Choice of law?

Schottenstein Pain & Neuro, PLLC v Travelers Ins. Co., 2020 NY Slip Op 51549(U)(App. Term 2d Dept. 2020)

“It is uncontroverted that the automobile accident took place in New Jersey and that a [*2]conflict exists between the no-fault laws of New York and New Jersey. The record on appeal indicates that the assignor is a New York resident who received medical services in New York from a New York provider. Defendant’s insurance policy was a Massachusetts business automobile policy issued to a Massachusetts corporation which owned the vehicle involved in the accident and in which the assignor was a passenger. We find that the Civil Court properly determined that New York law controls, since New York has the most significant contacts”

New York law would apply as Mass. does not have a dog in the fight.

Retroactive rescission

Omphil Care, Inc. v Pearl Holding Group Managing Gen. Agent for Ocean Harbor Cas. Ins. Co. 2020 NY Slip Op 50946(U)(App. Term 2d Dept. 2020)

“It is undisputed by the parties that Florida law applies. Inasmuch as defendant’s cross motion papers demonstrated that a rescission notice was sent to the insured, and that defendant had returned, or tendered, all premiums paid to the insured within a reasonable period of time after defendant’s discovery of the grounds for rescinding the policy, defendant established, prima facie, that it had voided the policy ab initio pursuant to Florida law (see W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 36 Misc 3d 4, 6-7 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012], citing Leonardo v State Farm Fire and Cas. Co., 675 So 2d 176, 179 [Fla Dist Ct App, 4th Dist 1996]).”

I love how attorneys when told Florida law applies do not put in any effort in to beating back the Defendant’s motion. Has anyone checked out what a Florida attorney fee in a PIP case is?

Pa retroactive rescission

Monroe v Omni Indem. Co., 2020 NY Slip Op 50731(U)(App. Term 2d Dept. 2020)

“Contrary to plaintiff’s contention, the affidavit of defendant’s litigation representative was sufficient to demonstrate that defendant had mailed the rescission letter and refund check to the insured/assignor. As defendant set forth facts showing that it had rescinded the insurance policy ab initio in accordance with Pennsylvania law, defendant established its prima facie entitlement to summary judgment dismissing the complaint, which showing plaintiff failed to rebut (see Healthway Med. Care, P.C. v Infinity Group, 54 Misc 3d 132[A], 2017 NY Slip Op 50042[U]). Plaintiff’s contention that defendant had to prove that a material false statement had been made by the insured lacks merit. This court has “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

My assumption above is that is the law of the sister state requires the carrier to prove that they had the right to rescind the policy, then that inquiry would be riper for determination by our court?

In fact, I think it is a valid assumption:

Parisien v Omni Indem. Co., 2020 NY Slip Op 50729(U)(App. Term 2d Dept. 2020)

“The Pennsylvania Supreme Court has held, however, that while an automobile insurance policy may be retroactively rescinded as to an insured who has made a material misrepresentation, the policy may not be retroactively rescinded [*2]with respect to third parties “who are innocent of trickery, and injured through no fault of their own”:

Rescinding a policy in accordance with Florida law

NR Acupuncture, P.C. v Ocean Harbor Cas. Ins. Co., 2019 NY Slip Op 51892(U)(App. Term 2d Dept. 2019)

“It is uncontroverted that the vehicle involved in the accident was insured by defendant under a Florida automobile insurance policy. According to the affidavit submitted by an employee of defendant’s managing agent, an investigation conducted after the accident revealed that, at the time the policyholder applied for automobile insurance, she did not reside at the Florida address listed on her application, and that the insured vehicle was not garaged at that Florida address. Thereafter, defendant purportedly rescinded the policy ab initio, pursuant to [*2]Florida Statutes Annotated § 627.409, which permits the retroactive rescission of an insurance policy.

In order to demonstrate that an automobile insurance policy has been properly rescinded ab initio in accordance with Florida law, an insurer must demonstrate that it gave notice of the rescission to the insured and that it returned, or tendered, all paid premiums within a reasonable time after the discovery of the grounds for avoiding the policy (see Fla Stat Ann § 627.728 [5]; Leonardo v State Farm Fire and Cas. Co., 675 So 2d 176, 179 [Fla Dist Ct App, 4th Dist 1996]; see also United Auto. Ins. Co. v Salgado, 22 So 3d 594, 600-601 [Fla Dist Ct App, 3d Dist 2009]). Here, defendant’s motion papers failed to demonstrate that it had provided the insured with notice of the rescission, and defendant admitted that it had not returned all of the paid premiums to the insured. “

