Material misrepresentation?

In New York no-fault insurance litigation, the fraudulent procurement defense is among the most potent weapons available to insurers. If an insurer can demonstrate that the policyholder obtained coverage through material misrepresentations — such as lying about a garaging address to secure lower premiums — the entire policy may be voided, and all no-fault benefits denied. However, the evidentiary burden on the insurer is significant. The Appellate Term, Second Department’s decision in Renelique v National Liability & Fire Insurance Co. illustrates the difficulty insurers face in establishing this defense as a matter of law and clarifies the evidentiary standard that separates a triable issue of fact from outright entitlement to summary judgment.

The distinction matters because fraudulent procurement operates differently from a misrepresentation defense under Insurance Law § 3105. Under § 3105, an insurer must typically demonstrate that a misrepresentation was material to the risk undertaken — often requiring production of its underwriting guidelines or handbook. Fraudulent procurement, by contrast, goes to the very formation of the contract and can void the policy ab initio. Yet even this powerful defense requires the insurer to present proof in admissible form sufficient to eliminate all material issues of fact.

Case Background

In Renelique, the plaintiff provider, as assignee of Denis Edwitch, brought suit against National Liability & Fire Insurance Company to recover assigned first-party no-fault benefits. The insurer denied the claim based on its contention that the assignor had fraudulently procured the insurance policy by misrepresenting her place of residence to obtain coverage at a lower premium. Both sides moved for summary judgment in Civil Court, Queens County, which denied the plaintiff’s motion and granted the insurer’s cross-motion to dismiss. The provider appealed to the Appellate Term, Second Department.

Jason Tenenbaum’s Analysis

Renelique v National Liab. & Fire Ins. Co., 2016 NY Slip Op 50254(U)(App. Term 2d Dept. 2016)

“With respect to defendant’s cross motion, “he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 ). No-fault benefits may be denied to an insured where an insurer submits evidence in admissible form showing that the insured had fraudulently procured the insurance policy (see W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 36 Misc 3d 4 ; New Millennium Psychological Servs., P.C. v Commerce Ins. Co., 34 Misc 3d 127, 2011 NY Slip Op 52286 ). Upon the record before us, we find that defendant failed to establish as a matter of law that plaintiff’s assignor had made material misrepresentations in order to obtain insurance at reduced premiums”

The question is what is necessary regarding the type of “material misrepresentations” that are necessary to demonstrate a fraudulent procurement defense. I also do not see any notion that the underwriting handbook has to be presented here, making this different than a 3105 misrepresentation.

Legal Significance

The Appellate Term’s modification of the Civil Court order — denying the insurer’s cross-motion while affirming the denial of the plaintiff’s motion — left the case in a posture where neither side could prevail on the papers alone. The court found that while the insurer had raised a triable issue sufficient to defeat the plaintiff’s motion, it had not met the higher standard of eliminating all factual questions necessary to obtain summary judgment in its own favor. This outcome underscores a recurring theme in the Second Department: the fraudulent procurement defense, while viable, requires robust evidentiary support. Cases like Jamaica Dedicated Med. Care, P.C. v Praetorian Ins. Co. (2015) and Delta Diagnostic Radiology, P.C. v National Liab. & Fire Ins. Co. (2014) reflect a consistent judicial expectation that insurers do more than merely allege address discrepancies — they must present admissible proof tying the misrepresentation to the procurement of the policy.

Practical Implications

For practitioners defending no-fault claims, this decision is a reminder that asserting fraudulent procurement at the summary judgment stage demands a carefully built evidentiary record. Mere allegations or circumstantial indications of an address discrepancy will not suffice. Insurers should consider obtaining sworn investigator affidavits, utility and postal records, and documentary evidence linking the insured’s actual residence to a different location than what was represented on the application. For plaintiff-side attorneys, the case provides authority for resisting summary dismissal where the insurer’s proof consists of conclusory assertions rather than definitive evidence of intentional misrepresentation.

Key Takeaway: An insurer asserting fraudulent procurement must present admissible evidence sufficient to eliminate all material factual issues regarding the alleged misrepresentation. The standard is demanding — raising a triable issue is not enough to win on a cross-motion, and the absence of underwriting handbook evidence may further distinguish this defense from a statutory § 3105 misrepresentation claim.

Related Articles

• Material Misrepresentation in Insurance Claims: New York Legal Guide 2024
• Material Misrepresentation in Insurance Procurement: New York Law Protects Policyholders
• Identity Fraud in Insurance Policy Procurement: Long Island NYC Legal Guide
• Fraudulent procurement and preclusion