Matter of Geico Ins. Co. v. Battaglia
(4th Dept., decided 10/10/2008)
In January 2004, Battaglia was injured when his vehicle collided with a vehicle registered to O'Donnell and being operated by Ramos. GEICO insured the Battaglia vehicle, and New York Central Mutual Fire Insurance Company (NYCM) insured the O'Donnell vehicle.
One small problem. O'Donnell had died in 1998. NYCM disclaimed coverage to/for Ramos, and Battaglia demanded arbitration of his UM (decision incorrectly says SUM) claim. GEICO then commenced this special proceeding to permanently stay arbitration of that claim.
In AFFIRMING Erie Supreme's denial of GEICO's petition and granting of NYCM's cross motion to dismiss the petition against it, the Fourt Department ruled:
We conclude on the record before us that NYCM established as a matter of law that its policy, as renewed, was void ab initio based on the material misrepresentation with respect to O'Donnell's status, i.e., that O'Donnell was deceased (see generally Matter of Mercury Ins. Group v Ocana, 46 AD3d 561). NYCM established that it would not have renewed the policy covering the O'Donnell vehicle had it known that O'Donnell was deceased at that time (see Insurance Law § 3105 [b]; Precision Auto Accessories, Inc. v Utica First Ins. Co., 52 AD3d 1198, 1200).Yeah, that would be kinda material to underwriting the risk.
2 comments:
Doesn't this directly contradict the holding in Ins. Co. of North America v. Kaplun, 274 AD2d 293, 713 NYS2d 214 (2nd Dept. 2000)? I realize that Battaglia is a 4th Dept. case but we can we now say, officially, that there is a split in the departments on this issue?
No, it's not a contradiction. There is a distinction between the two cases. In "Kaplun," the policyholder made a material misrepresentation about where his car was garaged (upstate as opposed to Brooklyn, the true location), in a bid to pay a lower premium. In the case at bar, although the court calls it misrepresentation, it is more correctly a lack of capacity to contract issue. There is a standard provision in auto policies which states that if the policyholder dies, coverage continues only until the end of the policy, and then only for the benefit of the administrator of the estate. Once the policy expires, the dead person can't renew it.
I am litigating a similar DJ action in Kings right now, where the policyholder died and his adult son kept renewing the policy for 4 years in his father's name without notifying the insurer of the death. Then he got hit by a car while crossing a street and is looking for $150k in UM benefits. Our motion for summary judgment will be argued in November.
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