Preview
INDEX NO. 601285/2023
FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM
NYSCEF DOC. NO. 36 RECEIVED NYSCEF 04/24/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
BARRY YAMPOL, Index No. 601285/2023
Plamtiff, Hon. Danielle M. Peterson
-against-.
CERTAIN UNDERWRITERS AT LLOYD’S,
LONDON, including those subscribing to Syndicate
Nos. MIT 3210, PEM 4000, TAL 1183, MKL 3000,
CGM 2488, AXS 1686, CSL 1084, ASP 4711, COF
1036, AUW 0609, TRV 5000, ARK 4020, AAL 2012.
ADV 0780, AUL 1274, AFB 2623, AFB 0623, AES
1225, ANV 1861, ENH 5151, WRB 1967, BRT 2987.
Apollo 9975, CHN 2015, KLN 0510,
Defendants.
MEMORANDUM OF LAWIN SUPPORT OF PLAINTIFF’S MOTION TO ORDER
COMPLIANCE WITH N.Y. INS. LAW § 1213(c)(1) AND TO HOLD DEFENDANTS’
MOTION TO DISMISS IN ABEYANCE
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018-1405
(212) 841-1000
One CityCenter
850 Tenth Street, NW
Washington, DC 20001-4956
Telephone: (202) 662-6000
E-mail: kglandon@cov.com
Attorneys for Plaintiff
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TABLE OF CONTENTS
Introduction.
Argument
Defendants are Unauthorized Insurers .
Defendants Failed to Comply with Section 1213(c)(1)’s Requirements Before
They Filed Any Pleading
The Court Should Hold Defendants’ Motion to Dismiss in Abeyance Until
Defendants Comply with Section 1213(c)(1)
Conclusion...
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TABLE OF AUTHORITIES
Page(s)
Cases
Chao Jiang v. PingAn Ins.,
179 A.D.3d 517, 518 (1st Dep’t 2020)
Glob. Art Exhibitions, Inc. v. Kuhn & Bulow Italia Versicherungsmakler GmbH,
No. 20-CV-1395 (KMW), 2021 WL 5331678 (S.D.N.Y. Nov. 16, 2021)..
Healthnow N.Y. Inc. v. N.Y. State Ins. Dep’
110 A._D.3d 1216 (3d Dep’t 2013)
Levin v. Intercont’l Cas. Ins. Co.,
95 N-Y.2d 523 (2000) oo... eececececeseeeseseesseseesseseeseeeseeeeceseeceesesceeseseseseseseeeecseeseeeeseseeeatees 2,4
In re Revson,
86 A.D.2d 872 (2d Dep’t 1982)
Segal Co. v. Certain Underwriters at Lloyd’s, London,
21 A.D.3d 138 (Ist Dep’t 2005) ..
Statutes
N.Y. Ins. Law § 107..
N.Y. Ins. Law § 1213 1, 2, 3,4
N.Y. Ins. Law § 6116(c)
Other Authorities
CPLR § 5001
CPLR § 5004
Opinion No. 03-01-23 (Jan. 7,2003),
https ://www.dfs.ny.gov/insura nce/ogco2003/rg030123.htm..
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Introduction
“The legislature declares that it is a subject of concern that many residents of this state hold
policies of msurance issued or delivered in this stateby nsurers while not authorized to do business
in this state . .” N.Y. Ins. Law § 1213(a). In order to address this concern, the New York
Legislature enacted N.Y. Ins. Law § 1213 which provided policy holders with multiple tools to
hold unauthorized insurers accountable. Plaintiff, who has a residence nm New York, and who
purchased a policy from Defendants, is entitled to the protections afforded by N.Y. Ins. Law §
1213. See NYSCEF 2 §{§ 8, 16 (the Policy msures Mr. Yampol’s residence in New York);
NYSCEF 3 at 4 (same).
One of these tools is section 1213(c)(1)’s mandatory requirement that unauthorized
insurers, such as Defendants, take one of the three following steps before filing “any pleading”:
(1) posting a bond or other security sufficient to ensure payment of a final judgment; (2) become
licensed in New York; or (3) receive a certification from the Superintendent of Financial Services
that the Defendant has sufficient funds in the state to withstand a judgment in the action.
