Claims that the broker failed to secure adequate coverage for condominium owners were dismissed. Ting Lin v. Mountain Valley Indemn. Co., 2022 N.Y. Misc. LEXIS 1254 (N.Y. Sup. Ct. March 10, 2022).
The amended complaint alleged the agent, Century Max Inc., breached its duty to advise and sell to plaintiffs a homeowners and fire policy far in excess of $100,000 for their condominium unit, which was worth in excess of $600,000. Century moved to dismiss
A fire in the building forced all owners to vacate their units. The entire building was thereafter declared unsafe for habitation by the City of New York. The condominium owners met and voted to not restore the building, but to sell the burnt-out shell and distribute the sales proceeds and the condominium's insurance among the unit owners. There was no indication that the owners would not be made whole once the funds were distributed.
Century argued that the plaintiffs never requested specific coverage. Nor were plaintiffs advised that specific coverage was not available. Century further contended it had no continuing duty to advise plaintiffs to increase their coverage in anticipation of inflation, and that it had no special relationship with plaintiffs that would create any additional responsibilities on its part.
Plaintiffs argued that their unit owners' policy should have been for the fair market value of their unit, or more that $600,000 before the fire.
The condominium's declaration stated "the coverage shall be in an amount equal to not less than eighty (80%) percent of the full replacement cost of the Building, without deduction for depreciation . . . " The master policy paid out approximately $8,000,000 to the condominium board, which was held in trust for the unit owners.
The condominium governing documents required the maser policy to cover walls, floors, wiring, plumbing and fixtures in the units, but not the appliances or built-ins. The value of the vacant land under the building was not covered by fire insurance, so the amount of coverage was never the fair market value of the entire property as if it were to be sold.
Here plaintiffs failed to establish that they made a specific and timely request to Century for a specific amount of condominium unit owners' coverage, for items not covered by the master policy. The motion to dismiss was therefore granted,