Executive Plaza, LLC, Appellant,v.Peerless Insurance Company, Respondent.BriefN.Y.January 6, 2014CTQ-2013-00005 Court of Appeals STATE OF NEW YORK EXECUTIVE PLAZA, LLC, Plaintiff-Appellant, against PEERLESS INSURANCE COMPANY, Defendant-Respondent. >> >> REPLY BRIEF FOR PLAINTIFF-APPELLANT JAROSLAWICZ & JAROS LLC Attorneys for Plaintiff-Appellant 225 Broadway, 24th Floor New York, New York 10007 212-227-2780 dtolchin@lawjaros.com On Question Certified by the United States Court of Appeals for the Second Circuit (USCOA Docket No. 12-1470-cv) To Be Argued By: David Jaroslawicz Time Requested: 30 Minutes On the brief: David Tolchin David Jaroslawicz Date Completed: October 23, 2013 Table of Contents TABLE OF AUTHORITIES .................................................................................. iii PRELIMINARY STATEMENT .............................................................................. 1 POINT I THE STANDARD FIRE POLICY DOES NOT OVERRIDE THE COMMON LAW ACCRUAL DATE APPLICABLE TO PLAINTIFF’S CLAIM ................................................................................... 2 The Policy At Issue Is Not The Standard Fire Policy .................... 4 The Policy At Issue Is Ambiguous ................................................... 8 POINT II PLAINTIFF IS ASKING THE COURT TO CONSTRUE THE POLICY AT ISSUE, NOT “REWRITE” IT ................................................. 9 POINT III THE STANDARD FIRE POLICY SETS MINIMUM STANDARDS, NOT OUTSIDE LIMITS, DESPITE WHAT DEFENDANT SUGGESTS ........................................................................ 10 POINT IV IN ATTEMPTING TO DISTINGUISH BAKOS, DEFENDANT IMPERMISSIBLY TAKES AN INCONSISTENT POSITION ..................................................................... 11 - ii - POINT V RECOGNIZING THE AMBIGUITY IN DEFENDANT’S INTERPRETATION OF ITS UNIQUE POLICY WILL NOT SPELL DOOM AND GLOOM FOR THE FIRE INSURANCE INDUSTRY ................................................................................................... 13 POINT VI RETAINING A PUBLIC ADJUSTER DOES NOT CLARIFY THE AMBIGUITY IN THE POLICY ITSELF AND IS IRRELEVANT TO ANY ISSUE BEFORE THE COURT ........................ 15 POINT VII THE POLICY DOES NOT REQUIRE THE INSURED TO PURCHASE ANOTHER PROPERTY ...................................................... 16 POINT VIII PLAINTIFF’S REFERENCE TO THE ORDINANCE OR LAW PROVISION WAS MERELY ILLUSTRATIVE ............................. 17 CONCLUSION ...................................................................................................... 19 - iii - Table of Authorities Cases 1303 Webster Ave. Realty Corp. v. Great American Surplus Lines Ins. Co., 63 N.Y.2d 227 (1984) ............................................................................ 10-11 Badigian v. Badigian, 9 N.Y.2d 472 (1961) ........................................................... 13 Bakos v. New York Cent. Mut. Fire Ins. Co., 83 A.D.3d 1485 (4th Dep’t 2011) ..................................................................................................................... 11 Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351 (1978) ........................................ 9 Chinosi v. Kringstein, 7 A.D.3d 558 (2d Dep’t 2004) .......................................... 14 City of N.Y. v. State of N.Y. 40 N.Y.2d 659, 668 (1976) ......................................... 3 Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704 (2012) ........................................... 9 Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399 (1993) ............................ 3 Gelbman v. Gelbman, 23 N.Y.2d 434 (1969). ........................................................ 13 John J. Kassner & Co. v. New York, 46 N.Y.2d 544 (1979) ............................. 3, 8-9 Kass v. Kass, 91 N.Y.2d 554 (1998) ....................................................................... 12 Krzesniak v. New York Univ., 22 A.D.3d 378 (1st Dep’t 2005) .......................... 14 LaRocca v. DeRicco, 39 A.D.3d 486 (2d Dep’t 2007) ........................................... 14 Lemmerman v. Delmar Dental, PC, 3 A.D.3d 771 (2d Dep’t 2004) .................... 