the prior written approval of Department of Insurance." This prior written approval is evidenced by letters of confirmation sent by the New York State Department of Insurance. On April 27, 1993, the defendant advised the plaintiff by mail that although his Policy would not be renewed, he would be eligible for an extension of coverage under the provisions set forth above and at issue in this case. Pursuant to the three enumerated subparagraphs governing the extension provisions, the extension provided to the plaintiff was for the length of the injury or sickness causing the disability, during the uninterrupted continuance of the total disability and during the twelve month period following the termination of coverage, namely from April 3, 1993 to April 3, 1994.
The clearly expressed language in the provision limited a totally disabled person, whose policy was not renewed in accordance with the policy's terms, to an extension for a period of twelve months and no longer. Accordingly, the policy extension of coverage requirements were fully complied with by State Farm when it paid benefits to the plaintiff from April 3, 1993 to April 3, 1994.
In reaching this decision, the Court is mindful of the Policy's provision that "any refusal to renew this policy shall be without prejudice to any claim originating while the policy is in force." The plaintiff argues that this statement refers to claims arising after the Policy was terminated because of non-renewal where the claim is based on an injury predating the termination, a sort of reversion back theory. The Court disagrees.
A review of the Renewability provisions reveals the flaw in this argument. As the defendant correctly asserts, it can decline to renew the Policy for several stated reasons. One such reason is discontinuance with State approval. A second reason is for filing fraudulent claims. Applying Coan's reasoning to this second scenario implies that proponents of fraudulent claims would be entitled to benefit after their policy was not renewed on that ground. Such an outcome could not have been intended by the parties and is inconceivable.
The plaintiff further contends that the defendant's election not to renew the Policy constitutes an unlawful modification of the insurance contract citing Danzig v. Dikman, 78 A.D.2d 303, 434 N.Y.S.2d 217 (1st Dept. 1980). However, Danzig is clearly distinguishable on its facts. In Danzig, the insurer modified the insurance contract after the plaintiff's right to benefits vested. In this case the insurance policy was never modified. Rather, the defendant simply exercised its contractual right not to renew the policy in accordance with both state law and the Policy's original terms, which were in effect when the Policy was issued on October 3, 1990. Therefore, the attempt to retroactively limit benefits contrary to the plain terms of the insurance policy done in Danzig is not present in this case.
Finally, the plaintiff contends that the defendant's election not to renew the Policy did not constitute a termination of benefits, and therefore he is still covered by the original policy. The Court finds this argument to be without merit. While the Policy provisions governing "termination of coverage" do not expressly include non-renewal, no other interpretation is logical or reasonable. If the failure to renew a policy did not constitute a termination of coverage, there would be no need for the "extension of coverage" provisions as the result of a non-renewal under any circumstances. The Court declines to accept such an illogical conclusion.
Accordingly, the plaintiff's motion for summary judgment is denied and the defendant's cross motion for summary judgment dismissing the complaint is granted.
After reviewing the papers submitted by both parties, and hearing oral argument, and for the reasons set forth above, it is hereby
ORDERED that the plaintiff's motion for summary judgment in his favor pursuant to Fed. R. Civ. P. 56 is denied; it is further
ORDERED that the defendant's motion for summary judgment in its favor pursuant to Fed. R. Civ. 56, dismissing the complaint, is granted; and it is further
ORDERED that the Clerk of the Court enter judgment in favor of the defendant and close this case.
Dated: Uniondale, New York
January 13, 1996
Hon. Arthur D. Spatt
United States District Judge
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