Wade Clark Mulcahy LLP

<p style="text-align: justify;">On May 31, 2022, the Eastern District of New York issued a Memorandum &amp; Order in <em><a href="https://www.wcmlaw.com/wp-content/uploads/2022/06/Herman-Brettler-v.-Allianz-Life-Insurance-of-North-America.pdf">Herman Brettler v. Allianz Life Insurance of North America</a></em>.</p>
<p style="text-align: justify;">In 2016, Herman Brettler (“Herman”), as trustee of the Zupnick Family Trust 2008 (the “Trust”), commenced an action against Allianz Life Insurance Company of North America (“Allianz”), seeking a declaration that a life insurance policy issued by Allianz (the “Policy”) remained in effect. In 2018, the Eastern District of New York granted Allianz’s motion to dismiss under Rule 12(b)6), finding the previous owner of the Policy failed to provide Allianz with written notice of its assignment to the Trust as the terms of the Policy required, and therefore, the assignment was ineffective and the Trust lacked contractual standing to sue.</p>
<p style="text-align: justify;">On appeal, the Second Circuit acknowledged the question of whether a policy owner’s failure to comply with the written notice requirement renders an assignment ineffective under New York law is a question best answered by the Court of Appeals of New York because the issue lacks binding precedent; however, in hopes of avoiding the need for certification, the Second Circuit remanded to determine whether the claims were time-barred and whether the Policy was in fact assignable on May 24, 2016, when it was allegedly transferred to the Trust.</p>
<p style="text-align: justify;">In sum, the Court in <em>Brettler</em> found (i) the time-bar under New York Insurance Law § 3211(d) did not apply to the declaratory judgment and that Allianz’s position that the death of the insured while the matter was pending transformed the declaratory judgment into an action seeking recovery was unavailing; (ii) the time-bar under C.P.L.R. § 213, not § 214(2) was applicable, meaning, plaintiff had six years, not three years, to bring the action because the wrongs alleged exist under common or decisional law; (iii) it was plausible that Allianz’s grace notice was defective because it may have significantly overstated the amount due to prevent the Policy from lapsing; and (iv) it was sufficiently shown that the Trust attempted to make the premium payments even though, strictly speaking, Allianz’s insistence of extracontractual performance by overstating the amount due to prevent lapse may constitute repudiation of its own terms which would then preclude it from relying on the policyholder’s failure to tender premiums when arguing the policy lapsed.</p>
<p style="text-align: justify;">As this case was not dismissed under either of the issues for which the Second Circuit remanded it, Wade Clark Mulcahy LLP will be keeping an eye on whether it leads to a precedent-setting certification by the Court of Appeals of New York.</p>
Thanks to Richard Dunne for his contribution to this article.  Should you have any questions, please contact <a href="mailto:mcare@wcmlaw.com">Matthew Care</a>.