Piller v Otsego Mut. Fire Ins. Co. 2018 NY Slip Op 05615 [2d Dept 2018]
"To establish the right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when he or she secured the policy" (Joseph v Interboro Ins. Co., 144 AD3d 1105, 1106 [internal quotation marks omitted]; see Interboro Ins. Co. v Fatmir, 89 AD3d 993, 993-994; Novick v Middlesex Mut. Assur. Co., 84 AD3d 1330, 1330; Varshavskaya v Metropolitan Life Ins. Co., 68 AD3d 855, 856). "A representation is a statement as to past or present fact, made to the insurer by, or by the authority of, the applicant for insurance or the prospective insured, at or before the making of the insurance contract as an inducement to the making thereof" (Insurance Law § 3105[a]; see Morales v Castlepoint Ins. Co., 125 AD3d 947, 948). "A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented" (Interboro Ins. Co. v. Fatmir, 89 AD3d at 994; see Insurance Law § 3105[b][1]; Novick v Middlesex Mut. Assur. Co., 84 AD3d at 1330; Varshavskaya v Metropolitan Life Ins. Co., 68 AD3d at 856). "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, that show that it would not have issued the same policy if the correct information had been disclosed in the application" (Morales v Castlepoint Ins. Co., 125 AD3d at 948 [internal quotation marks omitted] ; see Joseph v Interboro Ins. Co., 144 AD3d at 1106; Interboro Ins. Co. v Fatmir, 89 AD3d at 994; Schirmer v Penkert, 41 AD3d 688, 690-691).
Otsego Mutual established its prima facie entitlement to judgment as a matter of law by submitting evidence demonstrating that the plaintiffs' application for insurance contained a material misrepresentation regarding whether the townhouse would be owner-occupied and that it would not have issued the subject policy if the application had disclosed that the townhouse would not be owner-occupied (see Joseph v Interboro Ins. Co., 144 AD3d at 1106; Morales v Castlepoint Ins. Co., 125 AD3d at 948; Interboro Ins. Co. v. Fatmir, 89 AD3d at 993-994).
In opposition, the plaintiffs failed to raise a triable issue of fact. The plaintiffs' contention that Otsego Mutual was required to establish that their misrepresentation was willful lacks merit. With limited exception not applicable here, "a material misrepresentation, even if innocent or unintentional, is sufficient to warrant rescission of an insurance policy" (Joseph v Interboro Ins. Co., 144 AD3d at 1107; see Smith v Guardian Life Ins. Co. of Am., 116 AD3d 1031, 1032; Security Mut. Ins. Co. v Perkins, 86 AD3d 702, 703; Precision Auto Accessories, Inc. v Utica First Ins. Co., 52 AD3d 1198, 1201; McLaughlin v Nationwide Mut. Fire Ins. Co., 8 AD3d 739, 740; see also Insurance Law § 3105).
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