policy has been exhausted.”
Chubb said it has paid Tumelty for all covered losses, including an advance of $75,000 in 2012 and provided the $223,781 check for sewage and wind damages and remediation costs, which Tumelty has refused to deposit. “Any other claimed loss to the home or its contents was the result of flood, which is not covered under the policy,” it said.
Tumelty was not being evicted, Chubb said, but could stay in temporary housing, “if she so chooses, provided she makes arrangements to pay the costs.”
Brandveen said that to obtain a preliminary injunction, Tumelty had to show a likelihood of success on the merits, the danger of irreparable injury without injunctive relief and a balance of equities in her favor.
“The court determines the plaintiff satisfies the three-part test,” the judge said.
“The plaintiff shows a legitimate interest in protecting (her) temporary living conditions during evaluation and resolution of adequate, prompt and full compensation for the plaintiff’s claimed losses,” Brandveen said, adding that Chubb was restrained, pending a determination, from discontinuing interim housing provisions.
Salman, a solo practitioner, said he was unaware of other cases in New York where a court granted interim relief on the issue of additional living expense contractual benefits pending conclusion of litigation. He said the arguments could be applied in other circumstances.”It wasn’t about money. It was lives of people that you couldn’t quantify with a dollar value,” he said. “When an insured purchases an insurance policy … what they’re really purchasing is the benefit of a peace of mind.”
John Nocera, of Rosner Nocera & Ragone, represents Chubb. Spokesman Mark Schussel said the company does not comment on matters in litigation.
Dennis Artese, an Anderson Kill shareholder who was not involved in this case, said his firm has had success securing injunctive relief against health insurers, but believes the decision was unique in the property insurance context.
“I’ve advised [other firm] lawyers to keep it in mind,” he said. “If this gets some traction, this could be very beneficial to policyholders.”
Tumelty, a former Brooklyn County assistant district attorney, handles criminal defense and personal injury in her downtown Manhattan practice. In an interview, she said her experience with Sandy and this case “was very, very emotionally devastating.”
She said Chubb threatened several times to terminate the benefits. “If you’re getting evicted every 30 days, you don’t know where your son is going to school,” she said, breaking into tears. “[The decision] is just a little reassurance I’m going to be alright for a little bit.”