The following papers numbered 1 to 4 read herein:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1, 2, 3

Opposing Affidavits (Affirmations)4

Reply Affidavits (Affirmations)

Affidavit (Affirmation)

Other Papers

Upon the foregoing papers, defendant Phoenix Life Insurance Company (Phoenix) moves for an order, pursuant to CPLR 3211(a)(1) and 3211(a)(7), dismissing plaintiffs' claims on the ground that plaintiffs have failed to state a cause of action as against Phoenix or on the ground that Phoenix has a defense founded upon documentary evidence.

Phoenix's motion is denied.

In this declaratory judgment action, plaintiffs Samuel Zeligfeld and Toby Weber, as Trustees of the CZ Shelter and Guarantee Trust (Trust), allege that Phoenix's lapse notices failed to comply with the requirements of Insurance Law §3211(a) and (b) and that they are thus entitled to a judgment declaring that two life insurance policies issued to the trust by Phoenix are in full force and effect. It is undisputed that in 2007 Phoenix issued two life insurance policies (policy number 97304778 [Policy 778] and policy number 97304705 [Policy 705]) to the Trust insuring the life of Zeligfeld and Weber's father. [*2]

With respect to Policy 705, Phoenix thereafter mailed the Trust a lapse notice dated August 5, 2011 that, at the top of the notice, listed entities "Phoenix Life Insurance Company," "PHL Variable Insurance Company," and "Phoenix Life and Annuity Company" above a post office box address. Under these companies and the post-office box address, the notice listed the Trust's address, and to the right of the Trust's address, the notice listed an address for "Simkowitz & Company Inc., 268 Willoughby Ave., Brooklyn NY 11205." This notice identified a due date of August 8, 2011 and an amount due of $37,478.42, and stated:

"Did you forget something very important to you? Our records indicate that you did not make the scheduled premium payments on this premium policy as you planned. The cash value of your policy has been depleted, and is no longer sufficient to support the monthly charges and consequently the policy entered its 61 day grace period at that time.

"At a minimum, $37,478.42 must be received by us on or before 10/5/2011 in order to prevent a lapse.

"In accordance with our electronic draft provision, if you are currently participating, this notice serves as a 30 day notification, at which time you may be removed from the monthly Check-O-Matic service.

"We urge you to prevent the loss of this valuable coverage by sending your payment today. If you have any questions or if we may be of any assistance, please contact your agent or you may call us at 800-541-0171."

For Policy 705, Phoenix also mailed the Trust a "Notice to Prevent Lapse REMINDER,"dated September 6, 2011, which lists the due date as August 5, 2011 and the amount due as $37,478.42 and which states:

"Your universal life insurance policy is in danger of lapsing without value.

"We urge you to take this opportunity to pay your planned premiums to date. If you have already mailed your payment, please disregard this letter.

"In addition to the amount due to avoid immediate lapse, regular premium payments are recommended. If you are interested in setting up a pre-authorized checking payment schedule, please contact your advisor, visit our website www.phoenixwm.com, call our customer service center at 1-800-541-0171 or write to us at:

"Phoenix

Variable Products Mail Operation

PO Box 8027

Boston MA 02266-8027"

With respect to Policy 778, Phoenix mailed a lapse notice that contains the exact same wording as the lapse notice for Policy 705, except that it is dated August 8, 2011, it lists the due date as August 8, 2011, it lists the amount due as $31,721.77, and it states that $31,721.77 must be received on or before October 8, 2011 in order to prevent a lapse. Similarly, the "Notice to Prevent Lapse REMINDER" for Policy 778 that Phoenix mailed to Trust is worded exactly the same as the reminder for Policy 705, except it is dated September [*3]7, 2011, it lists the due date as August 8, 2011, it lists the amount due as $31,721.77, and it states that $31,721.77 must be received on or before October 8, 2011 in order to prevent a lapse.

In the complaint's first and second causes of action,^[FN1] the Trust alleges that the lapse notices with respect to both policies violated applicable statutes and the terms of the policies by misstating the premium payment amounts required to prevent a lapse. In this regard, the Trust asserts that, with respect to Policy 778, only $23,793 was actually due, rather than the $31,721.77 indicated in the lapse notice, and that, with respect to Policy 705, only $28,109 was actually due, rather than the $37,478.42 indicated in the lapse notice. The Trust, in the third and fourth causes of action, alleges that the lapse notices and the lapse notice reminders did not comply with Insurance Law § 3211(a) and (b). The essence of the Trust's fifth and six causes of action is its allegation that Phoenix failed to send timely lapse notices in accordance with the terms of the policies and under the statute.^[FN2] Based on these improprieties with the notices alleged in each of the causes of action, the Trust asserts that Phoenix improperly attempted to lapse Policy 778 and Policy 705. As the Trust states that the insured is still alive, the Trust is not making a claim on the policies, but rather, seeks a judgment declaring the policies to be in full force and effect.

