Preview
INDEX NO. 601285/2023
FILED: NASSAU COUNTY CLERK 05/04/2023 07:41 PM
NYSCEF DOC. NO. 37 RECEIVED NYSCEF 05/04/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
BARRY YAMPOL, Index No. 601285/2023
Plaintiff, 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 LAW IN SUPPORT OF BARRY YAMPOL’S
OPPOSITION TO THE MOTION TO DISMISS FILED BY
CERTAIN UNDERWRITERS AT LLOYD’S, LONDON
COVINGTON & BURLING LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Tel: 212.841.1000
One CityCenter
850 Tenth Street, NW
Washington, DC 20001
Tel: 202.662.6000
Attorneys for Plaintiff
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TABLE OF CONTENTS
Page(s)
INTRODUCTION
STATEMENT OF FACTS
STANDARD OF REVIEW
ARGUMENT
I The Court Should Deny the Motion to Dismiss.....0...0.cccccscesseseeseseseseseseseseseeeseeeseeeeeeees 5
A The Insurers’ claimed lack of ownership is belied by the allegations in Mr.
Yampol’s Complaint
Mr. Yampol’s ownership of his Imperial Topaz is further confirmed by
evidence provided with this Opposition. ..........ccccseseseseseeeseeeteteeeeteteeseeeseeseees 11
IL Mr. Yampol Properly Pleaded a Breach of the Implied Covenant of Good Faith
and Fair Dealing to Support Consequential Damages, Including Attorneys’ Fees. ......... 12
A The Insurers have failed to meet the high bar to dismiss Mr. Yampol’s bad
faith Claim. 2.00.0... eee eeeseeseses eee eseeesseseeseseseseseeseseseeee 12
The Insurers’ breach of the implied covenant of good faith and fair dealing
is an additional basis for Mr. Yampol’s breach of contract claim. ...........ceee 15
The Insurers’ breach of the covenant of good faith and fair dealing
supports the award of consequential damages, including attorneys’ fees. ........... 17
The Factfinder May Consider N.Y. Insurance Code § 216.4 For Purposes
of Assessing Whether the Insurers’ Conduct Was Reasonable or
Demonstrated Undue Delay. 20
CONCLUSION 22
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TABLE OF AUTHORITIES
Page(s)
Cases
34-06 73, LLC v. Seneca Ins. Co.,
39 N.Y.3d 44 (2022)
511 W. 232nd Owners Corp. v. Jennifer Realty Co.,
98 N.Y.2d 144 (2002)
Acquista v. N.Y. Life Ins. Co.,
285 A.D.2d 73 (1st Dep’t 2001) 13, 16, 17
Alliance Network, LLC v. Sidley Austin LLP,
43 Misc.3d 848 (Sup. Ct. N.Y. Cnty. 2014)
Anderson v. Armentano,
139 A.D.3d 769 (2d Dep’t 2016) 5, 10
Anglero v. Hanif,
140 A.D.3d 905 (2d Dep’t 2016) 5, 10
ARI& Co. v. Regent Int’l Corp.,
273 F. Supp. 2d 518 (S.D.N.Y. 2003) 16
Bi-Economy Mit, Inc. v. Harleysville Ins. Co.,
10 N.Y.3d 187 (2008) 17, 19, 20
Bristol Harbour Assocs., L.P. v. Home Ins. Co.,
244 A.D.2d 885 (4th Dep’t 1997) 20, 21
Brown v. Erie Ins. Co.,
207 A.D.3d 1144 (2d Dep’t 2022) 15
Certain Underwriters at Lloyd’s v. BioEnergy Dev. Grp. LLC,
178 A.D.3d 463 (1st Dep’t 2019) 18, 19, 20
Chernish v. Mass. Mut. Life Ins. Co.,
No. 5:08—CV-0957, 2009 WL 385418 (N.D.N.Y. Feb. 10, 2009). 19
Dalton v. Educ. Testing Serv.,
87 N.Y.2d 384 (1995)
De Marinis v. Tower Ins. Co. of N.Y.,
6 A.D.3d 484 (2d Dep’t 2004) 21
i
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D.K. Prop., Inc.,
168 A.D.3d 505 (1st Dep’t 2019) 13,17
Doody v. Liberty Mut. Grp., Inc.,
137 A.D.3d 959 (2d Dep’t 2016). 12
E. Ramapo Cent. Sch. Dist. v. New York Sch. Ins Reciprocal,
199 A.D.3d 881 (2d Dep’t 2021) 13, 15, 16
Fishberg v. State Farm Fire & Cas. Co.,
No. 20-CV-6664 (LIL), 2021 WL 3077478 (S.D.N.Y. July 20, 2021)
Franklin v. Liberty Mut. Ins. Co.,
No. 08 Civ. 7120 (DAB)(DF), 2010 WL 5758984 (S.D.N.Y. Oct. 22, 2010) 18
Gauthier v. Countryway Ins. Co.,
100 A.D.3d 1062 (3d Dep’t 2012) 18, 19
Goshen vy. Mut. Life Ins. Co.,
98 N.Y.2d 314 (2002) 5, 14
Granada Condominium III Ass’n, v. Palomino,
78 A.D.3d 996 (2d Dep’t 2010) 5, 10
Grazioli v. Encompass Ins. Co.,
40 A.D.3d 696 (2d Dep’t 2007) 16
Grinshpun v. Travelers Cas. Co. of Conn.,
885 N.Y.S.2d 711 (Sup. Ct. Kings Cnty. 2009) 19
Guggenheimer v. Ginzburg,
43 N.Y.2d 268 (1977)
Gutierrez v. Gov’t Employees Ins. Co.,
136 A.D.3d 975 (2d Dep’t 2016) 16
Harris v. Provident Life & Acc. Ins. Co.,
310 F.3d 73 (2d Cir. 2002). 21
Hartnagel v. FTW Contracting,
47 N.Y.S.3d 96 (2d Dep’t 2017)
Hershfeld v. JM Woodworth Risk Retention Grp., Inc.,
213 A.D.3d 651 (2d Dep’t 2023) 19
Howard Spring, Inc., et al., v. Seneca Ins. Co.,
No. 603396/2021 (Nassau Ct. Mar. 19, 2021). 17
iii
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Howard Spring v. Seneca Ins. Co.,
No. 603396/2021, 2022 N.Y. Misc. LEXIS 7200 (Sup. Ct. Suffolk Cnty. Feb.
10, 2022) 17
Jain v Bathija,
No. 012958-08, 2009 N.Y. Misc. LEXIS 6044 (Sup. Ct. Nassau Cnty. Jul. 7,
2009) 11
Jane Street Holding, LLC v. Aspen Am. Ins. Co.,
No. 13 Civ. 2291 (RWS), 2014 WL 28600 (S.D.N.Y. Jan. 2, 2014) 18
Janssen v. Inc. Vill. of Rockville Ctr.,
59 A.D.3d 15 (2008) 22
Karpovich v. City of N.Y.,
162 A.D.3d 996 (2d Dep’t 2018)
Leon v Martinez,
84 N.Y.2d 83 (1994) passim
M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd.,
12 N.Y.3d 798 (2009) 10
Marino v. N.Y. Tel. Co.,
No. 88 CIV. 5817 (PKL), 1992 WL 212184 (S.D.N.Y. Aug. 24, 1992)
McMahan v. McMahan,
131 A.D.3d 593 (2d Dep’t 2015) 4,11
Mohrman vy. Johns,
210 A.D.3d 1075 (2d Dep’t 2022)
N.Y.U. v. Cont’l Ins. Co.,
87 N.Y.2d 308 (1995) 16, 19
Nat'l Mkt. Share, Inc. v. Sterling Nat’l Bank,
392 F.3d 520 (2d Cir. 2004). 15
Nicholas K. Inc. v. Sentinel Ins. Co., Ltd.,
No. 654344/2019, 2020 WL 1158815 (Sup. Ct. N.Y. Cnty. Mar. 6, 2020) 18, 19
Northwell Health, Inc. v. Lexington Ins. Co.,
550 F. Supp. 3d 108 (S.D.N.Y. 2021) 21
P.S. Auctions, Inc. v. Exch. Mut. Ins. Co.,
105 A.D.2d 473 (3d Dep’t 1984)
iv
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Palazzolo v. Herrick, Feinstein,
