In cases involving insurance contracts, courts look primarily at which state "the parties understood was to be the principal location of the insured risk" unless (with respect to the particular issue) some other state has "a more significant relationship" to the transaction and the parties (such as being where the parties resided and/or where the contract was issued and negotiated). Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 84 N.Y.2d 309, 318 (N.Y. 1994); Colonial Penn Ins. Co. v. Minkoff, 338 N.Y.S.2d 444, 445 (N.Y. App. Div., 1st Dep't 1972), aff'd, 33 N.Y.2d 542 (N.Y. 1973); Steinbeck v. Aetna Casualty and Surety Co., 81 A.D.2d 382, 385-86 (N.Y. App. Div., 1st Dep't 1981); Fireman's Fund Ins. Co. v. Great Am. Ins. Co., 10 F. Supp. 3d 460, 496 (S.D.N.Y. 2014); cf. Munzer v. St. Paul Fire and Marine Ins. Co., 145 A.D.2d 193, 200-01 (N.Y. App. Div., 3d Dep't 1989) (characterizing the understood location of the insured risk as the "primary factor" in the application of the "grouping of contacts rule" in an insurance case). When the insured risk is essentially restricted to one state, the understood location of the insured risk is given "overriding consideration in determining applicable law."

Under this formulation, Green Mountain's alleged negligence in mailing the Notice of Cancellation to the wrong address appears to have occurred in Vermont, the place from which the Notice of Cancellation was mailed. See, e.g., Colonial Penn. Ins. Co. v. Minkoff, 40 A.D. 2d 819, 820, 338 N.Y.S.2d 444, 446 (1st Dep't 1972) (stating: "The lex loci contractus is Pennsylvania, where the policy was mailed, so that law should govern"), aff'd, 33 N.Y.2d 542, 301 N.E.2d 424, 347 N.Y.S.2d 437 (1973). However, since neither party has suggested that Vermont law should apply, the Court need not consider whether New York courts would apply Vermont law to the present claim.

Under a "grouping of contacts" theory, New York courts have applied the rule embodied in Restatement § 193 to insurance contracts. See Steinbach v. Aetna Cas. and Surety Co., 81 A.D.2d 382, 385, 440 N.Y.S.2d 637, 640 (1st Dep't 1981) ("grouping of contacts" rule established by Court of Appeals "requires courts to apply the law of the State which the parties understood would be the principal location of the insured risk and the one most intimately concerned with the outcome of the litigation" (citing § 193)); Colonial Penn Ins. Co. v. Minkoff, 40 A.D.2d 819, 338 N.Y.S.2d 444, 445 (1st Dep't 1972), aff'd, 33 N.Y.2d 542, 347 N.Y.S.2d 437 (1973). It would be somewhat anomalous for this Court to apply New York law to a dispute to which a New York court would probably have applied New Jersey law.

under a grouping a contacts analysis New York law was the proper choice. The conflict between New York and New Jersey law arises from NJM's insistence that the reduction in coverage clause can be enforced in New York in the face of this Court's ruling that such a clause is void under New York law. Since this is an issue of contract enforcement between the Stolarzes as insureds and NJM — turning only on whether New York decisional law (i.e., Mucatel) should be given effect to invalidate the reduction in coverage clause — a grouping of contacts analysis demonstrates, on established authority, that New York law should apply (see, e.g., Auten v Auten, 308 N.Y. 155, 160; Intercontinental Planning v Daystrom, Inc., 24 N.Y.2d 372, 382-383 [holding New York law the proper choice in dispute over enforcement of contract made in New Jersey and invalidating contract under the New York Statute of Frauds]; Babcock v Jackson, 12 N.Y.2d 473, 481; Colonial Penn Ins. Co. v Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542; Borg-Warner Corp. v Insurance Co., 174 A.D.2d 24, 29). The majority, while ostensibly agreeing with the Appellate Division's use of a grouping of contacts, appears to apply the traditional and outmoded lex loci contractus and, relying on New Amsterdam Cas. Co. v Stecker ( 3 N.Y.2d 1), concludes that the law of New Jersey, not New York, is the proper choice.

