Matco Products, Inc. v. Boston Old Colony Ins. Co.
Decision Date | 01 October 1984 |
Citation | 104 A.D.2d 793,480 N.Y.S.2d 134 |
Parties | MATCO PRODUCTS, INC., Appellant-Respondent, v. BOSTON OLD COLONY INSURANCE COMPANY, et al., Respondents-Appellants, et al., Defendants. |
Court | New York Supreme Court — Appellate Division |
Hayt, Hayt & Landau, Great Neck (Gary Neil Sazer and James Brian Boyle, Great Neck, of counsel), for appellant-respondent.
Friesner & Salzman, Great Neck (Victor K. Soffer, Great Neck, of counsel), for respondents-appellants.
Before MOLLEN, P.J., and WEINSTEIN, RUBIN and EIBER, JJ.
MEMORANDUM BY THE COURT.
In an action on an open marine cargo insurance policy in which, inter alia, plaintiff seeks a declaratory judgment that no premiums are due on the policy or, in the alternative, rescission or reformation on the insurance contract, and damages for fraudulent misrepresentation, (1) plaintiff appeals from so much of an order of the Supreme Court, Nassau County, entered September 22, 1983, as granted those branches of defendants Boston Old Colony Insurance Company and Marine Office of America Corporation's motion for summary judgment as sought dismissal of the complaint against them and as adjudged plaintiff to be liable on their counterclaim for premiums due, and (2) defendants Boston Old Colony Insurance Company and Marine Office of America Corporation cross-appeal from so much of the same order as denied that branch of their motion as sought summary judgment on the counterclaim with respect to damages.
Order affirmed insofar as appealed from, without costs or disbursements.
On or about May 1, 1979, plaintiff Matco Products, Inc., an importer of plumbing parts and gas cocks, obtained an open marine cargo policy of insurance issued by defendant Marine Office of America Corporation (hereinafter MOAC), as marine manager for defendant Boston Old Colony Insurance Company (hereinafter Boston Old Colony). Plaintiff obtained this policy through one Jack Travers, an insurance broker and officer of defendant Carlin Travers Company, Inc. The policy remained in effect until May 9, 1982, at which time plaintiff canceled it. In October, 1982, the defendant insurance companies conducted an audit inspection of plaintiff's books and records which revealed that plaintiff had received numerous import shipments which it had not reported and for which it had paid no premiums. MOAC billed plaintiff $39,408.94 for premiums allegedly due, which plaintiff refused to pay. Thereafter, plaintiff commenced this action on the insurance policy.
One of the issues presented on this appeal is whether, under the policy in question, plaintiff could selectively insure its imports by not reporting those shipments for which it desired no coverage or whether it was bound to pay premiums on all shipments not expressly excluded by the terms of the policy irrespective of whether it reported them or not.
The policy by its terms attaches to and covers all shipments of goods and merchandise consisting principally of plumbing supplies, made on or after May 1, 1979, either consigned to the assured or to others for the account of the assured, but excluding such shipments as are bought on costs, insurance and freight terms or other terms which include marine insurance. Paragraph 43(a) obligates the assured to declare each shipment coming within the terms of the policy and further provides that the unintentional delay or omission in reporting shall not prejudice the insurance but that the willful failure to report shall, at the insurer's option, render the policy as to all subsequent shipments null and void. According to paragraph 43(b) of the policy, the insurer is "entitled to premiums, at rates agreed, on all risks covered * * * whether reported or not".
This type of open marine cargo insurance, covering all shipments made during the life of the policy and basing premiums upon the number of shipments put into transit, has long been recognized (see, e.g., United States Fire Ins. Co. v. Commodore Mfg. Corp., 81 A.D.2d 562, 438 N.Y.S.2d 337; Insurance Co. of North Amer. v. Bernard, 222 App.Div. 512, 226 N.Y.S. 524). Although the assured is required to...
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