Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc., 2011 NY Slip Op 00217 (2d Dept. 2011)
“Moreover, although the defendants contend that they submitted evidence showing that the plaintiff’s assignor misrepresented his state of residence in connection with the issuance of the subject insurance policy, the defendants are precluded from asserting that defense, as a result of their untimely denial of the claim (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 564; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 319; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047).”
This decision raises the question regarding whether certain other “fraudulent” acts on the assignor (or the assignee) are really coverage issues. Are staged accidents really coverage issues? Mallela issues? Did Fair Price (note the above cite) change the calculus on certain issues that we thought were really coverage based?
6 Responses
Well we are going to find out at least with Malella my friend. Nice work. Printing this one out. I know what appeal to perfect first.
The whole thing bothers me. Why the heck are we rewarding fraudulent conduct, while giving MVAIC a free pass? It should be other way around. Punish MVAIC for their poor claims handling, and give the carriers a pass when they can demonstrate palpable fraud. I must be in the minority here.
No I am all in favor of punishing MANIAC. But J.T. if we are going to give up our right to sue the texting motorist that rear ends us as we’re stopped for traffic — no matter how much it hurts (pain does not = threshold) — then it must be prompt compensation or prompt denial.
You see you automatically think everytime an insurance company says material misrepresentation or Mallela — it must be true. I see a handy way to get out of paying claims when you screw up your denials at about a 50% clip.
I believe in the Court of Appeals definition of a coverage defense and standing (Hospital for Joint Diseases). I believe when applied to issues like what you wrote on the application or Mallela the Court of Appeals will ultimately hold that such matters are not coverage defenses.
Funny how the Court of Appeals definition of coverage or standing was never applied to Mallela. Mallela was applied to Mallela. But Mallela never addressed whether it was a coverage defense. In fact in the opening sentences of the decision the Court stated that insurers must promptly pay or deny.
I love insurance companies taking the premium with what I would say is constructive knowledge of miseps on the application — Texas address — and then when it comes time to pay — the insurance company says fraud. You should be able to have a shot at proving the insurance company knew or should have known but took the money anyway. i.e. “I bought the policy in NY and my agent knows I live here.”
It’s like banks complaining the borrowers lied about their income when the bank tells you what to say in the first place.
Will be using this case at arbitrations later today. Thanks Dave!
Oops, thought I was on NF Paradise… Thanks JT!
You see, I promote the honest discourse of the law, even if it may be against my interests…