Antonio Garcia, Appellant,v.Government Employees Insurance Company, Respondent.BriefN.Y.December 7, 2017 September 18, 2017 Court of Appeals of the State of New York Court of Appeals Hall 20 Eagle Street Albany, New York 12207-1095 Re: Antonio Garcia v. Government Employees Insurance Company Nassau County Index No.: 4844/13 Appellate Division, Second Department No.: 2015-05471 Court of Appeals No.: APL-2017-00145 Honorable Judges of the Court: The undersigned is the attorney for the Plaintiff-Appellant, Antonio Garcia, in the above-referenced appeal, which is before this Honorable Court as a matter of right pursuant to CPLR 5601(a) (dissents on the law at the Appellate Division), and pursuant to Plaintiff’s Notice of Appeal dated July 11, 2017. In that capacity, and in response to the Court’s letter dated August 15, 2017, pursuant to Section 500.11 of the Court of Appeals Rules of Practice, I respectfully submit Plaintiff-Appellant’s written comments and arguments in support of his position on the merits of his appeal. In addition, filed herewith are three (3) copies of the Record on Appeal and Briefs submitted to the Appellate Division below. Copies of the Order of the Supreme Court, Nassau County, which denied Defendant’s motion for summary judgment, and the Appellate Division’s Decision and Order, dated June 28, 2017, which, over two (2) dissents, reversed that Order and granted Defendant’s motion and dismissed the Complaint were annexed to Plaintiff’s LAW OFFICES SHAYNE, DACHS, SAUER & DACHS, LLP 114 OLD COUNTRY ROAD SUITE 410 M1NEOLA, NY 11501-4410 TEL (516) 747-1100 FAX (516) 747-1185 shaynedachs .com BRIAN J. SAUER JONATHAN A. DACHS KENNETH J. LANDAU THOMAS J. JORGENSEN LEGAL ASSISTANT RICHARD JANOW1TZ OF COUNSELMOE LEVINE 0908-1974) NEIL T. SHAYNE (1932-1998) THOMAS W. STANISCI (1928-2012) NORMAN H. DACHS (1933-2014) -2- previously filed Preliminary Appeal Statement (pursuant to Section 500.9 of the Rules of the Court of Appeals), and are annexed hereto as well for the convenience of the Court. As aptly set forth by the dissenting justice(s) below, the issue presented in this action pursuant to Ins. L. §3420(a)(2) to recover the amount of an unsatisfied judgment against GEICO’s insured is whether an umbrella insurance policy issued by GEICO to its insured, Jeanne Rakowski (“Rakowski”), was entire, such that it provided $2,000,000 of coverage in exchange for a premium of $505, or severable, such that it provided $1,000,000 of coverage in exchange for a premium of $306, and an additional $1,000,000 in coverage in exchange for an additional premium of $199. The significance of this dispute is that “If the contract was severable, then Rakowski’s payment of $306 was sufficient to secure $1,000,000 of coverage for the entire policy period, a result which would avoid a forfeiture of Rakowski’s umbrella insurance protection for a portion of the policy period, as favored by the law [citations omitted].” See dissenting opinion by Justice Sgroi, in which Justice Austin concurred. It is Plaintiff’s contention on this appeal that the Appellate Division majority erred in granting GEICO’s motion for summary judgment dismissing the Complaint. Specifically, as a review of the Record on Appeal will confirm, GEICO failed to meet its prima facie burden in support of its motion insofar as triable questions of fact existed regarding such issues as the intentions of the parties with respect to the payment of premiums and the severability of the portions of the policy that provided an initial coverage limit of $1,000,000 – which was fully paid for -- and a subsequent increase of an additional $1,000,000 in coverage -- which was separately billed for but not timely paid. As correctly found by the dissenting justices below, Defendant failed to demonstrate, prima facie, that the subject policy was entire and divisible, and that its notice of cancellation for non-payment of premium affected the whole policy, rather than merely the additional $1,000,000 of coverage. As such, the court below should have denied GEICO’s motion (even without the necessity of considering the sufficiency of Plaintiff’s opposition thereto). In addition, triable issues were raised by Plaintiff regarding the actual date of the purported policy cancellation, and the sufficiency of Defendant’s proof of timely and proper mailing of its notice of cancellation, which GEICO did not adequately address or refute. For that reason as well, GEICO’s motion for summary judgment should have been denied. 1Unless otherwise indicated, numbers in brackets refer to pages in the Record on Appeal to the Appellate Division, copies of which have been filed simultaneously herewith. -3- Factual Background The facts underlying the subject action and motion are established by the documentary evidence in the Record on Appeal, and are undisputed. Rakowski applied for and was issued a personal umbrella policy by GEICO, originally effective October 10, 2003. That policy, No. P5118238, covered a 2003 Land Rover automobile, and a primary residence in Belle Harbor, New York, and carried a liability limit of $1,000,000 for an annual premium of $199 [326-334,181- 183,186].1 The premium for that policy was paid in full by Ms. Rakowski prior to its effective date [182]. The initial policy was automatically renewed for the policy period of October 10, 2014 to October 10, 2015. The renewed policy maintained the same policy number, P5118238, covered the same exposures as the initial policy, and also carried a $1,000,000 liability limit, for an annual premium of $211, which was paid in full by Ms. Rakowski [335-345,188-191]. GEICO’s renewal cover letter included a statement encouraging the insured to consider increasing the coverage limits from $1,000,000 to $2,000,000 or more. [335,206-207]. In March 2005, Rakowski made a change in the policy to add another vehicle, and the applicable premium was adjusted to $306, which she timely paid in full [346- 365,192-205]. On August 29, 2005, GEICO contacted Rakowski with respect to the next renewal of her umbrella policy, No. P5118238, and included a similar letter urging her to consider increasing the coverage limits of the policy [366-374]. The premium indicated for the renewal of the policy with limits of $1,000,000 was $306 [366- 374,205; 210,214-215,31-32,379]. On August 30, 2005, Rakowski, by telephone, requested changes to her umbrella policy -- i.e., an increase in the coverage limits from $1,000,000 to -4- $2,000,000, as well as the addition of a rental property in Brooklyn to the covered risks, and those changes were approved by GEICO [50-59,98,233-234,238- 239,241,298]. She testified that she understood that when she requested a change in the coverage limits, “GEICO would charge {her] an additional amount of money for that additional liability limits” [emphasis added]. Although GEICO’s representative, Richard Pitts, Umbrella Product Program Manager, testified at his deposition that in response to Rakowski’s change requests, GEICO “generated a new policy document,” and/or an “amended policy contract” [240-243], it is readily apparent from a review of the pertinent document produced by GEICO [50-59] that what was actually generated by GEICO was simply “Amended Declarations” pages, dated August 31, 2005, reflecting the increased “limit of liability” ($2,000,000) and the additional covered property, and that, in fact, no new “policy document” was generated: the Policy Number remained unchanged (P5118238); the policy period remained the same (10/10/05 to 10/10/06); and no new or different “Forms and Endorsements” were issued [329-334,340-345,350-355,360-365,370-374,240-245]. Significantly, with respect to the premium applicable to the “Amended Declarations,” the “premium for additional coverage to second million” of $199 was set forth as a separate line item to be added to the previously indicated premium of $306 for the $1,000,000 in coverage -- thus making the “total premium” $505 [52]. Similarly, the “GEICO’s Personal Umbrella Policy Bill,” issued on August 31, 2005 [60], separated out the amount due for the original, $1,000,000 coverage, i.e., $306, from the $199 due for the additional $1,000,000 in coverage, by making that exact amount the “minimum amount due.” This, notwithstanding that, as noted by the dissenting justices, below, “Rakowski was on a “one-pay” rather than an installment payment plan.” It was not a mere coincidence that the minimum amount due was the amount for which $1,000,000 in coverage was previously purchased. Indeed, Pitts testified that GEICO’s computer system recognized the $306 as “the amount previously billed” [244]. Ms. Rakowski