Dear Coverage Pointers Subscribers:
OK. OK. I promise. We'll get a larger number of reviews to you as soon as the courts get back into the swing of things.
The appellate courts will be back at full tilt by next issue, or the issue thereafter. Once the summer ends, and the election cases are decided, the appellate judges find themselves back on the bench and decisions of interest will start flying out of the clerks' offices. Last year, we reported on six cases in the last August and first September issues of CP and then the floodgates opened. This week, we report on seven appellate cases and we provide an update on the Insurance Department proposal to amend Section 3420 of the Insurance Law. You'll recall an length summary of that proposal, released by the Insurance Department on August 3rd, in our previous issue. We urge you to follow these proposals, and let the Insurance Department know of your concerns.
From Audrey Seeley, the Queen of No Fault (whose insights on arbitration provided in the attached issue are worth remembering:
The arbitration and litigation fronts are extremely quiet most likely due to vacations. I took advantage of this by including in my column a brief note on arbitration submissions and conduct at arbitrations. If this issue is of interest to you and you would like a more in-depth discussion on it let me know. I would be more than happy to provide you with some training on it.
I hope that everyone has a safe and happy Labor Day weekend!
Audrey A. Seeley
Fall means training time! Our staff of crack coverage and defense lawyers have their Power Points packed and are ready to visit your claims staff to provide in-house training. We travel throughout the country. Just contact us for scheduling. Some topics of interest are suggested here, but we can craft a program around whatever you might need:
- Primary and Excess Insurance - Rights & Responsibilities
- SUM Claims Handling
- Preventing Bad Faith Claims - First Party Cases
- Preventing Bad Faith Claims - Liability Cases
- Late Notice - How to Handle
- The Cooperation Clause - How to Handle
- NY Disclaimer Letter - Nuts & Bolts: How to Create and Write and Send a Disclaimer Letter, and How Not To. (The Reservation of Right Letter Myth)
- No- Fault Arbitrations and Appeals: Mock Arbitrations, Preserving the Record, Taking an Appeal
- No Fault Regs - Knowledge is Power
- The "Serious Injury" Threshold; Early Dismissal with Properly Crafted Motions
- An Auto Liability Policy Primer
- A CGL Policy Primer
- A Homeowners Liability Policy Primer
- EUO's Under First Party Policies
- How to Resolve Coverage Disputes: DJ Actions, Insurance Law Section 3420 Direct Actions (Choice, Strategy and Timing)
- Insured Selected Counsel: When is it Necessary and How to Avoid it?
- Mediation and the Role of the Mediator
- ADR and How to Get to "Yes".
- The Internet as a Tool for the Claims Representative
- Construction Cases - The Interplay Between Indemnity Agreements and Insurance Policies
- Other Insurance, Additional Insureds and Priority of Coverage
Now on to the important stuff.
Allan Sherman. Lots of Allan Sherman fans commented on the discussion related to Hello Muddah, Hello Fadduh in an earlier issue. So I thought I'd share the first three stanzas of one on my favorite Sherman ditties, Automation, which, like the camp song, was on everyone's favorite Sherman album, My Son, the Nut, sung to the tune of Fascination. If you want to sing along, click here and the midi will start. Now THIS is music, and a period piece at that, a song ahead of its time:
It was automation, I know
That was what was making the factory go
It was IBM
It was Univac
It was all those gears going
Clickity clack, dear
I thought automation was
keen
Till you were replaced by a ten-ton machine
It was a computer that tore us apart, dear
Automation broke my heart.
There's an RCA 5-0-3
Standing next to me, dear, where you used to be
Doesn't have your smile
Doesn't have your shape,
Just a bunch of punch cards and
light
bulbs and tape, dear...
Copyright 1963 Curtain Call
Productions
That's it for this issue. Thanks for the great feedback we receive on this publication. My prediction is that our subscription list will reach 1300 by next issue and we're delighted to provide this service to our readers.
Dan
Hurwitz & Fine, P.C. is a
full-service law firm
providing legal services throughout the State of New York.
Newsletter Editor
Dan D. Kohane
[email protected]
Insurance Coverage Team
Dan D. Kohane, Team Leader
[email protected]
Michael F. Perley
Audrey A. Seeley
Steven E. Peiper
Fire, First-Party and
Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper
NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge
Mark Starosielec
APPELLATE
TEAM
Dan D. Kohane
Scott M. Duquin
Index to Special Columns
Starosielec’s Serious Side of “Serious Injury”
Update on Significant Insurance Department Proposal
The Legislature is out of session, the courts are on summer hiatus but the process of making sausage is ongoing.
We reported, last issue, on a very important and far reaching Insurance Department proposal to rather significantly change Insurance Law Section 3420. The proposal, as you know, would provide for limited direct actions against insurers by claimants even before judgment is obtained against insureds, require a demonstration of prejudice for any late notice disclaimer, extend the requirement for prompt late notice disclaimers, and corresponding penalties, to property damage cases and out-of-state accidents and require pre-action disclosure of insurance policy information upon request.
Insurance companies and trade organizations are seeking a more balanced bill, recognizing that the Department appears poised to have “prejudice” and “direct action” legislation before the New York State Legislature as soon as is possible. We urge you to follow this debate closely as this matter is moving quickly to a head
Case Law
8/23/07 First Unum Life Insurance Company v. Gravante
Appellate Division, First Department
The Truth is the Truth
Under Insurance Law § 3105, a misrepresentation in an application for insurance is defined as a false "statement as to past or present fact, made to the insurer ... at or before the making of the insurance contract as an inducement to the making thereof. Here, the application for disability insurance told First Unum that if they issued a new policy to him, he would cancel the policy he had. They did (issue), he did (cancel) and then, First Unum tried to rescind second policy. “Nah,” sayeth the appellate court. Not only was their no misrepresentation, the insured said what he’d do and did what he said.
8/21/07 In the Matter of Government Employees Insurance Company v. Lopez
Appellate Division, Second Department
Cancellation of Auto Policy by
Premium Finance Agency (PFA) Upheld Even Without Notice of Right to Appeal
Premium finance agency cancelled NYAIP (Assigned Risk) policy for
non-payment of premium. An application was made for uninsured motorists benefits
and carrier moved to stay arbitration challenging validity of cancellation.
