Post 5418
Posted on August 5, 2026 by Barry Zalma
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units.
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
As a result, the Supreme Court erred in denying Union Mutual’s motion for summary judgment and in granting the defendants’ cross-motion dismissing the complaint.
The order was reversed. Union Mutual was entitled to summary judgment declaring that the policies were void ab initio and that it had no duty to defend or indemnify the defendants in the underlying personal injury action.
An insurance company has a right to rescind an insurance policy if the applicant makes a material misrepresentation on the insurance application
Accordingly, the trial court: Supreme Court should have granted the plaintiff’s motion for summary judgment on the complaint and denied the defendants’ cross-motion for summary judgment dismissing the complaint.
Since this is a declaratory judgment action, the appellate court remitted the matter to the Supreme Court, Nassau County, for the entry of a judgment, among other things, declaring that the subject insurance policies are void ab initio and that the plaintiff is not obligated to defend or indemnify the defendants in the underlying.
Insurance is a contract of good faith and fair dealing. An insurance application is a statement of facts presented to an insurance company as a request for insurance and must be presented fairly, completely and in good faith. When the insurer failed to tell the truth by telling the insurer it was insuring a two unit apartment when it was really three. That was a material misrepresentation and grounds for rescission.
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