paid the $306 premium prior to the effective date of the renewed policy, and GEICO applied that payment on October 14, 2005 [211,218,220-221,223,230]. The subsequent “GEICO’s Personal Umbrella Policy Bill,” issued on October 18, 2005 [61], which reflected that the $306 had already been paid and that it was only the $199 for the additional $1,000,000 in coverage that remained outstanding, furthered the impression that the $306 and $199 premiums were separate and distinct, and that the coverages attributable to each such separately listed premium were severable [266-267; 32]. In this regard, Pitts testified that GEICO “break[s] out as a convenience to [its] insured which [sic] each exposure that -5- [it] charge[s] costs them, so they can determine whether or not they want to pay that premium during that renewal time or not” [249-250]. Having failed to receive payment of the $199 premium for the second $1,000,000 in coverage by its October 27, 2005 due date (as stated on the October 18, 2005 bill) [61], GEICO issued to Rakowski a Notice of Cancellation, for non- payment of premium, dated November 4, 2005, indicating that “your insurance as indicated below” [emphasis added] was to be canceled at 12:01 standard time on May 19, 2006 [62]. Notably, the only thing “indicated below” was that the premium of $199 was past due, and, thus, by its own terms, it was the non-payment of that separately stated and unpaid premium that was the basis for GEICO’s purported cancellation. Pitts testified (after the fact) that had GEICO received payment of the outstanding $199 any time before May 19, 2006, “the policy would have continued” [267,269]. At his deposition, Pitts further testified that the Notice of Cancellation was automatically generated by GEICO’s computer system, which generates a batch cycle and sends the billing “into a large file” that then goes into the “print mail facility” [245, 259]. When asked specifically if there was any “human involvement in the mailing process,” Pitts answered, equivocally, at first, “There can be, yes” [260]. However, he thereafter stated that he did not know whether or not there was any human involvement in the mailing process at the pertinent time period herein [260], and then stated that such mailings “should have no human intervention” [268]. He explained that GEICO has machines that print the notices and “envelope them and mail them” [260-261]. He did not have knowledge about whether the machine applied postage as well [261]. When asked specifically whether there was any method by which it can be insured that the cancellation notice is properly put in the envelope and properly posted, Pitts stated that “we do have certification from the United States Post Office that they received a notice for Jeanne Rakowski dated on that date” -- referring to the document denominated a “Certificate of Mailing” [262-263,63]. However, examination of that document reveals (and Pitts conceded) that: (1) there is no indication thereon as to what was allegedly mailed to Rakowski; (2) there is no indication thereon as to whether postage was paid for any of the alleged mailings referenced on the “certificate,” or at all; and (3) the postmaster’s stamp is illegible at least as to the year of the claimed mailings [63, 263-265]. -6- Notwithstanding that questions were raised concerning the propriety and effectiveness of GEICO’s mailing of the Notice of Cancellation, GEICO failed to submit any evidence, including an Affidavit by an individual in charge of or with knowledge of the mailing process, concerning that important issue. In its “Defendant’s Responses to Post EBT Demands,” dated August 13, 2014 [388-391], GEICO identified GEICO employee, Donna Truslow, Output Manager, as the person “most closely fitting the description” “involved in supervising the processing of these notices of cancellation (of an umbrella policy) and their mailing.” However, GEICO did not submit an affidavit from Ms. Truslow in support of its motion. Rakowski, for her part, testified that she did not recall receiving or seeing the Notice of Cancellation at any time prior to her EBT on June 17, 2014 [105,113-114]. In fact, she did not even know that her policy was canceled until she was told about it for the first time at the time of the trial of the underlying action [115]. According to Pitts, and GEICO’s “Policy Log” document [65], on May 15, 2006 -- four days before the intended cancellation date -- GEICO sent a “pending cancellation e-mail” to Rakowski as a “warning shot,” in an effort to avoid the cancellation by obtaining payment of the outstanding balance [65,32,239,270-277]. GEICO has failed to produce a copy of that email, and, thus, there is no way to know precisely what it said [271-272]. On the afternoon of May 19, 2006, Rakowski loaned her car to an employee of hers, and the car was involved in an accident in which the Plaintiff herein, Antonio Garcia, was severely injured. Although, pursuant to the terms of the Notice of Cancellation [62], the cancellation for nonpayment of premium was to be effective on May 19, 2006, Pitts testified that on May 20, 2006,GEICO attempted to contact Rakowski by telephone, in what was referred to in GEICO’s “Policy Log” as a “pend canc” or “pending cancellation” call [65], in order “to try to collect a payment” [273-274,33]. Indeed, Pitts testified that if Rakowski had answered that call and made a payment on that date -- the day after the cancellation date and the day after the accident -- the policy would have continued [274-277]. No recordings of this telephone call were produced by GEICO, and, thus, again, there is no way to know what was actually said to Rakowski with regard to her deadline for payment of the outstanding premium amount. -7- According to GEICO’s “Policy Log Inquiry” documents [392-395], and Pitts’ EBT testimony [276-282], after GEICO cancelled Rakowski’s entire policy, she called GEICO to advise that she had complained to “state agencies” and the “insurance board” about the cancellation of her umbrella policy. Obviously, Rakowski was not happy with the cancellation of her entire policy simply because of her non-payment for the “second million” dollars of coverage. In addition to the foregoing, it is also important to note that in GEICO’s Reply Affirmation, dated July 15, 2013, in connection with prior motion practice in this case [396-400], at paragraph 1 thereof, GEICO’s counsel stated that the subject policy was canceled “at midnight May 19, 2006" [emphasis added] [396]. Also in his Affidavit in Support of GEICO’s motion for summary judgment, at paragraph 2 thereof, Pitts, on behalf of GEICO, stated that “that $2 million umbrella policy was cancelled for non-payment of premium at 12:01 a.m. on October 19, 2006. . . .” [emphasis added] [30]. And, in a document produced by GEICO during discovery in this action as part of the Umbrella Policy Claims File, entitled “Control File Alert,” dated May 23, 2006 -- four days after the subject accident [401-402], GEICO’s supervisor noted that there was BI coverage of $300,000/$300,000, and “Pacesetter Plus” (umbrella) coverage of “2mm,” and that there was “good coverage” for the date of loss [401]. In the lawsuit commenced by Plaintiff against Rakowski, as owner of the vehicle that struck and injured him, and Linda Danielson, the driver of that vehicle, Plaintiff obtained a judgment in his favor. After obtaining a partial satisfaction of that judgment, Plaintiff sought to recover the unsatisfied portion from GEICO. After GEICO failed to satisfy the remainder of the judgment within 30 days of Plaintiff’s request, Plaintiff commenced the instant action against GEICO pursuant to Ins. L. 3420(a)(2). GEICO moved for summary judgment asserting that the entire $2,000,000 umbrella policy was canceled hours before the accident for non-payment of premium. Plaintiff responded that the additional coverage attributable to the unpaid premium of $199 was severable, and, therefore, there was a $1,000,000 umbrella policy, paid for by Rakowski, that was in effect at the time of the accident. The Supreme Court’s Decision and Order By Decision and Order dated June 15, 2015 [3-6], Hon. Jerome Murphy, of the -8- Supreme Court, Nassau County, after careful consideration of all the facts and arguments by the parties, including the history of the relationship between the parties dating back to 2003, concluded that “defendant’s summary judgment motion is denied due to one or more factual questions that exist against the defendant”[6]. Justice Murphy noted that he was influenced by the Appellate Division, Second Department’s prior resolution of “an analogous