Insurer Denied Summary Judgment for Failure to Show Material Misrepresentations by Insured

On June 7, 2017, the Second Department issued a decision in Indian Harbor Insurance Co. v SP&K Construction, 2017 NY Slip Op. 04427, denying an insurer's motion for summary judgment for failure to show material misrepresentations by the insured in applying for insurance, explaining:

To establish the right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when securing the policy. A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented. To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, that show that it would not have issued the same policy if the correct information had been disclosed in the application.

Here, the Supreme Court properly denied the plaintiff's motion for summary judgment on the complaint. The plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the issue of the materiality of the alleged misrepresentations. Since the plaintiff failed to meet its prima facie burden, its motion for summary judgment was properly denied, regardless of the sufficiency of the defendants' papers in opposition.

(Internal quotations and citations omitted).