15 days is 360 hours

Matter of Global Liberty Ins. of N.Y. v Cedillo, 2017 NY Slip Op 00165 (2d Dept. 2016)

At a framed-issue hearing, the evidence showed that the respondent National Continental Insurance Co. (hereinafter National) had issued a policy to Sidibe effective October 23, 2008, through October 23, 2009, but that on November 5, 2008, at “6:00,” it mailed to Sidibe a notice of cancellation for nonpayment of the premium, which advised that the subject policy would be cancelled effective November 20, 2008, at 12:01 a.m. The Supreme Court found that the cancellation of the policy was valid based upon the 15-day notice and, therefore, denied the petition and dismissed the proceeding.

Under the terms of the subject policy, and pursuant to Vehicle and Traffic Law § 313(1)(a), National was required to give a minimum of 15 days’ notice for cancellation of coverage for nonpayment. “[I]n the absence of an express agreement to do so, the law does not recognize fractions of a day” (Savino v Merchants Mut. Ins. Co., 44 NY2d 625, 628). Thus, the 15 days specified in the Vehicle and Traffic Law ” means 15 times 24 hours'” (Matter of Nassau Ins. Co. [Epps—Public Serv. Mut. Ins., Co.], 63 AD2d 473, 475 quoting Nassau Ins. Co. v Lion Ins. Co., 89 Misc 2d 982, 986 [Sup Ct, Queens County]; see Matter of Allstate Ins. Co. [Perrine], 300 AD2d 1065). Here, because National failed to give the full 15 days’ notice, its notice of cancellation was invalid. The contentions raised in National’s brief are without merit. Accordingly, the Supreme Court should have granted the petition to permanently stay arbitration

This was an interesting case because the proof showed that there was either 14.75 days notice (probably) or 14.25 days notice.  Neither is 15 days notice.  Supreme Court said 15 days is 15 calendar days.  Well, Supreme Court got this one wrong, and I got this one right.

VTL cancellation issues

Art of Healing Medicine, P.C. v Allstate Ins. Co., 2016 NY Slip Op 26387 (App. Term 2d Dept. 2016)

“[o]n December 17, 2009, in compliance with Vehicle and Traffic Law § 313 (1), defendant had mailed a letter to the policyholder notifying it that, due to “missing information or no response to our underwriting inquiry,” the policy would terminate on March 16, 2010. However, although the affidavit referred to an annexed document purportedly showing a record of defendant’s March 17, 2010 notification to the Department of Motor Vehicles (DMV) of defendant’s March 16, 2010 termination of the policy, these submissions did not conclusively establish, as a matter of law, that defendant’s notice of termination had been properly filed with the DMV (see e.g. Matter of Government Empls. Ins. Co. v Barthold, 194 AD2d 724 [1993]). As defendant failed to demonstrate, as a matter of law, that it had filed a copy of the notice of termination, upon which its defense is based, with the DMV within 30 days of the effective date of the policy’s termination, as required by Vehicle and Traffic Law § 313 (2) (a) (see Matter of Progressive Classic Ins. Co. v Kitchen, 46 AD3d 333 [2007]), defendant did not show that the cancellation was effective with respect to plaintiff’s assignor, who was not the named insured or a member of the insured’s household (Vehicle and Traffic Law § 313 [3]). Consequently, defendant should not have been awarded summary judgment dismissing the complaint.”

The proof of the filing of the DMV cancellation is one of the most annoying parts of any motion based upon a cancellation.  First, it has to be done in 30-days.  Second, the insurance printout must be certified.  You cannot use the web-dial in application cancellation for court papers.  The evidentiary requirements are silly in the paperless computer world we live in, especially when the proof is supplied through a New York State database.  Silliness pervades this profession.  The penalty of course for not proving timely filing is that insurance coverage is available for anybody accept the policyholder and his family members for the time period until proof of new insurance (if ever) crops up.

 

 

VTL 313(2)(a) not complied with

Advanced Med. Care, P.C. v Allstate Ins. Co., 2016 NY Slip Op 50130(U)(App. Term 2d Dept. 2016)
While defendant’s motion was based on its alleged termination of the insurance policy in question, defendant failed to sufficiently demonstrate, as a matter of law, that it had filed a copy of the notice of termination of the insurance policy with the Department of Motor Vehicles within 30 days of the effective date of the termination, as required by Vehicle and Traffic Law § 313 (2) (a) (see Matter of Progressive Classic Ins. Co. v Kitchen, 46 AD3d 333 [2007]). Therefore, defendant has not established that the termination of the insurance policy was effective with respect to plaintiff’s assignor, who was not the named insured and who was not shown to be a member of the named insured’s household”

The filing requirement is required to protect on third party claims and against first-party claims where a true “stranger to the policy” seeks benefits.   The Kitchen case is really the standard bearer as to what is necessary to plead and prove compliance with the filing requirement.

