T & S Med. Supply Corp. v Ocean Harbor Cas. Ins. Co.

Edited by Lawrence N. Rogak

In this suit for NY no-fault benefits against a Florida insurer, the insurer moved for summary judgment based upon its retroactive voiding of the policy due to material misrepresentation.  Reversing Civil Court’s grant of summary judgment, the Appellate Term held that while Florida law regarding rescissions applies, New York courts require the same standard of proof as New York insurers are held to: actual proof of mailing or proof of a standard office procedure.—LNR

Appeal from an order of the Civil Court of the City of New York, Kings County (Richard Montelione, J.), dated July 28, 2016. The order granted defendant’s motion for summary judgment dismissing the complaint.  ORDERED that the order is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is denied.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that the automobile insurance policy in question had been issued in Florida, and that Florida law applied, pursuant to which there was a lack of coverage due to the valid rescission of the automobile insurance policy. Plaintiff appeals from an order of the Civil Court dated July 28, 2016, which granted defendant’s motion.

It is undisputed that the vehicle in question was insured by defendant under a Florida automobile insurance policy. According to an affidavit submitted by an employee of defendant’s managing general agent, an investigation conducted after the accident revealed that, at the time the policyholder had applied for automobile insurance, she did not reside at the Florida address listed on her insurance application, and that the insured vehicle was not being garaged in Florida for the period stated on the application. Consequently, defendant had rescinded the policy ab initio, pursuant to Florida Statutes Annotated, title 37, § 627.409, which permits the retroactive rescission of an insurance policy if there has been a material misrepresentation in the application for insurance.

While the substantive law (see e.g. St. Chiropractic, P.C. v Geico Gen. Ins. Co., 53 Misc 3d 59 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]) of Florida applies, New York’s procedural laws control (see St. Chiropractic, P.C., 53 Misc 3d at 61). In order to show that it properly rescinded a motor vehicle insurance policy ab initio, an insurer must demonstrate that it had given notice of the rescission to the insured and that it had returned or tendered all premiums paid, in accordance with Florida law, all in a reasonable time after the discovery of the grounds for avoiding the policy (see Leonardo v State Farm Fire and Cas. Co., 675 So 2d 176, 179 [Fla Dist Ct App, 4th Dist 1996]; see also United Auto. Ins. Co. v Salgado, 22 So 3d 594, 600-601 [Fla Dist Ct App, 3d Dist 2009]). As defendant’s motion papers failed to establish “actual mailing or … a standard office practice or procedure designed to ensure that items are properly addressed and mailed” (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2001]; see also St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) demonstrating that the notice of rescission and the refund check had been mailed to the insured, defendant failed to establish its entitlement to summary judgment (see W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 36 Misc 3d 4, 6-7 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012], citing Leonardo, 675 So 2d 176, 179).

Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is denied.[IA]

2018 NY Slip Op 50665(U)
Decided on May 4, 2018
Appellate Term, Second Department

Plaintiff’s Failure to Respond to 90 Day Notice is Fatal to PIP Suit

Midwood Total Rehab, P.C. v GEICO Ins. Co.

In this PIP suit, the Appellate Term holds that a plaintiff’s failure to respond to a “90 day notice” is fatal to the lawsuit.  Plaintiff was required to provide both a reasonable excuse and prove the merits of its case, and did neither.—LNR

Plaintiff commenced this action by an attorney-verified complaint to recover assigned first-party no-fault benefits in March 2011. Defendant interposed an answer on June 23, 2011. On December 1, 2016, defendant served a 90-day written demand pursuant to CPLR 3216 (b) (3). On May 3, 2017, defendant moved pursuant to CPLR 3216 to dismiss the complaint as it had not been served with a notice of trial. On May 5, 2017, plaintiff served defendant with a notice of trial. Plaintiff’s counsel’s affirmation in opposition to defendant’s motion stated that the “delay in responding to [defendant’s] 90-day notice was neither willful nor contumacious, and does not evidence an intent to abandon the action.” By order dated July 12, 2017, the District Court denied the motion.

Once a 90-day demand is served upon a plaintiff, the plaintiff must either comply with the demand by filing a notice of trial within 90 days (see CPLR 3216 [c]), or move before the default date either to vacate the demand or to extend the 90-day period pursuant to CPLR 2004 (see Felix v County of Nassau, 52 AD3d 653 [2008]; Katina, Inc. v Town of Hempstead, 13 AD3d 343 [2004]; A.M. Med., P.C. v State Farm Mut. Ins. Co., 22 Misc 3d 43 [App Term, 2d Dept, 2d & 11th Jud Dists 2008]). Since plaintiff failed to do any of these, it was required, in opposition to defendant’s motion to dismiss, to establish both a justifiable excuse for its delay in properly responding to the 90-day demand and the existence of a meritorious cause of action (see Baczkowski v Collins Constr. Co., 89 NY2d 499 [1997]; Felix, 52 AD3d 653; A.M. Med., P.C., 22 Misc 3d 43). Here, plaintiff’s bare statement in its attorney’s affirmation, after a two-month delay in responding to defendant’s 90-day notice, that its “delay in responding to [defendant’s] 90-day notice was neither willful nor contumacious, and does not evidence an intent to abandon the action,” failed to establish a justifiable excuse for its delay. Additionally, plaintiff’s attorney asserted no meritorious cause of action.

Accordingly, the order is reversed and defendant’s motion to dismiss the complaint pursuant to CPLR 3216 is granted.

2018 NY Slip Op 50763(U)
Decided on May 24, 2018
Appellate Term, Second Department