Gross v. Home Indemnity Insurance

167 A.D.2d 278, 561 N.Y.S.2d 780, 1990 N.Y. App. Div. LEXIS 13923

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 20, 1990
• Status: Published

Opinion

Order, Supreme Court, Bronx County (David Levy, J.), entered on or about August 18, 1989, declaring defendant Home Indemnity Insurance Company’s entitlement to $20,000 held in escrow by plaintiffs’ attorney, is affirmed with costs.

The IAS court properly awarded the $20,000 held in escrow by plaintiffs’ attorney to defendant Home Indemnity Insurance Company, plaintiffs’ insurer. Plaintiffs were involved in an automobile accident with a vehicle insured by Government Employees Insurance Company (GEICO). After the incident, GEICO disclaimed coverage based on its cancellation of the policy some two weeks before the incident due to nonpayment of premium. Consequently, plaintiffs pursued and obtained a $30,000 arbitration award from defendant, pursuant to the terms of their own uninsured motorist policy. After payment of the award and execution of general releases, the Court of Appeals decided Barile v Kavanaugh (67 NY2d 392) and invalidated a similar type cancellation notice provision. Thereafter, GEICO paid $20,000, the maximum coverage under the offending vehicle’s policy, to plaintiffs’ attorney as escrowee. Under these facts, defendant became subrogated to plaintiffs’ rights against the offending motorist (State-Wide Ins. Co. v Buffalo Ins. Co., 105 AD2d 315, appeal dismissed 64 NY2d 1041) and thus was entitled to recover the $20,000 held in escrow to prevent double recovery by plaintiffs. (See, Scinta v Kazmierczak, 59 AD2d 313, 316.) Concur—Sullivan, J. P., Ross, Asch, Kassal and Smith, JJ.