Appellate court upheld cancellation, rejecting claim that cancellation notice
was invalid because it did not advise insured of right to seek review of
cancellation by NYAIP’s Governing Committee. Why? Because (a) there was no
right of review of the cancellation since the PFA and not the carrier, cancelled
[canceled???] the policy and (2) there was no requirement under the NYAIP rules
that the cancellation notice so advise.
Editor’s Note: Was the policy “cancelled” or “canceled?” For years, I’ve tried to avoid the debate on the correct spelling of the word. Having all kinds of free time to engage in research on the subject, I’ve found scores of websites that have convinced me that either or both works. However, I haven’t figured out whether I really found “websites” or “web sites.” Nothing’s easy.
8/16/07
Solomon v. United States Fidelity & Guaranty Company
Appellate Division, First Department
Where Claim Falls Outside the
Grant of Coverage, Disclaimer Unnecessary
The rule is repeated again, for those who
forget. Section 3420(d) of the Insurance Law requires prompt disclaimer if the
denial of coverage is based on policy exclusions or breaches of policy
conditions. If the reason for denial of coverage is that the claim does not
fall within the grant of coverage, a failure to disclaim promptly will not
create coverage where none exists.
STarosieleC’S serious (Injury) Side of New York No-FaulT
Mark Starosielec
[email protected]
8/23/07 Fernandez v. Laret
Appellate Division, First Department
Reversed: Appellate Division Grants Timely Summary Judgment Motion
In a brief opinion, the First Department reversed a lower court order which had denied defendants’ motion and cross motion for summary judgment. Here, the lower court improperly denied defendants’ motion for summary judgment as untimely, in view of the prior court order issued by another justice of coordinate jurisdiction extending their time to move for such relief. Further, defendants established their entitlement to summary judgment both as to the claim of negligence and as to whether plaintiff suffered a serious injury. There was no issue of fact and plaintiff failed to demonstrate a serious injury as a result of the accident.
8/21/07 Hypolite v. International Logistics Mgt., Inc.
Appellate Division, Second Department
Failure to Compare Findings Leads to Denial of Summary
Judgment
Plaintiffs appealed a lower court order which granted the separate motions of the defendants for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d). The Appellate Division reversed the order stating the defendants failed to establish, prima facie, that the plaintiffs did not sustain a serious injury. They relied on the affirmed medical report of a neurologist who examined each of the plaintiffs. In his affirmed medical report, the neurologist set forth his findings based on range of motion testing of the plaintiffs' respective cervical and lumbar spines. However, the neurologist failed to compare those findings to the normal ranges of motion.
8/14/07 Patel v DeLeon
Appellate Division, Second Department
Court to Defendants: Address the Issues or Suffer the
Consequences
The Appellate Division modified a lower court order, which kept
plaintiff’s lawsuit alive. Here, plaintiffs appealed order which had granted
defendants’ motion for summary judgment on the grounds that the plaintiff did
not sustain a serious injury within the meaning of Insurance Law § 5102(d). The
defendants made a prima facie showing that the injured plaintiff did not sustain
a “permanent loss of use of a body organ, member, function or system [, a]
permanent consequential limitation of use of a body organ or member [or a]
significant limitation of use of a body function or system” within the meaning
of Insurance Law § 5102(d). In opposition, the plaintiffs failed to raise a
triable issue of fact. So the lower court properly granted that branch of the
defendants’ motion. However, the lower court erred in granting summary judgment
dismissing the claim predicated on allegations that the injured plaintiff
sustained a medically-determined injury under the 90/180 category. Yet, the
defendants failed to adequately address those allegations in their papers. They
thus failed to demonstrate their entitlement to judgment as a matter of law with
respect to that claim.
Audrey’s Angle on No-Fault
Audrey Seeley
The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards. We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards, especially Master Arbitration awards, that address interesting no-fault issues.
An Angle on Arbitrations
Arbitration Submissions and Arbitration Attendance – How Effective are You?
Since the arbitration forum is quiet in Western New York this edition, I thought I would take the liberty to submit a brief discussion on arbitrations. More specifically on preparing arbitration submissions and conduct at arbitrations. Please note that this is a topic that we provide training on and if you are interested in more in-depth discussion on this topic let us know.
No-fault arbitration submissions are the first thing the assigned arbitrator can review before the arbitration. Irrespective of whether you are the applicant, insurer, or counsel to one of those two, the organization and content of the position statement can set the tone for the actual arbitration. For example, I recently arrived at an arbitration where the arbitrator immediately stated to the applicant’s counsel that she was confused as to whether the applicant was claiming other necessary expenses. I note that the AR-1 failed to list this claim yet in the middle of the submission there was a sheet of paper mentioning an other necessary expense claim. Imagine being that attorney, who had his client sitting there for the arbitration, and having to answer that question.
Any party to a no-fault arbitration should ensure that they take some time to organize their evidence submission in a way that an arbitrator can easily find documents during the arbitration when you present your case. A party should consider using exhibit tabs to separate documents and provide a table of contents when there are multiple providers at issue or multiple no-fault claims (i.e., medical, lost wages). Likewise, with the electronic system the arbitrators use many times I find where I appear that the arbitrator may not have your submission or the submission may have been separated as it was scanned into the system. A party should consider bringing an extra set of their submission with them to the arbitration for the arbitrator’s use.
Prior to the no-fault arbitration some arbitrators conduct telephonic conferences to discuss the issues at the arbitration and choose a mutually convenient date and time for all parties. In the event that the assigned arbitrator does not do this each party should consider whether their arbitration has been allotted the proper amount of time. The upstate arbitrators I appear before usually allot 30 to 45 minutes per arbitration and usually have a full day scheduled. If you have an arbitration where you are producing three witnesses and cross-examining the Applicant regarding non-cooperation with vocational rehabilitation warranting denial of lost wages consider requesting that the arbitrator set aside more than 45 minutes for the hearing. I have actually gone to hearings about 2 ½ hours from my office where a party failed to request additional time and was threatened to be forced to come back for a continued hearing due to the arbitrator’s full schedule and the party being inconsiderate of the arbitrator as well as other cases waiting in the hall.