298 A.D.2d 372 (2d Dep’t 2002)..
Panasia Ests., Inc. v. Hudson Ins. Co,
10 N.Y.3d 200 19, 20
Paterra v. Nationwide Mut. Fire Ins. Co.,
38 A.D.3d 511 (2d Dep’t 2007) 16
Quail Ridge Assocs. v. Chem. Bank,
162 A.D.2d 917 (3d Dep’t 1990) 15
Quick Response Com. Div., LLC v. Travelers Prop. Cas. Co. of Am.,
No. 109-CV-00651 GLS/RFT, 2009 WL 3334600 (N.D.N.Y. Oct. 14, 2009) 17
Reifv. Nagy,
175 A.D.3d 107 (1st Dep’t 2019) 19, 20
Simmons vy. Edelstein,
32 A.D.3d 464 (2d Dep’t 2006) 10
Sukup v. State,
19 N.Y.2d 519 (1967) 19
Sunset Café, Inc. v Mett’s Surf & Sports Corp.,
103 A.D.3d 707 (2d Dep’t 2013)..
Sweazey v. Merchants Mut. Ins. Co.,
169 A.D.2d 43 (3d Dep’t 1991) 19
Twelve Sixty LLC v. Extreme Music Libr. Ltd., a division of Sony/ATV Music
Publ’g, No. 17-CV-1479 (PAC), 2018 WL 369185 (S.D.N.Y. Jan. 9, 2018) 15
Wegman vy. Dairylea Coop. Inc.,
50 A.D.2d 108 (4th Dep’t 1975) 21
Whiteface Real Est. Dev. & Const., LLC v. Selective Ins. Co. of Am.,
No. 8:08-CV-24, 2010 WL 2521794 (N.D.N.Y. June 16, 2010) .. 9,13
Statutes, Regulations, and Rules
CPLR § 105(u)
CPLR § 3211 (a)(1) 5, 10, 11, 14
CPLR § 3211(a)(7) 4,10,11
N.Y. Ins. Law § 1213(c)(1)
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N.Y. Comp. Codes R. & Regs. tit. 11, § 216.0... ceeceseeseeeseseseseseseseseseeeseseseseseseseeesteeeteeeseeeeeee 21
N.Y. Comp. Codes R. & Regs. tit. 11, § 216.4 .ecccceseeeesesesesesesesssesssesesessseasseesseessenseeees 20, 21
Other Authorities
Acquire, Dictionary.com, www.dictionary.com (last visited Apr. 26, 2023)
Acquire, Merriam Webster Dictionary (11th ed. 2012)
His, Merriam Webster Dictionary (11th ed. 2012)
Interest, Merriam Webster Dictionary (11th ed. 2012)
Owner, Merriam Webster Dictionary (11th ed. 2012)
Ownership, Dictionary.com, www.dictionary.com (last visited Apr. 26, 2023)..
Ownership, Merriam Webster Dictionary (11th ed. 2012)
Title, Merriam Webster Dictionary (11th ed. 2012)
vi
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INTRODUCTION
In 1985, Plaintiff Barry Yampol, an internationally recognized mineral collector,
purchased the Vermillion Mine located in Ouro Preto, Brazil, which is well-known among
collectors for its high-quality imperial topaz. Mr. Yampol selected 26 kg for his personal
collection of world-class imperial topaz out of the best of the imperial topaz crystals he extracted
from his mine and the former owner’s reserve of top quality imperial topaz that he had purchased
along with the mine, referred to here as the “Imperial Topaz.” In their motion to dismiss, the
Insurers act as if Mr. Yampol had never pleaded and sworn to these facts in his verified Complaint.
But he has (NYSCEF 2 4 1, 5, 12, 30-45, 53, 55, 57-58, 66-68, 89-90), and those facts must be
accepted as true for purposes of this motion. Leon v Martinez, 84 N.Y.2d 83, 87-88 (1994).
To insure his Imperial Topaz and other assets, Mr. Yampol purchased an insurance policy
from the Insurers, Certain Underwriters at Lloyd’s of London. On April 2, 2017, Mr. Yampol
discovered that his Imperial Topaz was missing from his residence in Nassau County. He promptly
notified the police and the Insurers, filed a police report, and invited the Insurers to investigate the
claim. The Insurers should have investigated in good faith and compensated him for his loss.
Instead, they treated Mr. Yampol as an adversary, characterizing the claims handling process in
their motion as a “battle,” engaged in bad faith delaying tactics for over six years, and disregarded
his sworn proof of loss, which forced Mr. Yampol to bring this suit to enforce the promise of
coverage they made.
What is worse, the Insurers now, for the first time, after six years since they were notified
of the loss, make the spurious claim that Mr. Yampol never actually owned—or even asserted that
he has owned—the Imperial Topaz that he has owned for more than 30 years, even though he
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swore to his ownership of the Imperial Topaz in the April 29, 2021 Proof of Loss submitted under
penalty of perjury and in the verified Complaint.
That Complaint states a single cause of action—for breach of contract. As New York law
allows, Mr. Yampol included in this single cause of action a claim that the Insurers not only
breached the contract of insurance but also the implied covenant of good faith and fair dealing,
which supports an award of consequential damages.
The Insurers admit that there was a contract and do not dispute that they have failed to pay
a penny to Mr. Yampol. They hang their hat on the assertion that Mr. Yampol did not satisfy a
condition precedent to recovery under the insurance policy because he allegedly did not provide
“satisfactory proof of ownership” of his Imperial Topaz. Since this question is to be resolved by
the factfinder and not on a motion to dismiss, the Insurers assert that Mr. Yampol did not even
allege that he owned the Imperial Topaz: “there is nothing concerning his ownership of the
Imperial Topaz” in the Complaint. NYSCEF 27 at 11. In fact, the verified Complaint and
supporting exhibits contain over 50 separate assertions of Mr. Yampol’s ownership of his Imperial
Topaz collection.
The Insurers raise objections to the bad faith claim, including an improper request that the
Court rewrite the verified Complaint to include a separate cause of action for breach of the implied
covenant of good faith and fair dealing so that such nonexistent separate cause of action would
provide the Court with a basis to warrant the dismissal of Mr. Yampol’s actual and well-founded
claims on the basis that the nonexistent claim was “duplicative.” As discussed below, the Court
should deny this motion in full.
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STATEMENT OF FACTS
As alleged in the verified Complaint, Mr. Yampol purchased the mine in 1985, along with
a portion of the “mine reserve” (exceptional imperial topaz specimens set aside by the prior
owners—i.e., the best of the best). NYSCEF 2 4 25-26, 30, 32; NYSCEF 6 at 4. Mr. Yampol
selected a portion of the mine reserve he bought to become part of his Imperial Topaz collection,
with the remainder of his collection selected by Mr. Yampol from imperial topaz extracted from
his mine after 1985. NYSCEF 2 ff 5, 32, 35, 37; NYSCEF 4 at 10.
To safeguard his collection, Mr. Yampol purchased an insurance policy from the Insurers,
No. B0507N16SF04900 (the “Policy”). NYSCEF 3. It insures “Barry Yampol and all owned
entities for their respective rights and interests,” for his various collections, including “Mineral
9 66
Collections, cut gems” and “gems rough.” Jd. at 4. It insures “Vault Systems” in Ouro Preto
and Minas Gerais, Brazil. Jd.
Mr. Yampol discovered that his Imperial Topaz was missing from his residence on or about
April 2, 2017, notified the Insurers of the loss on April 4, and filed a police report on April 5.
NYSCEF 2 4 11, 61, 64.! Mr. Yampol provided the Insurers with satisfactory proof
of ownership,
triggering their contractual obligation to make him whole for his loss, up to Policy limits.
NYSCEF 2, Exs. 1-8. In the Proof of Loss provided to Insurers on April 29, 2021, Mr. Yampol
swore that he had 100% title and interest in the Imperial Topaz, that he had dominion and control
over the entire collection when last he saw it, and he did not give anyone permission to access or
take it. See, e.g., NYSCEF 4 at 3 (discussing title and interest and location at his residence prior
to loss), 132 (he did “not give anyone permission” to take the missing items). Mr. Yampol further
1 Other possessions belonging to Plaintiff are also missing. However, since the value of his
Imperial Topaz alone exceeds policy limits, Plaintiff chose to submit a claim only for his Imperial
Topaz.
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attested to his ownership of the Imperial Topaz in the verified Complaint. NYSCEF 2 {ff 5, 12,
50, 53, 55, 66.