NJ law should apply

Dassa Orthopedic Med. Servs. PC v Amica Mut. Ins. Co., 2019 NY Slip Op 51664(U)(Civ. Ct. Kings Co. 2019)

“The police report indicates that the subject accident occurred in New Jersey between a pedestrian who resided in New York and a New Jersey driver driving a vehicle registered in New Jersey. “

“In the case at bar, defendant submits no admissible evidence to establish its policy does not cover the subject incident. Ms. Outhouse’s affidavit states defendant’s policy does not cover the subject incident based on her review of the claim file. However, she does not specify what records she reviewed, including whether she even reviewed defendant’s subject insurance policy at issue. Ms. Outhouse further makes no attempt to establish the foundation of any reviewed records nor proffer the records for the court’s review. In fact, Ms. Outhouse does not even state whether she reviewed defendant’s subject insurance policy, nor does she submit a copy in support of defendant’s motion. “

[Defendant loses motion]

So a few questions. 1) Why wasn’t the dec page (in admissible form) presented? 2) Why wasn’t the policy (in admissible form) presented? 3) Why didn’t Defendant move to compel arbitration under NJ law?

These are the things I do not understand. Amica is a good insurance company; they deserve better.

PA law – a good read

Williams v Janvier, 2019 NY Slip Op 07638 (2d Dept. 2019)

One thing that I frequently observe is Pa license plates, Pa policies and the usual EUO showing the EIP did not actually reside in Pa. Here is a great example from the Appellate Division as to the rights, remedies and perils in this choice of law paradigm:

“We disagree with Penn National Insurance’s contention that the Supreme Court, in reaching its determination, misapplied Pennsylvania law. In the seminal case of Erie Ins. Exch. v Lake (543 Pa 363, 671 A2d 681), the Pennsylvania Supreme Court held that while an insurer may rescind an automobile insurance policy retroactively on the basis of fraud or misrepresentation “as to the actual perpetrator of the fraud, where the fraud could not reasonably have been discovered within the 60 day period immediately following issuance of the policy” (543 Pa at 374, 671 A2d at 686; see Parisien v Omni Indem. Co., 63 Misc 3d 1214[A], 2019 NY Slip Op 50523[U], *2 [Civ Ct, Kings County]; Monroe v Omni Indem. Co., 60 Misc 3d 1229[A], 2018 NY Slip Op 51258[U], *2 [Civ Ct, Kings County]; Infinity Select Ins. Co. v Fleming, 159 A3d 45 [Pa Super Ct] [table; text at 2016 WL 6088065, 2016 Pa Super Unpub LEXIS 3755]), it may not deny coverage under the policy with respect to claims made by third parties “who are innocent of trickery, and injured through no fault of their own” (Erie Ins. Exch. v Lake, 543 Pa at 375, 671 A2d at 687; see Island Life Chiropractic, P.C. v Infinity Group, 55 Misc 3d 42, 43 [App Term, 2d Dept, 11th & 13th Jud Dists]; Mutual Benefit Ins. Co. v Druce, 62 Pa D & C 4th 31, 39 [Common Pleas Ct of Dauphin County]). The court reasoned that “[m]otorists carry insurance not only for their own protection, but also, for the benefit of third parties who may suffer through the negligence of the insured motorist” (Erie Ins. Exch. v Lake, 543 Pa at 374, 671 A2d at 686).

Here, Penn National Insurance’s submissions established that it properly rescinded the subject policy under Pennsylvania law with respect to Janvier, based upon the material misrepresentations he made in his application for insurance. However, since there was no evidence that the plaintiffs participated in the fraud, Penn National Insurance failed to demonstrate that the plaintiffs were not innocent third parties who should be precluded from receiving protection under the policy (see Infinity Ins. Co. v Nazaire, 2016 NY Slip Op 31454[U], *5 [Sup Ct, Kings County]; Mutual Benefit Ins. Co. v Druce, 62 Pa D & C 4th at 39; cfOptimal Well-Being Chiropractic, P.C. v Infinity Ins. Co., 46 Misc 3d 27, 29 [App Term, 2d Dept, 11th & 13th Jud Dists]). Accordingly, we agree with the Supreme Court’s determination that Penn National Insurance failed to establish its entitlement to summary judgment on its cross claims against Janvier for a judgment declaring, inter alia, that it was not obligated to “indemnify any judgment obtained against . . . Janvier” arising out of the subject accident. Contrary to Penn National Insurance’s contention, the court’s [*3]determination that the plaintiffs may not maintain a direct action against it until after a judgment is entered in each action against Janvier (see Lang v Hanover Ins. Co., 3 NY3d 350Jimenez v New York Cent. Mut. Fire Ins. Co., 71 AD3d 637, 639), is not at odds with the court’s determination that Penn National Insurance is not entitled to summary judgment on its cross claims.”

