If Named Insured Dies, Coverage is Limited to Spouse and Estate Representative

Sunrise Acupuncture, P.C. a/a/o Sharise Davis v Kemper Independence Ins. Co.

Both named insureds under an auto policy died in June 2007.  Raquel Davis was named as executor of the estate.  In May 2008, Raquel’s daughter, Sharise, got into an accident while driving the insured vehicle and applied for no fault benefits, which were denied by the insurer.  The Court ruled for the insurer, holding that under the terms of the policy, once the insureds (husband and wife) died, only their estate representative (Raquel Davis) continued to be insured, not Raquel’s daughter.—LNR

Upon the testimony and evidence proffered at trial, the Court hereby finds in favor of defendant and dismisses the complaint.

The instant action is for the payment of no-fault insurance benefits for medical treatment. The complaint alleges, in relevant part, the following: On May 16, 2008, assignor SHARISE DAVIS (Davis) was involved in an automobile accident. At the time of the instant accident, Davis was covered under an automobile insurance policy issued by defendant, which provided benefits under the New York State No-Fault Law. Davis sought treatment from plaintiff SUNRISE ACUPUNCTURE, PC. the assignee of Davis’ no-fault benefits under defendant’s policy. Plaintiff submitted claims for medical treatment provided to Davis and defendant denied them. Based on the foregoing, pursuant to the New York State No-Fault Law and the policy, plaintiff seeks judgment in the amount of $425 plus interest.

On July 28, 2013 this Court (Taylor, J.) denied defendant’s motion for summary judgment and dismissal of the complaint. The Court held that defendant failed to submit admissible evidence in support of its claim that Davis was not an insured under the policy issued to the Albanos. Defendant appealed and the Appellate Term affirmed (Sunrise Acupuncture P.C. v Kemper Indep. Ins. Co., 50 Misc 3d 133(A) [App Term 2016] [“We sustain the denial of defendant-insurer’s motion for summary judgment. Although defendant asserted that the underlying no-fault claim is precluded by a provision of the subject insurance policy limiting coverage, upon the death of the insured, to the ‘legal representative of the deceased,’ defendant failed to tender evidentiary proof in admissible form establishing that the policy contained such a provision.”]).

At trial, the parties stipulated to the admission of several documents in evidence, some of which will be discussed hereinafter. More importantly, the parties limited the Court’s inquiry to one issue, namely, whether under the instant facts defendant’s insurance policy afforded coverage to Davis.

The parties submitted the insurance policy at issue (Exhibit B). Said policy was issued to Ronald and America Albano (the Albanos). According to the policy, the term began on July 24, 2007 and ended a year later. Per the declarations, the policy covered a 1998 Mercury and a 1980 Plymouth automobile. Section III of the policy governed coverage with respect to the foregoing vehicles. Specifically, the policy defined a “your covered auto,” as “any vehicle shown in the Declaration,” and “[a]ny of the following types of vehicles on the date you become the owner. . . [including] [a] private passenger auto.” The policy further defined a “family member” as “a person related to you by blood, marriage or adoption who is a resident of your household.” Per the policy, “’bodily injury,’ means bodily harm, sickness or disease, including death that result.” “’Occupying’ means in, upon, getting in, on out or off.” Part B or the Medical Payments Coverage portion of the policy defined “insured” as “[y]ou or any ‘family member’ . . . .[w]hile ‘occupying’ . . . a motor vehicle designed for use mainly on public roads.” Part B of the policy further stated that defendant “will pay reasonable expenses incurred for necessary medical . . . services because of ‘bodily injury’ . . . [c]aused by accident and . . . [s]ustained by an ‘injured.’” Section IV of the policy, titled General Policy Conditions stated that [y]our rights and duties under this policy may not be assigned without our written consent. However, if a named insured shown in the Declarations dies, coverage will be provided for . . . [t]the surviving spouse if a resident in the same household at the time of death . . . [and] [t]he legal representative of the deceased person as if a named insured shown in the Declarations . . . only with respect to . . . [t]he representative’s responsibility to maintain or use ‘your covered auto.’