However, more than six years after the loss, and despite Mr. Yampol’s swearing to facts
establishing his ownership and provision of hundreds of pages of information corroborating his
ownership of his Imperial Topaz and other details of the loss, the Insurers have failed to make any
payment, to acknowledge Mr. Yampol owned any part of his Imperial Topaz, or to admit that the
Imperial Topaz had any value. Jd.{J 13-14, 67-69, 71-74.
STANDARD OF REVIEW
The Court “must deny a motion to dismiss” under CPLR § 3211(a)(7) for failure to state a
cause of action if “factual allegations . . . manifest any cause of action cognizable at law.” 5/1 W.
232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002); Guggenheimer v.
Ginzburg, 43 N.Y.2d 268, 275 (1977). In evaluating a motion to dismiss, the Court must liberally
construe the pleading, accept facts alleged as true, and accord to the plaintiff every possible
favorable inference from the allegations. Leon, 84 N.Y.2d at 87; Mohrman v. Johns, 210 A.D.3d
1075, 1076 (2d Dep’t 2022) (citation omitted). However, “bare legal conclusions and factual
claims which are flatly contradicted by the evidence are not presumed to be true.” Palazzolo v.
Herrick, Feinstein, 298 A.D.2d 372 (2d Dep’t 2002). The Court may consider documents
referenced in or attached to the Complaint to assess whether Plaintiff has a cause of action.
McMahan v. McMahan, 131 A.D.3d 593, 594 (2d Dep’t 2015); Alliance Network, LLC v. Sidley
Austin LLP, 43 Misc.3d 848, 852 (Sup. Ct. N.Y. Cnty. 2014). However, the defendants’ affidavits
4
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“are not to be examined” when determining whether plaintiff has a cause of action. Anglero v.
Hanif, 140 A.D.3d 905, 907 (2d Dep’t 2016) (citation omitted).
The Court must deny a motion to dismiss under section 3211(a)(1) based on a defense
“founded upon documentary evidence” unless the “documentary evidence” for the defense
“resolves all factual issues as a matter of law, and utterly refutes a plaintiff's factual allegations,
conclusively establishing a defense as a matter of law.” Goshen v. Mut. Life Ins. Co., 98 N.Y.2d
314, 326 (2002); Sunset Café, Inc. v Mett’s Surf & Sports Corp., 103 A.D.3d 707, 709 (2d Dep’t
2013). To be considered such “documentary evidence,” the evidence must be “unambiguous,
authentic, and undeniable.” Karpovich v. City of N.Y., 162 A.D.3d 996, 997 (2d Dep’t 2018);
Hartnagel v. FTW Contracting, 47 N.Y.S.3d 96, 98-99 (2d Dep’t 2017) (mortgages, deeds, and
contracts may qualify as documentary evidence). Affidavits, letters, and emails are not
“documentary evidence,” and may not be used by a defendant to support a section 3211(a)(1)
motion. Granada Condominium II Ass'n, v. Palomino, 78 A.D.3d 996, 996-97 (2d Dep’t 2010);
Anderson v. Armentano, 139 A.D.3d 769, 770-71 (2d Dep’t 2016).
ARGUMENT
I The Court Should Deny the Motion to Dismiss.
The Court should deny the motion because: (A) the basis for the motion, a claimed lack of
ownership, is belied by the allegations in Mr. Yampol’s Complaint, and (B) his ownership is
further confirmed by evidence provided with this opposition.”
2 Additionally, before the Insurers (as foreign entities) could file their motion, they were
obligated to post a bond to secure any judgment. Their failure to do so makes their motion
defective. As explained in Plaintiff's separately filed Motion to Order Compliance with N.Y. Ins.
Law § 1213(c)(1), the Court should order the Insurers to post a bond and hold their motion in
abeyance pending compliance. NYSCEF 36 at 6-7.
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A. The Insurers’ claimed lack of ownership is belied by the allegations in Mr.
Yampol’s Complaint.
The Complaint states a cause of action for breach of contract. The elements of breach are
that: a contract exists, plaintiff performed, defendant breached, and defendant’s breach resulted in
damages. 34-06 73, LLC v. Seneca Ins. Co., 39 N.Y.3d 44, 52 (2022). The Complaint alleges
each of these elements. NYSCEF 2 §f 98-102. In their motion, the Insurers only dispute whether
Mr. Yampol provided “satisfactory proof of ownership.” NYSCEF 27 at 2, 10.
The Insurers incorrectly claim that that “[n]owhere did [Mr. Yampol] provide . . . proof of
ownership,” and that “there is nothing concerning his ownership of the Imperial Topaz” in Mr.
Yampol’s Complaint. Jd. at 4, 11 (emphasis in original). Not so.
As part of his Proof of Loss, Mr. Yampol filled out and swore to a form entitled “Sworn
Statement in Proofof Loss,” and filled out item 3 as follows (his responses appear in bold): “Title
and Interest: At the time of the loss the interest of your insured in the property described therein
was 100%. No other person or persons has any interest therein or encumbrance thereon, except:
N/A” NYSCEF 4 at 3. However, the Insurers ignore that Mr. Yampol swore to this statement,
and claim that stating he “had ‘100%’ interest in the property . . . is not enough” because “[t]here’s
no indication what ‘interest? means here.” NYSCEF 27 at 10. This argument is contrary to
common sense: If Mr. Yampol swears he has a “100%” interest in the property, the only
reasonable inference to be drawn is that Mr. Yampol is claiming that he owns the property.
Interest, Merriam Webster Dictionary (11th ed. 2012) (defining “interest” as a “right, title, or legal
share in something”). Additionally, Mr. Yampol’s answer must be read in the context of the form’s
prompt, which reads “Title and Interest.” The definition of “title” includes “all the elements
constituting legal ownership.” Title, Merriam Webster Dictionary (11th ed. 2012).
6
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In fact, there are more than 50 separate assertions of Mr. Yampol’s ownership of the
Imperial Topaz throughout the verified Complaint and attached documentation. The Insurers
never acknowledge that Mr. Yampol swore to the facts in the verified Complaint. See CPLR
§ 105(u) (a verified complaint serves as an affidavit). Mr. Yampol states—in paragraph one of his
verified Complaint—that the Imperial Topaz was “his.” NYSCEF 2 § 1. The possessive pronoun
“his,” is defined as “that which belongs to him.” His, Merriam Webster Dictionary (11th ed. 2012).
The word “his” is used to describe Mr. Yampol’s Imperial Topaz no less than fifteen times in the
Complaint, NYSCEF 2 § 1, 5, 16, 35-39, 64, 71, 79, 89-90, four times in the memorandum
supporting his Proof of Loss, NYSCEF 4 at 11, 13, and seven times in the May 13, 2022 Letter
attached to the Complaint, NYSCEF 6, at 3-4, 6-8. The Insurers, appearing to recognize that
admitting Mr. Yampol’s Imperial Topaz was “his” contradicts their argument, never mention that
Mr. Yampol repeatedly pleaded the Imperial Topaz was his, disingenuously referring to “an” or
“the” Imperial Topaz collection. NYSCEF 27 at 3; NYSCEF 2 41.
Mr. Yampol pleaded ownership in numerous additional ways, including the following:
By stating in the verified Complaint that Mr. Yampol’s Imperial Topaz was “his most
prized possession.” NYSCEF 2 [ 5.
By alleging that “Mr. Yampol submitted a Proof of Loss that he owned the Imperial
Topaz.” Jd. § 78 (emphasis added).
By describing the Imperial Topaz as “Mr. Yampol’s”—using the possessive form—no less
than seven times in the Complaint, Jd. § 41, 43-44, 68, 72, 89, 99, nine times in the
memorandum supporting his Proof
of Loss, NYSCEF 4 at 7, 12-14, and seven times in the
May 13, 2022 Letter, NYSCEF 6 at 3-5, 8, 10.
7
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e By explaining that, in 1985, he “acquired” or “paid approximately $2 million to acquire” a
portion of mine reserve to form part of his Imperial Topaz collection. NYSCEF 2 § 37;
NYSCEF 6 at 5. To “acquire” is to “buy or obtain (an asset or object) for oneself” or to
“get as one’s own.” Acquire, Dictionary.com, www.dictionary.com, (last visited Apr. 26,
2023); Acquire, Merriam Webster Dictionary (11th ed. 2012).
By explaining that he owned the mine, from which he extracted the remaining 20 kg of his
Imperial Topaz. NYSCEF 2 ff 30, 32, 35, 44-45, 68.