During the arbitration, both parties should stick to the legal issues and avoid personal comments. This occurs more often that you think in arbitrations and I always wonder what my opponent really thinks the advantage is to making a personal attack on my client. The blame is equal though as I have sat through other arbitrations and witnessed the insurer’s counsel attacking a weeping eligible injured person. At the end of the day I have yet to see any party gain an advantage by personally attacking their opponent.
Litigation
8/21/07 Mary Immaculate Hospital v. Allstate Insurance Company
Appellate Division, Second Department
To Prove a Provider Has Billed
the Carrier, it Must Provide Proof that it Billed the Carrier
The Applicant, medical provider, failed to present a prima facie case
entitlement to summary judgment. The Applicant submitted in support of its
motion for summary judgment an affidavit from a billing service representative
who only averred that she billed the insurer. Unfortunately, the affidavit
failed to establish that the billing representative or anyone else mailed a bill
or NF-5 to the insurer. The Applicant’s submission of certified mail receipts
failed to establish mailing since the receipt did not state that the documents
related to the assignee were included in the mailing.
Editor’s Note: Who can argue? No proof? No recovery.
PEIPER on PROPERTY
Steven E. Peiper
8/14/07 Cali v Merrimack Fire Ins. Co.
Appellate Division, Second Department
Faulty Foundations Fully Removed from Coverage by Policy’s Earth Movement Exclusion
Plaintiff/insured’s residence was severely damaged as a result of settlement and cracking of the concrete foundation which supported the structure. Carrier, Merrimack Mutual Fire Ins. Co. (Merrimack), denied the insured’s claim by relying upon an exclusion which removed coverage for “earth movement *** earth sinking, rising or shifting.” The insured countered carrier’s position by arguing that the “collapse” was actually occasioned by decayed wood which was supporting the residence’s foundation. As coverage for hidden decay was provided under the policy issued by Merrimack, the insured proposed that the resulting damage was also covered. The Trial Court agreed, and the insured’s motion for summary judgment was granted.
In reversing, the Second Department ruled that the policy at issue plainly excluded coverage for earth movement “regardless of any other cause or event contributing concurrently or in sequence to the loss.” Accordingly, although the decayed wood may have been “a covered peril” under the policy, the policy still removed coverage for damages resulting from “earth movement” notwithstanding any other factors. In turn, the disclaimer was upheld, and summary judgment was directed in favor of Merrimack.
Across Borders
Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org. Dan Kohane serves as the FDCC’s Immediate Past President and Board Chair and past Website Editor.
8/15/07 United National Insurance Company v.
Hydro Tank, Inc., et al
Fifth Circuit
Summary Judgment Interpreting Policy Exclusion
Clause in Favor of Insurer Affirmed.
Workers, who were performing sludge removal, alleged that they were
injured by the release of hydrogen sulfide, a pollutant. Insurer, which provided
umbrella coverage to employer and tank owner, sought a declaratory judgment that
it owed nothing and did not have to defend and indemnify the tank owner because
of a Pollution Exclusion clause in the umbrella policy. The District Court
granted summary judgment in favor of the insurer. The Fifth Circuit affirmed,
ruling that the umbrella policy did not apply because the Policy Exclusion
clause exempted from coverage all claims for bodily injury caused by the
"actual, alleged or threatened discharge, seepage, migration, dispersal, release
or escape of pollutants at any time." The Fifth Circuit also affirmed the
District Court's ruling that the broad language of a Contractor's Limitation
Exclusion clause could not trump the explicit exclusions of the Pollution
Exclusion clause and create coverage where it would otherwise not exist.
Reviewing the matter de novo, the Fifth Circuit agreed that the tank owner's
claim for indemnification was unavailing.
Submitted by: Chris Blake (Nelson Mullins Riley &
Scarborough LLP)
8/14/07 Trainwreck West, Inc. v. Burlington Ins. Co.
Missouri Court of Appeals, Eastern District
Unambiguous “Assault or Battery” Exclusion Bars Coverage in Personal Injury
Action
Burlington issued a CGL policy to Trainwreck, the owner and operator
of a nightclub. During the policy period, Cheri Neff, a patron of the nightclub,
fell and sustained personal injuries while being ushered out of the club by
Trainwreck personnel after she and her party caused a disturbance in the club.
Neff’s counsel sent an attorney’s lien letter to Trainwreck, contending she was
injured when she was “violently and unexpectedly pushed out of your
establishment by ‘your’ security people.” Trainwreck tendered the claim to
Burlington, which denied the claim on the basis that the loss arose from an
assault or battery. Neff subsequently filed suit, which Trainwreck tendered to
Burlington for defense and indemnity. Burlington again denied coverage,
asserting the CGL policy’s “assault or battery” exclusion barred coverage.
Trainwreck filed a declaratory judgment action against Burlington claiming that
the CGL policy did not bar coverage for Neff’s injuries and required Burlington
to defend and indemnify Trainwreck for the claims therein. Burlington moved to
join Neff as a necessary party and brought a counterclaim against Trainwreck and
a cross-claim against Neff. Burlington subsequently moved for summary judgment,
contending that her “assault or battery” exclusion barred coverage. The trial
court granted summary judgment in Burlington’s favor, finding that the “assault
or battery” exclusion barred coverage because 1) the “assault or battery”
exclusion was unambiguous; 2) the ascertainable facts at the time the lawsuit
was filed were consistent with the allegations in Neff’s Petition; and 3) both
the ascertainable facts in the Petition supported application of the “assault or
battery” exclusion. On appeal, the appellate court held, inter alia, that the
trial court did not err in granting summary judgment because 1) no genuine issue
of material fact exist regarding whether Burlington had a duty to defend; 2) the
assault or battery clause is clear and unambiguous; and 3) the allegations
contained within Neff’s petition, as well as actual facts known to Burlington or
reasonably ascertainable, did not establish a duty to defend.