To Plaintiff's knowledge, Defendants have failed to comply with this mandatory
requirement, and Plaintiff respectfully requests that the Court: (1) order Defendants to comply with
N.Y. Ins. Law § 1213 by posting a bond sufficient to secure payment of any final judgment which
may be rendered in this action, and (2) hold Defendants’ motion to dismiss in abeyance until they
comply with N.Y. Ins. Law § 1213.
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Argu it
I Defendants are Unauthorized Insurers
Defendants acknowledge in their motion to dismiss that they are not licensed to do business
in New York. NYSCEF 27 at 21. Under New York Insurance Law, Defendants are barred from
becoming licensed. N.Y. Ins. Law § 6116(c) (“No Lloyds underwriters shall hereafter be
organized in this state and no foreign or alien Lloyds underwriters shall be licensed to do an
insurance business in this state.”). Since Defendants are unlicensed they are considered
“unauthorized insurers.” See N.Y. Ins. Law § 107(a)(10) (defming an “authorized imsurer” as an
insurer who is licensed to do business in the state); Segal Co. v. Certain Underwriters at Lloyd's,
London,21 A.D.3d 138, 142 (1st Dep’t 2005) (stating the Lloyd’s underwriters in the case were
unauthorized because they were unlicensed); Off. of Gen. Counsel, Opinion No. 03-01-23 (Jan. 7,
2003), https//www.dfs.ny.gov/ins urance/ogco2003/rg030123.htm (concluding an unauthorized
insurer is an msurer that is unlicensed, unless the msurer is exempt from the licensmg requirement).
I. Defendants Failed to Comply with Section 1213(c)(1)’s Requirements Before They
Filed Any Pleading
As the Court of Appeals has held, pursuant to section 1213(c)(1), before filing their motion
to dismiss in this action, Defendants were required to either: (1) deposit cash, securities, or a bond
“in an amount to be fixed by the court sufficient to secure payment of any final judgment” with
the clerk of the court; or (2) procure a license to do msurance busmess in New York. Levin v.
Intercont’l Cas. Ins. Co.,95 N.Y.2d 523, 527 (2000) (holding that pre-answer motions to dismiss
fit within the definition of “any pleadmg”). As far as Plamntiff is aware, none of the Defendants
deposited cash, security, or bond with the court prior to filing their motion to dismiss, see
Affirmation of Joseph Vandegriff { 3, and Defendants are barred from becoming licensed, see
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N.Y. Ins. Law § 6116(c). As aresult, the statute bars Defendants’ motion to dismiss from bemg
considered until such time as Defendants comply with N.Y. Ins. Law§ 1213.
A “final judgment” in this matter would currently be for at least $48,638,627.10. This total
includes the policy’s $42,000,000 limit of liability, NYSCEF 3 at 5, and prejudgment interest.
Prejudgment interest accrues at the rate of 9% and runs from the time that the contract is breached.
CPLR §§ 5001, 5004.! Defendants breached
the policy when they unreasonably refused to accept
Plaintiff's proof of loss on June 29, 2021.2 NYSCEF 7 at 1; NYSCEF 2 4 13, 78-79, 97-103.
Thus, prejudgment interest as of March 29, 2023, is $6,836,627.10. To be clear, prejudgment
interest will continue to accrue and the $48,638,627.10 does not include consequential damages or
attorneys’ fees. However, since an exact estimate of these damages cannot be made at this time,
Plaintiff has not mcluded them mm above calculation.
The Court may dispense with section 1213(c)(1)’s requirement if the “Superintendent of
Insurance”? certifies to the Court that an insurer maintains “within this state funds or securities in
trust or otherwise sufficient and available to satisfy any final judgment which may be entered in
the proceeding.” Jd. § 1213(c)(1)(A). To Plaintiff's knowledge, no Defendant has received such
acertification. See Affirmation of Joseph Vandegriff § 4.
Til. The Court Should Hold Defendants’ Motion to Dis miss in Abe yance Until De fe ndants
Comply with Section 1213(c)(1)
The Court should hold Defendants’ motion to dismiss m abeyance until Defendants
comply with section 1213. See Chao Jiangv. PingAn Ins., 179 A.D.3d 517, 518 (1st Dep’t 2020)
(holding the trial court properly held portions of the motions to dismiss in abeyance until
1 Plamtiff reserves their right to argue that mterest compounds annually because Defendants
breached their duty of good faith. Jn re Revson,86 A.D.2d 872, 875 (2d Dep’t 1982).
? Plamntiff reserves the right to argue that such breach occurred sooner.
