Gottlieb v. Mountain Val. Indem. Co.
Docket Index No. 651393/22|Appeal No. 6478|Case No. 2025-00383|
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- Filed
- Jurisdiction
- New York
- Court
- Appellate Division of the Supreme Court of the State of New York
- Type
- Opinion
- Case type
- Civil
- Disposition
- Affirmed
- Citation
- 2026 NY Slip Op 02600
- Docket numbers
- Index No651393/22Appeal No6478Case No2025-00383
Appeal from denial of defendant's summary judgment motion to dismiss a fire-insurance coverage complaint
Summary
The Appellate Division, First Department affirmed a lower court order denying the insurer Mountain Valley Indemnity Company's summary judgment motion to dismiss an insureds' fire-damage complaint. The insurer argued the dwelling was a three-family property (allowing a coverage disclaimer) based on the basement configuration, while the insureds said it was two-family and the basement was shared family space. The court found disputed facts about the basement's physical separation, usage, and the investigator's qualifications, so summary judgment was improper and the case must proceed.
Issues Decided
- Whether the property is a two-family or three-family dwelling for purposes of the fire insurance policy
- Whether the insurer met its burden to disclaim coverage based on the alleged configuration of the basement
- Whether the basement constituted a separate, lawful apartment or was part of shared family living space
Court's Reasoning
The court applied the rule that unit determination depends on the property's structural configuration and actual use, including whether portions have their own kitchen, bathroom, and separate entrance. The insurer did not conclusively show the basement was a separate unit because evidence showed the basement shared an entrance and internal stair access, and the investigator's affidavit lacked explanation and qualifications. The insureds presented contrary evidence that the basement was used as family space consistent with cultural practices, creating triable issues.
Authorities Cited
- Dauria v CastlePoint Ins. Co.104 AD3d 406 (1st Dept 2013)
- Castlepoint Ins. Co. v Jaipersaud127 AD3d 401 (1st Dept 2015)
- Mandelos v Karavasidis86 NY2d 767 (1995)
Parties
- Respondent
- Nathan Gottlieb et al.
- Appellant
- Mountain Valley Indemnity Company
- Judge
- Webber, J.P.
- Judge
- Mendez, J.
- Judge
- Rodriguez, J.
- Judge
- O'Neill Levy, J.
- Judge
- Michael, J.
Key Dates
- Decision date
- 2026-04-28
- Lower court order entered
- 2024-12-16
What You Should Do Next
- 1
Proceed with fact development
Parties should complete discovery focused on the basement's physical layout, entrances, internal access, and actual use, including photographs, witness testimony, and expert reports where appropriate.
- 2
Consider expert qualifications
The insurer should provide a more detailed, qualified investigator or expert affidavit explaining how conclusions about the basement's status were reached and the expert's credentials.
- 3
Prepare for trial or further motion practice
Both sides should assess whether additional motions (e.g., to exclude deficient testimony) are appropriate or prepare the case for trial to resolve the disputed factual issues.
Frequently Asked Questions
- What did the court decide?
- The appeals court affirmed the denial of the insurer's summary judgment motion, meaning the case will continue because factual disputes exist about whether the basement was a separate apartment.
- Who is affected by this decision?
- The insured homeowners (Gottlieb and family) and the insurer (Mountain Valley Indemnity Company) are directly affected; the insurer cannot yet disclaim coverage based on the claimed three-family configuration.
- What happens next in the case?
- Because summary judgment was denied, the case will proceed to further litigation—likely discovery and possibly trial—to resolve the disputed facts about the property's use and configuration.
- Why didn't the court side with the insurer?
- The court found that the insurer did not prove the basement was a distinct apartment: there were questions about shared entrances, interior access, the investigator's basis and qualifications, and evidence that the basement was used as shared family space.
- Can the insurer appeal further?
- The insurer could seek further appellate review only by applying to a higher court, but this decision affirms the intermediate appellate court's order and the case will continue in the trial court on the disputed factual issues.
The above suggestions and answers are AI-generated for informational purposes only. They may contain errors. NoticeRegistry assumes no responsibility for their accuracy. Consult a qualified attorney before relying on them.
Full Filing Text
Gottlieb v Mountain Val. Indem. Co. - 2026 NY Slip Op 02600 Gottlieb v Mountain Val. Indem. Co. 2026 NY Slip Op 02600 April 28, 2026 Appellate Division, First Department Nathan Gottlieb et al., Respondents, v Mountain Valley Indemnity Company, Appellant. Decided and Entered: April 28, 2026 Index No. 651393/22|Appeal No. 6478|Case No. 2025-00383| Before: Webber, J.P., Mendez, Rodriguez, O'Neill Levy, Michael, JJ. Mound Cotton Wollan & Greengrass LLP, New York (Rachel M. Horzempa Winship of counsel), for appellant. Wilkofsky, Friedman, Karel & Cummins, New York (Roman Rabinovich of counsel), for respondents. Order, Supreme Court, New York County (Suzanne J. Adams, J.), entered on or about December 16, 2024, which denied defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs. Determining the number of units within a property requires consideration of its "structural configuration," which takes into account each respective portion or area of the property having "its own kitchen, bathroom and separate entrance" ( Dauria v CastlePoint Ins. Co. , 104 AD3d 406, 407 [1st Dept 2013]). Further, whether a dwelling is two-family, as contended by plaintiff insureds, who lived in one unit while their son and his family lived in the other, or three-family, as defendant fire insurer claims based on the configuration of the property's basement, "is determined by actual use" ( Castlepoint Ins. Co. v Jaipersaud , 127 AD3d 401, 401 [1st Dept 2015]). Summary judgment is not appropriate here because "unifying features" exist which could suggest that the basement was merely a space used by plaintiffs and their son's family, rather than a separate unit unto itself ( Mandelos v Karavasidis , 86 NY2d 767, 769 [1995]). Defendant failed to satisfy its burden of establishing that it was entitled to disclaim coverage for fire damage based on its belief that the building was for three families instead of two, the number described in the fire policy. Defendant submitted testimony indicating that the basement had the same entrance as the other two units. Further, deposition testimony and photographs taken by defendant's own investigator suggest that stairs led directly from the basement to one of the units, raising a question whether the basement was completely separate from the rest of the property ( see Jaipersaud , 127 AD3d at 401). Moreover, an affidavit submitted by defendant's field investigator failed to explain how he arrived at the conclusion that the basement was "an illegal apartment," nor did he state his qualifications for determining the legality of any part of the property's configuration ( see Residential Credit Solutions, Inc. v Gould , 171 AD3d 638, 638-639 [1st Dept 2019]). In any event, plaintiffs identified issues of fact in opposition. They submitted evidence that the basement was not a separate apartment but rather a space to accommodate extended family members and other visitors. Additionally, they explained that having a kitchen in the basement was consistent with the common practice of people in plaintiffs' Orthodox Jewish community, especially to facilitate the strict dietary laws observed during Passover. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: April 28, 2026