Take My Wife… Please! (NY)

The late Henny Youngman would have enjoyed the facts of Ostego Mutual v. Dinerman, (May 1, 2018), where a wife’s fraudulent misrepresentation in a property damage claim nearly prejudiced her husband’s, through no active fault of his own.

The Appellate Division, First Department found that one of the named insureds, Mrs. Dinerman, had committed fraud related to the policy and thus was not covered.  But the policy was not void as to defendant’s husband, also a named insured, simply due to the wife’s fraudulent acts. However, the Court found that Mr. Dinerman failed to timely file a proof of loss and as such violated the policy provisions.

Defendant, Mrs. Dinerman, was found to have violated the “Misrepresentation, Concealment and Fraud” condition of the homeowners policy issued by plaintiff when she submitted receipts for reimbursement for living expenses that she did not actually incur after a fire damaged their home. Dinerman claimed that the amount was minimal and as such it should not void the policy as to her. The Court found this argument unveiling and stated that the amount of fraudulently obtained monies is not the issue, the fact is that she violated the policy and as such it is void as to her.

As for Mr. Dinerman, the Court found that his claims under the policy would withstand his wife’s fraudulent misrepresentations and the policy is not void as against him. This is an interesting position for the Court to take in light of the fact that the policy covered a shared home and would in effect be covering some loss of Dinerman even though she violated the policy.

However, the court found that Mr. Dinerman also violated the policy in his own way, thus permitting plaintiff to decline coverage. Mr. Dinerman did not alert his insurance company about the damage or provide proof of loss within the prescribed time period. As such, the plaintiff insurance company had a right to decline coverage.

This case presents an interesting question as to whether Mr. Dinerman would have been permitted to recover under the policy absent his failure to provide proof of loss, even with his wife’s confirmed fraudulent behavior.  Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.