3 The Superintendent of Insurance has been replaced by the Superintendent of Fimancial Services.
See Healthnow N.Y. Inc. v. N.Y. State Ins. Dep’t, 110 A.D.3d 1216, 1218 n.1 (3d Dep’t 2013).
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Defendants complied with section 1213); Glob. Art Exhibitions, Inc. v. Kuhn & Bulow Italia
Versicherungsmakler GmbH, No. 20-CV-1395 (KMW), 2021 WL 5331678, at *3 (S.D.N.Y. Nov.
16, 2021) (holding defendants’ motion to dismiss for failure to state a claim m abeyance until
defendants comply with section 1213(c)(1)). Allowing Defendants’ motion to proceed risks
Defendants “wag[ing] extensive, costly motion practice” and then “ignor[ing] the remainder of the
proceedings and relegat[ing] the plaintiff to a default judgment with no in-State collateral” Levin,
95 N.Y.2d at 528.
Conclusion
For the reasons stated above, Plaintiff respectfully requests that the Court: (1) order
Defendants comply with N.Y. Ins. Law § 1213(c)(1) by depositing cash, bond or security of at
least $48,638,627.10; and (2) hold Defendants’ motion to dismiss, NYSCEF 13, in abeyance until
said compliance.
Dated: New York, New York COVINGTON & BURLING LLP
April 24, 2023
By: /s/ David A. Luttinger, Jr.
David A. Luttinger Jr.
Joseph Vandegriff
The New York Times Building
620 Eighth Avenue
New York, New York 10018-1405
Telephone: (212) 841-1000
Email: dluttnger@cov.com
jvandegriff@cov.com
Kevin R. Glandon*
One CityCenter
850 Tenth Street, NW
Washington, DC 20001-4956
Telephone: (202) 662-60000
E-mail: kglandon@cov.com
Attorneys for Plaintiff
4 Not admitted in New York, Pro Hac Vice application forthcoming.
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ATTORNEY CERTIFICATION PURSUANT TO NYCRR 202.8b
I, Joseph Vandegriff, an attorney admitted to practice before the Courts of the State of
New York, hereby certify that the word count of the attached Memorandum of Law, excluding
the caption, table of contents, table of authoritics and signature block is 1056.
a
7
Dated: New York, New York Zt
April 24, 2023 Joseph Vandegriff
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Preview
INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF 04/24/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU BARRY YAMPOL, Index No. 601285/2023 Plamtiff, Hon. Danielle M. Peterson -against-. CERTAIN UNDERWRITERS AT LLOYD’S, LONDON, including those subscribing to Syndicate Nos. MIT 3210, PEM 4000, TAL 1183, MKL 3000, CGM 2488, AXS 1686, CSL 1084, ASP 4711, COF 1036, AUW 0609, TRV 5000, ARK 4020, AAL 2012. ADV 0780, AUL 1274, AFB 2623, AFB 0623, AES 1225, ANV 1861, ENH 5151, WRB 1967, BRT 2987. Apollo 9975, CHN 2015, KLN 0510, Defendants. MEMORANDUM OF LAWIN SUPPORT OF PLAINTIFF’S MOTION TO ORDER COMPLIANCE WITH N.Y. INS. LAW § 1213(c)(1) AND TO HOLD DEFENDANTS’ MOTION TO DISMISS IN ABEYANCE Covington & Burling LLP The New York Times Building 620 Eighth Avenue New York, New York 10018-1405 (212) 841-1000 One CityCenter 850 Tenth Street, NW Washington, DC 20001-4956 Telephone: (202) 662-6000 E-mail: kglandon@cov.com Attorneys for Plaintiff 1 of 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 TABLE OF CONTENTS Introduction. Argument Defendants are Unauthorized Insurers . Defendants Failed to Comply with Section 1213(c)(1)’s Requirements Before They Filed Any Pleading The Court Should Hold Defendants’ Motion to Dismiss in Abeyance Until Defendants Comply with Section 1213(c)(1) Conclusion... 2 of 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 TABLE OF AUTHORITIES Page(s) Cases Chao Jiang v. PingAn Ins., 179 A.D.3d 517, 518 (1st Dep’t 2020) Glob. Art Exhibitions, Inc. v. Kuhn & Bulow Italia Versicherungsmakler GmbH, No. 20-CV-1395 (KMW), 2021 WL 5331678 (S.D.N.Y. Nov. 16, 2021).. Healthnow N.Y. Inc. v. N.Y. State Ins. Dep’ 110 A._D.3d 1216 (3d Dep’t 2013) Levin v. Intercont’l Cas. Ins. Co., 95 N-Y.2d 523 (2000) oo... eececececeseeeseseesseseesseseeseeeseeeeceseeceesesceeseseseseseseeeecseeseeeeseseeeatees 2,4 In re Revson, 86 A.D.2d 872 (2d Dep’t 1982) Segal Co. v. Certain Underwriters at Lloyd’s, London, 21 A.D.3d 