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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

BOROKHOVICH et al v. BANKERS STANDARD INSURANCE COMPANY et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
2:14-cv-07182 Search Pacer
ACE Group party(s): 
Opposing Party: 
Elena Borokhovich
Court Type: 
Federal
US District Court: 
Eastern District of New York
Date Filed: 
Dec 9 2014

PLAINTIFFS, ELENA BOROKHOVICH and GENNADY BOROKHOVICH
(“Plaintiffs” or the “Borokhovichs”), by their attorneys, Pinczewski & Shpelfogel, P.C.,
complaining against the defendants, BANKERS STANDARD INSURANCE COMPANY and
BANKERS STANDARD INSURANCE COMPANY d/b/a ACE GROUP a/k/a ACE
PRIVATE RISK SERVICES (hereinafter collectively referred to as “Defendants”), alleges as
follows:  
 
SUMMARY
1. The Borokhovichs’ home, located at 1310 Seawane Drive, Hewlett Harbor, New York
11557 (the “Premises”), was ravaged by fire on or about February 10, 2013 (the “Fire”).   
2. The Fire severely damaged much of the Premises’ structure, as well as its expensive,
custom furnishings, and its contents.
3. The Premises was insured by a policy of insurance Plaintiffs had purchased from
Defendants.
4. Not only have Defendants failed to make covered payment under the Policy, they have
acted and continue to act in bad faith in delaying the adjustment and payment of every portion of
the Borokhovichs’ insurance claim.
5. As a result of Defendants’ bad faith delay in timely and fully adjusting and paying the
Claim, Plaintiffs have been forced to continue to live in inadequate conditions, almost two years
after the Fire.
6.  Now, Defendants’ delay has resulted in the Premises being condemned by the local
village and faceing imminent demolition.  
7. The Borokhovichs bring this action in order to recover the proceeds of the Policy they
had contracted for, allowing them to rebuild their home and lives.  Plaintiffs demand that
Defendants be held accountable for their chronic and deliberate pattern of bad faith insurance
practices.   

PARTIES
8. Plaintiffs ELENA BOROKHOVICH and GENNADY BOROKHOVICH, at all times
hereinafter mentioned, were and are individuals over the age of 18, residing in the State of New
York, County of Nassau.   
9. Defendant BANKERS STANDARD INSURANCE COMPANY is an insurance
company and is a foreign corporation duly organized and existing under the laws of the State of
Pennsylvania, with its principal place of business located at 436 Walnut Street, Philadelphia,
Pennsylvania 24153.    
10. Defendant BANKERS STANDARD INSURANCE COMPANY d/b/a ACE GROUP
a/k/a ACE PRIVATE RISK SERVICES is an insurance company and is a foreign corporation
duly organized and existing under the laws of the State of Pennsylvania, with its principal place
of business located at 436 Walnut Street, Philadelphia, Pennsylvania 24153.
11. Defendants are authorized to do business in the State of New York, write policies of
insurance for insureds throughout the State of New York, and wrote the policy of insurance that
is the subject of this action.
 
