Motion to Compel in Masuda Begum, Motashem Billah v. Associated Mutual Insurance Cooperative, Erhardt Adjustment Co., Inc., All Dry Usa| Trellis.Law

On August 08, 2022 a Motion-Secondary was filed involving a dispute between Masuda Begum, Motashem Billah, and All Dry Usa, Associated Mutual Insurance Cooperative, Erhardt Adjustment Co., Inc., for Commercial - Contract in the District Court of Nassau County.

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FILED: NASSAU COUNTY CLERK 12/01/2022 07:43 PM INDEX NO. 610946/2022
NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 12/01/2022

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
_______________________________________________

MASUDA BEGUM and MOTASHEM BILLAH,

Plaintiffs,

vs.

ASSOCIATED MUTUAL INSURANCE COOPERATIVE,
ERHARDT ADJUSTMENT CO., INC. and
ALL DRY USA,

Defendants.

_______________________________________________

Index No. 610946/2022
_______________________________________________

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT ERHARDT
ADJUSTMENT COMPANY’S MOTION COMPELLING PLAINTIFFS’ ACCEPTANCE
OF ERHARDT’S ANSWER AND DISMSSING PLAINTIFFS’ COMPLAINT

Respectfully Submitted,

Roy A. Mura, Esq.
Scott D. Mancuso, Esq.
MURA LAW GROUP, PLLC
Attorneys for Defendant
Erhardt Adjustment Co., Inc.
930 Rand Building
14 Lafayette Square
Buffalo, New York 14203
(716) 855-2800

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TABLE OF CONTENTS

Table of Authorities ........................................................................................................................ ii

Preliminary Statement ......................................................................................................................1

Statement of Facts ............................................................................................................................1

Argument .........................................................................................................................................2

POINT I

ALL ELEMENTS EXIST FOR THE COURT TO COMPEL PLAINTIFFS’
ACCEPTANCE OF ERHARDT’S ANSWER UNDER CPLR 3012(D)............................2

POINT II

PLAINTIFFS’ COMPLAINT FAILS TO STATE A CAUSE OF ACTION AGAINST
ERHARDT BECAUSE, AS A MATTER OF LAW, AN INDEPENDENT ADJUSTER
RETAINED BY AN INSURANCE COMPANY DOES NOT OWE A DUTY TO THE
INSURANCE COMPANY’S POLICYHOLDER ..............................................................5

Conclusion .......................................................................................................................................8

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816
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TABLE OF AUTHORITIES

Statutes

CPLR 3012(d) ..................................................................................................................................2

CPLR 3211(a)(7) .............................................................................................................................5

Cases

Automatic Findings, Inc. v Miller, 232 AD2d 245 (1st Dept 1996) ................................................6

Bardi v Farmer's Fire Ins. Co., 260 AD2d 783 (3d Dept 1999), lv denied, 96 NY2d 815 .............6

Connaughton v Chipotle Mexican Grill, Inc., 29 NY3d 137 (2017) ...............................................5

Connolly v Long Island Power Authority, 30 NY3d 719 (2018) .....................................................5

Goldner v Kemper Ins. Co., 125 AD2d 954 (4th Dept 1986) ..........................................................6

Louzoun v Moss, 139 AD3d 680 (2d Dept 2016) ............................................................................5

Old Republic Nat. Title Ins. Co. v Salamon, 2021 NY Slip Op 31631(U),
2021 WL 1925640 (Sup Ct, Kings County 2021) ...........................................................................2

Palmieri v New York Property Ins. Underwriting Assn, 2011 NY Slip Op 30724(U),
2011 WL 1212733 (Sup Ct, Suffolk County 2011) .........................................................................5

Yongjie Xu v JJW Enterprises, Inc., 149 AD3d 1146 (2d Dept 2017). ...........................................2

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816
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PRELIMINARY STATEMENT

Defendant, ERHARDT ADJUSTMENT CO., INC. (“Erhardt”), submits this

memorandum of law in support of its motion for an order of this Court:

(a) pursuant to CPLR 3012(d) compelling plaintiffs to accept Erhardt’s

verified answer, dated and filed on November 30, 2022; and

(b) pursuant to CPLR 3211(a)(7) dismissing plaintiffs’ complaint as against

Erhardt only, in its entirety and with prejduice.