Submitted by: Bruce D. Celebrezze & Lisa G. Rowe (Sedgwick, Detert, Moran & Arnold LLP)
8/14/07 Stark Liquidation Co. v. Florists
Mutual Ins. Com.
Missouri Court of Appeals, Eastern District
Underlying Judgment Not
Fraudulent Where Insurer Failed To Investigate Or Participate In Defense of
Underlying Claim
James Duffin purchased approximately 3,500 Earli Sun apricot trees from
Stark Brothers Nurseries and Orchards, which failed to produce “commercial
quantities” of fruit. The trees apparently contained bacteria, which also spread
to a parallel orchard, causing damage to nectarine trees. Stark tendered
numerous claims to its insured, Florists, which had issued a broad form CGL
policy to Stark. Each claim was denied, including a tender of the defense of a
lawsuit, on the bases that 1) the failure of the trees to bear fruit did not
represent an occurrence under the meaning of the CGL policy and did not occur
within the policies’ applicable coverage period, 2) that the claims were
excluded by the “your products” and the “failure of your products” provisions of
the policy, and 3) that the claims were excluded by a “loss of use” provision to
the policy. Stark and Duffin subsequently reached a settlement wherein Stark
agreed to pay Duffin a sum certain and assign all its “rights, title and
interest” in its Florists CGL policies to Duffin, and assign Duffin all of its
“rights, title and interest” in its patent for the Earli Sun apricot trees, in
exchange for a covenant not to execute signed by Duffin. Subsequently, a
California arbitrator issued an award, which was confirmed by a California
court. Stark moved forward with its Missouri action against Florists for
declaratory judgment and breach of contract for vexatious refusal. The Missouri
Court of Appeals upheld the trial court’s decision on summary judgment that 1)
Florists had a duty to defend Stark because the injuries to Duffin’s apricot and
nectarine orchards came within the coverage of the CGL policies, occurred within
the applicable coverage periods and were not excluded by any applicable policy
provisions; 2) Florists had a duty to indemnify Stark against Duffin’s claim
because Florists had an opportunity to participate in the defense of the
underlying claim and to assert its coverage defenses in the instant action and
the underlying judgment was not procured by collusion or fraud; and 3) trial
court did not err in granting Stark summary judgment on its breach of insurance
contract for vexatious refusal to defend and indemnify because Florists failed
to investigate Duffin’s claim.
Submitted by: Bruce D. Celebrezze & Lisa G. Rowe (Sedgwick, Detert, Moran & Arnold LLP)
Reported Decisions
Solomon v. United States Fidelity & Guaranty Company
L'Abbate, Balkan, Colavita & Contini, L.L.P., Garden City
(Maureen E. O'Connor of counsel), for appellant.
Diamond and Diamond, LLC, New York (Stuart Diamond of
counsel), for respondents.
Order, Supreme Court, New York County (Herman Cahn, J.), entered June 1, 2006, which denied defendant's motion, pursuant to CPLR 3211(a)(7), to dismiss the complaint, unanimously reversed, on the law, without costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.
We agree with the motion court that section A.1 of defendant's policy is not ambiguous, and that plaintiffs' claim herein does not fall within the ambit of the policy's coverage. We disagree with the motion court, however, regarding the applicability of Insurance Law § 3420(d).
In Matter of Worcester Ins. Co. v Bettenhauser (95 NY2d 185 [2000]), the Court of Appeals stated that:
"Disclaimer pursuant to [Insurance Law] section 3420(d) is unnecessary when a claim falls outside the scope of the policy's coverage portion. Under those circumstances, the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed. By contrast, disclaimer pursuant to section 3420(d) is necessary when denial of coverage is based on a policy exclusion without which the claim would be covered."
(id. at 188-189,
see also Lutheran Social Servs. of Metro. N.Y., Inc. v Guide One Ins., 35
AD3d 285 [2006]).
Here, since the claim falls outside of the scope of the policy, a disclaimer is unnecessary, rendering the timeliness of defendant's notice irrelevant.
Law Offices of Steven I. Lubowitz, Scarsdale (Susan I. Lubowitz of counsel),
for Linda and Herman A. Laret
appellants.
Mead, Hecht, Conklin & Gallagher, LLP, Mamaroneck (Elizabeth M. Hecht of
counsel),
for Julio C. Vasquez and Enita A. Calderon appellants.
Order, Supreme Court, Bronx County (Alan J. Saks, J.), entered October 12, 2006, which denied defendants' motion and cross motion for summary judgment, unanimously reversed, on the law, without costs, the motion and cross motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.
The motion court improperly denied the Laret defendants' motion for summary judgment as untimely, in view of the prior court order issued by another justice of coordinate jurisdiction extending their time to move for such relief (see Dondi v Jones, 40 NY2d 815 [1976]). On the merits, the Laret defendants established their entitlement to summary judgment both as to the claim of negligence and as to whether plaintiff suffered a serious injury. Mr. Laret's testimony that his car was stopped when struck was unrebutted by any proper evidence; plaintiff's deposition, replete with internal contradictions, was clearly coached and tailored, creating only a feigned issue of fact as to whether the Laret car was moving when the Calderon car collided with it, and was insufficient to defeat summary judgment. Furthermore, the Laret motion and the cross motion by defendants Vasquez and Calderon should have been granted based upon plaintiff's failure to demonstrate serious injury (Insurance Law § 5102[d]) as a result of the accident.
THIS
CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: AUGUST 23, 2007
Hypolite v. International Logistics Mgt., Inc.
Koenigsberg & Associates, P.C., Brooklyn, N.Y. (Richard S. Weiss of counsel),
for appellants.
White Fleischner & Fino, LLP, New York, N.Y. (Deanna E. Hazen of counsel), for
respondents
International Logistics Management, Inc., and Andres Gilbert.
James G. Bilello & Associates, Westbury, N.Y. (Patricia McDonagh of counsel),
for respondent
Annika D. Campbell Hugley
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Kings County (Bayne, J.), dated March 3, 2006, which granted the separate motions of the defendants International Logistics Management, Inc., and Andres Gilbert, and the defendant Annika D. Campbell Hugley for summary judgment dismissing the complaint insofar as asserted against them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with one bill of costs payable by the defendants appearing separately and filing separate briefs, and the separate motions of the defendants International Logistics Management, Inc., and Andres Gilbert, and the defendant Annika D. Campbell Hugley are denied.