JURISDICTION AND VENUE
12. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) in that
Plaintiffs and Defendants are citizens of different states and the amount in controversy exceeds
$75,000.00.
13. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(a)(2) because the
loss property is located in this judicial district and the events giving rise to this action
substantially occurred in this judicial district.
FACTUAL BACKGROUND
14. The Borokhovichs are married and have two children.  The Borkhovichs’ home was
severely damaged by the effects of Super Storm Sandy (“Sandy”) on October 29, 2012.  
Following the trauma of Sandy, with the Premises being without heat and being otherwise
inadequate for daily living, Plaintiff Elena Borokhovich took the couple’s two children and
temporarily relocated to Florida to be in a warmer climate, while her husband presided over the
insurance claims process and adequately restored their home so Elena and the children could
return to the Premises.  Plaintiff Gennady Borokhovich continued to reside in the Premises in
order to watch over it and keep it secure.
15. On or about the evening of February 10, 2013, a portable space heater that Plaintiff
Gennady Borokhovich was using to stay warm caused a Fire.  The Fire and subsequent
intervention by the local fire department caused widespread damage to the Premises, including
but not limited to the Premises’ structure, finishes, custom furniture, and personal contents.
16. Plaintiffs purchased a policy of insurance, bearing policy number 268011551 (the
“Policy”) from Defendants, insuring the Premises from fire damage.
17. Plaintiffs made timely payments of the premiums due under the Policy and the Policy
was in full force and effect at the time of the damage complained of herein, with a term from
June 5, 2012 through June 5, 2013.  
18. After being timely notified of Plaintiffs’ claim (“Claim”), Defendants engaged and
continue to engage in a never-ending pattern of delay tactics aimed at wrongfully denying
Plaintiffs the coverage they are entitled to under the Policy.
19. The Policy provided coverage of up to $2,153,000.00 for damage to the Premises and
loss of its use, and up to $1,507,000.00 for damage to personal property located at the Premises.
20. The Policy provided coverage for “Additional Living Expenses” so that the
Borokhovichs would be able to maintain their normal standard of living in the event a loss event
rendered the Premises unfit to live in.
21. Defendants did not adjust the Claim or make payment thereunder but instead demanded
to take an Examination Under Oath (“EUO”) of Plaintiff Gennady Borokhovich.  Defendants
took Mr. Borokhovich’s EUO on or about November 26, 2013.
22. The EUO, taken more than nine months after the Fire, was unfounded and unnecessary,
and just but one of Defendants’ innumerable delays, intentionally aimed at forcing the cash-
strapped Plaintiffs to accept a meager and insufficient amount as full satisfaction for the Claim.   
23. After the Fire, Plaintiffs needed to relocate as the Premises was unfit to live in.  They did
not have the liquid funds needed to outlay for rent for living accommodations comparable to the
Premises, which they were entitled to under the Policy provision for Additional Living Expenses.
24. Defendants initially denied the Borokhovichs’ claim for Additional Living Expenses by
stating that the damages caused by the Fire did not trigger the Policy’s loss of use provision.   
25. Without funds from Defendants for Additional Living Expenses, Plaintiffs were forced to
rent a small home, far beneath the size and standard of the Premises, while Defendants continued
to “adjust” the Claim.
26. Plaintiffs were entitled to payment from Defendants for the cost to rent a replacement
home comparable to their own.  
27.  Defendants waited for nearly two months after the EUO, until January 16, 2014, before
writing Plaintiffs asking that they provide Claim documentation, including documentation
irrelevant to the Claim and meant to harass Plaintiffs and unnecessarily complicate the Claim
process.
28. On March 21, 2014, some thirteen months after the Fire, Defendants wrote to Plaintiffs
advising them that they would be contacted “in the coming days” about an additional inspection
of the Premises by an “independent building contractor.”
29. On March 21, 2014, Defendants represented that they were still “investigation this
[C]laim under a full reservation of all its rights.”
30. Defendants waited until the very end of April 2014, almost fifteen months after the Fire,
before making the first partial payment to Plaintiffs for Additional Living Expenses to cover
their replacement rental.  Not only was the payment for Additional Living Expenses not
commensurate with the rental price for a property of like kind, to which Plaintiffs are entitled
under the Policy, Defendants’ payment was for only seven month’s rental, whereas Plaintiffs had
been displaced for approximately fifteen months at that time.
31. At the end of May 2014, approximately 16 months after the Fire, Defendants issued an
“advance payment” to Plaintiffs to “commence repairs on 1310 Seawane Drive.”
32. Over the many months of Defendants’ repeated delays and unreasonable and harassing
requests from the Borokhovichs for documentation, all of which Plaintiffs painstakingly tried to
cooperate with in good faith, Defendants tried to intimidate and prejudice the Borokhovichs by
threatening them that it “will deem the absence of additional information or materials… as an
acceptance” and Defendants’ adjustment of the Claim.   
33. On June 10, 2014, almost three months after it notified Plaintiffs that it would have the
Premises inspected by an independent contractor, Defendants’ contractor, Greg Wood,
conducted an inspection to determine the scope of damage to the structure of the Premises.  
Most, if not all, of the custom furniture that was damaged as a result of the Fire was on the