It is in this context that Phoenix has moved to dismiss based on documentary evidence (CPLR 3211[a][1]) and for failure to state a cause of action (CPLR 3211[a][7]). In considering a motion to dismiss for failing to state a cause of action under CPLR 3211(a)(7), the pleading is to be afforded a liberal construction (CPLR 3026), and the court should accept as true the facts alleged in the complaint, accord plaintiff the benefit of every possible inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory (see Hurrell-Harring v State of New York, 15 NY3d 8, 20 [2010]; Leon v Martinez, 84 NY2d 83, 87-88 [1995]). Although evidentiary material may be considered in determining the viability of a complaint, the complaint should not be dismissed unless defendant has established "that a material fact alleged by the plaintiff is not a fact at all and that no significant dispute exists regarding it" (Stewart v New York City Tr. Auth., 50 AD3d 1013, 1014 [2d Dept 2008][internal quotation marks and citations omitted]; see also Lawrence v Miller, 11 NY3d 588, 595 [2008]; Nunez v Mohamed, ___ AD3d ___, 2013 NY Slip Op 02058 *1 [2d Dept 2013]). Similarly, a motion to dismiss pursuant to CPLR 3211(a)(1) may be granted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002]; Harris v Barbera, 96 AD3d 904, 905 [2d Dept 2010]). To qualify as documentary evidence, printed materials "must be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d 78, 86 [2d Dept 2010]; see Flushing Sav. Bank, FSB v Siunykalimi, 94 AD3d 807, 808 [2d Dept 2012]). [*4]Affidavits do not constitute documentary evidence for purposes of a motion to dismiss pursuant to CPLR 3211(a)(1) (Flushing Sav. Bank, FSB, 94 AD3d at 809).

In moving, Phoenix contends that it is entitled to dismissal of the complaint because it complied with the statutory requirements for terminating a policy for non-payment of premiums. These requirements are currently embodied in Insurance Law § 3211,^[FN3] the provisions of which were enacted as a form of protection of insureds by providing them with notice before their interests could be forfeited (see McDougall v Provident Sav. Life Assur. Socy. of NY, 135 NY 551, 556 [1892][addressing a predecessor of the current statute]). Under the statute, an insurer may not terminate a policy for non-payment of premiums within a year of a default in the payment of premiums if the insurer has failed to comply with section 3211's notice requirements (see Salzman v Prudential Ins. Co. of America, 296 NY 273, 277 [1947][addressing former version of statute]; Pinkof v Mutual Life Ins. Co. of NY, 49 AD2d 452, 454-455 [2d Dept 1975][addressing former version of statute], affd on the opinion below 40 NY2d 1003 [1976]; Liensny v Metropolitan Life Ins. Co., 166 App Div 625, 629 [4th Dept 1915][addressing former version of statute]).

With respect to the Trust's first and second causes of action, in which it alleges that the lapse notices were defective because the notices listed the incorrect amount of premiums to be paid, Phoenix asserts that the Trust's allegations do not show a violation of Insurance Law § 3211. As is relevant to this issue, Insurance Law § 3211 (b) (2) provides that the notice shall:

"state the amount of such payment, the date when due, the place where and the person to whom it is payable; and shall also state that unless such payment is made on or before the date when due or within the specified grace period thereafter, the policy shall terminate or lapse except as to the right to any cash surrender value or nonforfeiture benefit."

Phoenix argues that the notices comply with these requirements by listing an amount due, and that, since section 3211 (b) (2) contains no mechanism for addressing premium disputes, a notice that lists the incorrect amount does not violate the section.

This court rejects Phoenix's argument. The plain language of section 3211 (b) (2), by requiring that the notice "state the amount of such payment," when read in conjunction with section 3211(a)(1) and (c),^[FN4] refers to the specific premium payments needed to prevent a [*5]policy lapse (see Turner v OM Financial Life Ins. Co., 822 F Supp2d 633, 637-638 [WD La 2011][addressing Louisiana's notice statute that contains the same essential wording as New York's statute]).^[FN5] The obvious statutory intent behind requiring that the insurer state the amount of premium due is to inform the insured of the premium payments necessary to prevent the lapse of the policy (Turner, 822 F Supp2d at 638). Section 3211 (b) (2) thus requires that the insurer to correctly state the amount of premiums to payed by the insured in order to avoid a default, and given the statutory purpose, an erroneous statement of the premium amount due may constitute grounds for finding a notice ineffective.^[FN6]

