The opinion of the court was delivered by: Kaplan, District Judge.
This is an action to declare that (1) a policy of insurance
issued to defendant Frank Halcond is void ab initio and may be
rescinded, and (2) the plaintiff is not obligated to defend
Halcond in two personal injury cases brought against him.
Discovery having been completed, plaintiff moves for summary
Frank Halcond has practiced as a nurse/anesthetist since 1970.
On March 26, 1996, he applied to plaintiff Chicago Insurance
Company ("Chicago") for an Individual Nurse Anesthetist
Professional Liability claims-made policy for the period April 1,
1996 to April 1, 1997. Question 4 on the form was captioned
"professional title" and provided two boxes, one for "CRNA"
(doubtless an acronym for certified registered nurse anesthetist
although that is not made clear on the application form) and the
other for "student nurse anesthetist" as well as a blank in which
to insert the applicant's number of years in practice. Halcond
check the CRNA box. In addition, he added the letters CRNA after
his signature at the end of the application. Chicago duly issued
The Gomez and Bourodimos Incidents
On September 23, 1996, Halcond served as the nurse-anesthetist
under the direction of a physician during a surgical procedure
performed on Francisca Gomez at the Queens Women's Medical
Services Center. A catastrophic event occurred. Ms. Gomez was
taken to Elmhurst Hospital but resuscitative efforts failed and
she remains in an irreversible coma/persistent vegetative state.
It is undisputed that Halcond did not notify Chicago of the
incident prior to being sued more than a year later.
On March 20, 1997, Halcond served as the nurse-anesthetist
under the supervision of another physician during a plastic
surgery procedure performed on Angela Bourodimos. Another
catastrophic event occurred. Ms. Bourodimos became unresponsive
and was rushed to New York Hospital. Apart from the inference to
be drawn from the fact that she is represented here by her mother
and court-appointed guardian in consequence of her mental
incompetence, the record before this Court is silent as to the
outcome in her case. In any event, Halcond did not notify Chicago
of this incident either before he was sued many months later.
The 1997-98 Renewal Application
On March 26, 1997, Halcond applied for renewal of the Nurse
Anesthetist Professional Liability claims-made policy for the
period April 1, 1997 to April 1, 1998. In response to a question
on the application form whether any facts or circumstances had
occurred in the past year "that might give rise to a claim or
suit," Halcond checked "No."
The Gomez and Bourodimos Lawsuits
In December 1997, personal injury suits were brought by Gomez
and Bourodimos' guardian against Halcond and others allegedly
involved in the incidents allegedly resulting in their injuries.
Halcond was served with the Gomez complaint on December 22,
1997 and the Bourodimos complaint on January 21, 1998. Although
Halcond claims to have given telephonic notice to Chicago's
"agent/broker" and to have forwarded the pleadings to Chicago by
mail, he concedes that the mailings were returned. It is
undisputed that Chicago first learned of these actions on March
13 (Bourodimos) and March 23, 1998 (Gomez).
The record does not contain Halcond's application to renew his
policy for the April 1, 1998 to April 1, 1999 year. Nevertheless,
it is undisputed that Chicago renewed the policy for that
additional one year term on April 3, 1998.
On May 8, 1998, Chicago issued a disclaimer to Halcond with
respect to the Gomez and Bourodimos claims. The letter makes
clear the carrier's view that Halcond's March 1997 statement in
the first renewal application that nothing had occurred in the
preceding year "that might give rise to a claim or suit" was
materially false given his knowledge of the Gomez and Bourodimos
incidents. Further, it asserted that the policy was "deemed void
as of its inception" and recited that the broker was forwarding a
check to Halcond under separate cover for the full amount of the
premium he had paid. In addition, the letter contended that
Halcond had breached his obligation to forward the pleadings in
the Gomez and Bourodimos cases to Chicago "as soon as
practicable" and that Chicago was not obliged to defend or
indemnify Halcond on that ground as well.*fn1
Some time in May 1998, it came to Chicago's attention that
Halcond was not a certified registered nurse anesthetist at the
time of or subsequent to his application for the policy. It now
is undisputed that his certification expired on July 31,
On June 23, 1998, Chicago commenced this action seeking a
declaration that it is not obliged to defend or indemnify Halcond
in the Gomez and Bourodimos cases on the grounds that (1) the
1997-98 policy is void ab initio in consequence of his
concealment and affirmative misrepresentation of material facts
in the procurement of the original policy and the renewal, viz.
the false assertion in the original application that he was a
CNRA and the negative response in the renewal application to the
question about incidents ...