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The Rogak Report: 02 Dec 2009 ** Insurance - Interspousal Claims **

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  • Lawrence
    B.I. CLAIMANT HAS NO CLAIM AGAINST INSURER FOR FAILING TO NOTIFY HER OF RIGHT TO BUY SPOUSAL COVERAGE Shofler v Geico Ins. Co. 2009 NY Slip Op 52412(U)
    Message 1 of 1 , Dec 2, 2009

      B.I. CLAIMANT HAS NO CLAIM AGAINST INSURER FOR FAILING TO NOTIFY HER OF RIGHT TO BUY SPOUSAL COVERAGE 

      Shofler v Geico Ins. Co.
      2009 NY Slip Op 52412(U)
      Decided on December 1, 2009
      Supreme Court, Kings County
      Rivera, J.
      Edited by Lawrence N. Rogak


      May a spouse assert a suit against her husband's auto insurer for not informing her, or her husband, that they had a right to purchase additional coverage for interspousal claims?  No, says Supreme Court, even though the statute requires such advice.

      V. Shofler commenced an action against her husband, A. Shofler, for personal injuries she sustained in a motor vehicle accident on July 31, 2005, while she was a passenger in a vehicle that her husband was driving.

      Later, V. Shofler commenced this DJ action against Geico based on its denial of insurance coverage for her injuries under her husband's policy. V. Shofler's complaint sought a declaration that Geico is required to defend and indemnify A. Shofler up to the policy limits for liability imposed upon him as a result of the accident on July 31, 2005. 

      Geico claimed that A. Shofler, its insured, did not purchase supplemental spousal liability insurance and that as a result Geico was not obligated to cover V. Sholfer's wife's injuries allegedly caused by his negligent driving.  Geico moved to dismiss under CPLR 3211 and for summary judgment under CPLR 3212.

      "The failure of Geico's insured to purchase supplemental spousal liability insurance is in the nature of an affirmative defense that Geico may assert in its answer and one which plaintiff is not obligated to disprove in the pleading stage of an action. Plaintiff states a cognizable claim against Geico for failing to cover her injuries allegedly caused by her husband, Geico's insured. The issue of whether the policy Geico provided to A. Shofler covered injuries which A. Shofler allegedly caused his wife is not one for resolution pursuant to a CPLR § 3211(a) motion. Geico's motion to dismiss the complaint pursuant to CPLR §3211(a)(7) is denied."

      "Geico also moves pursuant to CPLR § 3212 for summary judgment dismissing the complaint on two grounds. The first is that V. Shofler complaint improperly uses Insurance Law §3420(g)(1) to assert a private cause of action. The second is that it has complied with the requirements of Insurance Law §3420."

      "Although not artfully articulated, Geico is asserting Insurance Law § 3420(g) to bar coverage of plaintiff's injuries allegedly caused by her husband's negligent operation of a motor vehicle. Although spouses have the right to sue one another for tortuous acts, an insurance carrier will not be called upon to indemnify a wife due to the liability of her husband unless there is an express provision in the policy (Groysman v. Sibrizzi, 12 Misc 3d 1188(A) [N.Y.City Civ.Ct.,2006] citing State Farm Mutual Automobile Insurance Company, supra). According to Insurance Law § 3420(g) no policy or contract shall be deemed to insure against any liability of an insured because of death of or injury to his or her spouse unless the policy expressly indicates same (State Farm Mut. Auto. Ins. Co. v. Westlake, 35 NY2d 587 [1974])."

