Jerome Fleischman, as executor of the estate of Jean B. Hutson, appellant,
Transamerica Corporation, et al., respondents. Index No. 5461/13
Davidoff Hutcher & Citron, LLP, Garden City, NY (Michael
G. Zapson of counsel), for appellant.
Chorpenning, Good, Carlet & Garrison, New York, NY
(Michael J. Zaretsky of counsel), for respondents.
REINALDO E. RIVERA, J.P., CHERYL E. CHAMBERS, COLLEEN D.
DUFFY, BETSY BARROS, JJ.
DECISION & ORDER
action, inter alia, to recover damages for breach of
contract, the plaintiff appeals, as limited by his brief,
from so much of an order of the Supreme Court, Nassau County
(Bruno, J.), entered February 23, 2015, as granted the
defendants' motion for summary judgment dismissing the
complaint and denied his cross motion for summary judgment on
that the order is modified, on the law, by deleting the
provision thereof granting the defendants' motion for
summary judgment dismissing the complaint, and substituting
therefor a provision denying the defendants' motion; as
so modified, the order is affirmed insofar as appealed from,
without costs or disbursements.
plaintiff's decedent, Jean B. Hutson, purchased a single
premium deferred annuity from Presidential Life Insurance
Company (hereinafter Presidential) on February 18, 1997
(hereinafter Annuity #8231). Hutson later purchased a second
single premium deferred annuity from Presidential on January
21, 1998 (hereinafter Annuity #8420). Both annuities were
assigned to Transamerica Life Insurance Company of New York
(hereinafter TLICNY) in January 1998. TLICNY's business
was subsequently taken over by the defendant Transamerica
Financial Life Insurance Company (hereinafter TFLIC).
died on February 4, 1998. Shortly thereafter, the plaintiff
agreed to act as executor of Hutson's estate. On October
29, 1998, the estate's attorneys wrote to TLICNY
regarding Annuity #8420, requesting information on how to
close the account and cash in the value of the annuity as of
the date of death. TLICNY responded on November 5, 1998, and,
upon subsequently receiving due proof of Hutson's death,
TLICNY issued a check to the estate on October 29, 1999, in
the amount $54, 920.87, representing the proceeds of Annuity
#8420 valued as of the date of death, plus interest at the
rate of 3% from the date of death until the date of payment.
appears from the record that the estate was unaware of the
existence of Annuity #8231, and TLICNY initially failed to
make any link between the two contracts, despite its
knowledge that Hutson had died. Documents produced by the
defendants show that, on December 11, 2001, an employee of
Presidential wrote to TLICNY asking for Hutson's last
known address. The letter explained that Hutson had passed
away and that Presidential was unable to locate the family.
The subject line of the letter clearly referenced both
Annuity #8420 and Annuity #8231. On January 14, 2002, a
claims examiner from the Transamerica Insurance &
Investment Group in Kansas City, Missouri, wrote back to
Presidential stating that "the executor of Ms.
Hutson's estate was Jerome B. Fleishman, " and also
providing the address and contact information of the
estate's lawyers. The subject line of the response
clearly referred to Annuity #8420 and Annuity #8231.
documents produced by the defendants show that yearly
statements for Annuity #8231 were mailed to Hutson's
address from 1998 through 2002, and from 2005 through 2010.
Up to and including 2002, the yearly statements were mailed
by TLICNY in Purchase. Beginning in 2005, the yearly
statements were mailed by TFLIC, listing a home office
address in Purchase, but an administrative office in Cedar
such statement, dated February 15, 2002, was in fact returned
to TLICNY with the notation-"Moved-Left no Address"
and an additional handwritten note stating,
"deceased." After another annual statement was
returned to TFLIC in 2010, TFLIC, in a letter dated April 1,
2010, attempted to contact Hutson's executor. However,
the letter was sent to the address used by the estate's
lawyers in 1998, which was no longer current. According to
the plaintiff, TFLIC did not succeed in contacting a
representative of Hutson's estate regarding Annuity #8231
until September 2012, more than 14 years after Hutson's
about November 8, 2012, TFLIC sent the plaintiff a check for
$142, 163.54, representing the value of Annuity #8231 on the
date of Hutson's death ($132, 071.06), plus $10, 092.48
in interest, calculated at an annual rate of 0.5%. The estate
accepted the payment "without waiving any rights that
[the plaintiff] may have to interest since the date of death,
costs and expenses resulting from your failure to provide
this annuity upon the decedent's death." The estate
later commenced this action against the defendants alleging,
inter alia, breach of contract for the delay in paying the
proceeds of Annuity #8231, and demanding, inter alia,
prejudgment interest at the legal rate of 9% (see
defendants moved for summary judgment dismissing the
complaint, and the plaintiff cross-moved for summary judgment
on the complaint. The Supreme Court granted the
defendants' motion and denied the plaintiff's cross
motion. We modify by denying the defendants' motion.
to the plaintiff's contention, the calculation of
interest on the proceeds due under Annuity #8231 must be
determined in accordance with the principles set forth in
Insurance Law § 3214, which applies specifically to
interest paid on the proceeds of an annuity following the
death of the annuitant. The plaintiff's contention that
Insurance Law § 3214 does not apply under circumstances
where the insurer breaches the terms of the annuity contract
by unreasonably delaying payment (cf. Chipetine v William
Penn Life Ins. Co., 227 A.D.2d 216) is belied by the
plain language of the statute, which on its face admits of no
Supreme Court erred, however, in determining that the rate of
interest due on the proceeds of Annuity #8231 pursuant to
Insurance Law § 3214(c) should be determined solely by
reference to ...