On their separate motions for summary judgment, the defendants failed to establish, prima facie, that the plaintiffs did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). While the defendants' motions relied in large part on separate medical evidence, they both relied on the affirmed medical report of Dr. Kuldip Sachdev, a neurologist who examined each of the plaintiffs on April 28, 2004. In his affirmed medical report Dr. Sachdev set forth his findings based on range of motion testing of the plaintiffs' respective cervical and lumbar spines. However, Dr. Sachdev failed to compare those findings to the normal ranges of motion (see Somers v Macpherson, 40 AD3d 742; McNulty v Buglino, 40 AD3d 591; Harman v Busch, 37 AD3d 537).
Since the defendants failed to
establish their prima facie entitlement to judgment as a matter of law in the
first instance, it is unnecessary to reach the question of whether the
plaintiffs' papers submitted in opposition to the motions were sufficient to
raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d
538).
SCHMIDT, J.P., KRAUSMAN, GOLDSTEIN, COVELLO and ANGIOLILLO, JJ., concur.
Spada, Ardam & Sibener, P.C., Smithtown, N.Y. (David M. Ardam of counsel), for
appellants.
John P. Humphreys, Melville, N.Y. (Dominic P. Zafonte of counsel), for
respondents.
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Suffolk County (Weber, J.), dated September 20, 2006, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Mrunalani Patel did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendants' motion which was, in effect, for summary judgment dismissing the plaintiffs' claim predicated on allegations that the plaintiff Mrunalani Patel sustained a medically-determined injury of a nonpermanent nature which prevented her, for at least 90 of the 180 days immediately after the subject accident, from performing her usual and customary activities and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed, with costs to the plaintiffs.
The defendants made a prima facie showing that the injured plaintiff did not sustain a "permanent loss of use of a body organ, member, function or system [, a] permanent consequential limitation of use of a body organ or member [or a] significant limitation of use of a body function or system" within the meaning of Insurance Law § 5102(d). In opposition, the plaintiffs failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted that branch of the defendans' motion which was, in effect, for summary judgment dismissing the claims predicated on those categories of serious injury.
The Supreme Court erred, however, in granting that branch of the defendants' motion which was, in effect, for summary judgment dismissing the claim predicated on allegations that the injured plaintiff sustained a medically-determined injury of a nonpermanent nature which prevented her, for at least 90 of the 180 days immediately after the accident, from performing her usual and customary activities. In their motion papers, the defendants failed to adequately address those allegations. They thus failed to demonstrate their entitlement to judgment as a matter of law with respect to that claim (see Insurance Law § 5102[d]; see Torres v Performance Auto. Group, Inc., 36 AD3d 894, 895). Accordingly, the Supreme Court should have denied that branch of the defendants' motion which was, in effect, for summary judgment dismissing the claim predicated on this category of serious injury (see Lopez v Geraldino, 35 AD3d 398, 399).
Mary Immaculate Hospital v. Allstate Insurance Company
McDonnell & Adels, P.C., Garden City, N.Y. (Todd Hellman of
counsel), for appellant.
Joseph Henig, P.C., Bellmore, N.Y., for respondent.
DECISION & ORDER
In an action to recover no-fault medical payments under certain insurance contracts, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Peck, J.), dated December 28, 2004, as granted those branches of the plaintiff's motion which were for summary judgment on the causes of action to recover no-fault medical payments allegedly due to Mary Immaculate Hospital as assignee of Yvette Coley and Khayyam Jackson.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the plaintiff's motion which were for summary judgment on the causes of action to recover no-fault medical payments allegedly due to Mary Immaculate Hospital as assignee of Yvette Coley and Khayyam Jackson are denied.
Viewing the evidence in the light most favorable to the nonmoving party (see Gonzalez v Metropolitan Life Ins. Co., 269 AD2d 495, 496), we conclude that the plaintiff, Mary Immaculate Hospital (hereinafter the Hospital), failed, in support of its motion for summary judgment, to tender sufficient evidence in admissible form eliminating any triable issue of fact (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853; cf. Montefiore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 9 AD3d 354, 355 356). The Hospital submitted affidavits in which a billing service representative averred that she had "billed" the defendant, Allstate Insurance Company (hereinafter Allstate), "with a form N-F5 and UB92 for the sum of" $3606.93 and [*2]$2069.12, respectively. The evidence submitted in support of the motion, however, did not establish that the billing representative, or anyone else, mailed to Allstate those documents related to the claims for treatment rendered to Yvette Coley and Khayyam Jackson (cf. Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742 743; Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374, 375). The certified mail receipts submitted in support of the motion did not establish that those mailings contained the documents relating to those patients.
Since the Hospital failed to establish prima facie that it was entitled to judgment as a matter of law, it is unnecessary to consider the sufficiency of the opposing papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555).
Allstate's remaining contention is without merit.
Mary Ann Cali v. Merrimack Mutual Fire Ins. Co.
Faust Goetz Schenker & Blee, New York, N.Y. (Lisa L.
Gokhulsingh of counsel), for appellant.
Louis J. Castellano, Jr., P.C., Mineola, N.Y., for respondent.
DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is obligated to reimburse the plaintiff for damage to her property, the defendant appeals from an order of the Supreme Court, Nassau County (Alpert, J.), dated November 30, 2006, which denied its motion for summary judgment declaring that it is not obligated to reimburse the plaintiff for the subject loss to her property and granted the plaintiff's cross motion for summary judgment on the issue of liability.
ORDERED that the order is reversed, on the law, with costs, the plaintiff's cross motion for summary judgment on the issue of liability is denied, the defendant's motion for summary judgment is granted, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment, inter alia, declaring that the defendant, Merrimack Mutual Fire Ins. Co., is not obligated to reimburse the plaintiff for the subject loss to her property.
