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Misrepresentations concerning primary residency and ownership or occupancy of other residence provide grounds for rescinding homeowners policy

Stollenwerck v. Adirondack Ins. Exchange, Index No. 601202/2010 (Supreme Ct. N.Y. Cty. Sept 25, 2013)

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In a first-party fire case, Justice Richard F. Braun granted the insurer's motion for summary judgment, finding that the insured had made material misrepresentations on her application for a homeowners policy.

The insured was the record owner of a house in Staten Island, the mortgage on which was in her name. In the application she submitted to obtain insurance coverage she checked off boxes indicating that the house was her primary residence and that she neither owned nor occupied any other residence. A fire destroyed the premises, and she made building damage, contents and ALE claims to her carrier.

When an EUO was conducted, it became clear that the insured was only an occasional visitor to the property, which was occupied on a full time basis by a family that was distantly related to her. The insured spent most of her time at an apartment she rented in Suffolk County, over 50 miles away from the insured location. The EUO testimony confirmed that her place of employment was located near the apartment; that she voted in Suffolk County; that she declared herself a resident of Suffolk County on her tax returns; that her driver's license and car registration listed the apartment as her address; and that she had other life style connections to the area. The claims were denied on the grounds of fraud in the procurement of the policy and litigation ensued.

At the close of discovery, the carrier moved for summary judgment detailing the EUO testimony that showed the insured had little connection with the insured premises beyond being the record owner and nominal mortgagor. The insured's attorneys argued that the insured often visited the house, where she had her own living quarters, kept clothes and personal items and was free to come and go as she pleased. They cited a well-known line of cases holding that an insured can have more than one residence for insurance purposes.

The Court held for the carrier, finding that the insured's application had misrepresented that the Staten Island house was her primary residence and had concealed the fact that she actually resided in the Suffolk County apartment. The decision also pointed out that these misrepresentations were material because, according to an uncontradicted affidavit from the carrier's underwriter, the carrier would not have issued the policy had it known the truth.

AGF&J Counsel Mark Ian Binsky conducted the EUO, defended the carrier in the litigation and briefed and argued the motion on behalf of Adirondack Ins. Exchange.