As to the first part of this motion, Erhardt request that this Court compel plaintiffs

to accept its untimely answer as the record demonstrates that there was only a short delay in

answering the complaint under the circumstances, there was no willfulness on Erhardt’s part in

not timely answering, there would be no prejudice to the plaintiffs in compelling acceptance of

the untimely answer, and a meritorious defense to the plaintiffs’ complaint exists.

As to the second part of this motion, there is not only a meritorious defense to the

plaintiffs’ complaint, but there is black-letter New York law holding that plaintiffs, categorically,

cannot maintain causes of action in negligence or breach of contract against independent

insurance adjusters acting as agents for insurance companies. This is precisely the cause of

action plaintiffs assert against Erhardt in this action. As such, Erhardt further requests that this

Court dismiss plaintiffs’ complaint as against Erhardt only, in its entirety and with prejudice.

STATEMENT OF FACTS

For a recitation of the procedural and background facts relevant to this motion,

see the accompanying affirmation of Roy A. Mura, Esq., the accompanying affirmation of

Tamara A. Bland, Esq. and the affidavit of Erhardt’s president and owner, Thomas E. Erhardt.

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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ARGUMENT

POINT I

ALL ELEMENTS EXIST FOR THE COURT TO COMPEL
PLAINTIFFS’ ACCEPTANCE OF ERHARDT’S ANSWER UNDER CPLR 3012(D)

CPLR 3012 (d) provides that:

Extension of time to appear or plead. Upon the application of a
party, the court may extend the time to appear or plead, or compel
the acceptance of a pleading untimely served, upon such terms as
may be just and upon a showing of reasonable excuse for delay or
default.

“In light of the public policy favoring the resolution of cases on their merits, the

Supreme Court may compel a plaintiff to accept an untimely answer… where the record

demonstrates that there was only a short delay in appearing or answering the complaint, that

there was no willfulness on the part of the defendant, that there would be no prejudice to the

plaintiff, and that a potentially meritorious defense exists.” Old Republic Nat. Title Ins. Co. v

Salamon, 2021 NY Slip Op 31631(U), 2021 WL 1925640 (Sup Ct, Kings County 2021), quoting

Yongjie Xu v JJW Enterprises, Inc., 149 AD3d 1146, 1147 (2d Dept 2017).

1. Short Delay

Even assuming that the purported personal service of plaintiffs’ summons and

complaint on Erhardt on August 29, 2022 was proper, Erhardt’s delay in answering the

complaint was only 71 days (September 19, 2022 to November 30, 2022).

Under the circumstances, this delay was as short as possible given that Erhardt

was operating under the good faith belief that Associated would be providing a defense to it. As

soon as Erhardt received indication that Associated would not be providing that defense, it

immediately contacted its liability insurer and steps were immediately taken to attempt to secure

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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an extension to answer the complaint, to retain counsel, to answer the complaint, and now to

make the present motion.

2. No Willfulness

As set forth in the accompanying affidavit of Thomas E. Erhardt, upon receiving

copies of plaintiffs’ summons and complaint, Erhardt forwarded those pleadings to Associated

on August 31, 2022 under the good-faith assumption that Associated would be providing a

defense to Erhardt in this action. It was not until November 15, 2022 that Erhardt learned that

Associated would not be providing a defense to it. Erhardt then immediately forwarded the

papers to CPLIC.

As set forth in the accompanying affirmation of Tamara A. Bland, Esq., CPLIC

then acted immediately to confirm in writing that Associated was not providing Erhardt with a

defense. Upon CPLIC learning the same on November 28, 2022, CPLIC then immediately

requested an extension of time to answer from plaintiffs’ counsel. (It should be noted that this is

a courtesy that is routinely granted in such circumstances.) Regardless, CPLIC also immediately

assigned defense counsel to Erhardt and, within hours, retained defense counsel office filed a

verified answer. All told, from the moment that CPLIC received confirmation that Erhardt was

not being defended in this action, it took less than two days for Erhardt’s answer to be filed.

Under these circumstances, it cannot be said that there was any willfulness on the

part of Erhardt or CPLIC in not timely answering the plaintiffs’ complaint. Clearly, both parties

fully intended to appear and respond to plaintiffs’ complaint, and it was merely a matter of

attempting to confirm who might be providing a defense to Erhardt.

3. No Prejudice

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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Plaintiffs would not be prejudiced by this Court granting Erhardt’s motion to

compel their acceptance of its answer. Indeed, plaintiffs purportedly served Associated only

approximately a month and a half ago, on October 17, 2022 (NYSCEF Doc. No. 6). Defendant

All Dry answered and counterclaimed against plaintiffs on October 6, 2022 (NYSCEF Doc. No.