      "Geico contends that its policy to A. Shofler during the relevant period did not insure against liability for injury to his wife. In support of that contention Geico submitted an affidavit of Lubow, its senior underwriter, swearing to the following allegations of fact. Lubow attested to personal knowledge of the business practice and business records of Geico gained in the course of his sixteen years of employment with Geico.Lubow reviewed those business records and determined that the policy Geico issued to A. Shofler, bearing number 0423-49-88-07 had an inception date of July 28, 1997; and a July 28 annual renewal date. The policy in question was renewed on June 11, 2004 and June 11, 2005. A. Shofler was automatically mailed a computer generated option form known as form M-316-NY-B annually at each renewal date of his policy. Lubow reviewed and annexed a copy of A. Shofler's renewal policy for June 11, 2004 and June 11, 2005. Both of these renewal policies included the M-316-NY-B option form. The option form contains an explanation of supplemental spousal liability insurance and the cost of the additional premium. Lubow reviewed the business records and determined that A. Shofler did not elect to add or include New York supplemental spousal liability coverage to his policy at any time."

      "A review of plaintiff's [personal injury suit] complaint... establishes undisputably, that she sued her husband for injuries she sustained due to his negligent operation of an automobile. A review of the instant complaint establishes that plaintiff is seeking indemnification by Geico for her injuries caused by her husband, Geico's insured. Geico has met its burden for summary judgment by demonstrating that the insurance policy issued to A. Shofler did not expressly cover liability for any damages its insured caused his spouse."

      "In order for V. Shofler to defeat the motion, she must produce proof in admissible form sufficient to necessitate a trial as to material issues of fact (Barr v. County of Albany, 50 NY2d [1960]). In this instance it would be her burden to raise an issue of fact that the language of Geico's insurance policy expressly insures against any liability of A. Shofler because of injury he allegedly caused to her."

      "Plaintiff does not meet this burden. Rather, she contends that Geico should have offered supplemental spousal benefits to her husband and that its failure to do so should estop them from covering plaintiff's injuries. In support of that contention she submits an affidavit from her husband. A. Shofler's affidavit does not specifically deny receipt of form M-316-NY-B. Instead he states 'At no time prior to July 31, 2005, did I ever receive in the mail or otherwise, any form advising me I was entitled to secure supplemental spousal liability insurance ...'"

      "She also cites Farley v. Metropolitan Life Ins. Co., 127 AD2d 99 [2nd Dept 1987]) in support of her argument for estoppel. However, the Farley case concerned an alleged claim of egregious misrepresentation by the insurer to its insured. The Farley court found the alleged conduct of misrepresentation was so egregious as to warrant the imposition of a public policy estoppel so as to preclude it from contesting the plaintiff's claim. To invoke the equitable principle of estoppel plaintiff would be compelled to demonstrate that Geico also engaged in egregious conduct. The alleged failure to mail out a form explaining the availability of supplemental spousal liability coverage to its insured does not rise to the level of conduct so egregious as to warrant application of the equitable remedy of estoppel. This leaves remaining the fact plaintiff has not raised an issue of fact that on July 31, 2005, the time of V. Shofler's accident, A. Shofler's insurance policy did not include supplemental spousal liability insurance."

      "Geico, as an alternative argument to its assertion that it fully complied with Insurance Law § 3420, contends that its alleged failure to properly notify A. Shofler of the availability of supplemental spousal benefits does not create a private cause of action.  Typically, courts do not construe the Insurance Law as providing for a private right of action, in the absence of express language authorizing such enforcement. (See, e.g., Rocanova v. Equitable Life Assur. Socy., 83 NY2d 603 [1994]; (Bauer v. Mellon Mtge. Co., 178 Misc 2d 234 [N.Y.Sup. 1998])."

      "To determine whether a statute grants a private right of action for civil damages, a court must apply a tripartite test: (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purposes; and (3) whether creation of such a right would be consistent with the legislative scheme (Bauer v. Mellon Mtge. Co., 178 Misc 2d 234 [N.Y.Sup. 1998] citing Sheehy v. Big Flats Community Day, Inc., 73 NY2d 629 [1989]). The court agrees that Geico's alleged failure to notify A. Shofler of the availability of supplemental spousal liability would not create a private right of action. Geico's motion for summary judgment pursuant to CPLR § 3212 seeking dismissal of plaintiff's complaint pursuant to Insurance Law 3420(g) is granted."

      Larry Rogak

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