Insurance Doctor Could Not Cure Failure to Give Prompt Notice

Taking Months to Hire a Public Adjuster Not an Excuse for Late Notice

Every first party property insurance policy contains a requirement that the insured report a loss promptly. All use different language but the key is that the insurer wants to have notice soon enough to conduct a thorough investigation of the loss claimed.

In Trustworthy LLC, d/b/a Days Inn v. Vermont Mutual Insurance Group, 8:16-CV-367 (NAM/DJS), United States District Court Northern District Of New York (March 15, 2018) Plaintiff Trustworthy LLC, the owner of the Days Inn Hotel in Plattsburgh, New York, sued its insurance carrier Defendant Vermont Mutual Insurance Group, alleging a single cause of action for breach of contract related to benefits allegedly owed under an insurance policy.


Plaintiff’s Hotel

Plaintiff Trustworthy LLC is the owner of the Days Inn hotel in Plattsburgh, New York,  a property it purchased in 2009. The hotel was built in 1983; it is three stories high, and in 2014, it had 106 rooms.  Bhavik Jariwala is a salaried employee of Trustworthy LLC, whose role is “overlooking operations and asset management for the Plattsburgh Days Inn,” including submission of insurance claims. , Christopher Carron was the maintenance supervisor at the hotel, a position he held before Plaintiff purchased the property in 2009.

When Plaintiff purchased the hotel in 2009, the original roof had been in place since the hotel was built in 1983.  Mr. Carron testified that he made repairs due to wear and tear on the roof. Every year there were problems with the roof leaking due to the weight of snow and slush on the rubber and the rubber shrinking. Mr. Carron said that he had to go onto the roof in the springtime to make repairs because “it’s an ongoing maintenance issue.” In 2011, a company called Monahan Brothers also did work on the roof, “adding rubber where it had pulled out.”

The Insurance Policy

Plaintiff obtained insurance for the hotel in 2009, through a Business Owners Policy. The Policy covered the hotel building. In a section entitled “Duties in the Event of Loss or Damage,” the Policy states the following: “You must see that the following are done in the event of loss or damage to Covered Property: “(2) Give us prompt notice of the loss or damage. Include a description of the property involved.”

Plaintiff’s Insurance Claim

On September 11, 2014, Plaintiff submitted a Property Loss Notice to Defendant, which described the loss and damage as follows: “Wind driven rain – damage to hotel rooms and hallway damage/ceiling, floor.” The date of loss was noted as May 16, 2014. According to Mr. Jariwala testified that he could not recall noticing anything significant on May 16, 2014, but that “I think from our records that was when the first appearance of a water mark may have appeared.” Mr. Carron testified that in 2014 he was aware of problems with the roof as early as March, and that he performed repairs that spring, from March until May.

Mr. Jariwala also testified that “summertime is our peak season at all of our hotels so it is a really busy time for me and on top of that I was planning this wedding of mine.” Mr. Jariwala testified that towards the end of August 2014, Plaintiff retained The Insurance Doctor as its public adjuster. Mr. Jariwala told the public adjuster about “the type of issues we were having with the water damage getting worse and the smell of mold getting worse.”

Before the inspection date, Plaintiff retained CPR Restoration and Cleaning Services LLC (“CPR”) to perform repairs at the hotel on September 16-19, 2014. Mr. Jariwala testified that CPR was brought in at the recommendation of The Insurance Doctor. Mr. Jariwala believed that CPR worked on the hotel before Defendant had the chance to inspect it in October. CPR removed carpet, cut out sections of sheetrock where it could not be dried, and cut out material from the ceilings and walls.

At the first inspection the adjuster noticed that portions of walls had already been removed, ceiling tiles had already been replaced, wall paper had already been repaired, walls had been removed, portions of carpet had already been removed, and some stains on the ceiling had already been painted over and when the adjuster inspected the roof the same day she noticed that “the roof had already been repaired along the perimeter parapet wall with new flashing,” and that “[t]here were a few areas where the roof was pulled down along the parapet wall, but most of the areas of the roof appeared to have already been repaired prior to my arrival.”

The proximate cause of loss is the Weight of Ice & Snow on the flat roof system at the hotel.  The Insurance Doctor ultimately produced to Defendant a report prepared by a company called CentiMark, which stated that the roof was at the “end of its life cycle” and needed to be replaced. The report contained pictures of the roof taken in 2011, before the repairs by the Monahan Brothers. The report clearly states the entire roof was old and needed to be entirely replaced, and there is no indication in this report to support a claim that the roof had been damaged by weight of snow and ice during the prior winter.

The claim was declined because of the insured’s failure give the insurer prompt notice of the loss and to exhibit the damaged property. These failures have prejudiced the rights of the insurer.


Defendant seeks summary judgment on the basis that Plaintiff failed to perform its duties under the Policy by failing to provide VMI with prompt notice as soon as possible regarding this roof/water claim, and 2) Plaintiff did not afford VMI an opportunity to view the allegedly damaged roof and rooms prior to repairs having been made, thus making it impossible for VMI to make a determination as to whether or not the roof was damaged by a covered event.

Notice Provision

It is undisputed that Plaintiff gave notice on September 11, 2014, when its public adjuster submitted a Property Loss Notice to Defendant. The date of loss was reported as May 16, 2014. Thus, Defendant argued that it is undisputed that at the very least, Plaintiff failed to provide notice of a claim to VMI until nearly four months after the loss was first discovered.

It is well-settled that when an insurance policy requires that notice of an occurrence or claim be given “promptly” or “as soon as possible,” the “notice must be given within a reasonable time in view of all of the facts and circumstances.” Cambridge Realty Co., LLC v. St. Paul Fire & Marine Ins. Co., 421 F. App’x 52, 56 (2d Cir. 2011) (citing cases). ”

Among other things, the requirement for timely notice protects the carrier against fraud or collusion and gives the carrier an opportunity to investigate claims while evidence is fresh.

Starting from May 16, 2014, a total of 118 days elapsed before Plaintiff filed its claim on September 11, 2014. Seeking a public adjuster, being busy, and planning a wedding are not the sort of excuse, “such as lack of knowledge that an accident occurred, that will explain or excuse delay in giving notice and show it to be reasonable.”

Moreover, there is no evidence that Plaintiff made any effort whatsoever concerning a potential claim until the end of August 2014, when Plaintiff retained The Insurance Doctor as its public adjuster.

In view of all the undisputed facts and circumstances, the Court concluded that Plaintiff failed to provide timely notice because it waited nearly four months to report a loss to Defendant after discovering damage to the hotel, without any tenable excuse for the delay.

Inspection Provision

Defendant also argues that Plaintiff’s breach of contract claim must fail because Plaintiff failed to satisfy its obligation under the Policy to provide Defendant with an “opportunity to view the claimed damaged roof.” However, the Court need not consider this argument, since Plaintiff failed to provide timely notice, as discussed above.


There is no excuse for such a late report especially after performing many repairs and making it impossible for the insurer to determine the actual amount of loss. Had the insured reported the loss promptly his claim would have been resolved even though the roof was well beyond its life span and needed to be replaced before its last session of leaks. Doing the repairs before inspection are red flags of fraud that were not needed because of the late report.

© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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