This conclusion is supported by case law from other states addressing similar notice statutes and holding notices to be defective where they misstate the amount of premium due (see Turner, 822 F Supp2d at 637-638 [addressing Louisiana's notice statute]; Estate of Blakely v Federal Kemper Life Ass. Co., 267 IllApp3d 100, 110-111, 640 NE 961, 969 [Ill App Ct 1994], app denied 159 Ill2d 566, 647 NE2d 1008 [1995]; Stilen v Cavalier Ins. Co., 194 Neb 824, 828, 236 NW2d 178, 180-181 [1975]). Although courts addressing Kansas' statutory notice requirements that have found notices listing an incorrect premium due to be valid, they only did so where the incorrect amount due was an obvious typographical error in light of premium rate listed in the policy (see Swayze v Mutual Life Ins. Co. of NY, 32 F2d 784, 787 [DC Kan 1929][In addressing a notice under Kansas' notice statute, the court stated, "It was apparent to the most obtuse that it was a typographical error"]; Branch v Farmers' Life Ins. Co., 270 F 863, 865 [DC Kan 1919][addressing Kansas' notice statute]).

New York, unlike Illinois and Louisiana, may not require strict compliance with Insurance Law § 3211(b)(2) (compare Estate of Blakely, 267 IllApp3d at 111, 640 NE2d at 969; Turner, 822 F Supp2d at 637; with McDougall, 135 NY at 556 [while intended to protect the insured, the statute is not meant to operate harshly on the insurer]). In this regard, New York courts, in cases addressing the language of notices, have held that the notice need not follow the exact wording of the statute as long as the information intended to be provided is conveyed (McDougall, 135 NY at 556-557; see also Flint v Provident Life & Trust Co. of Phila., 215 NY 254, 257-258 [1915]). By parity of reasoning, a minor error in the [*6]premium amount due or an obvious typographical error in the premium amount due might still be deemed to provide the essential information required by the statute. On the other hand, where, as alleged here, the premium amount listed as due in the notice is significantly higher than the amount actually required, the notice runs the danger of deterring a person who could make the actual payment required, but could not make the erroneous higher amount listed, from making the payment necessary to prevent a lapse. Under such circumstances, this court concludes that such a notice would not be effective to cancel the policy (see Flint, 215 NY at 257-259), and that the first and second causes of action state a cause of action.^[FN7]

Phoenix nevertheless asserts that the first and second causes of action are deficient because the Trust has failed to identify or append portions of the policies supporting the Trust's contention that Phoenix has incorrectly calculated the premium amounts due. This argument is misplaced, because it is the insurer that generally bears the burden of proving the amount of premiums due (see Essex Ins. Co. v Laruccia Constr., Inc., 71 AD3d 818, 819 [2d Dept 2010]; Royal Ins. Co. of Am. v Mercy Hosp., 204 AD2d 219, 219 [1st Dept 1994]), and, before an insurer can terminate a policy for non-payment, it bears the burden of demonstrating its compliance with the statutory notice requirements (see Salzman , 296 NY at 277; Maloney v John Hancock Mut. Life Ins. Co., 271 F2d 609, 613 [2d Cir 1959]). As such, the Trust's failure to identify the terms of the policy or rate schedule that show that Phoenix overstated the premium amount due in its lapse notice is not fatal to its first and second causes of action. Further, since Phoenix has not submitted any documentary proof or any other proof showing that the Trust's allegations regarding the premium amount due to be incorrect, Phoenix is not entitled to dismissal of the first and second causes of action (see Flushing Sav. Bank FSB, 94 AD3d at 808; Stewart, 50 AD3d at 1014).

Phoenix correctly contends that the third and fourth causes of action, which generally allege that the lapse notices did not comply with Insurance Law § 3211, fail to specifically identify a defect with the lapse notices. Relying on the Lapse notices supplied by Phoenix as part of its motion to dismiss, the Trust, in opposing the motion contends that the notices violated the section 3211(b)(2) in that the notices do not clearly identify the place where and to whom the premium is payable. As described above, the initial notice listed Phoenix and two other entities at the top of the page above a post office box address. In addition, the notice had the address for "Simkowitz & Company" listed to the right of the address of the Trust. Given that the body of the notice states that the payment of "$37,478.42 must be received by us," without identifying who "us" is, there is at least some facial ambiguity with the notice, which may be sufficient to deem it defective with respect to the statutory requirement that the notice state to whom and where payment is to be made (see Flint v Provident Life & Trust Co., 78 Misc 673, 677 [Sup Ct, Albany County 1912], affd 157 App [*7]Div 885 [3d Dept 1913], affd 215 NY 254 [1915]) . As the Trust identifies at least one statutory defect with the notice, the Trust has a cause of action that may be encompassed within the third and fourth causes of action. The Trust's other arguments with respect to alleged defects with the wording of the notice need not be addressed at this time.

