Matter of Metropolitan Group Prop. & Cas. Ins. Co. v. Newkirk
Opinion
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Bureau Thomas J.K. Smith, State Reporter
Matter of Metropolitan Group Prop. & Cas. Ins. Co. v Newkirk
2026 NY Slip Op 04502
July 22, 2026
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This decision is uncorrected and subject to revision before publication in the Official Reports.
In the Matter of Metropolitan Group Property and Casualty Insurance Company, etc., petitioner-respondent,
v
Tiffany Newkirk, respondent, Embark General Insurance Adjusters, LLC, etc., proposed additional respondent-appellant, et al., proposed additional respondent.
Supreme Court of the State of New York, Appellate Division, Second Judicial Department
Decided on July 22, 2026
2020-08634, 2021-03781, (Index No. 527089/19)
Colleen D. Duffy, J.P.
Paul Wooten
Carl J. Landicino
Susan Quirk, JJ.
Carman, Callahan & Ingham, LLP, Farmingdale, NY (Paul A. Barrett and Anne P. O'Brien of counsel), for proposed additional respondent-appellant.
Abamont & Associates, Garden City, NY (Susan L. Cicio of counsel), for petitioner- respondent.
DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an insurance claim, Embark General Insurance Adjusters, LLC, appeals from (1) an order of the Supreme Court, Kings County (Loren Baily-Schiffman, J.), dated September 29, 2020, and (2) an order of the same court dated April 29, 2021. The order dated September 29, 2020, granted those branches of the amended petition which were to permanently stay arbitration and to add Embark General Insurance Adjusters, LLC, and John C. Chogllo as additional respondents in the proceeding and denied, as academic, that branch of the amended petition which was to temporarily stay arbitration pending discovery. The order dated April 29, 2021, insofar as appealed from, upon reargument, adhered to the prior determination in the order dated September 29, 2020.
ORDERED that the appeal from the order dated September 29, 2020, is dismissed, as that order was superseded by the order dated April 29, 2021, made upon reargument; and it is further,
ORDERED that the order dated April 29, 2021, is reversed insofar as appealed from, on the law, those branches of the amended petition which were to permanently stay arbitration and to add Embark General Insurance Adjusters, LLC, and John C. Chogllo as additional respondents in the proceeding are denied, and the matter is remitted to the Supreme Court, Kings County, for a new determination of that branch of the amended petition which was to temporarily stay arbitration pending discovery; and it is further,
ORDERED that one bill of costs is awarded to the appellant.
The petitioner, Metropolitan Group Property & Casualty Co. (hereinafter Metlife), commenced this proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration [*2]of a claim by the respondent Tiffany Newkirk for uninsured motorist benefits in connection with a motor vehicle collision between Newkirk's vehicle and a vehicle driven by the proposed additional respondent John C. Chogllo. The proposed additional respondent Embark General Insurance Adjusters, LLC (hereinafter Embark), which administered an insurance policy insuring Chogllo's vehicle, opposed the amended petition. In an order dated September 29, 2020, the Supreme Court granted those branches of the amended petition which were to permanently stay arbitration and to add Embark and Chogllo as additional respondents in the proceeding and denied, as academic, that branch of the amended petition which was to temporarily stay arbitration pending discovery (hereinafter the September 2020 order). Embark moved for leave to reargue its opposition to the amended petition. In an order dated April 29, 2021, the Supreme Court, among other things, upon reargument, adhered to its prior determination (hereinafter the April 2021 order). Embark appeals from the September 2020 and April 2021 orders.
The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue that would justify the stay (see Matter of Government Empls. Ins. Co. v Sarmiento, 241 AD3d 1563, 1564; Matter of Government Empls. Ins. Co. v Enriquez, 231 AD3d 724, 725). Thereafter, the burden shifts to the party opposing the stay to rebut the prima facie showing (see Matter of Government Empls. Ins. Co. v Enriquez, 231 AD3d at 725; Matter of Allstate Ins. Co. v Robinson, 188 AD3d 1186, 1188-1189).
Pennsylvania law, which governs this action, gives an insurer a common-law right to rescind a policy of automobile insurance (see Erie Ins. Exch. v Lake, 543 Pa 363, 375, 671 A2d 681, 687; Klopp v Keystone Ins. Cos., 528 Pa 1, 595 A2d 1). The Pennsylvania Supreme Court has held, however, that while an automobile insurance policy may be retroactively rescinded as to an insured who has made a misrepresentation material to the acceptance of risk by the insurer, the policy may not be retroactively rescinded with respect to third parties "who are innocent of trickery, and injured through no fault of their own" (see Erie Ins. Exch. v Lake, 543 Pa at 375, 671 A2d at 687). Rescission of an insurance policy, as to third parties, has been precluded in instances beyond the 60-day period following the issuance of the policy (see Erie Ins. Exch. v Lake, 543 Pa at 375, 671 A2d at 687; Prime Ins. Syndicate v Philadelphia Motor World Auto Serv., 138 Fed Appx 436 [3d Cir]).
Here, Embark's submissions rebutted Metlife's prima facie showing of a preliminary issue that would justify a stay. Embark established that it properly rescinded the policy at issue under Pennsylvania law with respect to Chogllo, based upon the material misrepresentations that Chogllo made in his application for insurance. Embark also established that such rescission was ab initio and occurred within the 60-day period after the issuance of the policy. As a result of that rescission, Newkirk was precluded from receiving protection under Embark's policy (see Erie Ins. Exch. v Lake, 543 Pa at 375, 671 A2d at 687; Klopp v Keystone Ins. Cos., 528 Pa 1, 595 A2d 1), but she could seek coverage under Metlife's policy insuring her own vehicle.
Accordingly, the Supreme Court should have denied those branches of the amended petition which were to permanently stay arbitration and to add Embark and Chogllo as additional respondents in the proceeding. Therefore, the court should not have denied, as academic, that branch of the amended petition which was to temporarily stay arbitration pending discovery. We remit the matter to the Supreme Court, Kings County, for a new determination of that branch of the amended petition.
DUFFY, J.P., WOOTEN, LANDICINO and QUIRK, JJ., concur.
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