Palisades Ins. Co. v Boodram

Supreme Court, Schenectady County

Decided on May 29, 2026

Index No. 2025-2742

Thomas D. Buchanan, J.

This matter comes before the Court on two applications by Plaintiff. First, by Order to Show Cause issued by the Court on March 9, 2026, Plaintiff seeks a preliminary injunction pending the outcome of this declaratory judgment action, enjoining all litigation and arbitration proceedings currently pending or that may be commenced in the future seeking No-Fault benefits, uninsured motorist benefits, underinsured benefits or the like under a certain automobile insurance policy issued by Plaintiff and naming as insureds defendants Nateram and Sanicharie Boodram. Plaintiff also seeks to preliminarily enjoin the Boodram defendants from pursuing litigation between themselves. Defendants Cascade RX, LLC, East Flushing Medical, PLLC, Empire K Corp., Medex Diagnostic and Treatment, LLC, Menahan Medical, PC, and Veterans Memorial Park Medicine, PC, have opposed the injunction. Plaintiff's second application, filed by Notice of Motion, seeks leave to amend the caption and the Summons and Complaint to name additional parties.

This action arises from an automobile accident that occurred in April of 2025, in Queens, New York, which involved an automobile owned by the Boodrams and covered by the subject policy of insurance issued by Plaintiff. According to Plaintiff, the Boodrams made material misrepresentations as to their home address when applying for the insurance policy in order to obtain a lower premium. In addition to the Boodrams, Plaintiff has named as defendants a number of health care providers seeking reimbursement from Plaintiff for treatment rendered to the Boodrams as a result of injuries claimed to have been suffered in the accident.

Injunction. The parties are in essential agreement as to the standard for issuance of a preliminary injunction. The applicant must show (1) a likelihood of success on the merits, (2) irreparable injury absent the injunction, and (3) a balance of equities that tips in favor of injunctive relief (see e.g. Doe v. Axelrod, 73 NY2d 748 [1988]; Dover Gourmet Corp. v. Nassau Health Care Corp., 89 AD3d 979 [2d Dept. 2011]).

In support of its application for preliminary injunction, Plaintiff focuses on the analysis from Supreme Court, New York County, which looks at case authority for the proposition that a misrepresentation of a material fact in an insurance application can be asserted as an affirmative defense by the insurance company in actions brought by its insured or by health care providers rendering treatment to the insured. The decision asserts that in situations where there are multiple entities seeking benefits, courts will issue a preliminary injunction rather than requiring the insurance company to litigate multiple cases in order assert the defense (Liberty Mutual Ins. Co. v. Colot, 2012 NY Misc. LEXIS 6460, 2012 WL 10008047, 2012 NY Slip Op. 33500(U) [Sup Ct NY County 2012]). This Court cannot agree.

The problem for Plaintiff in this case is likelihood of success on the merits. Insurance Law §3105(b) provides:

No misrepresentation shall avoid any contract of insurance or defeat recovery thereunder unless such misrepresentation was material. No misrepresentations shall be deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract.

(emphasis added). The Appellate Division cases referenced in the Liberty Mutual decision are in accord with the statute. In Matter of Ins. Co. of North America v. Kaplun (274 AD2d 293 [2d Dept 2000]), the misrepresentation was that the named insured owned the subject vehicle, when in fact she did not. The opinion states (albeit in dictum) that the insurance company "clearly would not have issued the policy" if it had known the truth. In Matter of Liberty Mutual Ins. Co. v. McClellan (127 AD2d 767 [2d Dept 1987]) the insured misrepresented that the vehicle had never been in an accident and the insurance company's witness testified that the policy would not have been renewed if the prior accident had been disclosed.

Plaintiff here does not allege that it would not have contracted with the Boodrams had it known their true residence address. Plaintiff merely states that the premium for the policy would have been higher. To the extent that the Appellate Term and trial-level opinions cited in the Liberty Mutual decision are offered for the proposition that misrepresentation for the purpose of obtaining a lower premium is material -- without a showing that the policy would not have been issued if the truth had been known -- those decisions run counter to the face of Insurance Law §3105(b) and this Court respectfully declines to follow them.

From the perspective of judicial economy, Plaintiff's argument has a logical appeal. This Court's signed Plaintiff's proposed Order to Show Cause, which includes a temporary restraining order. The outcome of the multiple lawsuits and arbitration proceedings arising from the subject accident will likely turn on the decision in this declaratory judgment action. However, a careful reading of the authority cited by the parties does not support Plaintiff's position.

The legislature has quite intentionally regulated the insurance industry. One needs to look no further than Vehicle and Traffic Law §313, which is discussed in several of the cases cited by Plaintiff, including the Liberty Mutual decision, where the legislature overrode the common-law right of insurance companies to cancel an insurance policy retroactively on the grounds of fraud or misrepresentation. On the record for this motion, the clear terms of Insurance Law §3105(b) preclude a finding that Plaintiff is likely to prevail on the merits of this action. A preliminary injunction is therefore unavailable to Plaintiff.

Amendment to Add Parties. Plaintiff's second motion seeks leave to amend the Verified Complaint to add certain medical providers who have submitted claims for payment arising from the subject accident as additional parties defendant. The standard for granting leave [*2]to amend is permissive. Leave "shall be freely given upon such terms as may be just" (CPLR 3025[b]). Plaintiff's application is meritorious and will not prejudice any existing party. Indeed, this motion is unopposed.

The parties' remaining contentions have been considered, but do not alter the outcome of these two motions. Therefore, in consideration of the foregoing, it is hereby

ORDERED, that the motion by Plaintiff seeking a preliminary injunction of all litigation and arbitration proceedings seeking benefits from the subject insurance policy is denied; and it is further

ORDERED, that the temporary restraining order contained within the Order to Show Cause issued by the Court on March 9, 2026, is hereby dissolved; and it is further

ORDERED, that the motion by Plaintiff seeking leave to amend the Verified Complaint in this action to name additional parties defendant is hereby granted; and it is further

ORDRED, that Plaintiff shall file and serve the Amended Summons and Amended Verified Complaint in the form annexed to its motion papers within thirty (30) days of the entry of this Decision and Order; and it is further

ORDERED, that the time frames found in CPLR §306-b shall apply to the service of the Amended Summons and Amended Complaint, measured from the date that same are filed with the Court.

Dated: May 29, 2026

ENTER.

Thomas D. Buchanan

Supreme Court Justice

Papers considered:

NYSCEF Document Nos. 30 through 59.