A western New York man may sue for fraud for allegedly being told by a claims representative that his homeowner’s insurance policy would not cover property damage that was caused by the 5- to 7-foot snowfall in a November 2013 storm, a judge ruled.

Nicholas Kraatz did not file a claim based on the conversation he said he had with the USAA Casualty Insurance Co. claims representative 12 days after the record-setting storm in the Buffalo area. Kraatz also maintains that the representative told him that because of his high deductible—$8,040—it was probably not in his best interests to file a claim, Western District Judge Frank Geraci Jr. said.

When Kraatz finally did file a claim in August 2015 at the urging of a friend in the insurance business, USAA denied it, claiming it was not filed promptly, court papers showed.

Kraatz, described in his complaint as a disabled Iraq War veteran, said he ultimately was forced to take out a $171,000 second mortgage on his home to pay for damage caused by the storm.

In its papers, the insurer argued that it had no record of a conversation between Kraatz and a claims representative on Dec. 1, 2013, as Kraatz insists took place, and that the contact with him in August 2015 was the first for which it had documentation.

While Kraatz was not able to produce a transcript of his Dec. 1, 2013, conversation with the USAA claims representative, he was able to show that he was dissuaded from filing a claim for property damage during a 14-minute call that day with the requisite specificity to defeat USAA’s motion to dismiss the fraud charge, Geraci ruled in Kraatz v. USAA Casualty Insurance Co., 1:16-cv-00103.

Since Kraatz’s policy covered the same kind of structural “collapse” caused by the weight of “snow, ice or sleet” that Kraatz contends occurred to the chimney, roof and garage of his Alden home under the accumulated weight of the huge 2013 snowfall, Geraci said a court could find that USAA acted with “falsity” in its dealings with the plaintiff.

“Given that plaintiff’s alleged description of the cause of damage is nearly identical to the description of damage which the policy covers, plaintiff’s allegation that the claims representative knew he was making a false statement when he said, on the spot, that that damage ‘would not be covered’ is persuasive and at least compelling as any competing inference,” Geraci wrote from Rochester on March 6.

In addition to the structural damage caused by the snow and ice, Kraatz said his house became flooded when the precipitation melted after the weather warmed to 60 degrees following the storm. The flooding, in turn, triggered electrical fires in the house, his complaint said.

Geraci also said that as his case moves forward, Kraatz may seek as “consequential damages” for fraud the cost of borrowing money to reconstruct his home. The judge said that, contrary to USAA’s argument, an insurer should expect to be held liable for the cost of money that has to be borrowed if it is found to have fraudulently refused coverage to a policyholder.

Among the Kraatz claims that Geraci did dismiss on USAA’s motion were for negligent misrepresentation and punitive damages.

Marco Cercone, a partner at Rupp Baase Pfalzgraf Cunningham in Buffalo, represented Kraatz along with firm associate Thomas Lyons.

William McPartland, shareholder at Marshall Dennehey Warner Coleman & Goggin in Moosic, Pennsylvania, represented the San Antonio-based USAA Casualty Insurance.

USAA disputes the plaintiff’s allegations, according to Roger Wildermuth, a spokesman for the insurer.

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