Application of North Carolina does not bode well

Matter of Metropolitan Prop. & Cas. Ins. Co. v Anthony, 2019 NY Slip Op 03662 (1st Dept. 2019)

“Contrary to petitioner’s contention, it was not permitted under North Carolina law to rescind the insurance policy ab initio after the accident involving an uninsured motorist had occurred. North Carolina insurance law prohibits rescission after an accident of any insurance “required” to be offered (see NC Gen Stat § 20-279.21[f][1]). This provision applies to prohibit rescission based on fraud in the application for insurance (see Odum v Nationwide Mut. Ins. Co., 101 NC App 627 [1991], review denied 329 NC 499 [1991]). Uninsured motorist coverage, which is required by statute to be included in all automobile insurance policies, is a “required” type of coverage (see Bray v North Carolina Farm Bur. Mut. Ins. Co., 341 NC 678 [1995]). “

I did the research on this a few years ago and this has been the law forever in North Carolina. Why under a choice of law anyone would think differently beats me? Not a wise appeal.

But I mention this because even though North Carolina is a med-pay state, assume this hypothetical. North Carolina policy and New York accident. Choice of law means NC law applies. Most insurance policies have a contractual deemer clause in them. Alternatively, Ins Law 5107 is the statutory deemer provision. Injured person is guilty of material misrepresentation, but seeks PIP benefits.

Since NY PIP benefits would be “required”, it would seem to follow that under NC law, the carrier would have to provide the benefits. Met Life would have been better off honoring the claim here and perhaps arguing that arbitration is not permitted under the policy. While the First Department would not accept this argument, the Second Department would.


Charles Deng Acupuncture, P.C. v 21st Century Ins. Co., 2018 NY Slip Op 51815(U)(App. Term 2d Dept. 2018)

“Moreover, even if defendant had established that Florida law applies here, defendant relied upon an annexed payment log to demonstrate that policy limits in the amount of $10,000 had been exhausted; however, the affidavits submitted by defendant failed to establish that the payment log constituted evidence in admissible form (seeCPLR 4518 [a])”

Oh the business record rule.  Carriers need to make sure in the rare instance this issue comes up, the prefatory paragraph “2” business record syllogism is present.

Also, if you alleged that Florida law applies and you lose, get ready for $800 an hour attorneys fees.

VA substantive law; NY Procedural law

Acupuncture Now, P.C. v GEICO Ins. Co., 2018 NY Slip Op 51084(U)(App. Term 2d Dept. 2018)

“While defendant asserts that Virginia law applies to this case, as the insurance policy had been obtained in Virginia, and it insured a Virginia resident and vehicle, defendant failed to demonstrate that it had mailed its cancellation notice in accordance with its office practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) “by registered or certified mail,” as required by the applicable statute (Va. Code Ann. § 38.2-2208 [A] [1] [a]). Consequently, the Civil Court should have denied the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground that defendant had properly cancelled the policy and that there was, therefore, no coverage at the time of the accident at issue.”

What is interesting here is that Civil Courts will apply substantive law from sister states but then apply NY procedural law.  This has been displayed many times (this is nothing new).  It appears “mailing” is procedural at best.

Policy voided

Utopia Equip. Inc. v Ocean Harbor Cas. Ins. Co., 2018 NY Slip Op 50080(U)(App. Term 1st Dept. 2018)

“Defendant’s submissions included an affidavit of its claims manager and other proof demonstrating that a rescission notice was sent to the assignor-insured and that defendant had tendered a check for premiums paid within a reasonable time after discovery of the grounds for rescinding the policy (see Utopia Equip., Inc. v Infinity Ins. Co., 55 Misc 3d 126[A], 2017 NY Slip Op 50332[U] [App Term, 1st Dept 2017]; Hu-Nam-Nam v Infinity Ins. Co., 51 Misc 3d 130[A], 2016 NY Slip Op 50391[U] [App Term, 2d, 11th and 13th Jud Dists 2016]). Defendant was not required to establish the basis for the retroactive rescission, but rather had the burden of establishing that it complied with the law of the sister state which permits retroactive rescission (see Utopia Equip., Inc., v Infinity Ins. Co., 2017 NY Slip Op 50332[U]).

In opposition to defendant’s prima facie showing, plaintiff failed to raise a triable issue of fact as to the validity of the retroactive rescission of the policy in accordance with Florida law (see Hu-Nam-Nam v Infinity Ins. Co., 2016 NY Slip Op 50391[U]).”