- “Mailbox Rule” Presumption Not Overcome in Suit Over Car Insurance Cancellation
- No Fraud Cause of Action; Only Breach of Contract
- How Well Does Your Spouse Drive?
“Mailbox Rule” Presumption Not Overcome in Suit Over Car Insurance Cancellation
In Tarnarider v. 21st Century Ins. & Fin. Servs. Inc., the plaintiff sued for a declaratory judgment that defendants 21st Century Insurance & Financial Services, Inc. and Farmers Group, Inc. have an obligation to indemnify him for his liability in a State court car accident action. The insurance companies refused to indemnify the plaintiff because they cancelled his policy before the accident. The crux of plaintiff’s complaint was that the defendants mailed the notice of cancellation to the wrong address, making it technically deficient. Defendants’ motion for summary judgment was granted.
Parties may seek a “declaratory judgment” after a legal controversy has arisen but before any damages have occurred or any laws have been violated. A declaratory judgment differs from other judicial rulings in that it does not require that any action be taken. Instead, the court, after analyzing the controversy, simply issues an opinion declaring the rights and obligations of each of the parties involved. The only caveat is that there must be an actual, rather than hypothetical, controversy that falls within a court’s jurisdiction.
According to the decision, the plaintiff did not deny that he failed to pay his premiums, but claimed he did not receive the required notice of cancellation from the defendants. After defendants refused to indemnify plaintiff, plaintiff’s attorney requested a copy of the notice of cancellation that the defendants allegedly sent to plaintiff. The defendants sent two faxes to plaintiff’s attorney, each containing copies of the notice of cancellation and the certificate of mailing for the notice. Both copies of the notice set forth the plaintiff’s correct address, but the first faxed copy of the certificate of mailing appeared to contain the wrong address: The plaintiff’s address was 445 Neptune Ave, Apt. 19C, but the certificate appeared to read 446 Neptune Ave., Apt. 19O — the 5 and the C were replaced with a 6 and an O, respectively. The second fax was sent approximately nine minutes after the first fax, and the address on the second certificate of mailing appeared to be correct.
The plaintiff argued that the alleged error on the first fax showed the defendants mailed the notice of cancellation to the wrong address, and that the defendants had noticed the incriminating mistake on the fax and attempted to cover it up by doctoring the certificate of mailing and faxing a second copy. To support this theory, the plaintiff submitted his own affidavit denying receipt of the notice.
In response, the defendants argued that the apparent error on the first fax was due to a distortion of the characters by the fax machine. They noted that the name “21st Century” appears on both faxes and that — just as the “C” in the plaintiff’s address looks like an “O” in the first fax — the “C” in “21st Century” appears as an “O” in both. They produced to the Court the original “un-faxed” copy of the certificate of mailing with the correct address clearly visible, along with affidavits from two employees — James Bryant and Brandon Debyle — outlining the defendants’ system for mailing notices. Defendants also provided the notice of cancellation that was allegedly sent and which states the correct address, and stated that plaintiff’s notice was properly mailed to the correct address.
On their motion for summary judgment, the defendants argued that they were entitled to summary judgment based on the “mailbox rule” and that neither the plaintiff’s denial that he received the notice nor the apparent discrepancy on the first fax sent to plaintiff created a genuine issue of fact to overcome the mailbox rule’s presumption of receipt.
The Court explained that “under the mailbox rule, proof of an office procedure followed in the regular course of business which establishes that a notice was properly addressed and mailed gives rise to a rebuttable presumption that the notice was actually received by the person to whom it was addressed. Under New York law, only personal knowledge of mailing procedures is required to establish the regular office procedure, not personal knowledge of the particular mailing.”
The Court further explained that “once the mailbox rule presumption arises, a party’s mere allegation that it did not receive the letter or notice does not rebut the presumption. ‘There must be — in addition to denial of receipt — some proof that the regular office practice was not followed or was carelessly executed so the presumption that notice was mailed becomes unreasonable.’”
Here, the Court found that the Bryant and Debyle affidavits submitted by the defendants were sufficient to invoke the mailbox rule presumption that plaintiff received the notice of cancellation. “These affidavits establish that the notice was created and mailed in the usual course of defendants’ business, according to established procedure, and addressed to plaintiff’s correct address. Plaintiff’s denial of receipt does not rebut the presumption, nor create any factual dispute” and the plaintiff had “not provided any other meaningful evidence to rebut the presumption.”
No Fraud Cause of Action; Only Breach of Contract
In Lattarulo v. Industrial Refrigeration Inc., the defendants moved to dismiss an action alleging unjust enrichment and fraud claims, arguing that these claims were duplicative of the plaintiffs’ breach of contract claim.
The complaint alleged that the plaintiffs were approached by a non-party to develop land into an ice distribution facility, and had recommended the defendant Industrial Refrigeration. The defendants allegedly stated that the development would cost $130,000, and the plaintiffs provided two checks. But the project fell apart and the defendants failed to reimburse the plaintiff. The Court found the complaint failed to state a fraud cause of action, and did not allege a separate and distinct duty from defendants’ contractual obligations which the Court found was properly alleged.
As for the fraud claim, the Court relied upon New York’s CPLR §3016 which requires particularity in the pleading of fraud and the circumstances constituting the wrong to be stated in detail. The Court concluded that dismissal of the fraud claim “was warranted as plaintiff failed to set forth the time and place of the alleged misrepresentation. It is well settled that an action predicated on fraud must be particularly pled whereby the circumstances constituting the wrong shall be stated in detail. The essential elements of a cause of action for fraud are representation of a material existing fact, falsity, scienter, deception and injury. Each element of fraud must be supported by factual allegations sufficient to satisfy CPLR §3016(b). ‘Bare conclusory allegations of fraud are
insufficient to sustain a cause of action sounding in fraud.’ A complaint devoid of any facts to support the allegation that the brokers knowingly misrepresented or omitted material facts to
induce insureds to purchase an insurance policy from them failed to state a fraud claim.”
Additionally, the Court reasoned that the “plaintiff has already pled a cause of action for breach of contract, and has not alleged a duty distinct and separate from the defendants’ contractual obligations, and has not plead sufficient facts to assert a cause of action sounding in fraud. It is well established that a party may not recover in quantum meriut or unjust enrichment where the parties have entered into a contract which governs the subject matter.”
How Well Does Your Spouse Drive?
There was a time when it was considered against public policy for a motor vehicle liability insurance policy to cover a claims between spouses. Even if the driver husband’s negligence caused an accident, the passenger wife could not recover under the couple’s insurance policy. This limitation was considered necessary to avoid “collusive” lawsuits.
However, although not widely known, Section 3420(g) of the Insurance Law today requires that insurance carriers offer “supplemental spousal liability insurance” in automobile accident insurance policies. Since 2003, insurance carriers have been required to give prominent annual notice of the availability of such supplemental coverage. But the onus remains on the insured to request the supplemental coverage in writing. If you don’t ask, you don’t get.
This supplemental insurance will allow one spouse to sue the other spouse for economic loss and non-economic loss (pain and suffering) sustained as a result of “serious injury” as defined in the Insurance Law. Of course, “culpable conduct” on the part of the defendant spouse (i.e., negligence) must also be established, as in any other auto accident case.
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