question” in Nationwide Mut. Ins. Co. v. Mason, 37 A.D.2d 15 (2d Dept. 1971), and the earlier decision of this Court in Donley v. Glens Falls Ins. Co., 184 NY 107, 111 (1906), which involved the question of the divisibility or severability of an insurance policy, to conclude that insofar as Rakowski paid $306 for a $1,000,000.00 umbrella policy covering two vehicles and her primary residence for the period of October 10, 2005 - October 10, 2006, that policy was in full force and effect on the date of the accident in which Plaintiff was injured, notwithstanding Rakowski’s failure to pay the additional $199 premium, which was for the sole purpose of increasing the amount of coverage from $1,000,000.00 to $2,000,000.00 [5-6]. Justice Murphy did not specifically refer to the arguments raised by Plaintiff regarding the failure of GEICO’s proof of proper mailing of its Notice of Cancellation and/or its post-accident cancellation of the policy. His reference to the existence “one or more factual questions” suggests, however, that those unresolved issues were among the bases for the denial of GEICO’s motion for summary judgment. GEICO’s appeal to the Appellate Division, Second Department ensued [2] The Decision and Order of the Appellate Division On GEICO’s appeal from the denial of its motion for summary judgment, the Second Department, by a 3-2 vote, reversed Justice Murphy’s Order “on the law,” and granted GEICO’s motion, dismissing the Complaint in its entirety. That determination was based on the majority’s conclusion that “there is no ambiguity in Rakowski’s umbrella policy as to either coverage or divisibility.” As the majority explained, “Rakowski contracted, before the policy term began, for an umbrella policy covering specified risks, with a coverage limit of $2,000,000. The policy she received unambiguously provided for the amount of coverage she had requested with respect to risks she had specified: the Amended Declarations of the insurance contract, dated August 31, 2005, stated that, for the policy period, of October 10, 2006, to October -9- 10, 2006, the risks pertained to the specified properties and vehicles, and the coverage limit pertaining to those risks was $2,000,000.” Disagreeing with the dissenters, and rejecting the notion that because of the way the premiums were set out in the Amended Declarations there was an ambiguity as to whether Rakowski received a policy for $2,000,000 or $1,000,000, and whether the policy was divisible or severable as to the amount of coverage, the majority concluded that “The fact that the premium was separately stated for the increase in coverage limit is irrelevant here.” The majority also concluded that there was no forfeiture in this matter because Rakowski asked for, and received from GEICO a liability limit of $2,000,000 as of the beginning of the new policy period. The majority went on the conclude that “because there is no ambiguity in what Rakowski contracted for – $2,000,000 in coverage, as stated in the Amended Declarations of the policy – there is likewise no ambiguity in GEICO’s notice of cancellation, which referred to the policy number of Rakowski’s umbrella policy.The cancellation notice could only have pertained to Rakowski’s coverage of $2,000,000, which was the only coverage the policy provided for the policy period” – citing First Sav. & Loan Assn. of Jersey City v. American Home Assur. Co., 29 NY2d [297] at 300. And, finally, the majority concluded that ‘GEICO established, prima facie, that it properly sent Rakowski notice of the cancellation” – citing the Second Department’s 1995 decision in Jones v. Allstate Ins. Co., 221 AD2d 596 (2d Dept. 1995) – and that in opposition, Plaintiff failed to raise a triable issue of fact. The two dissenting justices (Sgroi and Austin, JJ), on the other hand, found that “GEICO failed to eliminate triable issues of fact as to whether the parties intended their contract to be severable, such that the notice of cancellation would affect only the increased coverage.” Noting the fact that the Amended Declarations provided to the insured listed a separate premium “for additional coverage to second million,” and that Rakowski was then separately billed $306, the same amount as the premium for the first $1,000,000 of coverage, and then $199, the amount listed as the premium “for additional coverage to second million,” the dissenters found that “These facts are equivocal as to whether the parties intended the coverage for the first $1,000,000 and the coverage for the second $1,000,000, ‘and the consideration therefor’ to be ‘common each to the other and interdependent’ or to be indivisible [citations omitted].” -10- The dissenters also found that the notice of cancellation was “similarly equivocal,” advising as it did that Rakowski’s “insurance as indicated below” was canceled where the box that appeared “below” advised Rakowski that she should “act now to prevent cancellation of [her] insurance protection [emphasis added] as opposed to her insurance policy. These facts, as well as the facts that the endorsement in the policy herein did not explicitly provide that the initial policy and the endorsement of additional coverage formed one, inseparable contract, and the notice of cancellation did not specifically refer to the policy in its entirety rendered the instant case distinguishable from First Sav. & Loan Assn. of Jersey City, N.J. v. American Home Assur. Co. (29 NY2d 297). The dissenters further concluded that “the fact that GEICO persisted in listing a $306 premium for $1,000,000 of coverage, and added a separate $199 premium for a second $1,000,000 of coverage “is not, as a matter of law, irrelevant.” Rather, “the Amended Declarations, particularly when coupled with the separate billing statements, created a factual question as to whether the parties agreed that GEICO would provide Rakowski with $2,000,000 of coverage if she paid $505, or, if they agreed that GEICO would provide her with $1,000,000 of coverage if she paid $306, and $2,000,000 is she paid an additional $199.” They also concluded that “focusing on the reasonable expectations of the average insured, it cannot be said that the language of the policy, with its accompanying separate billing statements, was ‘unattended by danger of misconception’ as to whether Rakowski could secure $1,000,000 of coverage by paying $306 [citation omitted],” i.e., it was ambiguous. In sum, therefore, the dissenting justices concluded that “GEICO failed to establish its prima facie entitlement to judgment as a matter of law, and, thus, the denial of GEICO’s motion for summary judgment should have been affirmed, even without consideration of the sufficiency of Plaintiff’s opposition papers. -11- Discussion I. GEICO’s Purported Cancellation Of The Entire Policy For Non- Payment Of An Additional, Separately Billed, Premium For An Increase In The Policy Limits and Additional Property Covered Was Improper and Ineffective, and GEICO’s Insured Was Entitled To The $1,000,000 Coverage She Previously Paid For, Notwithstanding Her Subsequent Failure To Pay The Separate Additional Premium For the Second $1,000,000 In Coverage. At The Very Least, A Triable Question Of Fact Sufficient To Preclude Summary Judgment Exists As To The Intentions Of The Parties Regarding the Severability Or Divisibility Of The Policy Under The Facts and Circumstances Of This Case. In Prudential Prop. and Cas. Ins. Co. v. Pearce, 126 Misc.2d 1044 (Sup. Ct. Nassau Co. 1985), affd. on opinion below, 120 AD2d 597 (2d Dept. 1986), the policy issued by the Additional Respondent, Country-Wide, originally covered two vehicles. Thereafter, two other vehicles were added to the policy. The original premium covering the first two vehicles was paid in full prior to the accident. The additional premium for the third vehicle was also fully paid, but only less than half of the premium for the fourth vehicle was paid. Country-Wide issued a Notice of Cancellation of the entire policy based on the non-payment of the balance due on the fourth vehicle. In a proceeding to stay an Uninsured Motorist arbitration, Prudential argued, inter alia, that Country-Wide’s cancellation was ineffective because “Country-Wide could not cancel the entire policy covering the first three vehicles (including the vehicle involved in this occurrence) when the insured failed to pay only a portion of the additional premium for the fourth vehicle.” Referring to “[t]he law involving the severability of insurance contracts,” Justice Arthur Spatt (now, of course, on the Federal bench) noted that “No single formula has yet been devised which furnishes a test for determining in all cases what contracts of insurance are severable and what contracts are entire. Fundamentally, the question of divisibility or severability rests upon the question of intention of the parties. Donley v. Glens Falls Ins. Co., 184 NY 107 (1906); American Surety Co. v. Rosenthal, 206 Misc. 485 (Sup. Ct. N.Y. Co. 1954); 29 N.Y. Jur., Insurance §643, p. 634; 43 Am. Jur.2d, Insurance, §312, p. 386. Among the factors that must be examined to discover the intention of the parties are: -12- the entirety of the risk covered by the policy [citation omitted]; the division of premiums for separate automobiles [citation omitted]; and the special language of the contract of insurance [citation omitted].” Justice Spatt then set forth the rule in New York as to severability of insurance contracts, thusly: “In Donley v. Glens Falls Ins. Co., p. 111, the rule was set forth by the Court of Appeals as follows: ‘We regard it as settled that where, by the same policy, different classes of property, each separately valued, are insured for distinct amounts, even if the premium for the aggregate amount is paid in gross, the contract is severable.’ “In American Surety Company of New York v. Rosenthal, supra, p. 489, the Court construed the terms of a policy applicable to one vehicle where the question concerned the extent of coverage and the severability of various items of coverage, as follows: ‘The policy sets forth the limits of liability against each coverage and stipulates for a separate premium for each. In other words, the risks are separately stated and the premiums for each risk are separately fixed. Clearly, therefore, the policy in suit is severable and divisible.’ “The Second Department had occasion to apply the foregoing rules to the issue of severability with regard to two vehicles on a single policy. In Nationwide Mutual Ins. Co. v. Mason, 37 AD2d 15, 16, the Court was confronted with the following question of law, almost identical to the issue presented herein: ‘Where a holder of a fully paid automobile liability policy subsequently requests an endorsement adding another automobile to the coverage of the policy, may the carrier cancel the entire policy when the insured fails to pay the additional premium for the added automobile?’ “The Court found that since the policy involved separate automobiles and -13- the premium for each was separately apportioned, the contract was, therefore, severable. (Cf. Ming v. Corbin, 142 NY 334 [1894]; Matter of Rogers v. Graves, 254 App.Div. 467 [3d Dept. 1938], so that the non- payment of the premium on one vehicle did not permit the insurer to cancel the policy on both. The Court concluded that the rule of law laid down in Donley v. Glens Falls Ins. Co., supra, was ‘clearly applicable here, for the coverage added by the endorsement had a separate premium and was on a different automobile from the vehicle covered by the policy as theretofore in effect.’ (Matter of Nationwide Mutual Ins. Co. v. Mason, supra, p. 19).” The Mason Court further stated that to permit the insurer to cancel not only the additional coverage for non-payment of the premium therefor but also the pre-existing basic policy for which the premium had been paid in full “would be tantamount to a forfeiture, a result which the law abhors (Zivitz v. Maryland Cas. Co., 192 App. Div. 83; Press Pub. Co. v. General Acc. Fire & Life Assur. Corp. of Perth Scotland, 160 App. Div. 537, affd. 217 NY 648), particularly when it is remembered that in construing the terms of an insurance policy it will be given that construction which is most favorable to the insured (Matter of Vanguard Ins. Co. [Polchlopek]), 18 NY2d 376; Matter of Askey [General Acc. Fire & Life Assur. Corp.], 30 AD2d 632).” Because in Pearce, the policy listed each vehicle separately, with separate coverage assigned to each vehicle and with each vehicle assigned a separate premium, the “intention of the parties” was made clear. Accordingly, Justice Spatt concluded that the policy in that case was divisible and, therefore, not cancelable in full. The intention of the parties to this case to keep the original coverage limit ($1,000,000) and the increased coverage amount (a second $1,000,000) separate, distinct and divisible is manifest from the way the premiums were charged by GEICO, i.e., rather than setting out the premium as a single amount, or even increasing the premium for each individual item (vehicle and/or property) to reflect the increased limits, the Amended Declarations simply added a separate line item for a separate premium ($199) specifically attributable to the increased (extra) $1,000,000 in coverage [52]; in its initial “Personal Umbrella Policy Bill,” issued August 31, 2005 [60], GEICO separated out the amount due under the original policy ($1,000,000 coverage), i.e., $306, by making that exact amount the “minimum amount due” -- thus strongly suggesting that the insured could pay for that coverage first, or only, and treat -14- the remaining balance of $199.00 separately; and “GEICO’s second “Personal Umbrella Policy Bill,” dated October 18, 2005 [61], reflected that the $306 amount had already been paid and that it was only the $199.00 premium for the additional coverage that remained outstanding. Thus, as the Declarations and Bills were written, the coverage under the policy was “susceptible of division and apportionment” (see Prudential v. Pearce, supra). It must be remembered that, as evidenced by her deposition [84-135], the insured, Rakowski, is not a sophisticated businesswoman, regularly involved in insurance issues. Moreover, as previously noted, the Notice of Cancellation [62] itself was ambiguous, and did not clearly indicate that the entire policy, rather than just the portion associated with the unpaid premium, was to be canceled. The “indication below” on the Notice was that the premium of $199 [only] ,was past due and that it was the non-payment of that separately stated and unpaid premium that was the basis of GEICO’s cancellation. Under the circumstances, the insured could reasonably have assumed that it was only the added $1,000,000 in insurance coverage that was to be canceled for non-payment -- especially since she knew that she had already paid for the original $1,000,000 in coverage. As the dissenting justices below correctly found, the citation and reliance by GEICO and the Appellate Division majority upon First Savings and Loan Association of Jersey City, N.J. v. American Home Assurance Co., 35 AD2d 344 (1st Dept. 1970), affd. 29 NY2d 297 (1971), to support their arguments herein, is misplaced. As Plaintiff noted below in anticipation of GEICO’s argument [318-323], that case is readily distinguishable from the instant case, and does not warrant the granting of GEICO’s motion. In First Savings and Loan, supra, the owner of a property procured a fire insurance policy in the amount of $7,000.00 at an annual premium of $140.00, which was paid. The original insurance was later increased from $7,000.00 to $15,000.00 at an additional premium of $119.00, which was not paid. The policy was canceled for “nonpayment of premium” one month prior to a fire at the premises. The question presented to the court was “whether the notice of cancellation for the stated reason of ‘nonpayment’ of premiums affects the policy to the full extent of the $15,000.00 or applies only to the portion of the $8,000.00 for which the premium was not paid.” As stated by the majority in the Appellate Division, which held that the policy -15- was not divisible and, therefore, the cancellation was valid as to the full amount of the coverage: “Fundamentally and primarily, the question of divisibility or severability rests upon the question of intention of the parties deducible from the stipulations of the contract and the rules of construction governing the ascertainment of that intention. As a general rule, a contract is entire when by its terms, nature, and purpose, it contemplates and intends that each and all of its parts and the consideration therefor shall be common each to the other and interdependent. On the other hand, the contract is considered severable and divisible when by its terms, nature, and purpose, it is susceptible of division and apportionment. (29 N.Y. Juris., Insurance §643; American Sur. Co. of N.Y. v. Rosenthal, 206 Misc. 485). ‘The contract is said to be severable when the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item or is left to be implied by law’ (Ming et al. v. Corbin, 142 NY 334, 340-341).” As the court explained, the general endorsement when the increased coverage was obtained specifically provided that it