By Homeowners Insurance Policy effective from April 12, 2004, to April 12, 2005, the defendant, Merrimack Mutual Fire Ins. Co. (hereinafter the insurer), insured the plaintiff's home in Valley Stream. During the coverage period, the plaintiff's house suffered extensive damage when the concrete slab foundation, which supported the house, settled, sank, and cracked. The plaintiff made a claim to the insurer pursuant to the policy for the loss sustained as a result of the "collapse" of the premises. However, the insurer disclaimed coverage for the loss based upon language in the insurance policy which excluded losses, inter alia, due to "earth movement * * * earth sinking, rising or shifting" and due to the "settling, shrinking, bulging or expansion, including resultant cracking, of pavements, patios, foundations, walls, floors, roofs or ceilings."
In 2005 the plaintiff commenced this action against the insurer seeking, inter alia, a judgment declaring that the insurer is obligated to reimburse the plaintiff for the damage to her property. After discovery and the filing of a note of issue, the insurer moved for summary judgment declaring that it is not obligated to reimburse the plaintiff for the subject loss to her property, and the plaintiff cross-moved for summary judgment on the issue of liability, arguing that the house collapsed as the result of "hidden decay," a peril that was covered under the insurance policy. Specifically, the plaintiff's engineer concluded that the slab foundation "partial[ly] collapsed" as a result of decayed wood in the earth beneath the foundation, which created a void in the soil and the resultant "collapse" of the foundation. The Supreme Court denied the insurer's motion and granted the plaintiff's cross motion. We reverse.
"[C]ourts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies" (Sanabria v American Home Assur. Co., 68 NY2d 866, 868, quoting State of New York v Home Indem. Co., 66 NY2d 669, 671), whose unambiguous provisions must be given "their plain and ordinary meaning" (United States Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232, quoting Government Empls. Ins. Co. v Kliger, 42 NY2d 863, 864; see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 471-472; Catucci v Greenwich Ins. Co., 37 AD3d 513, 514). As such, "[a]n exclusion from coverage must be specific and clear in order to be enforced' (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311), and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" (Guachichulca v Laszlo N. Tauber & Assoc., LLC, 37 AD3d 760, 761; see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398; Ruge v Utica First Ins. Co., 32 AD3d 424, 426). The plain meaning of the policy's language may not be disregarded in order to find an ambiguity where none exists (see Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470, 471; Garson Mgt. Co. v Travelers Indem. Co. of Ill., 300 AD2d 538, 539; Sampson v Johnston, 272 AD2d 956).
In this case, the Supreme Court erred in denying the insurer's motion, and in granting the plaintiff's cross motion for summary judgment on the issue of liability. The insurer met its initial burden of establishing its entitlement to judgment as a matter of law by demonstrating that the exclusion clearly and unambiguously applies to the plaintiff's property loss (see Sheehan v State Farm Fire & Cas. Co., 239 AD2d 486; Kula v State Farm Fire & Cas. Co., 212 AD2d 16, 20; Nowacki v United Servs. Auto. Assn. Prop. & Cas. Ins. Co., 186 AD2d 1038). The plain language of the exclusion was to relieve the insurer from loss or damage to covered property caused directly or indirectly by "[e]arth movement, meaning earthquake; landslide; mine subsidence; mudflow; earth sinking, rising or shifting." The policy similarly does not insure for "settling, shrinking, bulging or expansion, including resultant cracking of * * * foundations, walls, [or] floors." Losses due to "earth movement" are excluded "regardless of any other cause or event contributing concurrently or in any sequence to the loss." Here, the loss was attributable to the resultant earth movement and sinking, even though the movement was precipitated, at least in part, by decayed wood in the earth beneath the foundation slab (see Weaver v Hanover Ins. Co., 206 AD2d 910, 911). In opposition, the plaintiff failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562).
Although it is not unreasonable for insureds to have an expectation that their insurance policy would provide coverage for their losses, particularly, where premiums are paid and losses are as significant as that sustained by this homeowner plaintiff, we are nonetheless constrained to conclude that this policy's language specifically excluded coverage for damages resulting from earth movement "even though the cause of the earth movement is a covered peril" (Kula v State Farm Fire & Cas. Co., 212 AD2d at 21).
Finally, since this is, in part, a declaratory
judgment action, we remit the matter to the Supreme Court, Nassau County, for
the entry of a judgment, inter alia, declaring that the defendant, Merrimack
Mutual Fire Ins. Co., is not obligated to reimburse the plaintiff for the loss
to her property (see Lanza v Wagner, 11 NY2d 317, 334, appeal
dismissed 371 US 74, cert denied 371 US 901;
Metropolitan Cas. Ins. Co. v Travelers Ins. Co., 21 AD3d 457, 459).
RITTER, J.P., GOLDSTEIN, FISHER and BALKIN, JJ., concur.
In the Matter of Government Employees Insurance Company v. Lopez
APPEAL
by Travelers Indemnity Company, as limited by its brief, in a proceeding
pursuant to CPLR 7503 to permanently stay arbitration of an uninsured motorist
claim, from so much of an order of the Supreme Court (Jaime A. Rios, J.),
entered May 9, 2005, in Queens County, as, in effect, upon reargument, adhered
to its prior determination in an order and judgment dated April 23, 2004, inter
alia, granting the petition and permanently staying the arbitration.
Karen C. Dodson, Melville, N.Y. (Carol Simonetti of counsel),
for proposed additional respondent-appellant.
Darienzo & Lauzon (Montfort, Healy, McGuire & Salley,
Garden City, N.Y. [Donald S.
Neumann, Jr.] of counsel), for petitioner-
respondent.
OPINION & ORDER
COVELLO, J.The question presented for our consideration is whether a "premium
finance agency" that sought to cancel an "assigned risk" automobile insurance
policy because of the insured's failure to make required payments under the
"premium finance agreement" had to advise the insured of a particular "right of
review" in order for the cancellation to be effective. For the reasons that
follow, we answer that question in the negative.
