Mound Cotton partner Kevin Buckley and associate Rachel Horzempa Winship won a summary judgement dealing with a material misrepresentation in the application for an insurance policy and whether a predecessor’s guidelines for issuing an insurance policy is sufficient to prove a misrepresentation is material to the insurer’s decision to issue and renew the policy. It also deals allegedly premature motions.
In sum, the plaintiff applied for insurance and represented that she, as the owner, would reside in the premises. The insurer’s guidelines state that it would issue a policy if the premises is owner occupied, and therefore, the insurer issued the policy. The policy was renewed for several years and during that time, the insurance company was purchased/succeeded by another insurance company. Thereafter, the premises suffered a fire and the new insurer discovered that the plaintiff did not reside at the premises and denied the claim. The plaintiff argued that the new insurer cannot deny coverage based on its predecessor’s guidelines, because it cannot prove the guidelines were material to its decision to keep and renew the insurance policy. The court disagreed and found the predecessor’s guidelines prove materiality of the misrepresentation when the misrepresentation was made.
This decision would be very useful to attorneys who practice in New York and through the country with a focus on first-party insurance since this is a somewhat common occurrence when an insurance company assumes the book of business from a predecessor. Such a decision also reiterates Mound Cotton’s prowess in defending insurance professionals in high-stakes litigation