Cleophas Craigg, D.C. as Assignee of ROOSEVELT ETIENNE, Respondent,
Infinity Select Insurance Company, Appellant.
PRESENT: PESCE, P.J., RIOS and ALIOTTA, JJ.
Appeal from a decision of the Civil Court of the City of New York, Queens County (Thomas D. Raffaele, J.), dated March 12, 2009, deemed from a judgment of the same court entered September 11, 2009 (see CPLR 5512 [a]). The judgment, after a nonjury trial, awarded plaintiff the principal sum of $1, 310.94.
ORDERED that the judgment is reversed, without costs, and the complaint is dismissed.
At a nonjury trial of this action by a provider to recover assigned first-party no-fault benefits, the parties' attorneys stipulated that plaintiff had established a prima facie case regarding the submission of its claim in the amount of $1, 310.94; that, some time after the receipt of plaintiff's claim, defendant, a Florida insurer, had issued letters rescinding plaintiff's assignor's insurance policy ab initio on the ground that material misrepresentations had been made during the application process; and that defendant had refunded the assignor's premiums. The parties' attorneys further stipulated to the admission into evidence of plaintiff's claim form, defendant's rescission letter, the policy application, and the insurance policy. Finally, the parties agreed that the sole issue for the Civil Court to decide was "whether or not Defendant has to establish the reason for rescinding its policy." After trial, the Civil Court found for plaintiff, holding that New York law applied and that defendant was required, but failed, to present evidence in support of the underlying basis for its rescission of the policy. A judgment was subsequently entered, from which the appeal is deemed to have been taken (see CPLR 5512 [a]).
Contrary to the conclusion of the Civil Court, New York law does not govern this matter. Rather, applying a "grouping of contacts" analysis (see Matter of Eagle Ins. Co. v Singletary, 279 A.D.2d 56 ), we find that Florida law applied since Florida had the most significant contacts with the contracting party and the contract (see also W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 36 Misc.3d 4 [App Term, 2d, 11th & 13th Jud Dists 2012]).
Florida Statutes Annotated § 627.409 permits the retroactive rescission of an insurance policy if there has been a material misrepresentation in an application for insurance. Where, as here, an insurer is not seeking a judicial decree of rescission in the action, but, rather, is seeking to establish that the policy had, in fact, been retroactively rescinded to a time prior to the commencement of the action, the insurer must simply demonstrate that it complied with the Florida statute by giving the requisite notice of the rescission to the insured and that it returned or tendered all premiums paid within a reasonable time after the discovery of the grounds for avoiding the policy (see Leonardo v State Farm Fire & Cas. Co., 675 So.2d 176, 179 [Fla Dist Ct App, 4th Dist 1996]; see also W.H.O. Acupuncture, P.C., 36 Misc.3d 4). Given the posture of this case, the insurer, under Florida law, does not have the burden of proving its good faith basis for the termination of the insurance policy (see generally Castellon v American Skyhawk Ins. Co., 785 So.2d 552 [Fla Dist Ct App, 3d Dist 2001] [cancellation of policy]). As the parties stipulated that the sole issue for trial was whether the insurer had to establish the reason for its rescission of the policy, and it was therefore essentially conceded that defendant had given notice of the rescission to the insured and had returned all premiums, defendant is entitled to judgment dismissing the complaint. We reach no other issue.
Accordingly, the judgment is reversed and the complaint is dismissed.
Pesce, P.J., and Aliotta, J., concur.
Rios, J., dissents in a separate memorandum.
Rios, J., dissents and votes to affirm the judgment in the following memorandum:
Plaintiff commenced this action to recover assigned first-party no-fault benefits. Plaintiff's assignor was insured under an automobile insurance policy issued in the State of Florida, which contained a provision allowing for the retroactive cancellation of the policy if the policyholder made a "false, misleading" statement in the application for insurance. Six months following the accident involving plaintiff's assignor, defendant disclaimed coverage based on its decision to void the policy ab initio. At trial, the insurance company presented no evidence other than its conclusion that the policy had been cancelled.
As the insurance policy was contracted in Florida, that state's laws regarding cancellation are applicable (see Matter of Eagle Ins. Co. v Singletary, 279 A.D.2d 56 ). While Florida law allows for the retroactive cancellation of an automobile policy based on a material misrepresentation (see Fla Stat Ann § 627.409), the courts of Florida require the production of evidence that establishes the material misrepresentation.
An insurer seeking to rescind a policy pursuant to Florida Statutes Annotated § 627.409 must prove detrimental reliance on the false statement (see Griffin v American Gen. Life & Accident Ins. Co., 752 So.2d 621 [Fla Dist Ct App, 2d Dist 1999]; Boca Raton Community Hosp. v Brucker, 695 So.2d 911 [Fla Dist Ct App, 4th Dist 1997]), and it is for the trier of fact to determine if the breach is material (see United Servs. Auto. Assn. v Clarke, 757 So.2d 554 [Fla Dist Ct App, 4th Dist 2000]). In applying Florida law to the issue of cancellation, the Appellate Division held that sufficient evidence was required to demonstrate that the policy would not have been issued but for the misrepresentation (see Varshavskaya v Metropolitan Life Ins. Co., 68 A.D.3d 855 ).
Here, no competent evidence was presented to establish the claim of misrepresentation other than the conclusion of the insurer (see Matter of Centennial Ins. Co. v Capehart, 220 A.D.2d 499 ; Matter of Electric Ins. Co. v Woods, 101 A.D.2d 840 ; Viuker v Allstate Ins. Co., 70 A.D.2d 295 ; Sanchez v Maryland Cas. Co., 67 A.D.2d 681 ; see also Penaranda v Progressive Am. Ins. Co., 747 So.2d 953 ...