Pursuant to an assigned risk automobile insurance policy that was effective April 12, 2002 (hereinafter the insurance policy), and issued pursuant to the rules of the New York Automobile Insurance Plan (hereinafter the NYAIP) (see Insurance Law § 5301[a]), Travelers Indemnity Company (hereinafter Travelers) insured Danngy Montoya's car. Montoya financed his insurance premiums by entering into a premium finance agreement (hereinafter the agreement) with an entity known as the Capitol Payment Plan (hereinafter Capitol), which was a premium finance agency. The agreement contained a power of attorney, which authorized Capitol to cancel the insurance policy in the event that Montoya defaulted on the payments that he was required to make under the agreement (see Banking Law § 576[1]).
In a notice of cancellation that purportedly was effective on August 1, 2002, Capitol advised Montoya that it had cancelled the insurance policy pursuant to the power of attorney. Indeed, Montoya had defaulted on his payments under the agreement.
On September 4, 2002, Montoya, who was driving his car in Queens County, collided with a vehicle occupied by Isabel Lopez, John Lopez, and Alba Ramones, who allegedly were injured. After the accident, the Lopezes and Ramones, who maintained that Montoya's car was uninsured, and who sought uninsured motorist coverage in connection with the accident, submitted a demand for arbitration to the petitioner Government Employees Insurance Company (hereinafter GEICO), which insured the vehicle they occupied.
On or about December 5, 2002, GEICO, which maintained that Montoya's car was insured under the insurance policy issued by Travelers, commenced the instant proceeding, seeking to permanently stay arbitration. According to GEICO, which named Travelers as a proposed additional respondent, the notice of cancellation was ineffective, as Capitol failed to advise Montoya that he had a right to have the NYAIP's "Governing Committee" review the cancellation of the insurance policy.
The Supreme Court agreed with GEICO that Capitol's failure to include language in the notice of cancellation advising Montoya of a right of review rendered the cancellation of the insurance policy ineffective. Accordingly, in an order and judgment dated April 23, 2004, the Supreme Court granted the petition, permanently stayed arbitration, and directed Travelers to provide Montoya with automobile coverage. Thereafter, in an order entered May 9, 2005, the Supreme Court, in effect, granted Travelers' motion for leave to reargue and, in effect, upon reargument, adhered to its prior determination. Travelers appeals from the order entered May 9, 2005.
We conclude that Capitol was not required to advise Montoya of a right of review, and that the insurance policy was effectively cancelled. Indeed, at the time Capitol sent Montoya the notice of cancellation, there was no statute or NYAIP rule requiring a premium finance agency that cancelled an assigned risk automobile insurance policy to advise an insured that the insured had a right to have the NYAIP's Governing Committee review that cancellation.
We begin with the fundamental premise that in New York State, all motor vehicle owners must have their vehicles insured (see Vehicle & Traffic Law § 312[1][a]). However, some owners, who are perceived by insurance companies to pose unreasonable risks, are unable to obtain insurance coverage for their vehicles (see Matter of Insurance Premium Fin. Assn of N.Y. State v New York State Dept. of Ins., 88 NY2d 337, 340). In order to ensure that such owners are able to obtain automobile insurance, the Legislature authorized the Superintendent of Insurance to approve a "reasonable plan" that required insurers who write automobile insurance policies in the State to provide those owners with automobile insurance coverage (see Insurance Law § 5301[a]). The NYAIP, which is administered by the Superintendent of Insurance and a 15-member Governing Committee (see Matter of Insurance Premium Fin. Assn of N.Y. State v New York State Dept. of Ins., supra at 341-343), then promulgated a set of rules governing the rights and liabilities of the motor vehicle owners who are insured under assigned risk automobile insurance policies (see Aetna Cas. & Sur. Co. v O'Connor, 8 NY2d 359, 362-364; Matter of Bowley Assoc. v State of N.Y. Ins. Dept., 98 AD2d 521, 526, affd 63 NY2d 982).
In addition to the problems that these motor vehicle owners face in obtaining insurance, they are often unable to pay the premiums for their assigned risk automobile insurance policies (see Matter of Insurance Premium Fin. Assn of N.Y. State v New York State Dept. of Ins., supra at 341). To assist the owners in paying the premiums, the Legislature has authorized premium finance agencies to enter into premium finance agreements, pursuant to which the premium finance agency pays the premiums on the insured's behalf (id.; see Banking Law art XII-B).
Where, as here, an insured fails to make a required payment under a premium finance agreement, and has given the premium finance agency a power of attorney authorizing it to cancel the assigned risk automobile insurance policy, the premium finance agency can do so pursuant to certain procedures set forth in Banking Law § 576(1). As part of the process, the agency is required to mail to the insured, inter alia, a cancellation notice (see Banking Law § 576[1][c], [d]). A premium finance agency's failure to comply with these procedures is "fatal" to the agency's attempt to cancel the policy (Matter of ELRAC, Inc. v White, 299 AD2d 546, 546-547; see Sea Ins. Co. v Kopsky, 137 AD2d 804, 804-805).
While Banking Law § 576(1)(c) and (d) sets forth detailed requirements for the form and content of the cancellation notice that a premium finance agency must send to the insured, these provisions do not require the agency to advise the insured that he or she has the right to have the NYAIP's Governing Committee review the cancellation of the assigned risk automobile insurance policy. Thus, it would follow that Capitol's failure to advise Montoya of such a right did not violate any statutorily-imposed requirement.
The question then becomes whether Capitol's failure to advise Montoya that he had the right to have the NYAIP's Governing Committee review the cancellation of the insurance policy violated the NYAIP's rules [FN1]. If that is the case, the cancellation was ineffective (see Aetna Cas. & Sur. Co. v O'Connor, supra at 362-364; Matter of Bowley Assoc. v State of N.Y. Ins. Dept., supra at 526). However, we find that the NYAIP's rules were not violated.
In 1987, the NYAIP's rules did not specifically address the issue of whether an insured had the right to have the NYAIP's Governing Committee review a premium finance agency's cancellation of the assigned risk automobile insurance policy [FN2]. Two years later, the rules were amended, so as to add the following paragraph to Section 18(1), which is entitled "Cancellation at Request of Insured":
"Cancellation by a premium finance company acting pursuant to a power of attorney granted by the insured is deemed to be a cancellation at the request of the insured. An insured has no right of review of such cancellation action by the Governing Committee of the [NYAIP]."
