Rosner v. Metropolitan Property & Liab. Ins.

• Citation: 236 F.3d 96
• Decision Date: 01 August 1999
• Docket Number: Docket No. 99-9110
• Parties: (2nd Cir. 2000) HANNA ROSNER, as Guardian of ISRAEL ROSNER, HANNA ROSNER, Individually, Plaintiff-Appellee, CHARLES D. MINTZ, LETTY MINTZ, Third-Party-Defendant-Appellees, v. METROPOLITAN PROPERTY AND LIABILITY INSURANCE COMPANY, Defendant-Third-Party-Plaintiff-Appellant
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 96

236 F.3d 96 (2nd Cir. 2000)

HANNA ROSNER, as Guardian of ISRAEL ROSNER, HANNA ROSNER, Individually, Plaintiff-Appellee, CHARLES D. MINTZ, LETTY MINTZ, Third-Party-Defendant-Appellees, v. METROPOLITAN PROPERTY AND LIABILITY INSURANCE COMPANY, Defendant-Third-Party-Plaintiff-Appellant.

Docket No. 99-9110

August Term, 1999

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Argued: May 22, 2000

December 12, 2000

Plaintiff, suing as guardian of person injured in an auto accident by defendant insurer's insured, sought declaratory judgment that defendant's policy remained in effect at the time of the accident. The United States District Court for the Eastern District of New York, Raymond J. Dearie, J., granted summary judgment for the plaintiffs, from which defendant insurer appealed. The Court of Appeals, Leval, Circuit Judge, certified to the New York Court of Appeals the meaning of the phrase "the date as of which a covered policy is first issued" in Section 3425(a)(7) of the New York Insurance Law.

Question certified, ruling deferred.

EDWARD B. FLINK, Latham, New York (Flink, Smith & Associates, LLC), for Defendant-Appellant.

BRIAN J. ISAAC, New York, New York (Herbert S. Subin, Subin Associates LLP, of counsel), for Plaintiffs-Appellees.

Before: LEVAL and SOTOMAYOR, Circuit Judges, and MURTHA, District Judge.^*

LEVAL, Circuit Judge:

This sad occurrence presents a complex question concerning the meaning of an unclear statute governing the administration of insurance in New York. Plaintiff, suing as guardian of a person injured in a traffic accident, sought a declaratory judgment that an insurance policy issued by the negligent driver's insurer, defendant Metropolitan Property and Liability Insurance Company, remained in effect on the date of the accident. The United States District Court for the Eastern District of New York, Raymond J. Dearie, Judge, granted summary judgment in plaintiff's favor, from which the insurer brought this appeal. The appeal turns on the meaning of the phrase, "the date as of which a policy is first issued" in Section 3425(a)(7) of the New York Insurance Law. The rulings of New York courts provide no authoritative guidance on the question. Because it is highly desirable for the benefit of both insurers and insureds to have the question authoritatively answered, we think it best to seek the guidance of the highest court of New York. Accordingly, we certify this question of the interpretation of a New York statute to the New York Court of Appeals and respectfully request the Court's guidance.

Background

On May 29, 1996, Israel Rosner was struck while walking on Route 306 in the Village of Kaiser, New York, by a motor vehicle operated by Charles Mintz. Israel Rosner suffered massive head injuries and has been institutionalized since the date of the accident.

At the time of accident, Metropolitan insured Charles and Letty Mintz under a policy of automobile liability insurance with single limit liability coverage of $100,000.¹ In addition, for a number of years previously, Metropolitan also insured the Mintzes under a personal excess liability insurance policy for one million dollars in excess of other coverage. The question presented in this litigation is whether this excess policy remained in effect on May 29, 1996.

The genesis of the excess liability policy was as follows: Effective May 25, 1988, the Mintzes contracted with Metropolitan for a one-million dollar personal excess liability insurance policy. Because the personal excess liability policy was a "covered policy" under New York Insurance Law Section 3425(a)(2), Metropolitan was required to comply with New York's "required policy period" rules as set forth in Sections 3425(a)(7) and 3425(e), under which covered personal lines policies must be extended for "three years from the date as of which a covered policy is first issued or is voluntarily renewed." N.Y. Ins. Law § 3425(a)(7) (McKinney's 2000) (emphasis added).² Accordingly, as mandated, Metropolitan granted the Mintzes two consecutive one-year renewals of the policy, covering the periods May 25, 1989 to May 25, 1990, and May 25, 1990 to May 25, 1991. Upon the completion of the first three-year period, Metropolitan and the Mintzes agreed to renew the policy effective May 25, 1991, thus triggering a second three-year required policy period under the statute. Pursuant to the requirement of the statute, Metropolitan granted the Mintzes a one-year renewal extending from May 25, 1992 through May 25, 1993.

