The Kings County Supreme Court enforced a 12-month suit limitation clause and dismissed a wind and hailstorm claim involving damage to two apartment complexes in Dallas, Texas. In doing so, the Court enforced well-established New York authority holding that policy provisions that modify the statute of limitations by mandating that suit be brought within 12-months of any loss are reasonable and enforceable.

In Chandler Management Corp. Corp. v. First Specialty Insurance Corp., the insured sought recovery under its commercial property policy for wind and storm damage to the roofs of two Dallas apartment complexes damaged during a May 24, 2011 storm. The insurer, First Specialty, denied the claim after determining that the damages did not meet the policy’s $25,000 deductible. Thirteen months later, the insured sued in Texas state court alleging that the buildings sustained storm damage exceeding $1.5 million. In a decision that was affirmed on appeal, First Specialty successfully obtained a dismissal of the Texas action based on the insured’s non-compliance with the policy’s forum selection clause requiring that all disputes be litigated in New York.

On August 5, 2015, the insured commenced a new action against First Specialty in Supreme Court, Kings County seeking to recover damages stemming from the same storm. The trial court granted First Specialty’s motion to dismiss the action based on the policy’s 12-month suit limitation clause. Citing Kassner & Co. v. City of New York, 46 N.Y.2d 544, 550-51 (1979), the court underscored that an agreement modifying the Statute of Limitations by prescribing a shorter period within which to bring suit will be enforced where “reasonable.” The court then held that 12-month suit limitation clauses are “both reasonable and enforceable” and that neither the Texas nor New York actions were timely commenced.

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