Then, in 1992, the NYAIP's rules were again amended. The rules in effect at the time Capitol mailed the notice of cancellation at issue were, in relevant part, the same as the rules as amended in 1992. The aforementioned addition to Section 18(1) of the NYAIP's rules, as added in 1989, was removed from that section in 1992. Moreover, Section 18(5), which was entitled "Cancellation under a Premium Finance Agreement," was added. This addition provided as follows:
"*Cancellation of a policy under a Premium Finance Agreement shall be on a pro-rata basis subject to a minimum earned premium on the policy of ten percent of the gross premium or $60, whichever is greater. An Insured has no right of review of such action by the Governing Committee of the [NYAIP]."
Thus, the NYAIP's rules no longer specifically indicated that "cancellation" of an assigned risk automobile insurance policy "by a premium finance company acting pursuant to a power of attorney granted by the insured [was] deemed to be a cancellation at the request of the insured." Similarly, the rules no longer specifically indicated that the insured had "no right of review of such cancellation." Nevertheless, we find that the rules, as amended in 1992, and as they existed when Capitol mailed the notice of cancellation at issue, did not provide that an insured had a right of review of a premium finance agency's cancellation of an assigned risk automobile insurance policy, much less require the agency to advise the insured of such a right in order for the cancellation to be effective.
First, Section 19 of the NYAIP's rules, which is entitled "RIGHT OF REVIEW AND APPEAL," provided that "an insured given notice of cancellation of insurance . . . may request that such action be reviewed by the [Governing Committee]." However, this applies only to notice given "under Section 18, subsection 2" of the rules, which pertains to cancellations by the insurer. Thus, while the rules did indicate that the insured had a right of review of a cancellation, and had to be advised of that right, it is clear that this was only in a situation where the cancellation was made by an insurer, which is governed by a different statutory scheme relating to cancellation than a premium finance agency (see Matter of ELRAC, Inc. v White, supra at 547; Vehicle & Traffic Law § 313).
In addition, Section 18(5) cannot be construed so as to provide that an insured had a right of review of a premium finance agency's cancellation of an assigned risk automobile insurance policy, and had to be advised of such a right. When considering the correspondence between the Insurance Department and the NYAIP surrounding the 1992 amendments to the NYAIP's rules, it is clear that Section 18(5) was added to reflect a 1991 amendment to Banking Law § 576 (see L 1991, ch 735), which dealt with the calculation of the refund the insured is to receive upon cancellation (see Matter of Preferred Mut. Ins. Co. v Rollo, 172 Misc 2d 631, 633). In contrast, nothing in the correspondence indicated any intent to change the rules' previous pronouncement that an insured did not have the right to have a premium finance agency's cancellation of an assigned risk automobile insurance policy reviewed, and did not have to be advised of such a right.
In summary, we conclude that at
the time Capitol cancelled Montoya's insurance policy pursuant to the power of
attorney, no statute or NYAIP rule required Capitol to notify Montoya of a right
of review of the cancellation. Accordingly, in effect, upon reargument, the
Supreme Court should have vacated its prior order and judgment, denied the
petition, dismissed the proceeding, and directed the parties to proceed to
arbitration.
SCHMIDT, J.P., SANTUCCI and SKELOS, JJ., concur.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs payable by the petitioner and, in effect, upon reargument, the order and judgment dated April 23, 2004, is vacated, the petition is denied, and the proceeding is dismissed.
ENTER:
James Edward Pelzer
Clerk of the Court
Footnotes
Footnote 1:We note that on July 1, 2006, which was approximately four
years after Capitol sent Montoya the subject notice of cancellation, the
following note was added to Section 19 of the NYAIP's rules: "An insured has no
right of review or appeal of a cancellation of a policy by a premium finance
company acting under a Power of Attorney or right authorized by the insured
pursuant to the provisions of a Premium Finance Agreement." Thus, the NYAIP's
rules now make it clear that an insured has no right to have the NYAIP's
Governing Committee review a premium finance agency's cancellation of an
assigned risk automobile insurance policy, which necessarily means that the
insured need not be advised of such a right in order for the cancellation to be
effective.
Footnote 2:In Roth v Aetna Life & Cas. Ins. Co. (128 AD2d 514,
515), which was decided in 1987, this court held that a premium finance company
that cancelled an assigned risk automobile insurance policy had to advise the
insured that he or she had a right to have the NYAIP's Governing Committee
review the cancellation of the policy in order for the cancellation to be
effective (contra Aetna Cas. & Sur. Co. v Preisigke, 139 AD2d 900, 901).
However, as will be seen from the discussion infra, in light of certain
amendments to the NYAIP's rules in the 20 years since Roth was decided,
circumstances have changed so as to make it clear that Roth should no
longer be followed (see Brennin v Perales, 163 AD2d 560, 562).
First Unum Life Insurance Company v. Gravante
Begos Horgan & Brown LLP, Bronxville (Patrick W. Begos of
counsel), for appellant.
Gravante & Looby, LLP, Brooklyn (Mary M. Looby of
counsel), for respondent.
Order, Supreme Court, New York County (Marylin G. Diamond, J.), entered October 14, 2005, which granted defendant's summary judgment motion to the extent of declaring that plaintiff had no basis to rescind its disability insurance policy and that the policy remained in effect, and denied plaintiff's cross motion for summary judgment, unanimously affirmed, with costs.
Under Insurance Law § 3105, a misrepresentation in an application for insurance is defined as a false "statement as to past or present fact, made to the insurer ... at or before the making of the insurance contract as an inducement to the making thereof." In the disability policy application at issue, there was no false statement as to past or present fact. Defendant simply stated the fact that he had an existing disability policy with Provident at the time he applied for the Unum policy, and that he intended to cancel the Provident policy in the event plaintiff issued one to him. Subsequently, defendant wrote to Provident and directed that it cancel the existing policy. The sending of the letter is conclusive proof that defendant did not misrepresent his intentions on the application. Provident's failure to cancel the policy does not otherwise evidence a misrepresentation by defendant.