formed part of the original policy. It provided, inter alia, that “in consideration of an additional premium of $119, it is hereby understood and agreed that insurance is increased from $7,000 to $15,000.” The property insured by the policy was a single “brick apartment,” and there were “no separate items or varied items of property (e.g., real and personal) such that it might arguably be maintained that the intention of the parties applied to one category to the exclusion of the other.” As the court noted, “It is clear that the parties gave a single assent to the whole transaction rather than separate assents to several things.” The dissenting justice in the Appellate Division focused on the fact that the cancellation specified “nonpayment” as the basis for the cancellation. In his view, “such ‘nonpayment’ could well indicate that the cancellation was intended to apply only to the additional portion of the coverage, $8,000, for which the premium was not paid.” Further, “If the insurer - Respondent intended to cancel the entire policy, it could have done so by omitting the ‘nonpayment’ phrase. Having chosen to place the cancellation on that specified basis, it conveyed the idea that the cancellation pertained only to the latter $8,000 coverage. If appellant had provided an additional $8,000 from another insurer, this defendant would clearly be liable under the $7,000 coverage -16- . . . .” He also referred to the fact that “the courts do not favor forfeiture” and that “the policy, as well as the notice of cancellation, should be strictly construed against the insurer.” In affirming the majority opinion below, the majority of this Court concluded that the endorsement increased the amount of coverage for the same property and the same risk, namely: damages sustained to the insured premises by fire.” The Court noted that upon the effective date of the endorsement, the insurer became liable, in the event of a fire, for the full amount of $15,000 even though the additional $119 premium was not paid -- at least until the notice of cancellation for nonpayment of premium became effective. Moreover, the cancellation notice specifically referred to the policy in its entirety. Thus, under those circumstances, the Court held that the policy was not divisible. Notably, the Court added that “The result, of course, would be different if the subsequently added endorsement to the policy extended to the scope of the coverage to include a different type of insurance risk than that covered by the original policy [citing Rosenthal v. Security Mut. Ins. Co. of N.Y., 28 NY2d 697(1971) and Donley v. Glens Falls Ins. Co., supra. The Court also noted and relied upon the fact that the plaintiff was “a large banking institution familiar with insurance procedures” and, therefore, should not have been misled by terms of the cancellation notice. In his dissenting opinion, Judge Scileppi stated, as particularly pertinent hereto, as follows: “In my view, the fact that the insured had increased its insurance coverage to $15,000 by adding an $8,000 rider to the original $7,000 policy, and then failed to pay the premium for the additional coverage, did not justify the cancellation of the entire policy for nonpayment of premiums. The original $7,000 policy and the $8,000 rider must be deemed separate and divisible. No new policy was issued when the insured sought increased protection; instead, respondent merely provided an endorsement and clearly indicated that an additional premium of $119 was required as a separate and distinct charge for additional and more comprehensive extended coverage after the issuance of the original policy. This was again recognized when respondent tendered its notice of cancellation. . . . . Since respondent had received and accepted the -17- premium for the original policy, it could not cancel that coverage for that reason. It had already been paid. Consequently, the effect of the cancellation should be limited to the additional coverage which had been sought, but not paid for. A different conclusion is unwarranted and unjust where, as here, respondent has been paid in full for the initial coverage. To allow respondent to cancel the entire policy ‘would be tantamount to a forfeiture, a result which the law abhors [citations omitted], particularly when it is remembered that in construing the terms of an insurance policy it will be given that construction which is most favorable to the insured [citations omitted]. Surely, if instead of endorsing the original policy, a separate policy for $8,000 had been issued, the failure to pay the premium on this additional policy would not affect the coverage under the original policy. The fact that the policy was increased by $8,000 under an endorsement, should not, in my opinion, require a different result.” As noted by the dissenters below, First Savings and Loan, supra, is distinguishable from the instant matter for several reasons. First, the GEICO endorsement cover sheet, dated August 31, 2005, which reflects the “recent change to [the] Umbrella policy,” indicates that a change was made to the coverage limit (from $1,000,000 to $2,000,000) and that there was “Property - Added” [51] [compare 368- 369 to 50-53]. The absence of a premium shown as being charged for this additional property lends credence to the notion that at least some part of the separately listed (in the next page) $199 “Premium for Additional Coverage to Second Million” was attributable to the addition of that second property. Such being the case, unlike First Savings and Loan, supra, the policy was severable/divisible, and although the coverage for the additional property and the increased $1,000,000 in coverage was properly canceled, the original $1,000,000 remained extant. At the very least, the “Amended Declarations” is ambiguous, thereby invoking the favorable rules of construction applicable in such instances. Mostow v. State Farm Ins. Cos., 88 NY2d 321 (1996); Breed v. Ins. Co. of N. A., 46 NY2d 351 (1978); Hartol Prods. Inc. v. Prudential Ins. Co., 290 NY 44 (1943). In addition, unlike First Savings and Loan, here, there is no specific statement in the endorsement that provides that it forms a part of the original policy. -18- Finally, the arguments set forth above concerning forfeiture are particularly pertinent herein, where the unintended and unexpected result of Rakowski’s failure to pay the added premium for the additional coverage has resulted in her being severely underinsured as compared to the judgment against her, and, thus, in Plaintiff’s being undercompensated for the significant and permanent injuries he sustained in the underlying accident involving Rakowski’s motor vehicle. II. Triable Issues Were Raised Regarding The Actual Date of the Purported Policy Cancellation and the Sufficiency of GEICO’s Proof of Timely and Proper Mailing of Its Notice of Cancellation, Which GEICO Did Not Adequately Address or Refute. In addition to the foregoing, as noted above, GEICO itself submitted conflicting evidence as to the actual effective date of its purported policy cancellation, some of which established that the cancellation became effective after the subject accident – at midnight on May 19, 2006 [396]; at 12:01 a.m. on October 19, 2006 [30}; that the coverage might still have been saved by payment on May 20, 2006 [401-402], and that there was “good coverage” on May 23, 2006 [id.]