May 4, 2018

T & S Med. Supply Corp. v Ocean Harbor Cas. Ins. Co. (2018 NY Slip Op 50665(U))

https://www.beynensonlaw.com/case-law/t-s-med-supply-corp-v-ocean-harbor-cas-ins-co-2018-ny-slip-op50665u/

Court: Appellate Term, Second Department
Decided: May 4, 2018
Citation: 2018 NY Slip Op 50665(U)
Posture: Summary judgment
Outcome: Provider prevailed
Later treatment: Followed in 1 later decision (see Cited by)
Issues: Policy issues Timeliness and preclusion

Cite as

T & S Med. Supply Corp. v Ocean Harbor Cas. Ins. Co., 2018 NY Slip Op 50665(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

The insurer failed to prove mailing of the rescission notice and premium refund needed to establish rescission of its Florida policy. The insurer sought summary judgment dismissing assigned no-fault claims, asserting material misrepresentations about the policyholder's residence and the vehicle's garaging location under Florida Statutes Annotated, title 37, § 627.409. Florida substantive law governed, but New York procedural law controlled. Under Florida law, rescission required notice and return or tender of all premiums within a reasonable time after discovery of the grounds. The insurer established neither actual mailing nor an office practice ensuring proper addressing and mailing of the notice and refund check. The Appellate Term, Second Department, reversed and denied the insurer's motion.

Reported in New York Official Reports at T & S Med. Supply Corp. v Ocean Harbor Cas. Ins. Co. (2018 NY Slip Op 50665(U))

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

T & S Medical Supply Corp., as Assignee of Anthony Cabreja, Appellant,
against
Ocean Harbor Casualty Insurance Company, Respondent.

The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for appellant. Gallo, Vitucci & Klar (Yolanda L. Ayala and Richard E. Weber, Jr. of counsel), for respondent.

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 [*2]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.

PESCE, P.J., ALIOTTA and ELLIOT, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: May 04, 2018

Cited in this decision

A label shows how this decision treated the case it cites.

St. Chiropractic, P.C. v Geico Gen. Ins. Co. (2016 NY Slip Op 26271) FollowedAn option to arbitrate a no-fault dispute does not furnish a ground to dismiss a court action over that dispute.
St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co. (2008 NY Slip Op 04072)The insurer raised factual issues concerning a proper timely denial and its entitlement to deny the hospital's claim.
W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co. (2012 NY Slip Op 22142) FollowedUnder Florida law, failure to follow statutory cancellation procedures does not preclude rescission for a material application misrepresentation.

Cited by

A label shows how the later decision treated this one.

NR Acupuncture, P.C. v Ocean Harbor Cas. Ins. Co. (2019 NY Slip Op 51892(U)) FollowedThe insurer failed to establish valid Florida policy rescission or that a Florida declaratory judgment bound the provider.
Castro v Omni Ins. Co. (2022 NY Slip Op 50057(U))An insurer invoking a Pennsylvania policy's 'as soon as practicable' notice clause must establish prejudice to deny for late notice.

Similar decisions

Blackman Pelham Med., P.C. v Ocean Harbor Cas. Ins. Co. (2021 NY Slip Op 51257(U))The insurer proved valid retroactive rescission of the Florida policy by sending notice and timely returning all premiums.
Daily Med. Equip. Distrib. Ctr., Inc. v Allstate Ins. Co. (2017 NY Slip Op 50029(U))The insurer failed to establish valid Florida policy rescission because it did not prove notice or timely return or tender of premiums.
Universal Health Chiropractic, P.C. v Infinity Prop. & Cas. Co. (2014 NY Slip Op 50350(U))The insurer established a valid retroactive rescission of the assignor's Florida automobile policy for material misrepresentations.
Omphil Care, Inc. v Pearl Holding Group Managing Gen. Agent for Ocean Harbor Cas. Ins. Co. (2020 NY Slip Op 50946(U))The insurer established retroactive rescission of a Florida policy through notice and timely return or tender of all premiums.
Compas Med., P.C. v Infinity Group (2016 NY Slip Op 50042(U))The insurer established valid retroactive rescission under Florida law, and the provider failed to raise a triable issue.