Auto Insurer Granted Broader Discovery on Its Application Mispresentation Defense

AUTO – APPLICATION MISREPRESENTATION – SCOPE OF DISCOVERY
Rampersant v. Nationwide Mut. Fire Ins. Co.
(2nd Dept., decided 3/23/2010)

New York Insurance Law § 3105 provides, in part:

§ 3105  Representations by the insured

(a)   A representation is a statement as to past or present fact, made to the insurer by, or by the authority of, the applicant for insurance or the prospective insured, at or before the making of the insurance contract as an inducement to the making thereof. A misrepresentation is a false representation, and the facts misrepresented are those facts which make the representation false.

(b)  No misrepresentation shall avoid any contract of insurance or defeat recovery thereunder unless such misrepresentation was material. No misrepresentation shall be deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract.

After Nationwide presumably denied his auto claim, plaintiff commenced this action to recover damages for Nationwide's alleged breach of contract and violation of New York General Business Law § 349.  Nationwide moved to strike plaintiff's note of issue, contending that plaintiff had failed to produce certain bank records, credit card statements and cellular phone records demanded by Nationwide in discovery.   Supreme Court, Kings County (Spodek, J.) granted Nationwide's motion to the extent of directing plaintiff to produce only some of the demanded records by a certain date, and Nationwide appealed.

In REVERSING that part of the order which had denied Nationwide's motion to compel the production of plaintiff's records for the period of August 1, 2005 through December 31, 2005, the Appellate Division, Second Department, ruled:

However, that branch of the defendant's motion which was to modify the order dated March 6, 2009, to extend the time period of disclosure to include August 1, 2005, through December 31, 2005, should have been granted (see CPLR 5015[a][4]). By submitting the plaintiff's application for insurance dated August 7, 2005, the defendant demonstrated that the disclosure sought for the time period between August 1, 2005, and December 31, 2005, was material and necessary to the defense of this action (see CPLR 3101[a]; Insurance Law § 3105[a]; Cain v United Ins. Co., 232 SC 397, 401, 102 SE2d 360; Barkan v New York Schools Ins. Reciprocal, 65 AD3d 1061, 1064; Tannenbaum v Provident Mut. Life Ins. Co. of Phila., 53 AD2d 86 affd 41 NY2d 1087). 

Rate evasion fraud or misrepresentation?  The decision does not say, but its citation to Insurance Law § 3105 implies that application misrep was among Nationwide's defenses to the plaintiff's claim.