Failure to comply with PA law

New Way Med. Supply Corp. v Infinity Group, 2015 NY Slip Op 51880(U)(App. Term 2d Dept. 2015)

“In Pennsylvania, in order for an insurance policy to be cancelled due to the nonpayment of premiums, the “notice of cancellation must be in strict accordance with the provisions of Act 68. An insurance policy may be cancelled by mailing to the named insured, at the address shown in the policy, a written notice of cancellation. If the notice sets forth a time period in which intervening action may negate the cancellation, the cancellation shall not become effective until the expiration of the time period” (Nationwide Ins. Co. v Pennsylvania Ins. Dept., 779 A2d 14, 17 [Pa Cmmw 2001]; see Donegal Mut. Ins. Co. v Pennsylvania Dept. of Ins., 694 A2d 391 [Pa Cmmw 1997]; see also 40 P.S. § 991.2006). Inasmuch as defendant failed to attach a copy of the insurance policy, or the declaration page of the policy, to its motion papers, it is impossible to determine whether the notice of cancellation was mailed to the insured “at the address shown in the policy” (40 P.S. § 991.2006). Consequently, defendant failed to establish as a matter of law that the insurance policy had been properly cancelled as of May 12, 2011 in accordance with [*2]Pennsylvania law and that, therefore, no coverage existed when the accident in question occurred on May 19, 2011.”

Does defense counsel have to refund the carrier when they make this type of mistake?

What happened Mr. Rookie?

Healthway Med. Care, P.C. v Travelers Ins. Co., 2014 NY Slip Op 51870(U)(App. Term 2d Dept. 2014)

“On its cross motion for summary judgment, the burden was on defendant to demonstrate the timely and valid cancellation of the insurance policy at issue based on nonpayment of the premium. The papers submitted by defendant in support of its cross motion were sufficient to make a prima facie showing that defendant met its initial burden in compliance with Vehicle and Traffic Law § 313 (see Matter of Auto One Ins. Co. v Forrester, 78 AD3d 1174 [2010]; GEICO Indem. v Roth, 56 AD3d 1244 [2008]; Queens Med. Supply, Inc. v New York Cent. Mut. Fire Ins. Co., 35 Misc 3d 146[A], 2012 NY Slip Op 51060[U] [App Term, 2d, 11th & 13th Jud Dists 2012]). The burden then shifted to plaintiff, as the party claiming coverage, to establish defendant’s noncompliance with the statutory requirements as to form and procedure. Inasmuch as plaintiff submitted no opposition to defendant’s cross motion, plaintiff failed to raise a triable issue of fact (see Flagstar Bank v Bellafiore, 94 AD3d 1044 [2012]) as to the validity of the cancellation of the policy.”

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There is one case that usually makes these cancellation cases very difficult:  Progressive Classic Ins. Co. v Kitchen, 46 AD3d 333 [2007]); Pomona Med. Diagnostic v MVAIC, 30 Misc.3d 132(A)(App. Term 1st Dept. 2011)

 

Staged accident and non-payments of premiums

21st Century Advantage Ins. Co. v Cabral

Look, 21st Century did their homework.  Someone admitted to defrauding the insurance companies.  Yet, Mr. All Boro, a distant relative of of Mr. Five Boro felt the need to put in gratuitous opposition to the preliminary injunction motion.  As such, more paper and judicial resources were were wasted on a case that has no value.  More can be said, but I will leave it that.

On a more serious note, it seems that a lot of companies are binding contracts over the internet without performing any due diligence.   Perhaps the ability to cancel policies based upon non-payment needs to be amended to allow retroactive rescission.    This will at least mandate that some payment is made before the insurance companies have to investigate these types of incidents.

Default vacated on CPLR 317 grounds

Nursing Personnel Homecare v New York Cent. Mut. Fire Ins. Co., 2010 NY Slip Op 50450(U)(App. Term 2d Dept. 2010)

“In support of defendant’s motion to vacate the default judgment, there was more than a “mere denial” of [*2]receipt of the summons and complaint (see Montefiore Med. Ctr. v Auto One Ins. Co., 57 AD3d 958, 959 [2008]). Defendant submitted an affidavit from one of its no-fault litigation examiners, who had personal knowledge regarding defendant’s practices and procedures in retrieving, opening and filing its mail and in maintaining its files on existing claims. In said affidavit, the no-fault litigation examiner stated that defendant had never received the summons, the complaint or the motion for a default judgment (cf. Westchester Med. Ctr. v Philadelphia Indem. Ins. Co., 69 AD3d 613 [2010]). Accordingly, pursuant to CPLR 317, defendant met its burden of showing that it did not receive actual notice of the summons in time to defend the action.
Furthermore, defendant established the existence of a meritorious defense to the action. Defendant submitted an affidavit from its litigation examiner in which he stated that the assignor had cancelled her insurance policy with defendant prior to the date of the accident and had not subsequently taken out another insurance policy with defendant.”

As many people know, vacating a default in the Second Department based upon the allegation of the “non-receipt” of a summons and complaint is a daunting task.  The resolution is either a traverse hearing or an ordering denying the opening of the default.

NYCM used CPLR 317, together with a well written affidavit of non receipt, to allow the court to exercise its discretion to open the default.  As us New York procedural nerds know, this is not an easy task.  So, I tip my hat to the attorney who represented NYCM on this case.