14‐2119‐cv Wingates, LLC v. Commonwealth Ins. Co. of Am.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of September, two thousand fifteen.

PRESENT: ROBERT D. SACK, DENNY CHIN, CHRISTOPHER F. DRONEY, Circuit Judges.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

THE WINGATES, LLC, MATRIX REALTY GROUP, INC., Plaintiffs‐Appellants,

v. 14‐2119‐cv

COMMONWEALTH INSURANCE COMPANY OF AMERICA, Defendant‐Appellee.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

FOR PLAINTIFFS‐APPELLANTS: HARRIS J. ZAKARIN, Harris J. Zakarin, P.C., Melville, New York, and Gerard J. McCreight, Port Jefferson Station, New York. FOR DEFENDANT‐APPELLEE: PETER E. KANARIS, Jefferson D. Patten, Fisher Kanaris, P.C., Chicago, Illinois, and Michael A. Troisi, Cheryl F. Korman, Rivkin Radler LLP, Uniondale, New York.

Appeal from the United States District Court for the Eastern District of

New York (Spatt, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Plaintiffs‐appellants The Wingates, LLC and Matrix Realty Group, Inc.

(together, ʺWingatesʺ) appeal from a judgment of the district court entered on May 19,

2014 in favor of defendant‐appellee Commonwealth Insurance Company of America

(ʺCommonwealthʺ) dismissing the complaint. By Memorandum of Decision and Order

entered the same day, the district court granted Commonwealthʹs motion for summary

judgment, and denied Wingatesʹ motion to reopen discovery and permit additional

expert discovery. This matter arises from an insurance coverage dispute following a

fire that damaged buildings owned by Wingates and insured by Commonwealth. We

assume the partiesʹ familiarity with the facts, procedural history, and issues for review,

which we briefly summarize before assessing the merits.

Commonwealth issued an insurance policy (the ʺPolicyʺ) to Wingates, the

owner of an apartment complex in Columbus, Ohio. The Policy insured against various

losses at the complex, including those caused by fire. It provided that the insured must

submit to ʺexaminations under oathʺ (ʺEUOʺ) and provide documentation related to the

‐ 2 ‐

insured property as ʺoften as may be reasonably required.ʺ J. App. at 178. The Policy

also contained a misrepresentation and fraud provision, voiding the policy in the event

of concealed or misrepresented material circumstances concerning the coverage.

Following a fire that destroyed one insured building and damaged another, Wingates

filed an insurance claim and sworn statements attesting to the value of its loss.

Commonwealth began investigating the claim, and requested various items from

Wingates, including documentation and photographs relating to the buildingsʹ pre‐fire

condition, and information regarding the apparent vacancy and value of the buildings.

Commonwealth also invoked the EUO requirement and asked to examine Wingates

employees about the claimed loss. Wingates received these requests and chose not to

submit to the examinations. Wingates did so against the advice of their adjuster and in

light of the adjusterʹs warning that failure to submit to an EUO would violate the Policy.

Shortly thereafter, and prior to the completion of Commonwealthʹs

investigation, Wingates filed this action in New York Suffolk County Supreme Court.

The case was subsequently removed to the district court below. During the course of

litigation, Commonwealth deposed several Wingates employees and conducted

extensive discovery concerning the vacancy and value of the destroyed buildings.

Wingates, on the other hand, conducted no discovery, took no depositions, made no

document requests, and disclosed no expert testimony. Nearly eight months after the

close of discovery, and four months after Commonwealth had moved for summary

‐ 3 ‐

judgment, Wingates requested that the magistrate judge reopen discovery so that it

could provide expert disclosures.

By its decision filed May 19, 2014, the district court granted

Commonwealthʹs motion for summary judgment and denied Wingatesʹ motion to

reopen discovery. We affirm for substantially the reasons set forth by the district court.

A. Summary Judgment

We review de novo the district courtʹs grant of summary judgment, with

the view that ʺ[s]ummary judgment is appropriate only if the moving party shows that

there are no genuine issues of material fact and that the moving party is entitled to

judgment as a matter of law.ʺ Miller v. Wolpoff & Abramson, L.L.P.,

(2d

Cir. 2003). On summary judgment, the court must consider ʺnot whether . . . the

evidence unmistakably favors one side or the other but whether a fair‐minded jury

could return a verdict for the plaintiff on the evidence presented.ʺ Anderson v. Liberty

Lobby, Inc.,

(1986).

The district court correctly concluded that, as a matter of law, Wingates

materially breached the Policyʹs cooperation provision by failing to comply with the

EUO requirement. It is undisputed that the Policy contained an EUO provision and

that Wingates failed to comply when requested. Under New York law, an insuredʹs

ʺwillful failure to appear at an EUO constitutes ʹa material breach of the cooperation

clause and a defense to an action on the policy.ʹʺ Rosenthal v. Prudential Prop. & Cas. Co.,

(2d Cir. 1991) (quoting Ausch v. St. Paul Fire & Marine Ins. Co., 511 ‐ 4 ‐

N.Y.S.2d 919, 925 (2d Depʹt 1987)); Abudayeh v. Fair Plan Ins. Co.,

(2d Depʹt 1984) (ʺIt is well established that the failure of an insured to submit to an

examination under oath is an absolute defense to a claim under the insurance

policy . . . .ʺ).

On appeal, Wingates claims that its failure to submit to an EUO was not

ʺwillfulʺ in light of its partial cooperation in the insurerʹs investigation. Although

Wingates did provide some documentation and acquiesced to Commonwealthʹs site

visits, these facts do not create a genuine issue as to the willfulness of their failure to

submit to an EUO. As the district court pointed out, Wingatesʹ repeated failure to

respond to the insurerʹs requests for EUOs ‐‐ against the advice of their adjuster and

with the knowledge of later repercussions for its failure to do so ‐‐ demonstrate as a

matter of law that the breach was entirely willful. Moreover, even assuming Wingates

provided substantial information, including via sworn proofs of loss, Commonwealth

was entitled to seek EUOs and further information.

Wingates also argues on appeal that a question of fact remains as to

whether Commonwealth had repudiated its obligations under the policy prior to

Wingatesʹ breach. Although repudiation would excuse a failure to submit to an EUO,

see Igbara Realty Corp. v. N.Y. Prop. Ins. Underwriting Assʹn,

, 217‐18 (1984),

repudiation by an insurer must be a ʺdistinct[], unequivocal[], and absolute[] refus[al] to

perform its obligations under the policy,ʺ Varda, Inc. v. Ins. Co. of N. Am.,

,

‐ 5 ‐

638 (2d Cir. 1995). On the record presented to the district court here, no reasonable trier

of fact could find repudiation.

We have considered Wingatesʹ other arguments as to why they were not

in breach of the contract and find them without merit.

B. Denial of Leave to Reopen Discovery

Wingates argues that the district court abused its discretion in refusing to

allow them to reopen discovery for the purposes of disclosing an expert witness

pursuant to Federal Rule of Civil Procedure 26(a)(2). Denial of leave to amend a set

scheduling order is reviewed for abuse of discretion. Grochowski v. Phoenix Const.,

, 86 (2d Cir. 2003). We have reviewed Wingatesʹ arguments on appeal and the

proceedings below, and we find no abuse of discretion in the district courtʹs denial of

this motion.

We have considered all of Wingatesʹ remaining arguments and find them

to be without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

‐ 6 ‐