14 Locator-Map, Inc. v. Adams, 42 N.Y.2d 1022 (1977) ............................................ 12 Martin v. Edwards Labs., 60 N.Y.2d 417 (1983) ..................................................... 3 Matter of Cicio v. City of N.Y., 98 A.D.2d 38 (2d Dep’t 1983) ............................. 1 Medical Facilities, Inc. v. Pryke, 62 N.Y.2d 716 (1984) ...................................... 7-8 - iv - Miller v. Continental Ins. Co., 40 N.Y.2d 675 (1976) ................................... 8, 9, 14 Mitchell v. New York Hosp., 61 N.Y.2d 208 (1984) .............................................. 12 Nishman v. De Marco, 62 N.Y.2d 926 (1984) ....................................................... 12 Palmieri v. Allstate Ins. Co., 445 F.3d 179 (2d Cir. 2009) .................................... 15 Port Jefferson Props., Ltd. v. Sapperstein, Hochberg & Haberman, Inc., 209 A.D.2d 679 (2d Dep’t 1994) ................................................................. 15-16 Proc v. Home Ins. Co., 17 N.Y.2d 239 (1966) ...................................................... 6-7 Richardson v. Orentreich, 64 N.Y.2d 896 (1985) .................................................. 14 Salesian Soc. v. Ellenville, 41 N.Y.2d 521 (1977) .................................................. 12 TAG 380, LLC v. ComMet 380, Inc., 10 N.Y.3d 507 (2008) ................................ 11 Town of Orangetown v. Magee, 88 N.Y.2d 41 (1996) ........................................... 12 Vigilant Ins. Co. of Am. v. Housing Auth. of El Paso, TX, 87 N.Y.2d 36 (1995) ..................................................................................................................... 3 White v. Continental Cas. Co., 9 N.Y.3d 264 (2007) ............................................... 2 Statutes and Other Authority INSURANCE LAW § 3404 ......................................................................................... 10 INSURANCE LAW § 3404(e) ................................................................................... 5, 7 INSURANCE LAW § 3404(f)(1)(A) ........................................................................... 11 NEW YORK COURT OF APPEALS No. 210 EXECUTIVE PLAZA LLC, Plaintiff-Appellant, -v- PEERLESS INSURANCE COMPANY, Defendant-Respondent. CTQ-2013-00005 REPLY BRIEF FOR PLAINTIFF-APPELLANT PRELIMINARY STATEMENT From page 1 of its Brief the defendant attempts to mislead the Court by blatantly misstating the Certified Question before it. In fact, the defendant’s Brief does not reveal until page 7 that the actual Certified Question has nothing at all to do with whether the statutory Standard Fire Insurance Policy (“Standard Fire Policy”) is unenforceable as against public policy. “The function of an appellate brief is to assist, not mislead, the court.” Matter of Cicio v. City of N.Y., 98 A.D.2d 38 (2d Dep’t 1983). The Court is being asked to interpret a unique fire insurance policy, drafted by the defendant, the nature of which fundamentally differs from the Standard Fire Policy. To answer the Certified Question in the - 2 - affirmative, as plaintiff believes it should, the Court will not have to determine whether the statutory policy not at issue is enforceable. POINT I THE STANDARD FIRE POLICY DOES NOT OVERRIDE THE COMMON LAW ACCRUAL DATE APPLICABLE TO PLAINTIFF’S CLAIM Our unique Policy unambiguously promises that the defendant will reimburse the insured for its repairs, so long as it completes the repairs as soon as reasonably possible (A1601, Policy § E.6.d.1). See White v. Continental Cas. Co., 9 N.Y.3d 264, 267 (2007). The Policy thus promises that an insured will have an enforceable claim for reimbursement of its repair costs—a claim that accrues when the repairs are completed (A160, Policy § E.6.d.1). The Court should not permit the defendant to renege on that promise. When Policy § E.6.d.1 states “We will not pay until . . .” it is the same as stating: “We will pay when . . . .” It promises that the defendant will reimburse the insured when repairs are made if made as soon as reasonably possible—plainly providing a pliable deadline, and one that 1 Reference is to the Appendix. - 3 - contemplates every situation, including the