. Such evidence, which GEICO did not adequately address or attempt to explain away, in and of itself raised material triable issues of fact sufficient to defeat summary judgment. Moreover, Plaintiff raised triable questions of fact concerning the propriety and effectiveness of its mailing of the Notice of Cancellation, which Rakowski denied receiving or reading at the pertinent time, and GEICO again failed to respond to or rebut those questions. The Certificate of Mailing produced by GEICO [63] was insufficient to establish a proper and effective mailing because the date of mailing was illegible, and there was no proof that the appropriate, or even any, postage was paid for each of the pieces of mail set forth therein. GEICO failed to provide any sworn statements by any employee with knowledge of the mailing and/or procedures at the post office with regard to the Notice of Cancellation in question. The bald and unsupported statements by Pitts, who conceded a lack of personal knowledge of the facts, were clearly insufficient to constitute the requisite common law proof of proper mailing in the absence of a valid Certificate of mailing. See Mid City Construction Co., Inc. v. Sirius America Ins. Co., 70 AD3d 789 (2d Dept. 2010); Cf., Preferred Mutual Ins. Co. v. Donnelly, 22 NY3d 1169 (2014). These failures of proof by -19- GEICO also warranted the denial of its motion for summary judgment. Finally, the court’s conclusion that GEICO established, prima facie, that it properly sent Rakowski notice of the cancellation – citing Jones v. Allstate Ins. Co., 221 AD2d 596 (2d Dept. 1995) – was incorrect and inappropriate. In Jones, unlike herein, the insurer introduced the testimony of “two knowledgeable employees” as to “routine cancellation notice mailing procedures, as well as a ”properly endorsed postal service certificate of mailing,” For all of the foregoing reasons, it is Plaintiff’s contention and request that the Order of the Appellate Division should be reversed, and Plaintiff-Appellant’s Complaint against GEICO should be reinstated and allowed to proceed to a determination by a jury of the issues presented. Respectfully submitted, Jonathan A. Dachs cc. Law Offices of Richard A. Fogel, P.C. 389 Cedar Avenue Islip, New York 11751 WORD COUNT CERTIFICATION Pursuant to 22 NYCRR §500.11(m) The foregoing letter, pursuant to 22 NYCRR §500.11(c)(2), was prepared on a computer, using a word-processing system (WordPerfect 6). A proportionally spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 Line spacing: Single The total number of words in the body of the letter is 6,918. The total number of words in the letter, inclusive of the address, “Re” section, signature and “cc” is 6,986. Certified by: ______________________________ Jonathan A. Dachs, Esq. September 18, 2017 ≤ SUPREME COURT: STATE OF NEW YORK COUNTY OF NASSAU PRESENT? HON. JEROME C- MURPHY, Justice. TRIAL/IAS PART 22 Index No.: 4844-13 Motion Date: 3/27/15 SequenceNo.: €03 ANTONIO GARCIA, Plaintiff, - against - DECISION AND ORDER GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant. The following papers were read on this motion: Notice of Motion, Affirmation,Affidavit and Exhibits.. Affirmation in Opposition and Exhibits.., . Reply Affirmation of Richard Fogel in Support. 1 2 3 PRELIMINARY STATEMENT Defendant brings this application for an order pursuant to CPLR § 3212 on the ground that there is no dispute of material fact that there is no evidence to support plaintiffs allegation that on May 19,2006, there was a $1 million umbrella liability insurance contract in effect entered into by defendant and the insured Jeanne Rakowski or that defendant wrongfully terminated anyumbrella liability insurancecontract with Rakowski, together with such other relief as the Court may deem just and proper. Plaintiff submitted opposition to this application. BACKGROUND Beginning as of October 10, 2003, Jeanne Rakowsi was covered by a $1,000,000.00 Personal Umbrella Insurance Policy with GEICO. The policy, 8 covered a 2003 Land Rover automobile, and a primary residenceat 127th Street, Belle Harbor, New York. The annual premium was $199.00. The policy was renewed for the period October 10, 2004 — October 10, 2005, with the same $1,000,000.00 coverage for the automobile and primary -1- residence. The annual premium was $211.00. During the policy period, an additional vehicle, a 2001 Mercedes Benz, was added and die premium increased to $332.00. 'After theapplication of a premium discount, the premium was reduced to $306.00. Similarly, for the period October 10, 2005 — October 10, 2006, the $1,000,000.00 coverage for thetwo vehicles and the primary residence cost $306.00, which was paid by Ms, Rakowski. In response to die August 29, 2005 suggestion by GEICO that she consider increasing her coverage, she telephoned them on August 30, 2005,seeking an increase in coverage to $2,000,000.00 and adding a rental propertyatÿHE.14*St., Brooklyn, New York as a covered risk. GEICO approved these changes on August 30, 2005 (Def.Exh. “Q”). On August 31, 2005, GEICO sent a notice regarding Policy # BS23S, indicating that the premium was $505, and that the minimum payment was $306.00. This was a change from the August 26, 2005 notification to Ms, Rakowski, which did not include the additional coverage or covered premises. On October 18, 2005 GEICO sent a notification to Ms. Rakov/ski that the amount nowdue was $199.00, indicating that the $306,00 had already been paid. When Ms.Rakowski failed to pay the additional premium of $199.00 by October 27, 2G05, GEICO issued a Notice of Cancellation, for non-payment of premium, dated November 4, „ 2005,which indicated that the premium of$199.00 was past due, and that the policy would be cancelled at 12:01 a.m. Standard Time on August 8, 2006, unless payment was made prior to that date. Ms. Rakowski testified that she had no recollection of receiving the Notice of Cancellation, and that she first learned of the lack of coverage during the course of the trial on behalf of Garcia for his personal injuries. Ms, Rakowski did not pay the additional $199.00, On August 8, 2006, after 12:01 she loaned her vehicle to a friend, who was involved in a collision, injuring plaintiff in this action. Mr. Garcia prevailed in his action against Ms. Rakowski, as owner, and the driver, in the amount of $819,152.90. Rakowski’s primary automobile insurance paid $310,000.00, and Garcia seeksto recover the balance of the award from the umbrella policy in the amount of $1,000,000.00, which he contends was in effect as of thedate of the accident. The issue presented is whether, having paid $306.00 for $1,000,000.00 in umbrella coverage, but having failed to pay $199.00 representing the increased premium for $2,000,000.00 coverage and an additional property, there existed a valid and subsisting $1,000,000.00 policy of insurance; or whether the failure to pay the added premium resulted in a valid cancellation of the aun., -2- policy in its entirety, DISCUSSION The answer to this question brings to the fore the issue of whether or not the policy is divisibleor severable. In Nationwide Mvt. Ins. Co. v. Mason, 37 A.D.2d 15 (2d Dept. 1971), the Court was called upon to resolve an analogous question, which they stated as follows: “(w)here a holder of a fully paid automobile liability policysubsequently requests an endorsement adding another automobile to the coverage of the policy, may the carrier cancel the Entire policy when the insured fails to pay the additional premium for the added automobile?” Lumbermens Mutual Casualty Company(“Lumbermans”) issued a policy of insurance to Hattie B. Dozier (“Dozier”) covering a1957 Ford Automobile, The terra of the policy was December 5, 1967 — December 5, 1968. The policy was renewed for another yearfrom December 5,1968 — Decembers, 1969. On December 13, 1968, the Ford was eliminated from the policy and replaced by a 1961 Buick. The renewal premium of $89 was fully paid. On March 24, 1969, a1961 Chevrolet was added in the policy, and from that day forward, the Buick and Chevrolet were both covered under the policy. On or about April 30, 1969 Lumbermens sent Dozier a notice that there was an additionalpremium of $68 due for “car#2 added” Mason was a passenger in the Dozier Buick-on October 3, 1969, during the term of the December 5, 1968 — December 5, 1969 policy. Lumbermens rejected Mason’s claim for damages for personal injuries, claiming that the policy had been canceled for non-payment of the $68 additional premium. Mason made a Demand for Arbitration against Nationwide, with whom he had a policy providing an uninsured coverage endorsement. The trial court determined that the cancellation notice issued by Lumbermens was ineffective, as they failed to filea copy with the Commissionerof Motor Vehicles within 30 days. The Appellate Division found it unnecessary to address the issue upon which the trial court determined the matter. Rather, the Court concluded that Lumbermens did not havedie right to cancel coverage on the Buick, for which the premium had been paid; its sole right was to cancel coverage of the Chevrolet, for which the additional premium had not been paid. The Court relied upon the language of Donley v. Glens Falls Ins. Co., 184N.Y.107, 111(1906) in determining that, under the rale of severability, that “the coverage afforded by the endorsement had a separate premium and was on a different automobile from the vehicle covered by the policy as thertofore in effect” -3- Thesame principle which dictated the result in Nationwide is applicable to the case at bar. Ms. Rakowski paid $306.00 for a $1,000,000.00 umbrella policy, covering two vehicles and her primary residence for the period October 10, 2005 — October 10, 2006, This policy was in full force and effect on August 8, 2006, when Garcia was injured in an accident involving one of the covered