During the policy year beginning May 25, 1992, Mr. Mintz's employer instituted a group insurance program known as "METPAY," which allowed employees to purchase insurance at a group-rate discount through payroll deductions. The Mintzes enrolled in METPAY in April 1993, and arranged that the METPAY payroll deduction plan would pay the premiums for their personal excess liability policy and their automobile policy. But the transfer of the Mintzes' policies to the METPAY program was mishandled. Because of various administrative errors by Metropolitan and oversights by the Mintzes (none of which is important in this litigation), the Mintzes' personal excess liability policy was canceled on July 15, 1993.

In the fall of 1993, the Mintzes and Metropolitan finally straightened out the transfer of their policies to METPAY. Metropolitan issued a new personal excess liability policy to the Mintzes. The new policy was issued on October 11, 1993, but showed an effective date of May 25, 1993, thus providing continuous coverage coterminous with the Mintzes' previous personal excess liability policies. Pursuant to the three year required policy period of the New York Insurance Law, the Mintzes and Metropolitan entered into two subsequent one-year renewals, extending coverage through May 25, 1996.

Early in 1996, however, Metropolitan Decided to terminate, or "nonrenew" as it is said in the New York insurance industry, the excess policy. This was because of two accidents in which the insureds were at fault, another no-fault accident, and multiple claims on the Mintzes' homeowner policy. On March 27, 1996, Metropolitan mailed a notice of cancellation to the Mintzes, stating that their excess liability policy would be canceled effective May 25, 1996. Metropolitan refused to reconsider its decision, and the Mintzes did not arrange for excess liability coverage after May 25, 1996. Four days after that date, Charles Mintz struck Israel Rosner, causing the injuries out of which this litigation arises.

The Rosners sued the Mintzes in New York State Supreme Court, Kings County. On September 18, 1997, Metropolitan tendered $100,000 to the plaintiffs under the Mintzes' basic automobile insurance policy, in full satisfaction of Metropolitan's liability under the policy. Hanna Rosner, as Israel's guardian and on her own behalf, then brought this action against Metropolitan seeking a declaratory judgment that the Mintzes' one-million dollar personal excess liability policy remained in effect on May 29, 1996, the date of the accident. The parties engaged in discovery and stipulated to the material facts. The Rosners moved for summary judgment on the theory that Sections 3425(a)(7) and 3425(e) required Metropolitan to extend coverage on the excess liability policy for three years from October 11, 1993, the date on which Metropolitan executed the Mintzes' policy. Metropolitan cross-moved for summary judgment, arguing that the relevant date for determining the required three-year period was not the date on which the policy was executed but rather May 25, 1993, the date as of which the policy became effective. Without authoritative guidance from the New York courts, Judge Dearie ruled that in the absence of a specified "issue date" in the policy itself, the required policy period under New York Insurance Law for a covered personal lines insurance policy runs from the date on which the policy is executed, rather than from its effective date. Accordingly, Judge Dearie entered judgment for the plaintiffs. Metropolitan brought this appeal.

Discussion

The parties agree that the determination of this appeal turns on the proper interpretation of Sections 3425(a)(7) and 3425(e) of the New York Insurance Law, which govern personal lines insurance policies other than automobile insurance policies. Section 3425(e) provides that absent one of several enumerated grounds for cancellation or nonrenewal (none of which is at issue in this litigation), "no notice of nonrenewal or conditional renewal of a covered policy shall be issued to become effective during the required policy period." N.Y. Ins. Law § 3425(e). Section 3425(a)(7) defines the "required policy period" for personal lines policies other than automobile policies as "a period of three years from the date as of which a covered policy is first issued or is voluntarily renewed." N.Y. Ins. Law § 3425(a)(7).

The meaning of the critically important phrase "the date as of which a covered policy is first issued," which triggers the three-year required policy period and determines whether the policy remained in effect on the date of the accident, is unclear. Indeed, our panel is split as to the plainest reading the statute. In our view, there are at least three possible readings of the phrase "the date as of which a covered policy is first issued." We discuss the most likely readings.

1. Plaintiff's Interpretation: Plaintiff interprets the phrase "the date as of which a covered policy is first issued" to mean the date on which the policy was executed (or delivered) by the insurer. Part of our panel believes that this reading fits best with the plain language of the statute.

(a) Plaintiff's reading focuses on the plain meaning of the phrase "is first issued," which could be said to support reading the statute as referring to the date on which the policy was actually executed by the insurer. The concept of "issuance" of a contract or policy...