situation where it takes longer than two years to complete repairs. As an insured cannot “incur a replacement cost,” to use the defendant’s words (Resp. Br. p. 16), until it completes repairs, the plaintiff’s claim for replacement costs cannot accrue until the repairs are completed. See City of N.Y. v. State of N.Y. 40 N.Y.2d 659, 668 (1976) (“[A] claimant’s cause of action does not accrue until it possesses the legal right to be paid and to enforce its right to payment in court.”); see also Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 (1993); John J. Kassner & Co. v. New York, 46 N.Y.2d 544, 550 (1979). While the defendant says, in reliance on Policy § E.4, that plaintiff had a two-year “opportunity” to assert its claim for replacement costs, provided that the plaintiff did the impossible, that was not a reasonable opportunity and thus no opportunity at all. An insured “should not be deprived of [its] claim before [it] has had a reasonable chance to assert it.” See Martin v. Edwards Labs., 60 N.Y.2d 417, 425 (1983); see also Vigilant Ins. Co. of Am. v. Housing Auth. of El Paso, TX, 87 N.Y.2d 36, 43-44 (1995). Policy § E.6.d.1 certainly does not notify the insured, in clear or explicit terms, that “We will pay nothing if you are unable to complete - 4 - repairs within two years.” The defendant knew how to be clear when it wished to do so (A145, A.6.e.1.b). The Policy At Issue Is Not The Standard Fire Policy Defendant makes it seem as though in order to answer the question in the affirmative, the Court must invalidate the Standard Fire Policy as being “against public policy.” (Resp. Br. p. 1). Not so. The Standard Fire Policy is not the policy under review and is, in fact, fundamentally different from our Policy. Unlike our Policy, the Standard Fire Policy contemplates claims based solely on estimated costs and never requires that any repair or replacement must ever be made. Defendant’s assertion that it can impose any restriction it wants—no matter how unreasonable—simply because it harvested some language from the Standard Fire Policy, is incorrect. In engrafting the “within a reasonable time” language into its unique Policy § E.6.d.1 the defendant took the statutory language out of context. Specifically, defendant transformed what was the prospective, estimates-only approach of the Standard Fire Policy into the retrospective, repair-before-you-may- claim approach of our unique Policy. This transformation fundamentally - 5 - altered the nature of the coverage and waived the protections of any legislatively-sanctioned two-year-from-the-fire suit deadline. The Standard Fire Policy recites that the insurer must pay: “the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss” if it is less than the estimated cash value. INSURANCE LAW § 3404(e)(Emphasis added). After the defendant’s tinkering, this language in our Policy became: “(b) We will not pay on a replacement cost basis for any loss or damage: (i) Until the lost or damaged property is actually repaired or replaced; and (ii) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage.” (Policy § E.6.d.1.b) (Emphasis added). Thus, instead of requiring what is always reasonably possible— i.e., merely estimating within two years what it would cost to repair a property within a reasonable time, our Policy became (under the defendant’s self-serving tinkering) one requiring repairs to be made as soon as reasonably possible, which is sometimes impossible within a two year period, if that were the outside time limit. As our Policy contains unique provisions not found in or contemplated by the Standard Fire Policy, it is not “a plain English - 6 - version” of the Standard Fire Policy as the defendant misleadingly asserts (Resp. Br., pp. 2, 12). Indeed, the suit limitation provision of the Standard Fire Policy states that it applies only to claims contemplated by “this policy”—i.e., by the statutory policy—and that policy does not contemplate a claim for the reimbursement of replacement costs. The statutory phrase “no suit or action on this policy” cannot apply to a claim that requires the insured to complete the repairs before the carrier must pay, because the