Key Takeaway
Court rejects insurance company's material misrepresentation defense, ruling insurer failed to prove it wouldn't have issued policy with correct information disclosed.
Maxford, Inc. v Erie Ins. Co. of N.Y., 2018 NY Slip Op 51057(U)(App. Term 2d Dept. 2018)
“Defendant cross-moved on the ground that plaintiff’s assignor had fraudulently procured the insurance policy in question by making a material misrepresentation on her policy application as to her place of residence and the principal location for the garaging of the vehicle which was to be insured. Upon a review of the record, we find that defendant failed to establish as a matter of law ” ‘that it would not have issued the same policy if the correct information had been disclosed in the application’ ” (Interboro Ins. Co. v Fatmir, 89 AD3d 993, 994 , quoting Schirmer v Penkert, 41 AD3d 688, 691 ; see Renelique v National Liab. & Fire Ins. Co., 53 Misc 3d 147, 2016 NY Slip Op 51615 ).
Defendant further asserts that plaintiff is collaterally estopped from maintaining the present action by virtue of an order, rendered on default, by the Civil Court, Queens County (Richard G. Latin, J.), in an action against plaintiff’s assignor, finding that the assignor had made “material and/or fraudulent misrepresentations” on her application for the insurance policy. However, the doctrine of collateral estoppel is not applicable here, as plaintiff was not named in the Civil Court, Queens County, action, and, thus, plaintiff was not in privity with the assignor (see Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 486-487 ; Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 67, 69 ). In view of the foregoing, we reach no other issue.”
The second part of the opinion is old news. Actually, so is the first part of the opinion. The Appellate Term has gauged the fraudulent procurement defense under the Ins Law 3105(b) standard for the last 2-3 years,
