Key Takeaway
Healthy Way v USAA reinstated a no-fault complaint after an untimely denial. Military-status evidence did not establish the insurer's right to dismissal.
This article is part of our ongoing material misrepresentation - procurement of insurance policy coverage, with 24 published articles analyzing material misrepresentation - procurement of insurance policy issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
USAA had evidence of a false military-status statement, but its denial was late. In Healthy Way Acupuncture v USAA, 2016 NY Slip Op 51342(U), the Appellate Term, First Department, denied the insurer’s dismissal motion and reinstated the provider’s complaint.
Still current (September 2026): Prompt Medical Group v Erie, 2026 NY Slip Op 50796(U), again treats procurement misrepresentation as a defense subject to timely-denial preclusion and requires proof of the claimed verification toll.
Last reviewed: September 2026.
What the appeal decided
The September 27, 2016 decision reversed an order granting USAA summary judgment. It did not award the provider payment. The opinion relied on Westchester Medical Center v GMAC (2011) and Gutierrez v USAA (2015) for procurement-defense preclusion.
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The published decision describes a first-party no-fault claim action. It does not describe a separate declaratory-judgment proceeding. The abbreviation in this post’s historical URL is not evidence of another lawsuit.
Military-status evidence did not decide materiality
A false answer and its underwriting significance are different questions. Insurance Law §3105(b)(1) and (c) address refusal to contract and the insurer’s treatment of similar risks. Healthy Way resolved the motion through preclusion; it supplied no finding that USAA’s underwriting evidence met that test.
Compare Alignment Chiropractic v Travelers (2020), where the insurer failed to prove that it would have refused the policy. Neither a false application answer nor a timely denial establishes every element of the defense.
For a claim review, assemble the bill-receipt record, verification correspondence and mailing evidence, then the denial and its stated ground. Prompt Medical’s 2026 decision shows why an asserted verification toll needs proof. It does not authorize a generic protective denial to preserve an unfinished investigation.
Jason’s September 2016 reaction
Jason’s original comment followed the court’s short preclusion ruling:
The result here was preordained.
That comment concerns the failed dismissal motion. It should not be read as a prediction about a later trial or payment.
Connect to the Encyclopedia
Start with the fraudulent procurement and material misrepresentation hub, then compare these records:
- Great Health Care (2014): a provider actually awarded summary judgment
- Alignment (2020): the missing underwriting proof
- Renelique (March 2016): both motions left denied
- Maxford (2018): why a prior default did not bind this provider
For review of a particular insurance dispute, contact the firm with the policy, notices and claim record.
Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Material Misrepresentation in Insurance Policy Procurement
An insurer may void a policy ab initio if the insured made a material misrepresentation during the application process. Under New York Insurance Law 3105, the misrepresentation must be material to the risk — meaning the insurer would not have issued the policy or would have charged a higher premium had it known the truth. In no-fault practice, misrepresentation defenses can eliminate coverage entirely. These articles analyze the legal standards, the burden of proof on the insurer, and the case law governing rescission based on misrepresentation.
24 published articles in Material misrepresentation - procurement of insurance policy
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Aug 10, 2017Frequently Asked Questions
Common Questions About This Topic
3 answers from the firm's New York personal-injury and employment-law practice. Click any question to expand.
Can an insurance company deny a no-fault claim for lying on the policy application?
Application misrepresentation is subject to timely-denial preclusion. Healthy Way rejected USAA's dismissal motion because its denial was untimely. A timely denial alone does not establish materiality: Insurance Law section 3105 requires a separate showing about whether truthful information would have led the insurer to refuse the contract.
What is the preclusion rule in New York no-fault insurance?
For procurement misrepresentation, an untimely denial can prevent the insurer from using that defense. Prompt Medical in 2026 also required proof that verification requests were properly and timely mailed to support a toll. These cases do not decide the treatment of every possible coverage defense.
Why do insurers bring declaratory judgment actions in misrepresentation cases?
An insurer may seek a declaration of its coverage obligations. Healthy Way, however, decided a provider's first-party claim action; its opinion describes no separate declaratory judgment. Whether another judgment binds a provider requires examination of the parties and record, as the different Maxford decision illustrates.
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a material misrepresentation - procurement of insurance policy matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.