Standard Fire Policy contemplates no such claim. Once the defendant varied the Standard Fire Policy, anything it leaves to be ambiguous should be construed against the defendant. Despite defendant’s assertion, this Court’s decision in Proc v. Home Ins. Co., 17 N.Y.2d 239 (1966), does not require finding for the defendant. The policy at issue in Proc was the statutory policy which was enacted in derogation of common law. It did not contain a unique replacement cost provision, drafted by the defendant, which contradicted the suit limitations provision. Our Policy does. The Proc statutory policy required an insured to do within 12 months what in all cases could reasonably be done within that time. It did not require, for example, completion of repairs before suit. It provided 1) that the insured must file a proof of loss within 60 days after it is - 7 - demanded by the insurer; and 2) that the claim is “payable sixty days after [said] proof of loss . . . is received”. Proc at 242 (quoting the statutory policy). The Court held in Proc that at common law the plaintiff’s claim accrued 60 days after the insurer’s receipt of the proof of loss, but because the policy at issue was the statutory policy then in effect,2 the plaintiff had to sue within 12 months after the fire. Id. at 243. In Proc, proof of loss was timely submitted within six months of the fire, but the action was dismissed because it was not commenced until more than 14 months after the fire, in violation of the unambiguous suit limitation provision. Id. at 245-46. Proc is inapposite because 1) our Policy is not the statutory policy; and 2) our Policy is not unambiguous. Although defendant also relies on Medical Facilities, Inc. v. Pryke, 62 N.Y.2d 716 (1984), that case actually supports plaintiff. In Pryke, the fire policy provided that all claims “will be paid within 30 days after presentation and acceptance by the insurer of satisfactory proof of loss” and did not contain any reference to a shortened limitations period. Id. at 717. When more than six years after a fire the plaintiff sued for business 2 The Standard Fire Policy now says 24 months. See INSURANCE LAW § 3404(e). - 8 - interruption and rent loss, this Court held the action was perfectly timely, stating: “Even if the insured furnished such proof on the very day of the fire, there could according to the contract be no breach by the insurer’s failure to pay until 30 days had passed.” Id. “An insurer who issues a policy omitting reference to the shortened limitations period . . . cannot claim the benefit of its own omission.” Id. For a similar reason, the defendant in our case, who drafted a unique policy provision that contradicts the shortened limitation period, should not be permitted to benefit from its contradictory drafting. The inherent ambiguity must be resolved against it. Miller v. Continental Ins. Co., 40 N.Y.2d 675, 678 (1976). The Policy At Issue Is Ambiguous Defendant misconstrues plaintiff’s argument. Merely having a replacement cost provision based on what it “would cost” to complete repairs as soon as reasonably possible is not what renders our Policy ambiguous (Resp. Br. p. 15). The Policy is ambiguous because it has two separate provisions: it requires repairs to be completed at that mandatory pace, “as soon as reasonably possible,” and, if the defendant’s claim is correct the repairs must be done within two years, even where they cannot reasonably be - 9 - done within two years. However, defendant’s claim cannot be correct because, as a matter of law, parties may only agree to shorter limitations periods “provided [those shorter periods] are reasonable.” John J. Kassner & Co., 46 N.Y.2d at 550-51. POINT II PLAINTIFF IS ASKING THE COURT TO CONSTRUE THE POLICY AT ISSUE, NOT “REWRITE” IT The Court should construe our unique Policy pursuant to the settled rules of contract construction, resolving any ambiguities in favor of the insured. See Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704 (2012); Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351, 353 (1978); Miller v. Continental Ins. Co., 40 N.Y.2d at 678. While the defendant worries that the Court will “rewrite” the Standard Fire Policy, the plaintiff is not asking the Court to do that. The defendant already “rewrote” the Standard Fire Policy when it drafted Policy § E.6.d.1.b. Defendant says its approach was to draft one policy with language broad enough to address a wide range of coverage situations. In - 10 - doing so, defendant should have avoided overlooking inherent ambiguities that may emerge in certain loss scenarios. Although the defendant reports, based on nothing in the record, that an undisclosed number of property insurance policies have provisions that are “based on” the Standard Fire Policy (Resp. Br., p. 15), that should not matter. Whatever boilerplate form an insurer abstracts from in the drafting of its contracts, it would be well advised to edit carefully and “beta test” to eliminate all ambiguities from the final versions of the policies it sells. As Law Professor Richard T. Farrell pithily advised, “A form should be used as a sober person uses a lamppost: for illumination not for support.” POINT III THE STANDARD FIRE POLICY SETS MINIMUM STANDARDS, NOT OUTSIDE LIMITS, DESPITE WHAT DEFENDANT SUGGESTS Defendant’s reliance on 1303 Webster Ave. Realty Corp. v. Great American Surplus Lines Ins. Co., 63 N.Y.2d 227 (1984), is misplaced. The Court there simply reiterated that a fire insurance policy issued in New York may not provide coverage less favorable to an insured than the - 11 - minimum protections set forth in the Standard Fire Policy, as codified at Insurance Law § 3404. Id. Since the policy in 1303 Webster Ave. improperly prescribed a one year suit limitation period, by operation of law the period was increased to two years, in conformity with the statutory minimum standard for fire cases. INSURANCE LAW § 3404(f)(1)(A). Contrary to the defendant’s misleading suggestion, if the 1303 Webster Ave. policy had instead contained a period longer than the statutory minimum, say, six years, the Court would have had no occasion to reduce it to two years. An insurer can always agree to offer the consumer greater protections, but not lesser ones. See TAG 380, LLC v. ComMet 380, Inc., 10 N.Y.3d 507, 513-14 (2008). POINT IV IN ATTEMPTING TO DISTINGUISH BAKOS, DEFENDANT IMPERMISSIBLY TAKES AN INCONSISTENT POSITION Defendant attempts to change the subject by arguing that Bakos v. New York Cent. Mut. Fire Ins. Co., 83 A.D.3d 1485 (4th Dep’t 2011), is inapposite because it was commenced within two years of the fire. Unlike - 12 - our plaintiff, however, the insured in Bakos did not have to complete repairs before commencing suit. Id. at 1486-87. Plaintiff’s position is that under our Policy, because the insured must complete repairs before commencing suit—and is permitted the time it needs to make the repairs as soon as reasonably possible—its time to sue cannot begin to run until it completes the repairs. The issue of what was “reasonably possible” is a fact question not before this Court. Indeed, when defendant commenced Action 1 within two years, the defendant took the position that it was premature because the repairs were not yet completed. Continuing its game of Gotcha!, the defendant now attempts to contradict its prior position by arguing that Action 1 was not premature, and that plaintiff should have appealed its dismissal. Defendant’s argument should be disregarded. Parties are estopped from taking inconsistent positions, and making judicial admissions in one action, and then attempting to take a directly contrary position in another related judicial proceeding. See Kass v. Kass, 91 N.Y.2d 554 n.5 (1998); Town of Orangetown v. Magee, 88 N.Y.2d 41 (1996); Nishman v. De Marco, 62 N.Y.2d 926 (1984); Mitchell v. New York Hosp., 61 N.Y.2d 208 (1984); Locator-Map, Inc. v. Adams, 42 N.Y.2d 1022 (1977); Salesian Soc. v. Ellenville, 41 N.Y.2d 521 (1977). - 13 - At any rate, plaintiff was not aggrieved by the dismissal of Action 1. As Judge Wexler observed: “Once repairs are complete, Executive can make its claim for full payment of the Policy. Peerless can then either make payment, or raise the issues of reasonableness and timeliness in support of a decision of non-payment.” (A450). That is where we are