Opinion
CV-10673-05/QU.
Decided March 14, 2011.
Defendant Allstate Insurance Company ("defendant") moved for summary judgment under Civil Practice Law and Rules (CLPR) 3212. Plaintiffs Luis Rodriguez and Rafael Jiminez ("plaintiffs" when referred to collectively) subsequently moved to preclude defendant from testifying at trial and to strike its complaint, or in the alternative, for an order scheduling depositions with preclusionary language.
The Court notes that plaintiff's Notice of Motion erroneously requests that defendant's complaint be stricken; however, the Affirmation in Support correctly requests that defendant's answer be stricken.
Plaintiff Rodriguez ("Rodriguez") was the holder of an automobile insurance policy with defendant. Plaintiff Jiminez ("Jiminez") was the titled owner of the vehicle, a 2001 Mitsubishi. On May 21, 2004, the vehicle was stolen, but was recovered nine (9) days later on May 30, 2004 in damaged condition. Defendant denied plaintiff Rodriguez' claim on grounds of material misrepresentations made in the insurance application regarding vehicle ownership; in turn, plaintiffs filed the action herein, alleging six (6) causes of action. Three (3) were dismissed by a December 29, 2008 order of the Honorable Carolyn E. Wade of this Court granting defendant's motion for summary judgment. In the remaining causes of action, plaintiffs allege breach of contract, misrepresentation of defendant's employees (who are also defendants in this case), and professional malpractice.
In the instant motion for summary judgment, defendant contends that policy holder Rodriguez had no insurable interest, and that Jiminez, the vehicle's titled owner, had no contractual relationship with it. Taking first the argument that defendant and Jiminez had no contractual relationship, it is undisputed in this matter that the insured was Rodriguez, not Jiminez. Case law is consistent that in absence of privity, a cause of action may not be maintained for breach of contract ( Plaisir v Royal Home Sales, ___ AD3d ___, ___, 2011 NY Slip Op. 01255 [2d Dept 2011]; CDJ Builders Corp v Hudson Group Construction , 67 AD3d 720 ; Grinnell v Ultimate Realty, LLC , 38 AD3d 600 ; M. Paladino, Inc. v Lucchese Son Contracting Corp., 247 AD2d 515), misrepresentation ( Levi v Utica First Insurance Company, 12 AD3d 256), or professional malpractice ( Bullmore v Ernst Young Cayman Islands , 45 AD3d 461 ; Tycon Tower I Investment Limited Partnership v Burgee, 234 AD2d 748).
In opposition, plaintiffs do not specifically address the issue of a lack of privity between Jiminez and the defendants; the opposition papers focus primarily on the "insurable interest" issue, and on case law disallowing an insurance company's ab initio cancellation of a policy ( Teeter v Allstate, 9 NY2d 655). Opposing papers only address Jiminez' relationship with the defendant by stating that "[p]laintiff Rafael Jiminez was informed by an insurance broker processing Allstate Insurance policies that he would save money if he could insure the car under someone with a better driving history" and by stating that he and Mr. Rodriguez were ". . .unsophisticated immigrants with little knowledge of the English language [who] were simply following the advice of Mr. Jiminez' insurance broker." Such statements fall far short of rebutting the argument that Jiminez lacked privity with the defendant in this matter. Further, the issue of whether a person has an insurable interest generally arises where that person is the contracted policyholder; that issue differs markedly from whether an individual has privity with the insurance company. Additionally, the question of whether an insurance company can issue an ab initio cancellation of a policy can only arise between the insurance company and the policyholder. Jiminez was not the policyholder in this case, and plaintiffs have failed to show otherwise. Plaintiffs have failed to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact requiring a trial on this issue ( Alvarez v Prospect Hospital, 68 NY2d 320; Winegrad v New York University Medical Center, 64 NY2d 851; Zuckerman v City of New York, 49 NY2d 557). Accordingly, the Court herein finds that Jiminez has no privity with the defendant, and therefore, no cause of action against the defendant(s) on any of the aforestated grounds. Defendant's motion for summary judgment as regards Jiminez must be granted.
