September 2, 2015
37 Ave Med., P.C. v Metlife Auto & Home Ins. Co. (2015 NY Slip Op 51293(U))
Reported in New York Official Reports at 37 Ave Med., P.C. v Metlife Auto & Home Ins. Co. (2015 NY Slip Op 51293(U))
37 Ave Medical, P.C., ELECTIVE ACUPUNCTURE P.C., AKA CHIROPRACTIC, P.C. A/A/O FELIX CORDOVA, Plaintiffs,
Metlife Auto & Home Ins. Co., Defendant.
Evan Polansky, Esq.
Counsel for plaintiffs
Gary Tsirelman, PC
129 Livingston Street
Brooklyn, NY 11201
Bruno, Gerbino & Soriano, LLP
Counsel for defendant
445 Broad Hollow Road
Melville, NY 11747
Counsel for defendant
3315 Nostrand Avenue
Brooklyn, NY 11229
Reginald A. Boddie, J.
In this action to recover assigned first-party no-fault insurance benefits, three medical providers sought reimbursement for services rendered to the assignor as the result of an automobile accident that occurred on August 4, 2010, in Brooklyn, New York. Defendant [*2]insurance carrier averred that plaintiffs may not obtain payment of first-party insurance benefits as a result of the accident because the assignor’s policy was terminated ab initio due to material misrepresentations in securing the policy. In opposition, plaintiffs contended that Rhode Island law does not permit termination of an automobile insurance policy ab initio. The parties stipulated to the facts, leaving the court to determine only whether a Rhode Island automobile insurance policy issued by the Rhode Island Automobile Insurance Plan may be terminated ab initio.
Pursuant to a deposition of Felix Cordova, the assignor, recorded on November 22, 2010, the parties agreed that Mr. Cordova did not know his Rhode Island address by memory and had to read it from his driver’s license. Mr. Cordova resided at 703 Ditmas Avenue, Brooklyn, New York for thirteen to fourteen years with his wife, daughter and granddaughter, and resided in Rhode Island only on weekends for three years at a property that was owned by friends. Mr. Cordova purported to be the owner of the Brooklyn property, although his wife is listed as the owner. Mr. Cordova owns a car repair shop/dealership located in Bridgeton, New Jersey. The parties further stipulated that the assignor made a material misrepresentation in his application for the subject policy and defendant issued a reservation of rights letter on October 28, 2010, and a denial letter on March 14, 2011.
The parties agreed that if plaintiffs prevailed, 37th Avenue Medical, P.C. would be entitled to reimbursement in the amount of $1,903.68, Elective Acupuncture, P.C. would receive $2,472.53, and AKA Chiropractic, P.C. would receive $526.54, and that although Rhode Island does not provide no-fault medical reimbursement, as in New York, coverage would be provided under the “out of state accident” coverage clause of the policy, which requires the insurer to provide the minimum coverage required in the state where the accident occurred.
Rhode Island General Laws § 31-33-8 (a) governs certain specialty automobile insurance plans, and provides,
After consultation with the insurance companies authorized to issue automobile liability and/or physical damage policies in this state, the insurance commissioner shall approve a reasonable plan or plans fair to the insurers and equitable to their policy holders, for the apportionment among the companies of applicants for motor vehicle liability and/or physical damage insurance who are in good faith entitled to but are unable to procure insurance through ordinary methods.
The policy at issue is such a liability and property damages policy issued through the Rhode Island Automobile Insurance Plan (see also Rhode Island General Laws § 31-47-16). The only portion of the policy in dispute here is the liability section since no claim for property damages was asserted.
Regulation 16, section 10, which was promulgated by Rhode Island General Laws §§ 27-8-11, 27-9-1 et seq., 31-47-4 and 42-14-17, governs cancellation and renewal of all Rhode Island automobile insurance policies, unless specifically exempted. It states:
No insurer may rescind ab initio coverage required by the terms of R.I. Gen Laws § 31-47-1 et seq. [requiring mandatory automobile liability insurance]. Whether or not rescission ab initio is available for other coverages is not addressed by this Regulation and shall be governed by the applicable statutory and case law of this state. Nothing in [*3]this section shall vary the ability of the insurer to cancel automobile liability coverage on a prospective basis, as long as the requirement of all statutes and Regulations governing cancellation are met [emphasis added].
Thus, according to Regulation 16, rescission ab initio is generally not permitted for Rhode Island automobile liability insurance policies.
Moreover, Regulation 16, sections 4, 5 and 6, prescribe the grounds for cancellation and non-renewal of automobile policies and the required notices. Specifically excluded is liability insurance policies issued through the Rhode Island Insurance Plan. The court will not presume that this omission was inadvertent.
The Rhode Automobile Insurance Plan Handbook and Rhode Island Department of Business Regulation provide further guidance as to the rules of cancellation and rescission of the insurance policy here. Section 15 (B) (g) (2) of the Rhode Automobile Insurance Plan Handbook states that rescission is only allowed to the extent permitted by law. The Rhode Island Department of Business Regulation also addressed this issue in Insurance Bulletin 2003-3, dated January 31, 2003, and provided as follows:
It is the Department’s position that the common law right of rescission of contracts has been preempted by the enactment of the Motor Vehicle Reparations Act R.I. Gen. Laws § 31-47-1 et seq. with regard to automobile liability insurance. Therefore, an insurer may not rescind an automobile liability insurance policy on any ground which may have been available at common law. In cases where automobile liability is one of a number of coverages in the policy, the automobile liability portion is severed from the remainder of the policy for this purpose and the remainder of the policy is subject to rescission pursuant to the legal requirements for such action. This position does not affect an insurer’s ability to prospectively cancel an Automobile Liability policy in accordance with all statutes and Regulation governing cancellation (2003 WL 25270929 [RI INS BUL]).
Therefore, it is apparent that Rhode Island has elected not to terminate automobile liability insurance policies retroactively even when procured by material misrepresentations. As such, the automobile liability insurance policy here may not be rescinded ab initio.
Accordingly, plaintiffs are entitled to judgment. The Clerk of the Court shall enter judgment in favor of 37th Avenue Medical, P.C. in the amount of $1,903.68, Elective Acupuncture, P.C. in the amount of $2,472.53, and AKA Chiropractic, P.C. in the amount of $526.54. In addition, plaintiffs shall each be compensated for costs, statutory interest, and attorney’s fees.
This constitutes the decision and order of the court.
Dated: September 2, 2015
Hon. Reginald A. Boddie
Acting Supreme Court Justice