Opinion
Index No.: 527089/2019
04-29-2021
In the Matter of the Application of METROPOLITAN GROUP PROPERTY & CASUALTY Co. d/b/a/Metlife Auto & Home, Petitioner, v. TIFFANY NEWKIRK, Respondent, EMBARK GENERAL INSURANCE ADJUSTERS, LLC, As the administrator for LYNDON SOUTHERN INSURANCE CO. and JOHN C. CHOGLLO, Additional Respondents.
NYSCEF DOC. NO. 40 At an IAS Part 65 of the Supreme Court of the State of New York, County of Kings at a Courthouse Located at 360 Adams Street, Brooklyn, New York on the 29th day of April, 2021. PRESENT: HON. LOREN BAILY-SCHIFFMAN JUSTICE Motion Seq. # 2 DECISION & ORDER
As required by CPLR 2219(a), the following papers were considered in the review of this motion:
| PAPERS NUMBERED | |
|---|---|
| Notice of Motion by Embark | 1 |
| Affirmation and Exhibits in Support | 2 |
| Affirmation in Support by Tiffany Newkirk | 3 |
| Affirmation in Opposition by Metlife | 4 |
| Reply Affirmation by Embark & Lyndon | 5 |
Upon the foregoing papers Respondent, Embark General Insurance Adjusters, LLC (Embark), as Administrator for Lyndon Southern Insurance Company (Lyndon) move this Court for an Order pursuant to CPLR § 2221 (d)(2)to reargue the prior motion made by Metlife Auto & Home (Metlife) . That motion to permanently stay the Uninsured Motorist Arbitration requested by Respondent, Tiffany Newkirk, was granted and John Chogllo, Embark and Lyndon were added as Additional Respondents to these proceedings.
On March 22, 2019 Ms. Newkirk and Mr. Chogllo were driving their own vehicles when they were involved in a collision in the Bronx, New York. Embark concluded after its investigation that Mr. Chogllo's original application for insurance was based upon the misrepresentation that he resided in and the vehicle would be garaged in Pennsylvania. While his vehicle had Pennsylvania plates and was registered there, Embark determined that Mr. Chogllo actually resided in New York. Embark issued a denial of coverage and rescinded the insurance policy issued to Mr. Chogllo ab initio to its effective date of March 20, 2019. After receipt of the Denial of Coverage, Ms. Newkirk filed a Demand for Uninsured Motorist Arbitration with Metlife on or about November 22, 2019
Upon a motion for re-argument the movant must demonstrate that the court misapprehended the relevant facts that were before it or misapplied a controlling principle of law. Matter of Mattie M v Admin for Children Service , 48 AD3d 392 (2nd Dept 2008); V Veeraswamy Realty v Yenom Corp , 71 AD3d 874 (2nd Dept 2010) . A motion for re-argument shall not include any matters of fact not offered on the prior motion." CPLR 2221(d)(2). HSBC Bank USA , NA v Halls , 98 AD3d 718, 720 (2d Dept 2012). Movant has the burden of demonstrating to this Court the manner in which it overlooked the facts or misapplied the law. V Veeraswamy Realty v Yenom Corp , supra at 874 , citing McGill v Goldman , 261 AD2d 593, 594 (2nd Dept 1999); Woody's Lbr Gem Community Mgt Inc v Jayram Realty Corp 30 AD3d 590 , 592-593 (2nd Dept 2006).
This Court found that Pennsylvania had the most significant contacts with the contracting party and the contract, i.e. the policy of insurance issued by Lyndon. Additionally, the prior decision herein also found that pursuant to Pennsylvania's common law, while a retroactive recision of the policy ab initio is permitted, it is ineffective as to innocent third parties. Embark contends that while the Pennsylvania law permitting a retroactive recision of an auto policy applies to the case at bar, the law making it ineffective to innocent third parties only applies to cases where the policy is retroactively cancelled after 60 days. 40 P.S.§991.2004.
However, under Pennsylvania law, an insurer always had a common-law right to rescind a policy of automobile insurance. Klopp v. Keystone Ins. Cos., 528 Pa 1, 595 A2d 1 (1991); Healthway Med. Care , P.C. v. Infinity Group , 54 Misc 3d 132[A] (App Term , 2d Dept , 2d , 11th & 13th Jud Dists , 2017); Erie Ins. Exch. v. Lake , 543 Pa 363, 375 (1996 ).Moreover, the Pennsylvania Supreme Court has also held that while an automobile insurance policy may be retroactively rescinded as to an insured who has made a material misrepresentation, the policy may not be retroactively rescinded with respect to third parties "who are innocent of trickery, and injured through no fault of their own." Id. at 375; Island Life Chiropractic , P.C. v. Infinity Group , 55 Misc 3d 42, 43 (App Term , 2d Dept , 2d , 11th & 13th Jud Dists 2017).
The Second Department reached the same conclusion in their application of Pennsylvania law in a New York action and held that an auto insurance carrier, ".......may not deny coverage under the policy with respect to claims made by third parties who are innocent of trickery, and injured through no fault of their own." Williams v Janvier , 176 AD3d 1139, 1141 (2d Dept 2019). The court reasoned therein that "[m]otorists carry insurance not only for their own protection, but also for the benefit of third parties who may suffer through the negligence of the insured motorist." Id. at 1141-1142 ; Infinity Ins. Co. v Nazaire , 2016 N.Y. Slip Op. 31454[U](N.Y. Sup Ct , Kings County 2016).
It is well settled that New York has long recognized the use of 'center of gravity' or 'grouping of contacts' as the appropriate analytical approach to choice of law questions in contract cases. Zurich Ins. Co. v Shearson Lehman Hutton , 84 NY2d 309, 317 (1994). In the context of liability insurance contracts, the jurisdiction with the most "significant relationship to the transaction and the parties" will generally be the jurisdiction "which the parties understood was to be the principal location of the insured risk." In re Liquidation of Midland Ins. Co., 16 NY3d 536, 543-44 (2011).
Contrary to the contentions put forth by Embark, the Pennsylvania rule making retroactive policy recisions ineffective against innocent third parties applies to the facts in this case. As explained by the Pennsylvania Court,
Automobile insurance is not issued solely for the benefit of the individual purchaser. Motorists carry insurance not only for their own protection, but also, for the benefit of third parties who may suffer through the negligence of the insured motorist. This concept of providing for the foreseeable consequences of driving in today's society is certainly one of the most important policy considerations prompting the remedial legislation in this area. ... [Thus, innocent third-party victims] should not be left to suffer. Although on the surface it appears harsh to force [an] insurance company to abide by a contract procured by fraud, it would be beyond harsh to preclude the third party [victims], who are innocent of trickery, and injured through no fault of their own, from receiving protection under the policy.Infinity Select Ins. Co. v Fleming , 2016 WL 6088065 , (Pa Super Ct , 2016) aff'd. 159 A3d 45 (2016).
This Court finds, therefore, that Lyndon's retroactive cancellation of the auto insurance policy issued to Mr. Chogllo is in fact valid. However, applying the Pennsylvania law as set forth above, this Court finds that the cancellation is ineffective as to claims made by Ms. Newkirk. Accordingly, it is
ORDERED that the motion to reargue is granted and upon re-argument, it is
ORDERED that the Petition to Permanently Stay the Arbitration between Metlife and Tiffany Newkirk is granted, and it is
ORDERED that Embark, Lyndon and John Chogllo are added as Additional Respondents to these proceedings, and it is
ORDERED that Metlife's request for relief concerning discovery is denied as moot.
ENTER
/s/_________
LOREN BAILY-SCHIFFMAN
JSC