On the issue of whether Rodriguez had an insurable interest, defendant relies upon Rodriguez' unsigned deposition transcript to contend that certain statements support his lack of financial interest in the vehicle, and that his role was only to secure insurance for his cousin, Jiminez. However, ". . .the unsigned deposition transcript of the plaintiff. . .submitted in support of [defendant's] motion, did not constitute admissible evidence in light of the [defendant's] failure to demonstrate that the transcript was forwarded to the plaintiff for. . .review pursuant to CPLR § 3116(a)" ( Marmer v IF USA Express, Inc. , 73 AD3d 868 [2d Dept 2010]). Consequently, the Court finds that defendant has failed to offer admissible evidence to support its contention that Rodriguez lacked a insurable interest in the vehicle. The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers ( Alvarez, 68 NY2d 320 at 324; Winegrad, 64 NY2d 851 at 853; Zuckerman, 49 NY2d 557 at 563). The Court must deny the branch of defendant's motion for summary judgment against Rodriguez.
Although not required to do so to reach a decision on the motion for summary judgment, the Court will address the plaintiff's contention in its papers that defendant has no legal right to issue an ab initio cancellation of an insurance policy. Case law is clear that an insurance company's termination of an insurance policy must be guided by Vehicle and Traffic Law (VTL) § 313. Subsection (1)(a) provides in part: "[n]o contract of insurance for which a certificate of insurance has been filed with the commissioner shall be terminated by cancellation by the insurer until at least twenty days after mailing to the named insured. . .a notice of termination. . ." Further, case law has held that "[r]egardless of whether plaintiff had an insurable interest. . .or whether he obtained the policy by misrepresentation, defendant could not rescind the policy ab initio and it could not terminate the policy prospectively without satisfying the procedural requirements of Vehicle and Traffic Law § 313" (Mooney v Nationwide Mutual Insurance Company, 172 AD2d 144 [3d Dept 1991]).
However, in Insurance Company of North America v Kaplun ( 274 AD2d 293 [2d Dept 2000]), while the Court underscored precedential and statutory authority prohibiting an insurer's retroactive cancellation of a policy, it also clarified that VTL § 313's provisions were designed to protect "innocent third parties" ( Id. at 298) who sustained injuries, and not those who were parties to misrepresentations made in procuring the policy. In that case, the Court found that the insurance company could deny benefits to the insured on grounds that he was a participant in the misrepresentation in obtaining the policy.
In the case at bar, there were no injured third parties; instead plaintiff seeks to recover for damage to the insured vehicle which occurred while it was stolen. Though defendant failed to meet its summary judgment burden regarding Rodriguez, if it is able to establish at trial that Rodriguez was a participant to misrepresentations made to procure the policy in question, as in Kaplun, ". . .denying plaintiff the right to recover would not impinge in any way upon the protection the policy affords innocent victims, would not subvert the statutory proscription against retroactive cancellation and would comport with elemental fairness" (Kaplun, 274 AD2d 293 at 299, citing Mooney v Nationwide Mutual Insurance Company, 172 AD2d 144 at 149).
The Court now addresses plaintiff's motion to preclude defendant from testifying at trial and to strike its complaint, or in the alternative, to have a date certain for depositions ordered with preclusionary language. In its opposition, defendant offers a chronology to explain the events that have arisen to prevent it from appearing for depositions, and contends that its failure to appear has not been either "willful or contumacious" ( Joseph v Roller Castle, Ltd., 100 AD2d 839). This Court has twice before ordered that depositions occur: in a May 18, 2006 order by the Honorable Joseph J. Esposito, and in a December 2, 2008 order by the Honorable Diccia T. Pineda-Kirwan. Since neither order included preclusionary language, the Court will neither preclude defendant from testifying at trial nor strike its answer at this time. However, the Court orders herein that depositions are to take place within 60 days of this Court order, i.e., by May 13, 2011, and that the failure of the defendant to comply with this order shall result in its preclusion from testifying at trial.
See Footnote 1.
The defendant's motion for summary judgment is granted with respect to plaintiff Rafael Jiminez, but is denied with respect to plaintiff Luis Rodriguez. The plaintiff's motion to preclude defendant's testimony at trial and strike defendant's answer or, in the alternative, to order a date for depositions with preclusionary language is granted to the extent that depositions are ordered herein to occur within 60 days of this order. The failure of the defendant to comply will result in its preclusion from testifying at trial.
The foregoing constitutes the Decision and Order of this Court.