cars. During the course of the deposition of Rich Pitts, on behalf of GEICO, he indicates that the additional unpaid premium of $199,00 was for the sole purpose of increasing the amount of coverage from $1,000,000.00 to $2,000,000.00. The addition of another property did not produce an additional premium, only the increase in coverage (Exh. “O” to Motion, pp. 113 — 118). Accordingly, defendant’s summary judgment motion is denied due to one OT more factual questions that exist against the defendant. This constitutes the Decision and Order of the Court. Dated: Mineola, New York June 15, 2015 ENTER: C MURPEYTÿ<7 J.S.C. ENTERED JUN 1 7 ZQ15 NteSf-J COUi'HY COUNTY K.;s OFFICE • -4- fkzpttm Ctart cf % cf fnrk Appellate Etuteum: #£ami Swiirad Separtment D52554 G/Q/htr Argued - January 17, 2017AD3d_ RUTH C. BALKIN, J.P. CHERYL E. CHAMBERS LEONARDB. AUSTIN SANDRA L. SGROI HECTOR D. LASALLE, JJ. 2015-05471 DECISION & ORDER Antonio Garcia, respondent, v Government Employees Insurance Company, appellant (Index No. 4844/13) Law Offices of Richard A. Fogel, P.C., Islip, NY, for appellant. Shayne, Dachs, Sauer & Dachs, LLP, Mineola,NY (Jonathan A.Dachs of counsel), for respondent In an action pursuant to Insurance Law § 3420(a)(2) to recover the amount of an unsatisfiedjudgment against the defendant’s insured, the defendant appeals from an order of the Supreme Court, Nassau County(J.Murphy, J.), enteredJune17, 2015,which deniedits motionfor summary judgment dismissing the complaint. ORDERED that the order is reversed on the law, with costs, and the defendant’s motion for summary judgment dismissing the complaint is granted. On May 19, 2006, the plaintiff, Antonio Garcia, was injured whenhe Was struck by avehicle in aparkinglot inBrooklyn. Garciacommenced an action against Jeanne Rakowski, who owned the vehicle, and Linda Danielson, who, with Rakowski’s permission, was driving it when it struck Garcia. In 2012, Garcia obtained a judgment against Rakowski and Danielson. After obtaining partial satisfaction of that judgment, Garcia sought to recover the unsatisfied portion of it from Government Employees Insurance Company (hereinafter GEICO). GEICO had issued a personalumbrellapolicy(hereinafter theumbrellapolicy) to Rakowski,andGarciaclaimed that the umbrella policy was in effect when Rakowski’s vehicle struck him. After GEICO failed to satisfy the remainder of the judgment within 30 days of Garcia’s request, Garcia commenced this action June 28, 2017 Page1. GARCIA, v GOVERNMENT EMPLOYEES INSURANCE COMPANY against GEICOpursuant toInsuranceLaw§3420(a)(2), Healleged,inrelevantpart,that,at the time of the accident, Rakowski’s umbrella policy, in the amount of $1,000,000, was in effect. He also alleged that GEICO’s purported cancellation of that policy before the accident was “improper, invalid, and ineffective.” GEICO moved for summaryjudgment dismissing the complaint on the ground that Rakowski’s umbrella policy was not in effect at the time of the accident. Specifically, GEICO contended that Rakowski’s umbrella policy, which contained aliability limit of $2,000,000 for the contractedpolicyperiod,had been cancelledfornonpayment of premium,effectiveat 12:01 am on May 19,2006, only a few hours before Rakowski’s vehicle struck Garcia. In supportofits motion, GEICOsubmitted evidence thatinAugust2005,Rakowski, who had a coverage limit of $1,000,000 for the period ending October 10, 2005, requested, and received, a renewal policy, for the period from October 10, 2005, to October 10, 2006, with a coverage limit of $2,000,000. Rakowski also added a rental propertyto the policy for that period. The increase in the coverage limit from$1,000,000 to $2,000,000 resultedin a$199 increase inthe premium. The addition of the rental property, however, did not result in any increase in the premium. Specifically, GEICO submitted the “Ameuded Declarations,” dated August 31, 2005, showingthe $2,000,000 coverage limit for theperiod from October 10, 2005, to October10,2006, theincreaseof$199“FORADDITIONAXCOVERAGETOSECONDMILLION,” andtheincrease of $0 for the addition of the rental property. GEICO also submitted Rakowski’s deposition testimonythatshehadrequestedthe$2,000,000 coveragelimit for theperiodbeginning October10, 2005. Notably, the Amended Declarations stated: “AMENDED DECLARATION EFFECTIVE 10/10/05 SUPERSEDES ANY PREVIOUS DECLARATION BEARING THE SAME NUMBER ' FOR TEES POLICY PERIOD.” GEICO also submitted evidence that before the beginning of the . renewal term, Rakowski made a $306 premium payment (the amount of the previous year’s • premium),buthad not paid the additional $199 that was due for the increase inher coverage limit. FinaEy,'GEICO submitted evidence that in November 2005, it had mailed Rakowski a notice informing her that her policy would be cancelled effective 12:01 a.in. on May 19, 2006, if she did not pay the remainder of the premium. The cancellation notice referenced Rakowski’s' policy number, which remained constant throughout the various policy periods. Garcia opposed GEICO’s motion. He contended that there was an issue of fact as to whether Rakowski’s payment of $306 before the commencement of the policy period beginning October 10, 2005, secured a fully paid policy providing a full year of coverage for $1,000,000. Additionally, Garcia contended that GEICO had failed to establish, prima facie, that it had validly cancelled the policy, whatever the limit of coverage. The Supreme Court denied GEICO’s motion, holdingthat therewas atriable issue offact as to whetherRakowsM’sumbrellapolicywasseverable as to the limits of liability. GEICO appeals. GEICO contends that, as a matter of law,Rakowski’sumbrella policyfor the period commencing October10, 2005, provided coverage of $2,000,000, and thatRakowski’s payment of only a portion of her premium for that policy resulted in GEICO’s valid cancellation of the policy after the prorated period covered by her payment expired. Hie umbrella policy, and Rakowski’s coverage, terminated upon cancellation at 12:01a.m. ou May 19, 2006, a few hours before Garcia June 28, 2017 Page 2. GARCIA v GOVERNMENT EMPLOYEES INSURANCE COMPANY was injured. Garcia, in contrast, contends there is a triable issue of fact as to whether Rakowski’s umbrella insurance contract was, on the one hand, “entire,” or, on the other hand, “severable” or “divisible.” If thepolicywasseverableordivisible,Garciacontends, thenRakowskihadafullypaid policyfor$1,000,000 that lasted from October10,2005, to October 10, 2006. Rakowski’s failure topaythepremium applicable to the “second million” of coverage meant onlythat she didnothave the second million dollars of coverage, at any time. We agree with GEICO. Resolution of disputes about insurance coverage begin with examination of the language of thepolicy(seeLendLease[US] Constr.LMBInc.vZurichAm.Ins.Co.,28 NY3d675, 681; Consolidated Edison Co. ofN.Y. v Allstate Ins. Co., 98 NY2d 208, 221). Interpretation of ■unambiguouspolicyprovisions,whichmustbegiven theirplain and ordinarymeaning, is aquestion of law(seeLendLease[US]Constr. IMBInc.v Zurich Am. Ins. Co.,28NY3d at681-682;Vigilant Ins.Co. vBear Steams Cos.,Inc.,10NY3dl70,177). Further, while ambiguities in an insurance contractare tobeinterpreted infavor of the insured (seeLendLease[US] Constr.LMBInc.vZurich Am.Ins. Co.,28 NY3d at 682; Matter of VikingPump, Inc.,27 NY3d 244, 257), ambiguities arise only where there is more than one reasonable interpretation of the policyÿ as measured by the reasonable expectations of the average insured. In other words, even where policy language is susceptible of more than oneinterpretation, there is no ambiguity if only one of them is reasonable (peeFederalIns. Co.v International Bus.Machs. Corp.i18NY3d 642,650; Great Am.Restoration Servs.,Inc. v Scottsdale Ins. Co.,78 AD3d 773, 116\Antoine v City of New York, 56 AD3d 583, 584). More specifically, an insurance intend thatit be divisible (see FirstSav. &LoanAssn.of Jersey City, N.J. v American HomeAssur. Co.f 29 NY2d 297,299; Donley v Glens Falls Ins. Co.r184 NY 107, 111). The parties’ intention ■> is ta be gleaned from the language of the contract and the application of the-rules governing : contractualinterpretation(see First Sav. &LoanAssn:of Jersey City,N.J:vAmericanHomeAssur. Co.,29 NY2d at 299). The general rule is that an insurance contract is not divisible “‘whenby its terms’, nature, and purpose, it contemplates and intends that each and all. of its parts and the considerationtherefor shall be common each tothe otherandinterdependent.Onthe otherhand, the contractisconsideredseverableand divisiblewhenbyitsierms,nature,andpurpose,it issusceptible of division and apportionment’” (id. at 299-300, quoting 29 NY Jur, Insurance § 643). The question of divisibility arises when, for example, a:policy covers separate properties or separate risks, and the policyholder has breached a condition or warranty as to — properly or one type of risk, but not involving the lossat issue. In the context of the insured’s nonpayment of a portion of the premium, the issue of divisibility arises when, for example, a policyholder has made a change to a fully paid policy but has not paid the additional premium occasionedbythechange. Dependingon the insurancecontract at issue,thelines of divisibilitymay run between the types of risk covered by the contract, such as property damage as opposed to personal injury (seeAmerican Sur. Co. ofN.Y. v Rosenthal, 206 Misc 485, 488 [Sup Ct, Nassau County]), orbetween the differentpropertiescovered,such as where differentvehicles or properties are coveredby the policy (see Matter of Nationwide Mut. Ins.Co. [Mason-Lumbermens Mut. Cas. Co.],37AD2d 15, 18; MatterofPrudentialProp. &Cas.Ins. Co.