Pennsylvania lawOctober 6, 2015

Delta Diagnostic Radiology, P.C. v Infinity Group, 2015 NY Slip Op 25304 (2d Dept. 2015)

It is relatively rare to see a court vacate a consent order, but in the right circumstances they will do it.

“Subsequently, in January 2013, defendant moved for leave to renew its motion for summary judgment, contending that, after the entry of the Civil Court’s order, there had been “a change in the law that would change the prior determination” (CPLR 2221 [e] [2]). Defendant [*2]specifically referred to this court’s decisions in Craigg v Infinity Select Ins. Co. (38 Misc 3d 56 [App Term, 2d, 11th & 13th Jud Dists 2013]) and W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co. (36 Misc 3d 4 [App Term, 2d, 11th & 13th Jud Dists 2012]), which held that an insurer need not establish the underlying reasons for the retroactive rescission of the policy, but rather has the burden of establishing that it complied with the law of the sister state which permits retroactive rescission. Thus, defendant argued, contrary to the Civil Court’s April 14, 2011 order, based on the W.H.O. and Craigg cases, which were decided subsequent to April 14, 2011, defendant’s burden at trial was not to prove that the policy had been procured by fraud, but rather to demonstrate that the policy had been properly rescinded from its inception in accordance with Pennsylvania law”

“Thus, defendant demonstrated, prima facie, that it had validly rescinded the policy in accordance with Pennsylvania law by showing that, within 60 days of issuance of the policy, it had provided the insured with “a written statement of the reason for cancellation” (40 P.S. § 991.2002 [c] [3]) and that it had returned to the insured the premiums he had paid (see Klopp v Keystone Ins. Cos., 528 Pa 1, 595 A2d 1).  In opposition to defendant’s showing, plaintiff failed to raise a triable issue of fact as to the validity of the retroactive rescission of the policy in accordance with Pennsylvania law.”

This is the long and short of it.  The Court seemingly gave Defendant a break.