Lisa Leigh Smith, also known as Lisa Selmonosky, et al., appellants, v. Guardian Life Insurance Company of America, also known as Guardian, respondent. (2014)

Argued—February 27, 2014

DECISION & ORDER

In an action to recover damages for breach of two insurance policies, in which the defendant counterclaimed to rescind the policies, the plaintiffs appeal, as limited by their brief, from so much of (1) an order of the Supreme Court, Westchester County (Adler, J.), entered July 25, 2012, as granted the defendant's motion for summary judgment on its counterclaim for rescission and denied their cross motion for summary judgment on the complaint, and (2) an order of the same court, also entered July 25, 2012, as denied, as academic, their separate cross motion to preclude the defendant's expert from testifying at trial.

ORDERED that the orders are affirmed insofar as appealed from, with one bill of costs.

“[T]o establish its right to rescind an insurance policy, an insurer must demonstrate that the insured made a material misrepresentation.   A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented” (Zilkha v Mutual Life Ins. Co. of N.Y., 287 A.D.2d 713, 714;  see Insurance Law § 3105[b];  Parmar v. Hermitage Ins. Co., 21 AD3d 538, 540).   Whether a misrepresentation is material is generally a question of fact for the jury (see Schirmer v. Penkert, 41 AD3d 688, 690;  Process Plants Corp. v Beneficial Natl. Life Ins. Co., 53 A.D.2d 214, 216, affd 42 N.Y.2d 928).

“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, which show that it would not have issued the same policy if the correct information had been disclosed in the application” (Parmar v. Hermitage Ins. Co., 21 AD3d at 540;  see Insurance Law § 3105[c];  Curanovic v New York Cent. Mut. Fire Ins. Co., 307 A.D.2d 435, 437).  “[E]ven innocent misrepresentations, if material, are sufficient to allow an insurer to defeat recovery under the insurance contract” (Meagher v Executive Life Ins. Co. of N.Y., 200 A.D.2d 720, 720;  see Tennenbaum v. Insurance Corp. of Ireland, 179 A.D.2d 589, 592;  Abulaynain v New York Merchant Bakers Mut. Fire Ins. Co., 128 A.D.2d 575, 576;  Kulikowski v. Roslyn Sav. Bank, 121 A.D.2d 603;  Barrett v. State Mut. Life Assur.   Co., 49 A.D.2d 856, affd 44 N.Y.2d 872, cert denied 440 U.S. 912).  “[M]aterial misrepresentations ․ if proven, would void the ․ insurance policy ab initio ” (Taradena v. Nationwide Mut. Ins. Co., 239 A.D.2d 876, 877;  see Sun Ins. Co. Of N.Y. v. Hercules Sec. Unlimited, 195 A.D.2d 24, 30).

Here, the defendant demonstrated its prima facie entitlement to judgment as a matter of law on its counterclaim for rescission (see Meah v. A. Aleem Constr., Inc., 105 AD3d 1017, 1020;  Schirmer v. Penkert, 41 AD3d 688, 690–691;  Roudneva v Bankers Life Ins. Co. of N.Y., 35 AD3d 580, 581).   In support of its motion, the defendant established, prima facie, that the plaintiffs' decedent made material misrepresentations in his application for the subject insurance policies.   Moreover, the defendant also established, prima facie, that, had it been properly advised, it would not have issued the subject policies.

In opposition to the defendant's showing of entitlement to judgment as a matter of law on its counterclaim for rescission of the life insurance policies, the plaintiffs failed to raise a triable issue of fact concerning either the decedent's misrepresentation or the materiality of that misrepresentation (see Zuckerman v. New York, 49 N.Y.2d 557).   Moreover, the plaintiffs did not raise a triable issue of fact concerning the doctrine of waiver, as they did not provide evidence that the defendant clearly manifested an intent to abandon its right to assert the existence of a material misrepresentation as a defense to the plaintiffs' claim for payment of the policies (see Sulner v. G.A. Ins. Co. of N.Y., 224 A.D.2d 205, 206;  see also Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 968).   Accordingly, the Supreme Court properly granted the defendant's motion for summary judgment on its counterclaim for rescission, and denied the plaintiffs' cross motion for summary judgment on the complaint.

In light of our determination, we conclude that the Supreme Court properly denied, as academic, the plaintiffs' separate cross motion to preclude the defendant's expert from testifying at trial.

We need not reach the plaintiffs' remaining contentions.

RIVERA, J.P., LOTT, ROMAN and COHEN, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court