Demonstrating that he had dominion and control over his Imperial Topaz—where it was
located (locked cabinets in the basement of his residence), who had authorized access (no
one but Mr. Yampol)—and where and when he displayed parts of his collection (twice—
at the Tucson Gem & Mineral Show in 1995 and 2010). See, e.g., NYSCEF 4 at 3, 11-13,
45-50, 131-32.
Of course, if these allegations are insufficient, and they are not, Mr. Yampol can further
attest to ownership in an amended complaint. See Leon, 84 N.Y.2d at 88 (“[A]ffidavit[s may be]
submitted by the plaintiffto remedy any defects.””)
The Policy provides that it is “a condition precedent” that “the presentation of satisfactory
proof
of . . ownership shall have been made to and accepted by [Defendants].” NYSCEF 3 at 10.
But a policyholder need only provide sufficient proof for the insurer to “consider its rights and
liabilities.” P.S. Auctions, Inc. v. Exch. Mut. Ins. Co., 105 A.D.2d 473, 475 (3d Dep’t 1984)
(citation omitted). Insurers are obligated to consider the totality of the evidence submitted.
Fishberg v. State Farm Fire & Cas. Co., No. 20-CV-6664 (LJL), 2021 WL 3077478, at *1, *4
(S.D.N.Y. July 20, 2021) (stating allegation that insurer only relied upon select information when
investigating claim could support a claim for breach of contract). Insurers are obligated to act
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reasonably when determining if Mr. Yampol submitted sufficient proof of ownership. Whiteface
Real Est. Dev. & Const., LLC v. Selective Ins. Co. of Am., No. 8:08-CV-24 (GLS/DRH), 2010 WL
2521794, at *4 (N.D.N.Y. June 16, 2010); see also Dalton v. Educ. Testing Serv., 87 N.Y.2d 384,
389 (1995) (contracting party may not act arbitrarily or irrationally when exercising discretion).
The facts Mr. Yampol has alleged and sworn to are consistent with the plain meaning of
“ownership.” In evaluating proof of “ownership,” the Policy must be interpreted using common
language and claims handlers are to apply common sense when adjusting claims; policyholders
are not required to use “magic words” in order to unlock coverage. Marino v. N.Y. Tel. Co., No.
88 CIV. 5817 (PKL), 1992 WL 212184, at *13 (S.D.N.Y. Aug. 24, 1992). “Ownership” is defined
as “the act, state, or right of possessing something,” Ownership, Dictionary.com,
www.dictionary.com, (last visited Apr. 26, 2023), or the “fact of being an owner,” Ownership,
Merriam Webster Dictionary (11th ed. 2012). An “owner” is a person who “owns” something—
i.e., one who “has the legal or rightful title to something,” or “one to whom property belongs.” Jd.
(Owner). In fact, Mr. Yampol provided sworn statements and supporting documentary proof
establishing his ownership. The Insurers impermissibly ignored all such evidence. Moreover, if
the Insurers were refusing to pay Mr. Yampol’s claim because he did not say the magic word—
“own” (to the exclusion of all of the other formulations listed herein)—they could have simply
asked Mr. Yampol at any point over the past six years to swear that he “owned” his Imperial Topaz,
and the matter would have been resolved. This kind of gamesmanship by the Insurers is precisely
why Mr. Yampol was required to file this suit and why the verified Complaint alleges a breach of
the covenant of good faith and fair dealing.
Improperly disregarding these extensive allegations, the Insurers assert that “Plaintiff's
alleged ownership of a mine in Brazil affords him no inference of ownership of the Imperial
9
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Topaz,” citing an affirmation of a Brazilian attorney, Paulo Brandio. NYSCEF 27 at 12. None of
the affidavits, letters, or emails attached to their motion may be relied upon under
section 3211(a)(1). Granada Condominium III Assn., 78 A.D.3d at 996-97; Anderson, 139 A.D.3d
at 770-71. While affidavits may be used by Mr. Yampol to help fix any defect in the Complaint,
the Insurers may not use them to defeat Mr. Yampol’s evidentiary showing under section
3211(a)(7). Anglero, 140 A.D.3d at 907. The Insurers cite M & B Joint Venture, Inc. v. Laurus
Master Fund, Ltd., 12 N.Y.3d 798, 800 (2009), and Simmons v. Edelstein, 32 A.D.3d 464, 465 (2d
Dep’t 2006), but M & B Joint Venture turned on an evaluation of the plaintiff's evidentiary
submissions, and the reasoning in Simmons was later rejected in Anglero.
Even setting aside the express allegations discussed above of Mr. Yampol’s ownership of
the Imperial Topaz, such ownership can be inferred from the totality of the facts sworn to by Mr.
Yampol. The Insurers do not challenge that Mr. Yampol owns the imperial topaz mine and they
have no basis to question whether he also owns the imperial topaz he extracts from that mine. Mr.
Brandao and the Insurers not only fail to explain how their general assertions about Brazilian law
apply to Mr. Yampol and his mine, they reference the wrong legal framework. Affirmation of
Luiz Lopes 4] 16-31.2 The Court should not take judicial notice of this irrelevant discussion.*
NYSCEF 27 at 12 n.3. Their unfounded allegations—made with the assistance of Brazilian
3 The Insurers also speculate that the Brazilian government may own the Imperial Topaz, a
claim the government has never asserted, which they base on Mr. Brandao’s opinion. But, as is
demonstrated in the Lopes Aff., their speculation is erroneous both legally and factually. Given
that the Insurers have long known Mr. Yampol owned the mine—the Policy expressly insures
“Vault Systems” in Brazil—if they had any serious questions about Brazilian mining rights, they
should have explored such questions before accepting Mr. Yampol’s premium payment.
4 Also irrelevant and disingenuous is the Insurers’ repeated reference to a “check” relating
to a mineral specimen a dealer had offered to sell to Mr. Yampol; they were previously informed
that the mineral was a spessartine garnet—and not the Imperial Topaz for which Mr. Yampol is
seeking coverage. NYSCEF 27 at 5, 16; NYSCEF 6 at 4.
10
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counsel, no less—are particularly troubling because documents recording Mr. Yampol’s
ownership of the mineral rights to the mine and surrounding land are publicly available. Lopes
Aff. §§ 7-15 (discussing public records).
In any event, under CPLR § 3211(a)(7), “liberally constru[ing]” the Complaint,
“accept[ing] the facts alleged as true,” and according to Mr. Yampol “every favorable inference
which may be drawn therefrom,” the Complaint states a cause of action. See Jain v Bathija, No.
012958-08, 2009 N.Y. Misc. LEXIS 6044, at *10 (Sup. Ct. Nassau Cnty. Jul. 7, 2009); McMahan,
131 A.D.3d at 594. Try as they might, the Insurers have not submitted “documentary evidence”
that “utterly refutes” Mr. Yampol’s allegations and “conclusively establishe[s] a defense as a
matter of law.” Jain, 2009 N.Y. Misc. LEXIS 6044, at *9-10; CPLR § 3211(a)(1).
B Mr. Yampol’s ownership of his Imperial Topaz is further confirmed by
evidence provided with this opposition.
To the extent that any additional evidence is needed to support Mr. Yampol’s claim of
ownership—and it is not—an affidavit by Mr. Yampol and an affirmation by an expert in Brazilian
law submitted herewith confirm Mr. Yampol’s ownership of his Imperial Topaz. See Leon, 84
N.Y.2d at 88. Specifically,
e Mr. Yampol owned his Imperial Topaz. Affidavit of Barry Yampol § 2.
e From June 14, 1985, when Mr. Yampol acquired his mine, through April 2, 2017, when he
discovered that his Imperial Topaz was missing, Mr. Yampol owned:
° the mine and surrounding land;
mining rights granting Mr. Yampol ownership of minerals extracted from his mine;
x
Vermelhao Mineragaéo Industria e Comércio Ltda. (“Vermelhao 3 ), the entity
through which Mr. Yampol acquired his mine; and
11
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o all the entities involved in the acquisition and operation of his mine, including
Vermelhao, Gemini — Industria e Comércio Ltda., Azurite Corp. Ltd., and the Barry
Yampol Trust, a grantor trust containing Mr. Yampol’s assets and as to which he is
the 100% beneficiary.
Id. 42; Lopes Aff. 8, 10-15, 23-31.
Il Mr. Yampol Properly Pleaded a Breach of the Implied Covenant of Good Faith and
Fair Dealing to Support Consequential Damages, Including Attorneys’ Fees.