Premises site at the time of Mr. Wood’s inspection yet Mr. Wood did not inspect said furniture.
34. Defendants subsequently issued a report, purportedly prepared by Mr. Wood, in which
Defendants concluded that the damage to the Premises structure amounted to approximately half
of the Plaintiffs’ estimated damages for same.
35. In June 2014, Plaintiffs notified Defendants that they had located a rental that would
provide acceptable living accommodations, comparable to the Premises, and asked Defendants to
confirm that it would make payment for the replacement rental.
36. Defendants continued their pattern of unreasonable delay, refusing to confirm that it
would cover the replacement rental until it was too late and the rental property that the
Borokhovichs had procured was no longer available, despite Plaintiffs’ repeated entreaties that
they needed Defendants’ response or they would risk losing the rental.
37. In August 2014, Defendants finally issued partial payment for some of Plaintiffs’
personal contents, along with an estimate of items.  The estimate blatantly omitted numerous
items submitted by Plaintiffs.  Plaintiffs alerted Defendants to its adjusting omission and, despite
repeated requests by Plaintiffs, Defendants have yet to revise their adjustment or advise Plaintiffs
of the reason(s) for the omissions.  
38. In August 2014, seventeen months after the Fire, Defendants requested, for the very first
time, to inspect the custom furniture “millwork” that had been damaged by the Fire and its
aftermath.  Not only was this the first instance in which Defendants demanded an inspection of
the millwork, but they had numerous previous opportunities to do so, including on June 10,
2014, when Mr. Wood inspected the Premises.  (See ¶ 33, infra).
39. On October 6, 2014, Defendants’ contractor, Robert Lord, inspected the millwork and
issued a report dated the same day, which understated the replacement cost for the damaged
millwork.  Incredibly, whereas the most serious damage took place in the Borokhovichs’
daughter’s room, Mr. Lord’s report completely omitted that room from the estimate.  Despite
being notified by Plaintiffs of their daughter’s room’s omission from Mr. Lord’s estimate,
Defendants have yet to revise the estimate to include it.  
40. Also on October 6, 2014, Mr. Wood, Defendants’ contractor who had previously
inspected the Premises on June 10, 2014 to evaluate the extent of the damage, re-inspected the
Premises; Mr. Wood subsequently issued a report with revised damages figures, upward
adjusting his previous estimate to almost the exact figures submitted by the Borokhovichs’
contractor for the cost of repair.  Mr. Wood’s revised report, dated October 16, 2014, was
produced to Plaintiffs on November 5, 2014, but to date Defendants have not made the additional
payment due under their own contractor’s estimate.  
41. From the Claim’s inception through the current day, Defendants have continuously and
unreasonably delayed and procrastinated the adjustment and payment process of this Claim,
finding every opportunity to filibuster and hinder the resolution of the Claim.
42. Defendants’ intentional bad-faith conduct in unreasonably delaying and/or denying
portions of the Claim has not only left Plaintiffs without the ability to rehabilitate their home and
move back into it, but also leaves them with the prospect of having their home destroyed.   
43. By letter dated August 1, 2014, the Village of Hewlett Harbor (the “Village”) notified the
Borokhovichs that the Premises had been condemned and would razed due to its remaining in
unrepaired condition for such an extended period of time, and advising the Borokhovichs that
they will be responsible for all of the Village’s costs and expenses incurred in connection with
the condemnation and demolition, including the Village’s own attorney fees.
44. The Borokhovichs promptly notified Defendants of the Village’s letter, pleading with
them to resolve the claim so the Plaintiffs could attempt to rehabilitate the Premises and avoid
further action by the Village.
45. Notwithstanding the Borokhovichs’ repeated entreaties, Defendants did nothing.  Instead,
they waited until October 6, 2014 to have Mr. Wood re-inspect the Premises and revise his
report.  
46. Without the funds necessary to adequately repair the damage to their home, the
Borokhovichs are faced with its impending demolition.
47. After going through the effects of Hurricane Sandy and then having their home and
possessions destroyed by the Fire, the Borokhovichs have been forced to live in sub-par
conditions for almost two years as Defendants slowly wind their way, without course, through
their never-ending “adjustment” of the Claim, in what is, at best, an intentional tactic of delay
and underpayment aimed at exhausting the Plaintiffs to the point of simply accepting
Defendants’ underpayment and lack of payment of insured losses.
48. Finally, due to Defendants’ inexcusable bad-faith delay, the Borokhovichs stand to lose
their home to their village’s condemnation of the Premises, a development that resulted
proximately and consequentially, and foreseeably to Defendants, from the close to two-year
delay in repairing the Premises.
49. It is inconceivable that Defendants could take the hefty insurance premiums paid by the
Borokhovichs for years yet blatantly, recklessly and intentionally, retard the Claim’s adjustment
and payment, while knowing full-well of the catastrophic, consequential damages to the
Borokhovichs that would result therefrom.
50. In addition to the compensatory and consequential damages suffered by the
Borokhovichs, and in order to deter other insurance companies from engaging in bad faith
insurance practices and denials, Defendants should be punished through the imposition of
punitive damages against them.  It is only through being held accountable for their fraud and
misconduct that Defendants and others similarly inclined will refrain from acting in bad faith in
wrongfully denying insureds’ claims.

