BELESI v. CONNECTICUT MUTUAL LIFE INSURANCE COMPANY (2000)

In an action to recover the proceeds of a disability insurance policy, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Schmidt, J.), entered November 2, 1998, as granted the defendant's motion (a) pursuant to CPLR 5015 to vacate a judgment of the same court entered March 24, 1998, and (b) for leave to renew its prior cross motion to amend its answer to include a counterclaim for rescission, and for summary judgment on the counterclaim, and (c), upon renewal, granted that branch of the cross motion which was for leave to amend the answer, and the defendant cross-appeals from so much of the same order as, upon renewal, denied that branch of its cross motion which was for summary judgment on the counterclaim.

ORDERED that the order is affirmed insofar as appealed from;  and it is further,

ORDERED that the order is reversed insofar as cross-appealed from, that branch of the defendant's prior cross motion which was for summary judgment on the counterclaim is granted, the subject policy is rescinded, and the complaint is dismissed;  and it is further,

ORDERED that the defendant is awarded one bill of costs.

 Contrary to the plaintiff's contention, the defendant offered sufficient evidence that the plaintiff had engaged in fraud, misrepresentation, or other misconduct by making false statements upon which the court relied in determining the prior motion for summary judgment.   Thus, vacatur of the judgment was proper (see, CPLR 5015[a][3] ).

The Supreme Court providently exercised its discretion by granting, upon renewal, that branch of the defendant's prior cross motion which was for leave to amend its answer to include a counterclaim for rescission (see, CPLR 3025 [b];  Edenwald Contr. Co. v. City of New York, 60 N.Y.2d 957, 471 N.Y.S.2d 55, 459 N.E.2d 164;  Sidor v. Zuhoski, 257 A.D.2d 564, 683 N.Y.S.2d 590;  Branch v. Abraham & Strauss Dept. Store, 220 A.D.2d 474, 475, 632 N.Y.S.2d 168;  Caruso v. Anpro, Ltd., 215 A.D.2d 713, 627 N.Y.S.2d 72;  McKiernan v. McKiernan, 207 A.D.2d 825, 616 N.Y.S.2d 629).

 However, the Supreme Court erred in denying, upon renewal, that branch of the defendant's prior cross motion which was for summary judgment on the counterclaim.   The defendant submitted sufficient evidence to establish as a matter of law that the insured made material misrepresentations on his application for disability insurance (see, Threatt v. American Centurion Life Assurance Co., 251 A.D.2d 284, 673 N.Y.S.2d 214;  Hydell v. North Atlantic Life Ins. Co., 246 A.D.2d 511, 667 N.Y.S.2d 391;  Gugleotti v. Lincoln Sec. Life Ins. Co., 234 A.D.2d 514, 651 N.Y.S.2d 600;  see also, Insurance Law § 3105[b] ).   The defendant did not waive its right to rescind since it did not continue to accept premium payments after gaining sufficient knowledge of the alleged misrepresentations (see, Insurance Law § 3105[b];  Hydell v. North Atlantic Life Ins. Co., 265 A.D.2d 528, 697 N.Y.S.2d 136 ;  cf., Scalia v. Equitable Life Assurance Socy. of U.S., 251 A.D.2d 315, 673 N.Y.S.2d 730).   In opposition, the plaintiff did not raise any triable issues of fact.

MEMORANDUM BY THE COURT.