Mr. Yampol brought a single cause of action for breach of contract. Consistent with New
York law, he has alleged bad faith to support the award of consequential damages, including
attorneys’ fees. Because the Insurers cannot show that Mr. Yampol improperly pleaded his claims,
the Insurers ask the Court to pretend that the Complaint pleads a separate cause
Preview
INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 05/04/2023 07:41 PM NYSCEF DOC. NO. 37 RECEIVED NYSCEF 05/04/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU BARRY YAMPOL, Index No. 601285/2023 Plaintiff, 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 LAW IN SUPPORT OF BARRY YAMPOL’S OPPOSITION TO THE MOTION TO DISMISS FILED BY CERTAIN UNDERWRITERS AT LLOYD’S, LONDON COVINGTON & BURLING LLP The New York Times Building 620 Eighth Avenue New York, NY 10018 Tel: 212.841.1000 One CityCenter 850 Tenth Street, NW Washington, DC 20001 Tel: 202.662.6000 Attorneys for Plaintiff 1 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 TABLE OF CONTENTS Page(s) INTRODUCTION STATEMENT OF FACTS STANDARD OF REVIEW ARGUMENT I The Court Should Deny the Motion to Dismiss.....0...0.cccccscesseseeseseseseseseseseseeeseeeseeeeeeees 5 A The Insurers’ claimed lack of ownership is belied by the allegations in Mr. Yampol’s Complaint Mr. Yampol’s ownership of his Imperial Topaz is further confirmed by evidence provided with this Opposition. ..........ccccseseseseseeeseeeteteeeeteteeseeeseeseees 11 IL Mr. Yampol Properly Pleaded a Breach of the Implied Covenant of Good Faith and Fair Dealing to Support Consequential Damages, Including Attorneys’ Fees. ......... 12 A The Insurers have failed to meet the high bar to dismiss Mr. Yampol’s bad faith Claim. 2.00.0... eee eeeseeseses eee eseeesseseeseseseseseeseseseeee 12 The Insurers’ breach of the implied covenant of good faith and fair dealing is an additional basis for Mr. Yampol’s breach of contract claim. ...........ceee 15 The Insurers’ breach of the covenant of good faith and fair dealing supports the award of consequential damages, including attorneys’ fees. ........... 17 The Factfinder May Consider N.Y. Insurance Code § 216.4 For Purposes of Assessing Whether the Insurers’ Conduct Was Reasonable or Demonstrated Undue Delay. 20 CONCLUSION 22 2 of 30 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 05/04/2023 07:41 PM NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 TABLE OF AUTHORITIES Page(s) Cases 34-06 73, LLC v. Seneca Ins. Co., 39 N.Y.3d 44 (2022) 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002) Acquista v. N.Y. Life Ins. Co., 285 A.D.2d 73 (1st Dep’t 2001) 13, 16, 17 Alliance Network, LLC v. Sidley Austin LLP, 43 Misc.3d 848 (Sup. Ct. N.Y. Cnty. 2014) Anderson v. Armentano, 139 A.D.3d 769 (2d Dep’t 2016) 5, 10 Anglero v. Hanif, 140 A.D.3d 905 (2d Dep’t 2016) 5, 10 ARI& Co. v. Regent Int’l Corp., 273 F. Supp. 2d 518 (S.D.N.Y. 2003) 16 Bi-Economy Mit, Inc. v. Harleysville Ins. Co., 10 N.Y.3d 187 (2008) 17, 19, 20 Bristol Harbour Assocs., L.P. v. Home Ins. Co., 244 A.D.2d 885 (4th Dep’t 1997) 20, 21 Brown v. Erie Ins. Co., 207 A.D.3d 1144 (2d Dep’t 2022) 15 Certain Underwriters at Lloyd’s v. BioEnergy Dev. Grp. LLC, 178 A.D.3d 463 (1st Dep’t 2019) 18, 19, 20 Chernish v. Mass. Mut. Life Ins. Co., No. 5:08—CV-0957, 2009 WL 385418 (N.D.N.Y. Feb. 10, 2009). 19 Dalton v. Educ. Testing Serv., 87 N.Y.2d 384 (1995) De Marinis v. Tower Ins. Co. of N.Y., 6 A.D.3d 484 (2d Dep’t 2004) 21 i 3 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 D.K. Prop., Inc., 168 A.D.3d 505 (1st Dep’t 2019) 13,17 Doody v. Liberty Mut. Grp., Inc., 137 A.D.3d 959 (2d Dep’t 2016). 12 E. Ramapo Cent. Sch. Dist. v. New York Sch. Ins Reciprocal, 199 A.D.3d 881 (2d Dep’t 2021) 13, 15, 16 Fishberg v. State Farm Fire & Cas. Co., No. 20-CV-6664 (LIL), 2021 WL 3077478 (S.D.N.Y. July 20, 2021) Franklin v. Liberty Mut. Ins. Co., No. 08 Civ. 7120 (DAB)(DF), 2010 WL 5758984 (S.D.N.Y. Oct. 22, 2010) 18 Gauthier v. Countryway Ins. Co., 100 A.D.3d 1062 (3d Dep’t 2012) 18, 19 Goshen vy. Mut. Life Ins. Co., 98 N.Y.2d 314 (2002) 5, 14 Granada Condominium III Ass’n, v. Palomino, 78 A.D.3d 996 (2d Dep’t 2010) 5, 10 Grazioli v. Encompass Ins. Co., 40 A.D.3d 696 (2d Dep’t 2007) 16 Grinshpun v. Travelers Cas. Co. of Conn., 885 N.Y.S.2d 711 (Sup. Ct. Kings Cnty. 2009) 19 Guggenheimer v. Ginzburg, 43 N.Y.2d 268 (1977) Gutierrez v. Gov’t Employees Ins. Co., 136 A.D.3d 975 (2d Dep’t 2016) 16 Harris v. Provident Life & Acc. Ins. Co., 310 F.3d 73 (2d Cir. 2002). 21 Hartnagel v. FTW Contracting, 47 N.Y.S.3d 96 (2d Dep’t 2017) Hershfeld v. JM Woodworth Risk Retention Grp., Inc., 213 A.D.3d 651 (2d Dep’t 2023) 19 Howard Spring, Inc., et al., v. Seneca Ins. Co., No. 603396/2021 (Nassau Ct. Mar. 19, 2021). 17 iii 4 of 30 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 05/04/2023 07:41 PM NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 Howard Spring v. Seneca Ins. Co., No. 603396/2021, 2022 N.Y. Misc. LEXIS 7200 (Sup. Ct. Suffolk Cnty. Feb. 10, 2022) 17 Jain v Bathija, No. 012958-08, 2009 N.Y. Misc. LEXIS 6044 (Sup. Ct. Nassau Cnty. Jul. 7, 2009) 11 Jane Street Holding, LLC v. Aspen Am. Ins. Co., No. 13 Civ. 2291 (RWS), 2014 WL 28600 (S.D.N.Y. Jan. 2, 2014) 18 Janssen v. Inc. Vill. of Rockville Ctr., 59 A.D.3d 15 (2008) 22 Karpovich v. City of N.Y., 162 A.D.3d 996 (2d Dep’t 2018) Leon v Martinez, 84 N.Y.2d 83 (1994) passim M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 N.Y.3d 798 (2009) 10 Marino v. N.Y. Tel. Co., No. 88 CIV. 5817 (PKL), 1992 WL 212184 (S.D.N.Y. Aug. 24, 1992) McMahan v. McMahan, 131 A.D.3d 593 (2d Dep’t 2015) 4,11 Mohrman vy. Johns, 210 A.D.3d 1075 (2d Dep’t 2022) N.Y.U. v. Cont’l Ins. Co., 87 N.Y.2d 308 (1995) 16, 19 Nat'l Mkt. Share, Inc. v. Sterling Nat’l Bank, 392 F.3d 520 (2d Cir. 2004). 15 Nicholas K. Inc. v. Sentinel Ins. Co., Ltd., No. 654344/2019, 2020 WL 1158815 (Sup. Ct. N.Y. Cnty. Mar. 6, 2020) 18, 19 Northwell Health, Inc. v. Lexington Ins. Co., 550 F. Supp. 3d 108 (S.D.N.Y. 2021) 21 P.S. Auctions, Inc. v. Exch. Mut. Ins. Co., 105 A.D.2d 473 (3d Dep’t 1984) iv 5 of 30 INDEX NO. 601285/2023 FILED: NASSAU COUNTY CLERK 05/04/2023 07:41 PM NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 Palazzolo v. Herrick, Feinstein, 298 A.D.2d 372 (2d Dep’t 2002).. Panasia Ests., Inc. v. Hudson Ins. Co, 10 N.Y.3d 200 19, 20 Paterra v. Nationwide Mut. Fire Ins. Co., 38 A.D.3d 511 (2d Dep’t 2007) 16 Quail Ridge Assocs. v. Chem. Bank, 162 A.D.2d 917 (3d Dep’t 1990) 15 Quick Response Com. Div., LLC v. Travelers Prop. Cas. Co. of Am., No. 109-CV-00651 GLS/RFT, 2009 WL 3334600 (N.D.N.Y. Oct. 14, 2009) 17 Reifv. Nagy, 175 A.D.3d 107 (1st Dep’t 2019) 19, 20 Simmons vy. Edelstein, 32 A.D.3d 464 (2d Dep’t 2006) 10 Sukup v. State, 19 N.Y.2d 519 (1967) 19 Sunset Café, Inc. v Mett’s Surf & Sports Corp., 103 A.D.3d 707 (2d Dep’t 2013).. Sweazey v. Merchants Mut. Ins. Co., 169 A.D.2d 43 (3d Dep’t 1991) 19 Twelve Sixty LLC v. Extreme Music Libr. Ltd., a division of Sony/ATV Music Publ’g, No. 17-CV-1479 (PAC), 2018 WL 369185 (S.D.N.Y. Jan. 9, 2018) 15 Wegman vy. Dairylea Coop. Inc., 50 A.D.2d 108 (4th Dep’t 1975) 21 Whiteface Real Est. Dev. & Const., LLC v. Selective Ins. Co. of Am., No. 8:08-CV-24, 2010 WL 2521794 (N.D.N.Y. June 16, 2010) .. 