Revocation of the assignment – material misrepresentations under New Jersey and New York law

Golden Age Med. Supply, Inc. v Clarendon Natl. Ins. Co., 2010 NY Slip Op 52010(U)(App. Term 2d Dept. 2010)

“Defendant argues first that the complaint should be dismissed as to the subject claims, which were submitted on January 14, 2002, because defendant’s assignor agreed to revoke the assignment in a December 2002 stipulation. Regardless of whether this defense was properly presented, it fails as a matter of law because “the assignor or legal representative of the assignor shall not unilaterally revoke the assignment after the services for which the assignment was originally executed were rendered” (Insurance Department Regulations § 65-3.11 ).”

This is the first time the court ever discussed the technical “nitty gritty” involving the revocation of an AOB.

This case also involved the retroactive cancellation of an insurance policy under New Jersey law due to the making of misrepresentations, or aiding and abetting the same in the procurement of the insurance policy.  The case also discussed the availability of this defense under New York law as it involves a non-innocent party.

The court said the following:

“Defendant’s second argument is that plaintiff should not recover for services rendered to assignor Espinal because he made material misrepresentations in order to obtain the subject New Jersey insurance policy. While New York law does not allow for the retroactive cancellation of an automobile insurance policy (see Vehicle and Traffic Law § 313), New Jersey law does allow for such retroactive rescission for a material misrepresentation at the inception of the policy (see Rutgers Cas. Ins. Co. v LaCroix, 194 NJ 515, 946 A2d 1027 ), and, had there been a cancellation of the subject insurance policy, New Jersey law would properly be applied (see Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56 ). However, defendant has not demonstrated that it cancelled the subject insurance policy.

On the other hand, defendant’s employee’s assertion that the subject insurance policy was obtained by fraud and/or material misrepresentations is a permissible affirmative defense that, if proved, precludes any recovery by the insured or a health care provider who accepts an assignment of the insured’s no-fault benefits (see A.B. Med. Servs. PLLC v Commercial Mut. Ins. Co., 12 Misc 3d 8, 11 ). We find that while the documents attached to defendant’s cross motion are not a sufficient basis for an award of summary judgment dismissing the complaint as to the claims submitted for services rendered to assignor Espinal, they are sufficient to raise a triable issue of fact as to whether the subject insurance policy was fraudulently obtained.”

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Legal Update (February 2026): Since this 2010 decision, New York’s Insurance Department Regulations Part 65 governing no-fault insurance have undergone multiple amendments, and fee schedules referenced in § 65-3.11 have been updated several times. Additionally, procedural requirements for assignment of benefits and revocation provisions may have been modified through regulatory changes. Practitioners should verify current provisions of Part 65 and any subsequent appellate decisions interpreting assignment revocation standards.