138 (Ist Dep’t 2005) .. Statutes N.Y. Ins. Law § 107.. N.Y. Ins. Law § 1213 1, 2, 3,4 N.Y. Ins. Law § 6116(c) Other Authorities CPLR § 5001 CPLR § 5004 Opinion No. 03-01-23 (Jan. 7,2003), https ://www.dfs.ny.gov/insura nce/ogco2003/rg030123.htm.. 3 0f 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 Introduction “The legislature declares that it is a subject of concern that many residents of this state hold policies of msurance issued or delivered in this stateby nsurers while not authorized to do business in this state . .” N.Y. Ins. Law § 1213(a). In order to address this concern, the New York Legislature enacted N.Y. Ins. Law § 1213 which provided policy holders with multiple tools to hold unauthorized insurers accountable. Plaintiff, who has a residence nm New York, and who purchased a policy from Defendants, is entitled to the protections afforded by N.Y. Ins. Law § 1213. See NYSCEF 2 §{§ 8, 16 (the Policy msures Mr. Yampol’s residence in New York); NYSCEF 3 at 4 (same). One of these tools is section 1213(c)(1)’s mandatory requirement that unauthorized insurers, such as Defendants, take one of the three following steps before filing “any pleading”: (1) posting a bond or other security sufficient to ensure payment of a final judgment; (2) become licensed in New York; or (3) receive a certification from the Superintendent of Financial Services that the Defendant has sufficient funds in the state to withstand a judgment in the action. To Plaintiff's knowledge, Defendants have failed to comply with this mandatory requirement, and Plaintiff respectfully requests that the Court: (1) order Defendants to comply with N.Y. Ins. Law § 1213 by posting a bond sufficient to secure payment of any final judgment which may be rendered in this action, and (2) hold Defendants’ motion to dismiss in abeyance until they comply with N.Y. Ins. Law § 1213. 4 of 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 Argu it I Defendants are Unauthorized Insurers Defendants acknowledge in their motion to dismiss that they are not licensed to do business in New York. NYSCEF 27 at 21. Under New York Insurance Law, Defendants are barred from becoming licensed. N.Y. Ins. Law § 6116(c) (“No Lloyds underwriters shall hereafter be organized in this state and no foreign or alien Lloyds underwriters shall be licensed to do an insurance business in this state.”). Since Defendants are unlicensed they are considered “unauthorized insurers.” See N.Y. Ins. Law § 107(a)(10) (defming an “authorized imsurer” as an insurer who is licensed to do business in the state); Segal Co. v. Certain Underwriters at Lloyd's, London,21 A.D.3d 138, 142 (1st Dep’t 2005) (stating the Lloyd’s underwriters in the case were unauthorized because they were unlicensed); Off. of Gen. Counsel, Opinion No. 03-01-23 (Jan. 7, 2003), https//www.dfs.ny.gov/ins urance/ogco2003/rg030123.htm (concluding an unauthorized insurer is an msurer that is unlicensed, unless the msurer is exempt from the licensmg requirement). I. Defendants Failed to Comply with Section 1213(c)(1)’s Requirements Before They Filed Any Pleading As the Court of Appeals has held, pursuant to section 1213(c)(1), before filing their motion to dismiss in this action, Defendants were required to either: (1) deposit cash, securities, or a bond “in an amount to be fixed by the court sufficient to secure payment of any final judgment” with the clerk of the court; or (2) procure a license to do msurance busmess in New York. Levin v. Intercont’l Cas. Ins. Co.,95 N.Y.2d 523, 527 (2000) (holding that pre-answer motions to dismiss fit within the definition of “any pleadmg”). As far as Plamntiff is aware, none of the Defendants deposited cash, security, or bond with the court prior to filing their motion to dismiss, see Affirmation of Joseph Vandegriff { 3, and Defendants are barred from becoming licensed, see 5 of 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 N.Y. Ins. Law § 6116(c). As aresult, the statute bars Defendants’ motion to dismiss from bemg considered until such time as Defendants comply with N.Y. Ins. Law§ 