A team of Michael T. Glascott and Matthew S. Lerner, partners in Goldberg Segalla’s Global Insurance Services and Appellate Practice Groups in the Buffalo and Albany offices, achieved the affirmation on appeal of a recent trial court victory for an insurer in a coverage dispute. The decision by the New York Appellate Division, First Department has significant implications for the insurance industry because the court held, for the first time, that a misrepresentation on an insurance application is a material misrepresentation as a matter of law if, had the insurer known the true facts, it would have refused “to make such contract” by either not issuing the policy or by charging a higher premium.

In this case, our team represented the plaintiff insurer against an insured construction company. On June 20, 2012, the Supreme Court of New York in New York County granted our cross-motion for summary judgment and declared the subject insurance policy void. Following appeal from the defendant, the case moved to the First Department, which on March 26, 2013, unanimously affirmed the lower court’s decision. The court rejected the appellant’s argument that charging a higher premium did not come within the ambit of Insurance Law § 3105 in order to demonstrate the materiality of the misrepresentation.