9,13 Statutes, Regulations, and Rules CPLR § 105(u) CPLR § 3211 (a)(1) 5, 10, 11, 14 CPLR § 3211(a)(7) 4,10,11 N.Y. Ins. Law § 1213(c)(1) 6 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 N.Y. Comp. Codes R. & Regs. tit. 11, § 216.0... ceeceseeseeeseseseseseseseseseeeseseseseseseseeesteeeteeeseeeeeee 21 N.Y. Comp. Codes R. & Regs. tit. 11, § 216.4 .ecccceseeeesesesesesesesssesssesesessseasseesseessenseeees 20, 21 Other Authorities Acquire, Dictionary.com, www.dictionary.com (last visited Apr. 26, 2023) Acquire, Merriam Webster Dictionary (11th ed. 2012) His, Merriam Webster Dictionary (11th ed. 2012) Interest, Merriam Webster Dictionary (11th ed. 2012) Owner, Merriam Webster Dictionary (11th ed. 2012) Ownership, Dictionary.com, www.dictionary.com (last visited Apr. 26, 2023).. Ownership, Merriam Webster Dictionary (11th ed. 2012) Title, Merriam Webster Dictionary (11th ed. 2012) vi 7 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 INTRODUCTION In 1985, Plaintiff Barry Yampol, an internationally recognized mineral collector, purchased the Vermillion Mine located in Ouro Preto, Brazil, which is well-known among collectors for its high-quality imperial topaz. Mr. Yampol selected 26 kg for his personal collection of world-class imperial topaz out of the best of the imperial topaz crystals he extracted from his mine and the former owner’s reserve of top quality imperial topaz that he had purchased along with the mine, referred to here as the “Imperial Topaz.” In their motion to dismiss, the Insurers act as if Mr. Yampol had never pleaded and sworn to these facts in his verified Complaint. But he has (NYSCEF 2 4 1, 5, 12, 30-45, 53, 55, 57-58, 66-68, 89-90), and those facts must be accepted as true for purposes of this motion. Leon v Martinez, 84 N.Y.2d 83, 87-88 (1994). To insure his Imperial Topaz and other assets, Mr. Yampol purchased an insurance policy from the Insurers, Certain Underwriters at Lloyd’s of London. On April 2, 2017, Mr. Yampol discovered that his Imperial Topaz was missing from his residence in Nassau County. He promptly notified the police and the Insurers, filed a police report, and invited the Insurers to investigate the claim. The Insurers should have investigated in good faith and compensated him for his loss. Instead, they treated Mr. Yampol as an adversary, characterizing the claims handling process in their motion as a “battle,” engaged in bad faith delaying tactics for over six years, and disregarded his sworn proof of loss, which forced Mr. Yampol to bring this suit to enforce the promise of coverage they made. What is worse, the Insurers now, for the first time, after six years since they were notified of the loss, make the spurious claim that Mr. Yampol never actually owned—or even asserted that he has owned—the Imperial Topaz that he has owned for more than 30 years, even though he 8 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 swore to his ownership of the Imperial Topaz in the April 29, 2021 Proof of Loss submitted under penalty of perjury and in the verified Complaint. That Complaint states a single cause of action—for breach of contract. As New York law allows, Mr. Yampol included in this single cause of action a claim that the Insurers not only breached the contract of insurance but also the implied covenant of good faith and fair dealing, which supports an award of consequential damages. The Insurers admit that there was a contract and do not dispute that they have failed to pay a penny to Mr. Yampol. They hang their hat on the assertion that Mr. Yampol did not satisfy a condition precedent to recovery under the insurance policy because he allegedly did not provide “satisfactory proof of ownership” of his Imperial Topaz. Since this question is to be resolved by the factfinder and not on a motion to dismiss, the Insurers assert that Mr. Yampol did not even allege that he owned the Imperial Topaz: “there is nothing concerning his ownership of the Imperial Topaz” in the Complaint. NYSCEF 27 at 11. In fact, the verified Complaint and supporting exhibits contain over 50 separate assertions of Mr. Yampol’s ownership of his Imperial Topaz collection. The Insurers raise objections to the bad faith claim, including an improper request that the Court rewrite the verified Complaint to include a separate cause of action for breach of the implied covenant of good faith and fair dealing so that such nonexistent separate cause of action would provide the Court with a basis to warrant the dismissal of Mr. Yampol’s actual and well-founded claims on the basis that the nonexistent claim was “duplicative.” As discussed below, the Court should deny this motion in full. 9 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 STATEMENT OF FACTS As alleged in the verified Complaint, Mr. Yampol purchased the mine in 1985, along with a portion of the “mine reserve” (exceptional imperial topaz specimens set aside by the prior owners—i.e., the best of the best). NYSCEF 2 4 25-26, 30, 32; NYSCEF 6 at 4. Mr. Yampol selected a portion of the mine reserve he bought to become part of his Imperial Topaz collection, with the remainder of his collection selected by Mr. Yampol from imperial topaz extracted from his mine after 1985. NYSCEF 2 ff 5, 32, 35, 37; NYSCEF 4 at 10. To safeguard his collection, Mr. Yampol purchased an insurance policy from the Insurers, No. B0507N16SF04900 (the “Policy”). NYSCEF 3. It insures “Barry Yampol and all owned entities for their respective rights and interests,” for his various collections, including “Mineral 9 66 Collections, cut gems” and “gems rough.” Jd. at 4. It insures “Vault Systems” in Ouro Preto and Minas Gerais, Brazil. Jd. Mr. Yampol discovered that his Imperial Topaz was missing from his residence on or about April 2, 2017, notified the Insurers of the loss on April 4, and filed a police report on April 5. NYSCEF 2 4 11, 61, 64.! Mr. Yampol provided the Insurers with satisfactory proof of ownership, triggering their contractual obligation to make him whole for his loss, up to Policy limits. NYSCEF 2, Exs. 1-8. In the Proof of Loss provided to Insurers on April 29, 2021, Mr. Yampol swore that he had 100% title and interest in the Imperial Topaz, that he had dominion and control over the entire collection when last he saw it, and he did not give anyone permission to access or take it. See, e.g., NYSCEF 4 at 3 (discussing title and interest and location at his residence prior to loss), 132 (he did “not give anyone permission” to take the missing items). Mr. Yampol further 1 Other possessions belonging to Plaintiff are also missing. However, since the value of his Imperial Topaz alone exceeds policy limits, Plaintiff chose to submit a claim only for his Imperial Topaz. 10 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 attested to his ownership of the Imperial Topaz in the verified Complaint. NYSCEF 2 {ff 5, 12, 50, 53, 55, 66. However, more than six years after the loss, and despite Mr. Yampol’s swearing to facts establishing his ownership and provision of hundreds of pages of information corroborating his ownership of his Imperial Topaz and other details of the loss, the Insurers have failed to make any payment, to acknowledge Mr. Yampol owned any part of his Imperial Topaz, or to admit that the Imperial Topaz had any value. Jd.