1213. A “final judgment” in this matter would currently be for at least $48,638,627.10. This total includes the policy’s $42,000,000 limit of liability, NYSCEF 3 at 5, and prejudgment interest. Prejudgment interest accrues at the rate of 9% and runs from the time that the contract is breached. CPLR §§ 5001, 5004.! Defendants breached the policy when they unreasonably refused to accept Plaintiff's proof of loss on June 29, 2021.2 NYSCEF 7 at 1; NYSCEF 2 4 13, 78-79, 97-103. Thus, prejudgment interest as of March 29, 2023, is $6,836,627.10. To be clear, prejudgment interest will continue to accrue and the $48,638,627.10 does not include consequential damages or attorneys’ fees. However, since an exact estimate of these damages cannot be made at this time, Plaintiff has not mcluded them mm above calculation. The Court may dispense with section 1213(c)(1)’s requirement if the “Superintendent of Insurance”? certifies to the Court that an insurer maintains “within this state funds or securities in trust or otherwise sufficient and available to satisfy any final judgment which may be entered in the proceeding.” Jd. § 1213(c)(1)(A). To Plaintiff's knowledge, no Defendant has received such acertification. See Affirmation of Joseph Vandegriff § 4. Til. The Court Should Hold Defendants’ Motion to Dis miss in Abe yance Until De fe ndants Comply with Section 1213(c)(1) The Court should hold Defendants’ motion to dismiss m abeyance until Defendants comply with section 1213. See Chao Jiangv. PingAn Ins., 179 A.D.3d 517, 518 (1st Dep’t 2020) (holding the trial court properly held portions of the motions to dismiss in abeyance until 1 Plamtiff reserves their right to argue that mterest compounds annually because Defendants breached their duty of good faith. Jn re Revson,86 A.D.2d 872, 875 (2d Dep’t 1982). ? Plamntiff reserves the right to argue that such breach occurred sooner. 3 The Superintendent of Insurance has been replaced by the Superintendent of Fimancial Services. See Healthnow N.Y. Inc. v. N.Y. State Ins. Dep’t, 110 A.D.3d 1216, 1218 n.1 (3d Dep’t 2013). 6 of 8 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 0472472023 08:02 PM NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 Defendants complied with section 1213); Glob. Art Exhibitions, Inc. v. Kuhn & Bulow Italia Versicherungsmakler GmbH, No. 20-CV-1395 (KMW), 2021 WL 5331678, at *3 (S.D.N.Y. Nov. 16, 2021) (holding defendants’ motion to dismiss for failure to state a claim m abeyance until defendants comply with section 1213(c)(1)). Allowing Defendants’ motion to proceed risks Defendants “wag[ing] extensive, costly motion practice” and then “ignor[ing] the remainder of the proceedings and relegat[ing] the plaintiff to a default judgment with no in-State collateral” Levin, 95 N.Y.2d at 528. Conclusion For the reasons stated above, Plaintiff respectfully requests that the Court: (1) order Defendants comply with N.Y. Ins. Law § 1213(c)(1) by depositing cash, bond or security of at least $48,638,627.10; and (2) hold Defendants’ motion to dismiss, NYSCEF 13, in abeyance until said compliance. Dated: New York, New York COVINGTON & BURLING LLP April 24, 2023 By: /s/ David A. Luttinger, Jr. David A. Luttinger Jr. Joseph Vandegriff The New York Times Building 620 Eighth Avenue New York, New York 10018-1405 Telephone: (212) 841-1000 Email: dluttnger@cov.com jvandegriff@cov.com Kevin R. Glandon* One CityCenter 850 Tenth Street, NW Washington, DC 20001-4956 Telephone: (202) 662-60000 E-mail: kglandon@cov.com Attorneys for Plaintiff 4 Not admitted in New York, Pro Hac Vice application forthcoming. 7 of 8 INDEX NO. 601285/2023 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 04/24/2023 ATTORNEY CERTIFICATION PURSUANT TO NYCRR 202.8b I, Joseph Vandegriff, an attorney admitted to practice before the Courts of the State of New York, hereby certify that the word count of the attached Memorandum of Law, excluding the caption, table of contents, table of authoritics and signature block is 1056. a 7 Dated: New York, New York Zt April 24, 2023 Joseph Vandegriff 8 of 8