Phoenix Mut. Life Ins. Co. v. Conway

• Decision Date: 05 March 1962
• Citation: 15 A.D.2d 924,225 N.Y.S.2d 532
• Parties: PHOENIX MUTUAL LIFE INSURANCE COMPANY, Appellant, v. John W. CONWAY and George Conway, Jr., individually, and John W. Conway, as executor of the Estate of Lillian M. Conway, deceased, Respondents.
• Court: New York Supreme Court — Appellate Division

Page 532

225 N.Y.S.2d 532

15 A.D.2d 924

PHOENIX MUTUAL LIFE INSURANCE COMPANY, Appellant, v. John W. CONWAY and George Conway, Jr., individually, and John W. Conway, as executor of the Estate of Lillian M. Conway, deceased, Respondents.

Supreme Court, Appellate Division, Second Department.

March 5, 1962.

Bleakley, Platt, Hart & Fritz, New York City, for appellant; Thomas C. Platt, Jr., New York City, of counsel.

Kleiger & Kleiger and Arnold A. Levin, New York City, for respondents; Arnold A. Levin, New York City, of counsel.

Before BELDOCK, P. J., and HILL, RABIN, UGHETTA and HOPKINS, JJ.

MEMORANDUM BY THE COURT.

In an action by plaintiff insurance company for rescission of a life insurance policy on the ground of fraud (first cause of action) and misrepresentation (second cause of action), in which defendants interposed a counterclaim for the recovery of the amount of the policy, plaintiff appeals from an order of the Supreme Court, Queens County, dated November 3, 1961, which granted defendants' motion: (a) for a separate jury trial of the issues of fact raised by the counterclaim and the reply thereto, such jury trial to be held prior to the trial of the issues raised by the complaint and answer; and (b) for a stay of the trial of plaintiff's two causes of action until the determination by the jury of the issues raised by such counterclaim and reply.

Order reversed, with ten dollars costs and disbursements, and defendants' motion denied.

In our opinion, defendants' failure to bring an action within the seven-month period after plaintiff notified them of its intention to rescind the policy on the ground of fraud, constituted a waiver of their right to a jury trial (Prudential Ins. Co. of America v. Haney, 163 Misc. 179, 296 N.Y.S. 576; American Life Insurance Co. v. Stewart, 300 U.S. 203, 57 S.Ct. 377, 81 L.Ed. 605).

We are also of the opinion that under the circumstances here, since the action for rescission was commenced first, it should be tried first (Wolff v. Mutual Life Insurance Co. of New York, 154 Misc. 431, 276 N.Y.S. 339, affd. 241 App.Div. 869, 271 N.Y.S. 1006; New York Life Ins. Co. v. Marcin, 164 Misc. 781, 299 N.Y.S. 832).

BELDOCK, P. J., and HILL, RABIN and HOPKINS, JJ., concur.

UGHETTA, J., dissents and votes to affirm the order, with the following memorandum:

A policy of life insurance was issued by plaintiff under date of October 16, 1959 to Lillian M. Conway, who died on July 17, 1960. The insurer, feeling that the insured had materially misrepresented her physical condition, on September 15, 1960 notified the beneficiaries that it intended to rescind the policy and tendered a check representing the premium paid, with interest. Subsequently, in April, 1961, the insurer commenced an action for rescission. In such action the beneficiaries interposed a counterclaim for recovery on the policy. That was the first time the beneficiaries asserted any right to recover upon the policy.

In other words, the beneficiaries allowed seven months of the applicable six-year Statute of Limitations to elapse before asserting their claim in litigation (Civ.Prac.Act, § 48). Although the beneficiaries have not placed themselves within the purview of section 426 of the Civil Practice Act with respect to waiver of the constitutional right to a jury trial in a civil action, the majority deem that the beneficiaries have waived that constitutional right by having permitted seven months out of six years to elapse before attempting to litigate their claim.

With the exception of Prudential Ins. Co. of America v. Haney, 163 Misc. 179, 296 N.Y.S. 576, which is here being followed for the first time by an appellate court, the decisions where a party has been held to have waived a jury, without reliance by the court on the grounds stated in section 426 of the Civil Practice Act, have involved situations where trial without a jury of a common-law claim was expressly obtained either by placement of the case on the Special Term calendar or in some other way, and where the right to such nonjury trial was not properly contested (see, e. g., MacKellar v. Rogers, 109 N.Y. 468, 17 N.E. 350; Baird v. Mayor, etc., of City of N. Y., 74 N.Y. 382; Greason v. Keteltas, 17 N.Y. 491; Lavisch v. Schwartz, 235 App.Div. 18, 256 N.Y.S. 416; Alfred University v. Frace, 193 App.Div. 279, 184 N.Y.S. 216).

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