{J 13-14, 67-69, 71-74. STANDARD OF REVIEW The Court “must deny a motion to dismiss” under CPLR § 3211(a)(7) for failure to state a cause of action if “factual allegations . . . manifest any cause of action cognizable at law.” 5/1 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002); Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 (1977). In evaluating a motion to dismiss, the Court must liberally construe the pleading, accept facts alleged as true, and accord to the plaintiff every possible favorable inference from the allegations. Leon, 84 N.Y.2d at 87; Mohrman v. Johns, 210 A.D.3d 1075, 1076 (2d Dep’t 2022) (citation omitted). However, “bare legal conclusions and factual claims which are flatly contradicted by the evidence are not presumed to be true.” Palazzolo v. Herrick, Feinstein, 298 A.D.2d 372 (2d Dep’t 2002). The Court may consider documents referenced in or attached to the Complaint to assess whether Plaintiff has a cause of action. McMahan v. McMahan, 131 A.D.3d 593, 594 (2d Dep’t 2015); Alliance Network, LLC v. Sidley Austin LLP, 43 Misc.3d 848, 852 (Sup. Ct. N.Y. Cnty. 2014). However, the defendants’ affidavits 4 11 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 “are not to be examined” when determining whether plaintiff has a cause of action. Anglero v. Hanif, 140 A.D.3d 905, 907 (2d Dep’t 2016) (citation omitted). The Court must deny a motion to dismiss under section 3211(a)(1) based on a defense “founded upon documentary evidence” unless the “documentary evidence” for the defense “resolves all factual issues as a matter of law, and utterly refutes a plaintiff's factual allegations, conclusively establishing a defense as a matter of law.” Goshen v. Mut. Life Ins. Co., 98 N.Y.2d 314, 326 (2002); Sunset Café, Inc. v Mett’s Surf & Sports Corp., 103 A.D.3d 707, 709 (2d Dep’t 2013). To be considered such “documentary evidence,” the evidence must be “unambiguous, authentic, and undeniable.” Karpovich v. City of N.Y., 162 A.D.3d 996, 997 (2d Dep’t 2018); Hartnagel v. FTW Contracting, 47 N.Y.S.3d 96, 98-99 (2d Dep’t 2017) (mortgages, deeds, and contracts may qualify as documentary evidence). Affidavits, letters, and emails are not “documentary evidence,” and may not be used by a defendant to support a section 3211(a)(1) motion. Granada Condominium II Ass'n, v. Palomino, 78 A.D.3d 996, 996-97 (2d Dep’t 2010); Anderson v. Armentano, 139 A.D.3d 769, 770-71 (2d Dep’t 2016). ARGUMENT I The Court Should Deny the Motion to Dismiss. The Court should deny the motion because: (A) the basis for the motion, a claimed lack of ownership, is belied by the allegations in Mr. Yampol’s Complaint, and (B) his ownership is further confirmed by evidence provided with this opposition.” 2 Additionally, before the Insurers (as foreign entities) could file their motion, they were obligated to post a bond to secure any judgment. Their failure to do so makes their motion defective. As explained in Plaintiff's separately filed Motion to Order Compliance with N.Y. Ins. Law § 1213(c)(1), the Court should order the Insurers to post a bond and hold their motion in abeyance pending compliance. NYSCEF 36 at 6-7. 12 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 A. The Insurers’ claimed lack of ownership is belied by the allegations in Mr. Yampol’s Complaint. The Complaint states a cause of action for breach of contract. The elements of breach are that: a contract exists, plaintiff performed, defendant breached, and defendant’s breach resulted in damages. 34-06 73, LLC v. Seneca Ins. Co., 39 N.Y.3d 44, 52 (2022). The Complaint alleges each of these elements. NYSCEF 2 §f 98-102. In their motion, the Insurers only dispute whether Mr. Yampol provided “satisfactory proof of ownership.” NYSCEF 27 at 2, 10. The Insurers incorrectly claim that that “[n]owhere did [Mr. Yampol] provide . . . proof of ownership,” and that “there is nothing concerning his ownership of the Imperial Topaz” in Mr. Yampol’s Complaint. Jd. at 4, 11 (emphasis in original). Not so. As part of his Proof of Loss, Mr. Yampol filled out and swore to a form entitled “Sworn Statement in Proofof Loss,” and filled out item 3 as follows (his responses appear in bold): “Title and Interest: At the time of the loss the interest of your insured in the property described therein was 100%. No other person or persons has any interest therein or encumbrance thereon, except: N/A” NYSCEF 4 at 3. However, the Insurers ignore that Mr. Yampol swore to this statement, and claim that stating he “had ‘100%’ interest in the property . . . is not enough” because “[t]here’s no indication what ‘interest? means here.” NYSCEF 27 at 10. This argument is contrary to common sense: If Mr. Yampol swears he has a “100%” interest in the property, the only reasonable inference to be drawn is that Mr. Yampol is claiming that he owns the property. Interest, Merriam Webster Dictionary (11th ed. 2012) (defining “interest” as a “right, title, or legal share in something”). Additionally, Mr. Yampol’s answer must be read in the context of the form’s prompt, which reads “Title and Interest.” The definition of “title” includes “all the elements constituting legal ownership.” Title, Merriam Webster Dictionary (11th ed. 2012). 6 13 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 In fact, there are more than 50 separate assertions of Mr. Yampol’s ownership of the Imperial Topaz throughout the verified Complaint and attached documentation. The Insurers never acknowledge that Mr. Yampol swore to the facts in the verified Complaint. See CPLR § 105(u) (a verified complaint serves as an affidavit). Mr. Yampol states—in paragraph one of his verified Complaint—that the Imperial Topaz was “his.” NYSCEF 2 § 1. The possessive pronoun “his,” is defined as “that which belongs to him.” His, Merriam Webster Dictionary (11th ed. 2012). The word “his” is used to describe Mr. Yampol’s Imperial Topaz no less than fifteen times in the Complaint, NYSCEF 2 § 1, 5, 16, 35-39, 64, 71, 79, 89-90, four times in the memorandum supporting his Proof of Loss, NYSCEF 4 at 11, 13, and seven times in the May 13, 2022 Letter attached to the Complaint, NYSCEF 6, at 3-4, 6-8. The Insurers, appearing to recognize that admitting Mr. Yampol’s Imperial Topaz was “his” contradicts their argument, never mention that Mr. Yampol repeatedly pleaded the Imperial Topaz was his, disingenuously referring to “an” or “the” Imperial Topaz collection. NYSCEF 27 at 3; NYSCEF 2 41. Mr. Yampol pleaded ownership in numerous additional ways, including the following: By stating in the verified Complaint that Mr. Yampol’s Imperial Topaz was “his most prized possession.” NYSCEF 2 [ 5. By alleging that “Mr. Yampol submitted a Proof of Loss that he owned the Imperial Topaz.” Jd. § 78 (emphasis added). By describing the Imperial Topaz as “Mr. Yampol’s”—using the possessive form—no less than seven times in the Complaint, Jd. § 41, 43-44, 68, 72, 89, 99, nine times in the memorandum supporting his Proof of Loss, NYSCEF 4 at 7, 12-14, and seven times in the May 13, 2022 Letter, NYSCEF 6 at 3-5, 8, 10. 7 14 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 e By explaining that, in 1985, he “acquired” or “paid approximately $2 million to acquire” a portion of mine reserve to form part of his Imperial Topaz collection. NYSCEF 2 § 37; NYSCEF 6 at 5. To “acquire” is to “buy or obtain (an asset or object) for oneself” or to “get as one’s own.” Acquire, Dictionary.com, www.dictionary.com, (last visited Apr. 26, 2023); Acquire, Merriam Webster Dictionary (11th ed. 2012). By explaining that he owned the mine, from which he extracted the remaining 20 kg of his Imperial Topaz. NYSCEF 2 ff 30, 32, 35, 44-45, 68. Demonstrating that he had dominion and control over his Imperial Topaz—where it was located (locked cabinets in the basement of his residence), who had authorized access (no one but Mr. Yampol)—and where and when he displayed parts of his collection (twice— at the Tucson Gem & Mineral Show in 1995 and 2010). See, e.g., NYSCEF 4 at 3, 11-13, 45-50, 131-32. Of course, if these allegations are insufficient, and they are not, Mr. Yampol can further attest to ownership in an amended complaint. See Leon, 84 N.Y.2d at 88 (“[A]ffidavit[s may be] submitted by the plaintiffto remedy any defects.””) The Policy provides that it is “a condition precedent” that “the presentation of satisfactory proof of . . ownership shall have been made to and accepted by [Defendants].” NYSCEF 3 at 10. But a policyholder need only provide sufficient proof for the insurer to “consider its rights and liabilities.” P.S. Auctions, Inc. v. Exch. Mut. Ins. Co., 105 A.D.2d 473, 475 (3d Dep’t 1984) (citation omitted). Insurers are obligated to consider the totality of the evidence submitted. Fishberg v. State Farm Fire & Cas. Co., No. 20-CV-6664 (LJL), 2021 WL 3077478, at *1, *4 (S.D.N.Y. July 20, 2021) (stating allegation that insurer only relied upon select information when investigating claim could support a claim for breach of contract). Insurers are obligated to act 15 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 reasonably when determining if Mr. Yampol submitted sufficient proof of ownership. Whiteface Real Est. Dev. & Const., LLC v. Selective Ins. Co. of Am., No. 8:08-CV-24 (GLS/DRH), 2010 WL 2521794, at *4 (N.D.N.Y. June 16, 2010); see also Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995) (contracting party may not act arbitrarily or irrationally when exercising discretion). The facts Mr. Yampol has alleged and sworn to are consistent with the plain meaning of “ownership.” In evaluating proof of “ownership,” the Policy must be interpreted using common language and claims handlers are to apply common sense when adjusting claims; policyholders are not required to use “magic words” in order to unlock coverage. Marino v. N.Y. Tel. Co., No. 88 CIV. 5817 (PKL), 1992 WL 212184, at *13 (S.D.N.Y. Aug. 24, 1992). “Ownership” is defined as “the act, state, or right of possessing something,” Ownership, Dictionary.com, www.dictionary.com, (last visited Apr. 26, 2023), or the “fact of being an owner,” Ownership, Merriam Webster Dictionary (11th ed. 2012). An “owner” is a person who “owns” something— i.e., one who “has the legal or rightful title to something,” or “one to whom property belongs.” Jd. (Owner). In fact, Mr. Yampol provided sworn statements and supporting documentary proof establishing his ownership. The Insurers impermissibly ignored all such evidence. Moreover, if the Insurers were refusing to pay Mr. Yampol’s claim because he did not say the magic word— “own” (to the exclusion of all of the other formulations listed herein)—they could have simply asked Mr. Yampol at any point over the past six years to swear that he “owned” his Imperial Topaz, and the matter would have been resolved. This kind of gamesmanship by the Insurers is precisely why Mr. Yampol was required to file this suit and why the verified Complaint alleges a breach of the covenant of good faith and fair dealing. Improperly disregarding these extensive allegations, the Insurers assert that “Plaintiff's alleged ownership of a mine in Brazil affords him no inference of ownership of the Imperial 9 16 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 Topaz,” citing an affirmation of a Brazilian attorney, Paulo Brandio. NYSCEF 27 at 12. None of the affidavits, letters, or emails attached to their motion may be relied upon under section 3211(a)(1). Granada Condominium III Assn., 78 A.D.3d at 996-97; Anderson, 139 A.D.3d at 770-71. While affidavits may be used by Mr. Yampol to help fix any defect in the Complaint, the Insurers may not use them to defeat Mr. Yampol’s evidentiary showing under section 3211(a)(7). Anglero, 140 A.D.3d at 907. The Insurers cite M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 N.Y.3d 798, 800 (2009), and Simmons v. Edelstein, 32 A.D.3d 464, 465 (2d Dep’t 2006), but M & B Joint Venture turned on an evaluation of the plaintiff's evidentiary submissions, and the reasoning in Simmons was later rejected in Anglero. Even setting aside the express allegations discussed above of Mr. Yampol’s ownership of the Imperial Topaz, such ownership can be inferred from the totality of the facts sworn to by Mr. Yampol. The Insurers do not challenge that Mr. Yampol owns the imperial topaz mine and they have no basis to question whether he also owns the imperial topaz he extracts from that mine. Mr. Brandao and the Insurers not only fail to explain how their general assertions about Brazilian law apply to Mr. Yampol and his mine, they reference the wrong legal framework. Affirmation of Luiz Lopes 4] 16-31.2 The Court should not take judicial notice of this irrelevant discussion.* NYSCEF 27 at 12 n.3. Their unfounded allegations—made with the assistance of Brazilian 3 The Insurers also speculate that the Brazilian government may own the Imperial Topaz, a claim the government has never asserted, which they base on Mr. Brandao’s opinion. But, as is demonstrated in the Lopes Aff., their speculation is erroneous both legally and factually. Given that the Insurers have long known Mr. Yampol owned the mine—the Policy expressly insures “Vault Systems” in Brazil—if they had any serious questions about Brazilian mining rights, they should have explored such questions before accepting Mr. Yampol’s premium payment. 4 Also irrelevant and disingenuous is the Insurers’ repeated reference to a “check” relating to a mineral specimen a dealer had offered to sell to Mr. Yampol; they were previously informed that the mineral was a spessartine garnet—and not the Imperial Topaz for which Mr. Yampol is seeking coverage. NYSCEF 27 at 5, 16; NYSCEF 6 at 4. 10 17 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 counsel, no less—are particularly troubling because documents recording Mr. Yampol’s ownership of the mineral rights to the mine and surrounding land are publicly available. Lopes Aff. §§ 7-15 (discussing public records). In any event, under CPLR § 3211(a)(7), “liberally constru[ing]” the Complaint, “accept[ing] the facts alleged as true,” and according to Mr. Yampol “every favorable inference which may be drawn therefrom,” the Complaint states a cause of action. See Jain v Bathija, No. 012958-08, 2009 N.Y. Misc. LEXIS 6044, at *10 (Sup. Ct. Nassau Cnty. Jul. 7, 2009); McMahan, 131 A.D.3d at 594. Try as they might, the Insurers have not submitted “documentary evidence” that “utterly refutes” Mr. Yampol’s allegations and “conclusively establishe[s] a defense as a matter of law.” Jain, 2009 N.Y. Misc. LEXIS 6044, at *9-10; CPLR § 3211(a)(1). B Mr. Yampol’s ownership of his Imperial Topaz is further confirmed by evidence provided with this opposition. To the extent that any additional evidence is needed to support Mr. Yampol’s claim of ownership—and it is not—an affidavit by Mr. Yampol and an affirmation by an expert in Brazilian law submitted herewith confirm Mr. Yampol’s ownership of his Imperial Topaz. See Leon, 84 N.Y.2d at 88. Specifically, e Mr. Yampol owned his Imperial Topaz. Affidavit of Barry Yampol § 2. e From June 14, 1985, when Mr. Yampol acquired his mine, through April 2, 2017, when he discovered that his Imperial Topaz was missing, Mr. Yampol owned: ° the mine and surrounding land; mining rights granting Mr. Yampol ownership of minerals extracted from his mine; x Vermelhao Mineragaéo Industria e Comércio Ltda. (“Vermelhao 3 ), the entity through which Mr. Yampol acquired his mine; and 11 18 of 30 INDEX NO. 601285/2023 NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 05/04/2023 o all the entities involved in the acquisition and operation of his mine, including Vermelhao, Gemini — Industria e Comércio Ltda., Azurite Corp. Ltd., and the Barry Yampol Trust, a grantor trust containing Mr. Yampol’s assets and as to which he is the 100% beneficiary. Id. 42; Lopes Aff. 8, 10-15, 23-31. Il Mr. Yampol Properly Pleaded a Breach of the Implied Covenant of Good Faith and Fair Dealing to Support Consequential Damages, Including Attorneys’ Fees. Mr. Yampol brought a single cause of action for breach of contract. Consistent with New York law, he has alleged bad faith to support the award of consequential damages, including attorneys’ fees. Because the Insurers cannot show that Mr. Yampol improperly pleaded his claims, the Insurers ask the Court to pretend that the Complaint pleads a separate cause