now. Judge Wexler did not say that the alleged two-year statute of limitations would or could have expired before the new action could be commenced. POINT V RECOGNIZING THE AMBIGUITY IN DEFENDANT’S INTERPRETATION OF ITS UNIQUE POLICY WILL NOT SPELL DOOM AND GLOOM FOR THE FIRE INSURANCE INDUSTRY Defendant’s resort to a “parade of horribles” argument signals that it has no legitimate argument on this appeal. Its forecast of an apocalyptic downfall of the fire insurance industry in the event the Court answers the certified question in the affirmative is grossly overstated. As (Chief) Judge Fuld stated in a perceptive 1961 dissent, the Court “should not be deterred in pursuing . . . a course by a fear that decision in this case will be binding in cases -- which may never eventuate”. Badigian v. Badigian, 9 N.Y.2d 472, 481-82 (1961) (Fuld, J., - 14 - dissenting), overruled, for reasons stated in dissent, by Gelbman v. Gelbman, 23 N.Y.2d 434 (1969). At issue here is a single unique policy that was ambiguously drafted by the defendant. Enforcing the Policy as drafted by the defendant will not ruin the defendant and certainly will not bankrupt the entire fire insurance industry. If anything, enforcing the Policy as written will tend to strengthen confidence in the industry by encouraging insurers to state their intentions clearly, so that consumers will know what is covered and what is not, and can make informed decisions about their insurance needs. Defendant’s concern that some cases may require a trial as to whether repairs were completed “as soon a reasonably possible” should not detain the Court. For one thing, the defendant chose that language when it drafted our Policy. Moreover, juries are asked to decide reasonableness and statute of limitations issues all the time, including where the question is one of continuous conduct or treatment. See, e.g., Richardson v. Orentreich, 64 N.Y.2d 896 (1985); Krzesniak v. New York Univ., 22 A.D.3d 378 (1st Dep’t 2005); LaRocca v. DeRicco, 39 A.D.3d 486 (2d Dep’t 2007); Chinosi v. Kringstein, 7 A.D.3d 558 (2d Dep’t 2004); Lemmerman v. Delmar Dental, PC, 3 A.D.3d 771 (2d Dep’t 2004). If the defendant wished to avoid such trials, it could have drafted the Policy differently. After all, the defendant has the responsibility - 15 - of stating its intentions clearly. Miller v. Continental Ins. Co., 40 N.Y.2d at 678. It is certainly not the Court’s role to rescue the defendant from the consequences of a poorly-drafted policy provision, and the Court should not make our plaintiff pay for this defendant’s sloppy and inconsistent, if not contradictory, draftsmanship. See, e.g., Palmieri v. Allstate Ins. Co., 445 F.3d 179 (2d Cir. 2009). Similarly, contrary to defendant’s unsubstantiated fears of being prejudiced, the insured cannot “sit back for years before filing suit” as the defendant says (Resp. Br. p. 15). The insured must make repairs as soon as reasonably possible, and must then sue within the applicable statute of limitations if the defendant does not pay what is owed. If the defendant wished to reduce the statute of limitations, it could have written a policy without ambiguity. Defendant knew how to be clear about imposing a two year time limitation when it wished to be clear in a different section of the same policy (A145, Policy § A.6.e.4.b). POINT VI RETAINING A PUBLIC ADJUSTER DOES NOT CLARIFY THE AMBIGUITY IN THE POLICY ITSELF AND IS IRRELEVANT TO ANY ISSUE BEFORE THE COURT Defendant speculates that because the plaintiff retained a public adjuster, it should have known that repairs had to be completed - 16 - within two years of the fire. The only reported decision on point is to the contrary. See Port Jefferson Props., Ltd. v. Sapperstein, Hochberg & Haberman, Inc., 209 A.D.2d 679 (2d Dep’t 1994) (“Specifically, we note that questions of fact exist as to whether the appellants [public adjusters] properly advised the plaintiff that it could recover the ‘replacement cost’ funds under the insurance policy more than two years after the fire occurred.”). POINT VII THE POLICY DOES NOT REQUIRE THE INSURED TO PURCHASE ANOTHER PROPERTY With perfect hindsight, the defendant further