Jones v AIG Ins. Co. (2007 NY Slip Op 50816(U))

Supreme Court, Queens County

13956 2006

Duane A. Hart, J.

Plaintiff allegedly was injured in a motor vehicle accident in New York on March 17, 2006, while a passenger in a vehicle owned and operated by Silvanous Parchment. Defendant issued an insurance policy in Florida to Parchment, who purportedly was a resident of Florida, for that vehicle, which was registered in Florida. [*2]

On April 13, 2006, plaintiff submitted a claim for no-fault benefits to defendant insurer. On June 15, 2006, defendant insurer denied said claim on the ground that the policy was revoked for material misrepresentation.

In this action by plaintiff, among other things, for judgment declaring her rights under the policy, plaintiff moves for summary judgment determining that she is eligible for no-fault benefits and that defendant’s denial of such benefits was untimely. Defendant cross-moves for summary judgment on the ground that plaintiff’s injuries did not arise from a covered accident.

Defendant cancelled the policy on June 7, 2006, after it discovered Parchment made a material misrepresentation on the insurance application. The material misrepresentation was that Parchment resided and garaged his vehicle in Florida. An investigation by defendant after the subject accident revealed that Parchment resided and garaged his vehicle in New York.

Florida law allows for the retroactive cancellation of an insurance policy, where, as in this case, a material misrepresentation is contained within the insurance application. (See Penaranda v Progressive American Insurance Co., 747 So.2d 953 [Fla. 1999].) New York law does not allow retroactive cancellation. (See Vehicle and Traffic Law § 313; see also Matter of Insurance Co. of North America v Kaplun, 274 AD2d 293 [2000]; Olivio v Government Employees Insurance Co. of Washington, D.C., 46 AD2d 437 [1975].) There is no dispute that there is a conflict between the law of New York and the law of Florida. This conflict of law relating to an insurance policy must be resolved by application of the conflict of law rules relevant to contracts. (See Matter of Integon Insurance Co. v Garcia, 281 AD2d 480 [2001].) The courts apply the “center of gravity” or “grouping of contacts” inquiry to determine which State has the most significant contacts to the dispute. (See Matter of Eagle Insurance Co. v Singletary, 279 AD2d 56 [2000].) Significant contacts in a case involving a contract, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract and the domicile or place of business of the contracting parties. (See Zurich Insurance Co. v Shearson Lehman Hutton, Inc., 84 NY2d 309 [1994]; see also Matter of Integon Insurance Co. v Garcia, supra; Matter of Eagle Insurance Co. v Singletary, supra.)

Applying the grouping of contacts inquiry to the facts here, the State of Florida has the most significant contacts with the parties and the contract. Defendant issued its insurance policy to Parchment in Florida, who purportedly was a resident of Florida, [*3]for a vehicle registered in Florida, which terms incorporated Florida law. The only connection between the policy and New York is that Parchment was driving the vehicle in New York at the time of the accident. Thus, Florida law is controlling under New York’s conflict of law rules. Moreover, Florida’s significant contacts with the subject contract and legitimate governmental interest in protecting its honest policyholders from bearing the burden of paying claims incurred by dishonest policyholders outweighs New York’s governmental interest in protecting innocent third parties from being deprived of insurance coverage, especially since New York statutes provide the means to ensure compensation to persons injured due to the fault of uninsured motorists within the state by requiring New York policyholders to purchase uninsured motorist coverage (see Insurance Law § 3420[f]) and establishing and providing insurance through the Motor Vehicle Accident Indemnification Corp. (See Insurance Law § 5201 et seq.)

Applying Florida law, defendant’s retroactive cancellation of the insurance policy due to Parchment’s material misrepresentation in his application for insurance was valid. Since the subject policy was void ab initio, defendant’s denial of plaintiff’s no-fault claim was proper. In addition, the timeliness of defendant’s denial of plaintiff’s no-fault claim is irrelevant as the denial was based upon lack of coverage. (See Central General Hospital v Chubb Group of Insurance Cos., 90 NY2d 195 [1997].)

Accordingly, it is ORDERED AND ADJUDGED that plaintiff’s motion for summary judgment and attorney’s fees is denied and defendant’s cross motion for summary judgment dismissing plaintiff’s complaint is granted; and it is further

ADJUDGED AND DECLARED that defendant is not obligated to provide “no-fault” coverage to plaintiff.

Dated: April 11, 2007J.S.C.