The parties submitted two death certificates (Exhibit D), which indicate that the Albanos died in June 2007 and Letters Testamentary (Exhibit C), which establish that on January 7, 2008, Raquel Davis (Raquel) was appointed as the executor of Ronald Albano’s Will. The parties submitted a Notice of Intention to Make Claim, which indicates that Davis made a claim to defendant for no-fault benefits arising from an accident on May 16, 2008 in which she was involved while operating the 1998 Mercury. Lastly, the parties submitted a letter dated July 14, 2008 sent by defendant to Davis, wherein defendant denies coverage to Davis under the policy because the accident occurred after the Albanos died and the policy issued to the Albanos contains a provision that limits coverage upon the death of the named insured to the surviving spouse or legal representative of the deceased person, but only with respect to the representative’s legal responsibility to maintain or use the vehicle scheduled on the policy.

The letter further stated that “since you are neither the legal representative nor surviving spouse of Ronald Albano, the policy will not provide you with coverage as an insured.”

Principles of contract interpretation apply equally to insurance policies. Thus, in interpreting an insurance policy, the court must determine the rights and obligations of the parties, using the specific language of the policy itself. 

When the language in an insurance policy is clear and unambiguous, the interpretation of said document and the determination of the rights an obligations of the parties is a question of law to be adjudicated by the court . However, if the language in the policy is ambiguous, the court can use extrinsic evidence to determine the intent of the parties to the policy and resolution of the rights and obligations of the parties is a question of fact, to be determined by the trier of fact. If the extrinsic evidence is conclusory, failing to equivocally resolve the ambiguity in a policy, interpretation of the policy remains a question of law for the court to decide; deciding any ambiguities against the insurer.

In interpreting an insurance policy, the language of the policy, when clear and unambiguous, must be given its plain and ordinary meaning.  In such a case, the policy should be construed in a way “that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.”

Based on the foregoing, the Court finds that at the time of the accident, Davis was not an insured as defined by the policy issued by defendant to the Albanos. As such, Davis was never entitled to no-fault benefits under the instant policy.

As noted above, when interpreting coverage pursuant to an insurance policy, we do so using contract law. Thus, when the language in an insurance policy is clear and unambiguous, the interpretation of said document and the determination of the rights an obligations of the parties thereunder is a question of law for the court. In interpreting an insurance policy, the language of the policy, when clear and unambiguous, must be given its plain and ordinary meaning, and the policy must be construed in a way that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.

Here, because it is undisputed that Davis’ accident occurred nine months after the death of the Albanos, it is clear that the demise of the Albanos triggered Section IV of the policy, rendering Section III of the policy inapplicable and limiting coverage to those persons listed under Section IV of the policy. Specifically, upon the Albanos’ death, per the policy the only insureds were a surviving spouse and generally, the Albanos’ legal representative. Given that Raquel was appointed as Executor of Ronald Albano’s will, Raquel was the only insured under the instant policy and the only person entitled to coverage. Thus, Davis, which as per Kemper’s letter was Raquel’s daughter was neither a surviving spouse as defined by the policy or a legal representative of the Albanos. Thus, Davis was not an insured under the instant policy. Accordingly, defendant had no obligation to provide bo-fault benefits to Davis and properly denied those claims.

Plaintiff’s reliance on Section III of the instant policy to extend coverage to Davis is unavailing. While it is true that Part III of the policy defines “family member” as “a person related to you by blood, marriage or adoption who is a resident of your household,” and Part B of the policy states that defendant “will pay reasonable expenses incurred for necessary medical . . . services because of ‘bodily injury’ . . . caused by accident and . . . sustained by an ‘insured,’” Part III is simply inapplicable here since it clearly only applies while the Albanos were alive. Any other interpretation would render the limiting language in Part IV of the policy meaningless, which would violate a central tenet of contract law – that a policy must be construed in a way “that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.” 

Moreover, even if Part III were dispositive, here, the record is bereft of any evidence that Davis was an insured thereunder. To be sure, Section B of the policy provided coverage for “’bodily injury’ . . . caused by accident and . . . sustained by an ‘insured.’” However, as noted above, an insured is, inter alia, a “family member,” meaning “a person related to you by blood, marriage or adoption who is a resident of your household.” Here, the record is bereft of any evidence establishing that Davis was related to the Albanos and that if so, she resided in their household. It is hereby ORDERED that the complaint be dismissed, with prejudice.

2018 NY Slip Op 28344

Decided on October 31, 2018

Civil Court Of The City Of New York, Bronx County

Gomez, J.