AND AS FOR THE FIRST CAUSE OF ACTION
BREACH OF CONTRACT
51. Plaintiffs hereby incorporate by reference as if fully set forth herein all of the preceding
paragraphs.  
52. Plaintiffs and Defendants entered into a contract when Plaintiffs purchased, and
Defendants issued, the Policy.
53. The Policy provided coverage to Plaintiffs for physical damage to the Premises and its
contents, as well as for Additional Living Expenses, caused by Fire.
54. Plaintiffs fully performed under the contract by paying all premiums and cooperating
with Defendants regarding the Claim.  Plaintiffs complied with all conditions precedent to their
recovery herein, including appropriate and adequate demands, or Defendants waived or excused
such conditions precedent.      
55. Defendants failed to perform and materially breached the insurance contract when they
wrongfully failed to pay and refused to reimburse Plaintiffs the monies they are owed for
damaged to the Premises and its contents, and for Additional Living Expenses.
56. As a result of Defendants’ breaches of contract, Plaintiffs suffered damages.

AND AS FOR THE SECOND CAUSE OF ACTION
BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING
57. Plaintiffs hereby incorporate by reference as if fully set forth herein all of the preceding
paragraphs.  
58. Every contract contains the implied covenant of good faith and fair dealing, by which the
contracting parties agree to act in good faith and deal fairly with one another, and abstain from
engaging in bad faith and unfair dealing that would deprive the other party of the benefits of the
insurance contract or cause undue hardship or harm.  It also requires an insurer, inter alia, to
investigate claims in good faith and to reasonably and promptly pay covered claims.
59. As described above and throughout this Complaint, Defendants repeatedly acted in bad
faith in the administration and denial of Plaintiffs’ Claim.
60. As a result of Defendants’ breach of the implied covenant of good faith and fair dealing,
Plaintiffs suffered damages.

DAMAGES
61. Plaintiffs were denied their legitimate claim for policy benefits, resulting in a loss in
excess of $750,000.00.
62. By virtue of their various breaches of contract, including their failure to fully reimburse
the Borokhovichs for their covered losses, Defendants are liable and owe Plaintiffs for the actual
damage the sustained as a foreseeable and direct result of the breach, all costs associated with
recovering, repairing and/or replacing the covered properties, together with interest and all other
damages Plaintiffs may prove as allowed by law.  Plaintiffs are entitled to compensatory and
consequential damages, in an amount to be determined at trial, together with pre- and post-
judgment interest at the maximum rate allowable by law.

JURY DEMAND
63. Plaintiffs demand a trial by jury in this action.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully request that this Court order relief in their favor and
further request judgment against Defendants as follows:
A. Finding Defendants liable for breach of contract and for breach of the implied covenant
of good faith and fair dealing;
B. Declaring that Defendants acted in bad faith in its investigation, administration, and
denial of Plaintiffs’ Claim;
C. Declaring that Plaintiffs are entitled to be compensated from the time of loss in the
amount equal to the market rental value of their property or one of like kind;
D. Awarding to Plaintiffs compensatory and consequential damages against Defendants, in
an amount to be determined at trial, together with pre- and post-judgment interest at the
maximum rate allowable by law;
E. Awarding to Plaintiffs punitive damages against Defendants;
F. Awarding to Plaintiffs the costs and disbursements of this action, including the award of
reasonable fees and expenses of Plaintiffs’ counsel and experts; and
G. Granting Plaintiffs such other relief as this Court deems just and proper.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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