Initially, we reject plaintiff's argument that we should apply Illinois law to the substantive issues of this insurance coverage dispute. A number of facts, including (1) the presence of 7 of the 19 contaminated landfill sites in New York, with the balance of the sites being scattered throughout the country, (2) New York's unique policy-based interest in the pollution exclusion clause (see, former Insurance Law § 46 [13], [14]; Technicon Elecs. Corp. v American Home Assur. Co., 141 A.D.2d 124, 141-143, affd 74 N.Y.2d 66), a significant issue in the matter at bar, and (3) plaintiff's choice of New York as the forum for this action, amply demonstrate New York's paramount interest in the litigation (see, Intercontinental Planning v Daystrom, Inc., 24 N.Y.2d 372, 382; Auten v Auten, 308 N.Y. 155, 160-161; Colonial Penn Ins. Co. v Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542; Restatement [Second] of Conflict of Laws §§ 6, 188 [1]). It is also worth noting that plaintiff relies primarily on New York authority to support its coverage arguments. Add to the foregoing the fact that the Illinois courts are divided as to the proper construction and application of the pollution exclusion clause (compare, International Mins. Chem. Corp. v Liberty Mut. Ins. Co., 168 Ill. App.3d 361, 522 N.E.2d 758, lv denied 122 Ill.2d 576, 530 N.E.2d 246, with United States Fid. Guar. Co. v Specialty Coatings Co., 180 Ill. App.3d 378, 535 N.E.2d 1071, lv denied 127 Ill.2d 643, 545 N.E.2d 133), requiring "New York courts * * * as a matter of substantive interpretation [to] presume that the unsettled common law of [Illinois] would resemble New York's" (Rogers v Grimaldi, 875 F.2d 994, 1003), and it is apparent that New York's substantive law should govern.

The IAS court applied New York law and held (1) that the delay in providing notice to the insurer is a sufficient basis for disclaimer (Jenkins v. Burgos, 99 A.D.2d 217) and (2) that if, as plaintiff contends, New Jersey law applies to the case, the failure to afford North River the opportunity to defend the action by A-Line, Ltd. and to participate in pretrial discovery constitutes the requisite prejudice to the carrier to warrant disclaimer (Hovdestad v. Interboro Mut. Indem. Ins. Co., 135 A.D.2d 783). It is clear that the State of New Jersey has the most contacts with the policy under the grouping of contacts concept (Auten v Auten, 308 N.Y. 155), as the principal location of the risk and the State most concerned with the outcome of the litigation (Steinbach v. Aetna Cas. Sur. Co., 81 A.D.2d 382; Colonial Penn Ins. Co. v. Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542). The policy was issued by a New Jersey insurer to a New Jersey corporation to insure against losses "happening anywhere during the policy period." The loss occurred in Jersey City, New Jersey, and plaintiff's liability therefor was litigated in that State. The mere fact that the policy was placed through a New York insurance broker which negotiated its terms is not a sufficient contact with this forum to preclude application of the lex loci delicti commissi in favor of the lex loci contractus.Colonial Penn Ins. Co. v. Minkoff (supra), upon which defendant North River Insurance Company relies, is not to the contrary.

Important factors in making this determination are, for example, location of the insured risk, residence of the parties, and where the contract was issued and negotiated (see, e.g., Steinbach v Aetna Cas. Sur. Co., 81 A.D.2d 382; Colonial Penn Ins. Co. v Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542). In the case at bar, however, the parties dispute the majority of these issues and no evidence on the record satisfactorily supports either side.

Nor do we perceive the issue to pose a choice of law problem as our colleagues in the First Department addressed it. Were choice of law the issue, the predominance of contacts with New York would clearly preclude the application of New Jersey law (see, Colonial Penn Ins. Co. v Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542). As we view the matter, however, the issue is the meaning of the New York insurance policy, a meaning that cannot be ascertained without considering the requirements of the New York Insurance Law and the regulations promulgated under it. Since the Insurance Law and the regulations mandate that under circumstances like the instant ones the requirements of New Jersey law be incorporated into the New York contract, there can be no question of choosing between the laws of two States.

(2 Couch, Insurance 2d, [1971 Supp.], § 16:19.5; 12 Appleman, Insurance Law and Practice, [1972 Supp.], § 7079.)" (Colonial Penn Ins. Co. v Minkoff, 40 A.D.2d 819, affd 33 N.Y.2d 542; accord Restatement, Conflict of Laws 2d, § 193; Lumbermens Mut. Cas. Co. v Stamell Constr. Co., 105 N.H. 28, 31.) Here the location of the insured risk and most of the contacts were indisputably New Hampshire. The policy declaration gives the only address of the insured as Parlin Field, Newport, New Hampshire; states that the aircraft "will usually be based at Parlin Field located at Newport, New Hampshire"; and states the business of the insured as "fixed base operator". Thus the parties clearly understood that the principal location of the insured risk was New Hampshire. The other contacts are almost all with New Hampshire. The flight was wholly an intra-New Hampshire local flight to drop leaflets over a camp in New Hampshire at the request of the owners of the camp.