As noted above, the Trust alleges, in the fifth and sixth causes of action, that the lapse notices were not timely mailed in accordance with the terms of the policies or the statute. Although the Trust acknowledges receipt of the notice, it alleges that, based on the receipt date of the notices, that they were mailed "days after" they were meter stamped and that, as such, the mailing was untimely. These allegations are sufficient to allege that the notices were not sent in a timely manner, especially given, as noted above, that it is Phoenix that bears the burden of demonstrating its compliance with the notice statute (see Salzman , 296 NY at 277; Phelan v Northwestern Mut. Life Ins. Co., 113 NY 147, 151 [1889]). In moving to dismiss these causes of action, Phoenix has submitted an affidavit from an assistant vice president, who addresses the date the lapse notices were mailed through her review of Phoenix's electronic file databases with respect to the policies and bases her knowledge of Phoenix's regular business practices with respect to the records she reviewed and the mailing of lapse notices. This affidavit, however, is not unquestioned documentary proof for purposes of CPLR 3211(a)(1) (see Flushing Sav. Bank FSB, 94 AD3d at 808), and is not sufficient to demonstrate that plaintiff's allegations are not facts at all for purposes of CPLR 3211(a)(7). Of note in this respect, although the vice-president, in somewhat conclusory terms, states that she is aware of Phoenix's record and mailing practices, she does not state that she was employed by Phoenix at the time of the mailings or that these practice of which she is aware were in effect at the time of the mailings (see Nocella v Fort Dearborn Life Ins. Co. of NY, 99 AD3d 877, 878-879 [2d Dept 2012]). The dates on the notices and the fact that the notices were actually received by the Trust are not proof that they were timely mailed (see Phelan, 113 NY at 151).

Moreover, the statutory dates when the notices were required to be mailed cannot be determined from the papers before the court, since, other than one sample page purportedly from a policy containing the same terms as the policies at issue, the policies are not before the court. If the policies require the regular payment of premiums, Insurance Law § 3211(a)(1) mandates that the insurer to mail the notices at least 15 days and not more than 45 days before the premium due date. The initial lapse notices, however, are dated the same day as the due date identified in the notices. As such, the notices would be untimely under the provision relating to policies that require the regular payment of premiums. On the other hand, for policies in which the amount and frequency of payments may vary, the section 3211(a)(1) requires that the notice be sent, "no earlier than and within thirty days after the day when the insurer determines that the net cash surrender value under the policy is insufficient to pay the total charges that are necessary to keep the policy in force." The notices sent, by stating that, "[t]he cash value of your policy has been depleted, and is no longer sufficient to support the monthly charges and consequently the policy entered its 61 day grace period, are more consistent with the requirements for variable policies (see Insurance Law §§ 3203[a][1] [61 day lapse period for variable policies] and 3211[a][1] and [2]).

In sum, Phoenix has failed to demonstrate that it is entitled to dismissal of the complaint pursuant to CPLR 3211(a)(1) and (7).

With respect arguments raised by the Trust in its opposition papers, this court notes that it has not converted the motion to one for summary judgment pursuant to CPLR 3211(c). In addition, even if it had, the Trust would not be entitled to summary judgment in its favor [*8]pursuant to the court's power to search the record (CPLR 3212 [b]). Of note in this respect, the record itself does not show the absence of factual issues with respect to the sufficiency of the notices. In addition, Insurance Law § 3211(a)(1) only bars the termination of a policy for non-payment of premiums within the first year from default. Here, the Trust alleges in each of its causes of action that "the trustees are prepared and have always been prepared to pay any outstanding premiums on [both policies] and hereby make constructive payment of any outstanding premiums on [both policies]." The Trust, however, does not explain how it made "constructive payment" and makes no allegation that it ever attempted to tender payment of the policies or alleged facts that would demonstrate that such tender would have been fruitless. Under these circumstances, and given that it has now well over a year since any default, Phoenix may be able to demonstrate that it is entitled to terminate the policies even if it is found that it failed to give proper notice under Insurance Law § 3211 (see Liesny, 166 App Div at 629).^[FN8]

This constitutes the decision and order of the court.

E N T E R,

J. S. C.