4). With Associated yet to appear in this action, discovery presumably has not yet taken place.

4. Meritorious Defense

As set forth more fully below, New York case law makes clear that an

independent insurance adjuster or adjustment company acting as the disclosed agent of a

policyholder’s insurer in adjusting the policyholder’s reported loss owes no contractual or

common law duty to the policyholder and cannot not be held liable to the policyholder on either

a breach of contract or negligence basis.

Plaintiffs’ complaint acknowledges that Erhardt was retained by Associated to

adjust plaintiffs’ reported loss (Complaint ¶ 15) and was acting as Associated’s agent in doing so

(Complaint ¶ 29). Plaintiffs’ complaint asserts only a single cause of action against Erhardt based

on Erhardt’s alleged negligence in “inspecting the [plaintiffs’] premises” (Complaint ¶ 30).

Under the well-established and longstanding New York caselaw cited and outlined below,

Erhardt possesses a meritorious defense to plaintiffs’ complaint.

Based on these demonstrations, this Court may and, in line with New York’s

public policy favoring the resolution of cases on their merits, respectfully should compel

plaintiffs to accept Erhardt’s verified answer that was filed on November 30, 2022.

POINT II

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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CPLR 3211(a)(7) states that a “party may move for judgment dismissing one or

more causes of action asserted against him on the ground that” “the pleading fails to state a cause

of action.”

On a CPLR 3211(a)(7) motion to dismiss, “defendants bear the burden of

establishing that the complaint fails to state a viable cause of action.” Connolly v Long Island

Power Authority, 30 NY3d 719 (2018). While courts must accept the facts alleged in the

complaint as true, “allegations consisting of bare legal conclusions… are not entitled to any such

consideration”. Connaughton v Chipotle Mexican Grill, Inc., 29 NY3d 137 (2017); accord

Louzoun v Moss, 139 AD3d 680 (2d Dept. 2016) (“dismissal is warranted where the allegations

in the complaint are merely conclusory and speculative”).

Plaintiffs’ complaint as against Erhardt fails to state a cause of action because, as

a matter of law, the disclosed agent of an insurer—such as an independent insurance adjuster or

adjustment company—cannot be held liable for the insurer’s alleged breach of the policy and

owes no duty to the insurer’s policyholders.

In Palmieri v New York Property Ins. Underwriting Assn. (2011 NY Slip Op

30724[U], 2011 WL 1212733 [Sup. Ct., Suffolk Co. 2011]), the plaintiff commenced an action

against James H. Mason’s Sons, Inc. (“Mason”), an independent adjusting firm hired by the

defendant insurer to investigate and adjust the plaintiff's claim. Mason sought to dismiss

plaintiff’s complaint in its entirety as against it, alleging that as “an independent insurance

adjuster, it has no common law or contractual duty to the insured.” Id.

Supreme Court agreed, stating that it was “undisputed that Mason was retained by

[the insurer] as an independent adjuster to investigate and handle the first-party property claim

made by plaintiff.” The plaintiff “submitted his claim under the subject policy issued by [the

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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insurer], which policy forms the basis of the plaintiff's breach of contract action against his

insurer.” It was also undisputed that the insurance policy was “solely between [plaintiff] and [the

insurer], and that Mason was not a party to the contract and had no privity with the plaintiff.”

The Palmieri court also noted that there “are no allegations that the plaintiff

retained the independent adjuster Mason. Absent any privity between plaintiff and Mason, and

absent any duty on the part of the independent adjuster to plaintiff, there is no basis for the stated

causes of action to stand against Mason.” Id. See Bardi v Farmer's Fire Ins. Co., 260 AD2d 783

(3d Dept 1999), Iv denied, 96 NY2d 815; Automatic Findings, Inc. v Miller, 232 AD2d 245, 246

(1st Dept 1996) (“Defendants were clearly agents of the insurance company and were acting in

the scope of their authority when they investigated the claim and may not be held liable for

damages arising from the insurance company's decision to deny the claim.” “The relationship

between defendants, who investigated the claim, and plaintiffs, who were seeking coverage

under a policy of insurance, is not one that is so close as to approach that of privity.”)