speculates that within two years plaintiff could have “replaced” the property by purchasing and improving another lot, or by purchasing an already operating rental building owned by a competitor. Contrary to this idle speculation, there is no evidence that the plaintiff, within two years, could have located, funded, purchased, and closed on an equally desirable property in the same geographic neighborhood adjacent to the train station that was available, affordable, and not subject to the same zoning ordinances as the covered property. Indeed, if plaintiff had spent its time conducting a fruitless search for new property, it would then have had little or no time to rebuild the old - 17 - property. As it is, even starting to rebuild right away it could not be done within two years. In addition, no matter what defendant now says for the first time on this appeal, if plaintiff had spent its time seeking out a new property instead of rebuilding the old one, defendant would have accused plaintiff of failing to repair the property “as soon as reasonably possible.” The plaintiff had every right under the Policy to rebuild its fire- damaged property at the same location rather than abandon it (see Policy § Policy §§ E.6.d.1.a, E.6.d.1.c). Further, not only was rebuilding the more socially responsible course, the plaintiff had no reason to abandon its commercial office building, located at a prime location adjacent to a train station. POINT VIII PLAINTIFF’S REFERENCE TO THE ORDINANCE OR LAW PROVISION WAS MERELY ILLUSTRATIVE The Ordinance or Law provision contained in the “Additional Coverages” portion of the Policy is discussed in plaintiff’s opening brief simply to illustrate that nothing prevented the defendant from using such clarifying words as “not to exceed two years” when it wished to do so (see, - 18 - e.g., A145, Policy § A.6.e.4.b), and that it did not do so in the replacement costs provision at issue (A160, Policy § E.6.d.1.b.ii).3 This Ordinance or Law coverage was actually inapplicable to our situation because the plaintiff’s entire property was damaged in the fire and, moreover, the plaintiff did not even purchase this additional coverage. Contrary to defendant’s assertion, however, the Ordinance or Law provision provides coverage, without time limitation, to pay “The cost to 3 Contrary to defendant’s assertion, plaintiff made this argument to the Second Circuit. At page 26 of Appellant’s Brief in that court, plaintiff argued: Policy § E.6.d.1 provides that the insured may “make a claim” on a replacement cost basis if the insured notifies the carrier of its intent to do so with six months, and then proceeds to make repairs as soon as reasonably possible. This section conspicuously does not say “…and we will not pay if you do not finish repairs within two years of the fire.” And in the Reply Brief, at page 5, plaintiff argued: If the Defendant’s goal was clarity, the language of Policy § E.6.d.1 could have easily been clarified, for example, by simply adding eight words “. . . and in no event more than two years . . .” after “as soon as reasonably possible”. As discussed in Appellant’s opening Brief, adding a few such words would have avoided what in this case alone is a $250,000 ambiguity. - 19 - demolish and clear the site of undamaged parts of the property caused by the enforcement of building, zoning or land use ordinance or law. [sic]” (Policy § A.6.e.1.b). Demolishing undamaged parts, when required by law, and clearing away the debris is the first order of business after a fire, long before the completion of the repairs. Finally, contrary to defendant’s suggestion plaintiff does not claim that its repair costs increased because it had to wait for building permits to be issued. The permit delays just made the repairs take longer. CONCLUSION For the reasons set forth above, and in plaintiff’s opening Brief, the Court should answer the Certified Question in the affirmative. Dated: October 23, 2013 Respectfully submitted, JAROSLAWICZ & JAROS LLC Attorneys for Plaintiff-Appellant 225 Broadway, 24th Floor New York, New York 10007 (212) 227-2780 dtolchin@lawjaros.com by: David Tolchin David Jaroslawicz