12-1470-cv
Exec. Plaza, LLC v. Peerless Ins. Co.


                               UNITED STATES COURT OF APPEALS
                                   FOR THE SECOND CIRCUIT


                                          August Term 2012

                 (Argued: February 20, 2013            Decided: March 11, 2014)

                                      Docket No. 12-1470-cv
                                    ________________________

                                        EXECUTIVE PLAZA, LLC,
                                                           Plaintiff-Appellant,

                                                  v.

                                 PEERLESS INSURANCE COMPANY,
                                                       Defendant-Appellee.
                                  ________________________

Before:
                         WINTER, CHIN, and DRONEY, Circuit Judges.
                               ________________________

                Appeal from a judgment of the United States District Court for the

Eastern District of New York (Seybert, J.) dismissing with prejudice

plaintiff-appellant's complaint seeking, pursuant to an insurance policy,

indemnification for property loss caused by fire.

                VACATED AND REMANDED.
                           ____________________________

                           DAVID TOLCHIN, Jaroslawicz & Jaros LLC, New York,
                                New York, for Plaintiff-Appellant.

                           SCOTT D. STORM, Mura & Storm, PLLC, Buffalo, New
                                 York, for Defendant-Appellee.
                           ____________________________

PER CURIAM:

             Plaintiff-appellant Executive Plaza, LLC ("Executive") appeals from

a judgment of the United States District Court for the Eastern District of New

York (Seybert, J.) in favor of defendant-appellee Peerless Insurance Company

("Peerless"), dismissing Executive's claim that it is entitled, under a fire insurance

policy, to indemnification from Peerless for the cost of replacing a building

damaged in a fire. We assume familiarity with our May 23, 2013, opinion in this

case, which sets forth the facts. Exec. Plaza, LLC v. Peerless Ins. Co., 717 F.3d 114

(2d Cir. 2013).

             The fire insurance policy issued to Executive by Peerless contains

two provisions that are relevant to this appeal. Section E.4 of the Policy provides

for a limitations period requiring Executive to file suit to recover for loss or

damage within two years of the fire. Section E.6 provides, however, with respect




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to replacement costs, that Executive must replace the property before bringing

suit and must complete the replacement work "as soon as reasonably possible."

               The rebuilding of the fire-damaged property was not completed

within the two-year limitations period. Peerless denied coverage on the ground

that Executive was time-barred from recovering under the policy. Executive

filed suit in New York State Supreme Court, and Peerless removed the suit to the

Eastern District of New York.1

               The district court dismissed Executive's complaint under Federal

Rule of Civil Procedure 12(c), concluding that the Policy's limitations provision

"unambiguously bars any and all suits commenced more than two years after the

date of the damage or loss." See Exec. Plaza, LLC v. Peerless Ins. Co., No. 11-cv-

1716, 2012 WL 910086, at *6 (E.D.N.Y. Mar. 13, 2012). Executive appealed,

arguing that it could not reasonably complete construction to replace the

fire-damaged building within the two-year limitations period.

               In our prior opinion, we concluded that New York case law does not

clearly resolve the question raised by this case, and we thus certified the

following question to the New York Court of Appeals:


       1
               There was an earlier action, filed in 2009 in state court and removed to the district
court below, that was dismissed without prejudice on ripeness grounds.


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              If a fire insurance policy contains

              (1)    a provision allowing reimbursement of
                     replacement costs only after the property was
                     replaced and requiring the property to be
                     replaced "as soon as reasonably possible after the
                     loss"; and

              (2)    a provision requiring an insured to bring suit
                     within two years after the loss;

              is an insured covered for replacement costs if the
              insured property cannot reasonably be replaced within
              two years?

Exec. Plaza, 717 F.3d at 118.

              The Court of Appeals answered the certified question in the

affirmative. Exec. Plaza, LLC v. Peerless Ins. Co., No. 2, slip op. at 7 (N.Y. Feb. 13,

2014), available at 2014 WL 551251. The court concluded that the limitations

period at issue here is not reasonable, as "[a] 'limitation period' that expires

before suit can be brought is not really a limitation period at all, but simply a

nullification of the claim." Id., slip op. at 5-6.

              The decision of the Court of Appeals resolves the contract

interpretation question, holding that in a case where the property cannot

reasonably be replaced in two years, the two-year contractual limitation period is

"unreasonable and unenforceable." Id., slip op. at 2. We thus hold that the



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district court incorrectly dismissed Executive's claim under the Policy. Because

the district court resolved the case on a motion for judgment on the pleadings

before discovery, on remand the parties will still have to address the factual

questions of whether Executive could reasonably replace the damaged property

within two years and whether it replaced the property "as soon as reasonably

possible." Accordingly, the judgment of the district court is vacated and the case

is remanded for further proceedings consistent with this decision.

            VACATED AND REMANDED.




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