The Palmieri went on further to state that “[i]n addition, independent adjusters

have no duty towards an insured whose claim is not paid by the insurer, inasmuch as the duty of

the adjuster runs exclusively to the insurer and does not extend in the performance of their

investigation toward the insured.” Id., citing Goldner v Kemper Ins. Co., 125 AD2d 954, 954–55

(4th Dept 1986) (“Liability for negligent conduct may be imposed only if it can be established

that the defendants owe a duty to the plaintiffs. [The independent adjusters] had a duty under

their contract with [the insurance company] to investigate and report on the fire loss in a

nonnegligent manner. That duty did not extend to plaintiffs.”)

Based on this case law, the court in Palmieri dismissed the plaintiff’s complaint

as against the independent adjuster.

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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The New York case law is clear. Independent adjusters retained and disclosed as

agents of the policyholders’ insurance company to investigate a claimed loss have no duty to

those policyholders, as a matter of law. Additionally, and similarly, independent adjusters,

retained as disclosed agents of an insurance company to investigate a claimed loss have no

privity of contract with the policyholders who made the claim to the insurance company, as a

matter of law.

The Second Cause of Action of plaintiffs’ complaint is directed at Erhardt and

sounds in “Negligence” (NYSCEF Doc. No. 1, ¶28-33). The plaintiffs’ complaint sets forth no

other cause of action against Erhardt.

Plaintiffs’ complaint accurately alleges that Erhardt was an “agent of Associated”

(NYSCEF Doc. No. 1, ¶29). However, that same paragraph goes on to allege, incorrectly, that

this means Erhardt “owed a duty of care to Plaintiffs.” Id. If Erhardt owed a duty of care to

anyone, it could only be to Associated. New York case law is clear: Erhardt, as an independent

adjuster retained by Associated, owed no duty to the plaintiffs. Without any duty owed by

Erhardt to plaintiffs, plaintiffs’ sole, “Second” cause of action sounding in negligence against

Erhardt fails to state a cognizable claim.

For the same reasons, even if plaintiffs were to argue and this Court were to agree

that the complaint asserts a breach of contract theory of liability against Erhardt, it would still

fail to state a cognizable cause of action as against Erhardt; New York case law is legion that the

disclosed agent of an insurer, such as Erhardt, cannot be held liable for the insurer’s alleged

breach of the policy. Moreover, because the plaintiffs’ complaint alleges no contractual

relationship between the plaintiffs and Erhardt sufficient to constitute privity, Erhardt cannot be

liable directly to plaintiffs on a breach of contract basis.

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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CONCLUSION

For the foregoing reasons, Erhardt respectfully request that this Court grant an

order pursuant to CPLR 3012(d) compelling plaintiffs to accept Erhardt’s untimely answer and

then, pursuant to CPLR 3211(a)(7), dismissing plaintiffs’ complaint as against Erhardt in its

entirety and with prejudice.

DATED: Buffalo, New York
December 1, 2022

__________________________________________
Roy A. Mura, Esq.

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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22 NYCRR § 202.8-b Word Count Certification

The total number of words in the foregoing Memorandum of Law, exclusive of

the caption, table of contents, table of authorities, and signature block, as calculated by the word-

processing system used to prepare the document, is 2,098 words.

I certify that that the document complies with the 7,000-word-count limit of 22

NYCRR § 202.8-b(a).

DATED: Buffalo, New York
December 1, 2022

__________________________________________
Roy A. Mura, Esq.

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MURA LAW GROUP, PLLC • 930 RAND BUILDING • 14 LAFAYETTE SQUARE • BUFFALO, NEW YORK 14203
(716) 855-2800 • FAX (716) 855-2816

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Case Info

Judge

Gary F. Knobel Track Judge’s New Case

Case No.

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Document Filed Date

December 01, 2022

Case Filing Date

August 08, 2022

County

Parties

All Dry USA Defendant
Associated Mutual Insurance Cooperative Defendant
BROCKS, WILLIAM ROBERT Attorney for the Defendant
Erhardt Adjustment Co., Inc. Defendant
KIRCHNER, JONATHAN EDWARD Attorney for the Plaintiff
MANCUSO, SCOTT DAVID Attorney for the Defendant
Masuda Begum Plaintiff
Motashem Billah Plaintiff
MURA, ROY ALBERT Attorney for the Defendant
SARDAR, MURAD Attorney for the Defendant
SPICER, GREGORY STEPHEN Attorney for the Defendant
ZANE, AUDRA S Attorney for the Defendant
TAMARA ASHJIAN Attorney
TAMARA BLAND Attorney

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Motion-Secondary: Masuda Begum, Motashem Billah v. Associated Mutual Insurance Cooperative, Erhardt Adjustment Co., Inc., All Dry Usa

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