Wade Clark Mulcahy LLP

Hon. Judge Suzanne J. Adams, recently granted WCM's motion to dismiss plaintiff’s complaint in the case of New Liberty Pawn Shop, Inc. v. Certain Underwriters at Lloyd’s of London filed in the Supreme Court of the State of New York, New York County.

Plaintiff New Liberty Pawn Shop Inc.  (“New Liberty”) sought coverage under its policy of insurance issued by Defendants Certain Underwriters at Lloyd’s of London (“Underwriters”) after a reported theft. After the theft occurred, Underwriters conducted a preliminary investigation into New Liberty’s claim. Underwriters soon discovered that New Liberty was acting as the owner and controlling force behind Romanov Gold Buyers, another jewelry entity which was being criminally investigated. New Liberty did not disclose that it was acting as the controlling force behind Romanov on its application for insurance and essentially lied when filling out question 17(c) which required “the names and addresses of other locations of the proposer and of other concerns engaged in the jewelry trade under the same ownership or management as the proposer and not included in this proposal.” Underwriters determined that this misstatement was a breach of the policy and therefore disclaimed coverage on April 7, 2021.

On October 27, 2023, thirty months after the disclaimer was issued, New Liberty filed suit against Underwriters asserting a cause of action for breach of contract. Notably, New Liberty’s policy contained Condition “n”, which provided that: “No suit, action or proceeding for the recovery of any claim under this Contract shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery of the insured of the occurrence which gives rise to the claim…” We argued that New Liberty’s delay in filing violated the unambiguous terms of the policy, and therefore New Liberty’s complaint should be dismissed. Judge Adams agreed, holding that New Liberty’s complaint and amended complaint filed on November 6, 2023 were time barred and dismissed with prejudice. Time bar provisions are generally disfavored and scrutinized carefully, but in this case, Judge Adams fully WCM's position, and found excuse for New Liberty having waited more than two years to test the merits of the disclaimer. An important win for WCM and for our clients in London.  Nice work by Dennis Wade, Mike Bono, Martha Osisek and Dominika Tomasetti in a true team effort.