Wade Clark Mulcahy LLP

<p class="p1"><span class="s1"><span style="color: windowtext;">P</span>laintiff</span><span class="s1"><span style="color: windowtext;"> insureds</span> brought </span><span class="s1"><span style="color: windowtext;">a putative</span> class</span><span class="s1"><span style="color: windowtext;"> </span>action <a href="https://www.wcmlaw.com/wp-content/uploads/2021/08/suit.pdf">suit </a>for violations of New York Gen</span><span class="s1"><span style="color: windowtext;">eral</span> </span><span class="s1"><span style="color: windowtext;">B</span>usiness </span><span class="s1"><span style="color: windowtext;">L</span>aw</span><span class="s1"><span style="color: windowtext;"> (GBL)</span>, fraud, and </span><span class="s1"><span style="color: windowtext;">breach of </span>contract claims. Plaintiffs allege that in 2000 defendant sold</span><span class="s1"><span style="color: windowtext;"> accident disability and medical expense</span> insurance products in violation of New York </span><span class="s1"><span style="color: windowtext;">I</span>nsurance </span><span class="s1"><span style="color: windowtext;">L</span>aw </span><span class="s1"><span style="color: windowtext;">in that</span> they were on not approved, that th</span><span class="s1"><span style="color: windowtext;">e</span> insurance provided illusory coverage</span><span class="s1"><span style="color: windowtext;">,</span> and that the marketing included unlawful deceptive acts in violation of New York Gen</span><span class="s1"><span style="color: windowtext;">eral B</span>usiness </span><span class="s1"><span style="color: windowtext;">L</span>aw.</span></p>
<p class="p1" style="text-align: justify;"><span class="s1">Defendants </span><span class="s1"><span style="color: windowtext;">moved to dismiss</span> the plaintiff's claims </span><span class="s1"><span style="color: windowtext;">as</span> time-barred because any and all of the alleged misrepresentations and omissions were at the time plaintiff first received coverage in the year 2000</span><span class="s1"><span style="color: windowtext;">, and that suit brought in 2016 was untimely.  </span>The p</span><span class="s1"><span style="color: windowtext;">olicyholders</span> a</span><span class="s1"><span style="color: windowtext;">rgued the “continuing wrong” </span>doctrine</span><span class="s1"><span style="color: windowtext;"> applied</span> which </span><span class="s1"><span style="color: windowtext;">would toll</span> the limitation period up to the date of the commission of the last </span><span class="s1"><span style="color: windowtext;">wrongful act</span> and that the insurer's had a continuing ongoing obligation that </span><span class="s1"><span style="color: windowtext;">continued </span>past the GBL or CPLR statute limitations date.</span></p>
<p class="p1" style="text-align: justify;"><span class="s1">The court rejected the </span><span class="s1"><span style="color: windowtext;">policyholders’</span> argument </span><span class="s1"><span style="color: windowtext;">that each time they paid continuing premiums, there were </span>separate and distinct </span><span class="s1"><span style="color: windowtext;">wrongs.  Ra</span>ther the </span><span class="s1"><span style="color: windowtext;">Court found that after </span>plaintiffs first purchased </span><span class="s1"><span style="color: windowtext;">the </span>policies</span><span class="s1"><span style="color: windowtext;"> in 2000, this was the only </span>alleged false and misleading advertising. </span><span class="s1"><span style="color: windowtext;">  The i</span>nsurers took no action beyond continuing the coverage. The court held because the alleged deceptive false advertising took place when the policies were sold and because plaintiffs have not alleged</span><span class="s1"><span style="color: windowtext;"> they</span> suffered injury by virtue of false and misleading advertising</span><span class="s1"><span style="color: windowtext;"> </span>thereafter, </span><span class="s1"><span style="color: windowtext;">the “</span>continu</span><span class="s1"><span style="color: windowtext;">ing wrong”</span> doctrine did not apply. The court also found the </span><span class="s1"><span style="color: windowtext;">“</span>equitable </span><span class="s1"><span style="color: windowtext;">tolling”</span> argument equally distinguishable </span><span class="s1"><span style="color: windowtext;">because</span> the plaintiff</span><span class="s1"><span style="color: windowtext;"> was</span> on notice of the potential wrongdoing </span><span class="s1"><span style="color: windowtext;">and took </span>no steps to investigate further. Here plaintiffs became aware the policies</span><span class="s1"><span style="color: windowtext;"> may have</span> violated </span><span class="s1"><span style="color: windowtext;">the law</span> by 2005 and </span><span class="s1"><span style="color: windowtext;">undertook </span>no investigation to elicit the equitable tolling doctrine</span><span class="s1"><span style="color: windowtext;"> applicability</span>.</span><span style="color: windowtext;">  Thus, </span><span class="s1">all</span><span class="s1"><span style="color: windowtext;"> of</span> the plaintiff's claims were deemed time-barred </span><span class="s1"><span style="color: windowtext;">and</span> the policyholders</span><span class="s1"><span style="color: windowtext;">’ putative class</span> action was dismissed.</span><span style="color: windowtext;"></span></p>
If you have any questions, please contact <a href="mailto:tbracken@wcmlaw.com">Tom Bracken.</a>