[Pearce],126Misc2d1044[Sup Ct,NassauCounty], subnom- MatterofPrudentialProp&Cas.Co.fPearce-Country-Widelns. Page 3. contract is divisible, when the contracting parties one June 28, 2017 GARCIA, v GOVERNMENT EMPLOYEES INSURANCE COMPANY Co.],120AD2d597; cf.First Sav.&LoanAssn.of Jersey City,N.J. vAmerican Home Assur. Co., 29NY2dat300). When, however, an insuredhas increased liability limits of an entire policy as of the inception date of coverage, buthas not paid thefull premium and thepolicyhas thus lapsed,the CourtofAppeals has held that thepolicyisnotdivisible toprovidecoverageinalesseramount than stated in the policy, at least where no different type of risk had been added to the policy (see First Sav. & Loan Assn,of Jersey City, N. J. v American Home Assur. Co.,29 NY2d at 299). Here, there is no ambiguity in Rakowski’s umbrella policy as to either coverage or divisibility. Rakowski contracted, before the policy term began, for an umbrella policy covering specified risks, with a coverage limit of $2,000,000. The policy she received unambiguously providedfor the amount of coverageshe had requestedwith respect to risks she had specified:the AmendedDeclarations of the insurance contract, dated August 31,2005, stated that, for thepolicy period,of October10, 2005, to October10,2006,therisks pertainedtothespecified properties and vehicles, and the coverage limit pertainingto those risks was $2,000,000. Garda argues, and our dissenting colleagues would,conclude, that, because of how the premiums were set out in the Amended Declarations,- there is an ambiguity as to whether Rakowskireceivedapolicyfor $2,000,000 or$l,000,000, oras towhetherthepolicywasdivisible or severable as to the amount of coverage. We disagree-The fact that the premium was separately statedfor the increase inthe coverage limit is irrelevanthere. The$1,000,000 renewal proposal of the policyfrom theprevious year hadalready beensent out beforeRakowski askedfor an increase in the amount of coverage to $2,000,000. The “Amended Declarations,” which, by their terms, “SUPERSEDEfD]ANY PREVIOUS DECLARATION” for the policy period beginning October : ■ 10, 2005,were sentto Rakowski aftershe asked for.the? changes toherpolicy. Thus, the additional billing, which separated the original premium from the amount attributable to the increase, was v unremarkable and did not give rise to an ambiguityin the policy that Rakowski had asked for and ifjGEICO agreed to provide: a liability limit of $2,000,000 asnf.the beginning of the new policy. .period. Garda isnotseekingto divideRakowski’spolicy,butyineffect,to rewrite it toprovidewhat- Rakowski never asked for.a policywith coverageof only$1,000,000. I. As Garcia points out, forfeiture is not favored in the law (see Matter of Prudential Prop. & Cas. Ins. Co. [Pearce], .126 Misc 2d at1047), and, where cancellation of an entire policy would result in forfeiture, courts may be reluctant to hold that an insurancecontract is notdivisible (seeid.;seealso MatterofNationwideMut. Ins. Co.[Mason-LumbermensMut.Cas.Co.]-,37AD2d at 20). There is, however, no forfeiture here. RakowskLasked for, and received, a $2,000,000 policy, andshe had$2,000,000 in coverage fromthe outset of the policyperiod, October 10,2005. Because she only paid part of the premium, her coverage was cancelled, upon notice, when the proratedpremium for thecoverageshecontractedforwas exhausted. In otherwords,Rakowskigot everythingshe paidfor, and sheforfeited nothing. ThatRakowski “just missed” being insured for the injuries caused to Garcia is unfortunate, but nonetheless irrelevant to this analysis. GEICO sent its cancellation notice more than six monthsbeforeRakowski’s vehiclestruck Garcia, We are not free to alter the meaning of the policy to avoid the result caused byRakowski’s nonpayment of the premium for her $2,000,000 policy (see White v Continental Cas. Co., 9 NY3d 264, 267; cf. Greenfield v PhillesRecords, 98 NY2d 562,573). Page 4.June28, 2017 GARCIA v GOVERNMENT EMPLOYEES INSURANCE COMPANY Next, because there is no ambiguity in what Rakowski contracted for— $2,000,000in coverage, as stated in the Amended Declarations of thepolicy— there islikewise no ambiguityin GEICO’snoticeofcancellation,whichreferred to thepolicynumberofRakowski’sumbrellapolicy. ThecancellationnoticecouldonlyhavepertainedtoRakowski’s coverageof$2,000,000,which was the only coverage the policyprovided for the policy period (,see First Sav. &Loan Assn, of Jersey City, N. J. v American Home Assur. Co.,29 NY2d at 300). Finally, GEICO established,primafacie, that it properlysentRakowskinoticeof the cancellation (seeJonesvAllstate Ins.Co.,221AD2d 596,597). In opposition,Garcia failed to raise a triable issue of fact. Garcia’s remaining contentions are without merit. Accordingly, theSupreme Courtshouldhavegranted GEICO’s motionforsummary judgment dismissing the complaint. BATKIN, J.P., CHAMBERS and LASALLE, JJ., concur. SGROI, J., dissents, and votes to affirm the order appealedfrom, with the following memorandum, in which AUSTIN, J., concurs. Theissuepresented inthis case is whether an umbrella insurancepolicy-providedby thedefendantGovemmentEmployeesInsuranceCompany(hereinafterGEICO)toJeanneRakowski was entire, such that it provided $2,000,000 of coverage in exchange for a premium of $505, or whether it was severable, such that itprovided $1,000,000 of coverage in exchange for a premium of $306, and an additional $1,000,000 in coverage in-exchange for an additional premium of$199. If the contract wasseverable,then Rakowski’s payment of$306 wassufficientto secure$1,000,000 of coverage for the entire policy period, a Tesult which would avoid a forfeiture of Rakowski’s umbrella insuranceprotectionfor a portion of the policy period, asfavored by the law (see Matter . . of Prudential.Prop. & Cas. Ins. Co. [Pearce],126 Misc 2d 1044, 1047 [Sup Ct, NassauCounty], qffdsub nom. Matter of Prudential Prop. & Cas. Co. [Pearce-Country-Wide Ins. Go],-Y2§ AD2d 597). Sincethequestionof whether the contract was-entire orseverable rests on the intention of the - parties, and there are factual questions as to those intentions, as demonstrated by ambiguityin-the - policy,billingstatements,andnotice of cancellation,Iwouldaffirmthedenialof GEICO’s summary judgment motion. Jeanne Rakowski was issued a personal umbrella insurance policy by GEICO, effective October 10, 2003. The policy carried- a limit of liability of $1,000,000, and covered Rakowski’s primary residence and a car. The policy was renewed for thepolicy period ofOctober 10, 2004,to October10,2005. IaMarch2005,Rakowskimade a change tothepolicyto add another vehicle, after which her total premium for the policy was $306. OnAugust29,2005, GEICOsent toRakowski renewalpapers for her policy,for the periodof October 10, 2005, to October10, 2006, at the same premium of $306. The letter enclosing the renewal policy urged Rakowski to consider increasing the limits of her umbrella policy. The June 28, 2017 Page 5. GARCIA v GOVERNMENT EMPLOYEES INSURANCE COMPANY following day, Rakowski contacted GEICO and requested an increase in the coverage limit from $1,000,000 to $2,000,000, as well as the addition of a rental property in Brooklyn. On August 31, - 2005, GEICO sent Rakowski “Amended Declarations,” containing the same policy number that appeared on her prior umbrella policies. The Amended Declarations listed the limit of liability as $2,000,000 and included the Brooklyn property. As a separate line item, a premium of $199 for “additional coverage to second million” "was listed. The premium of $199, when added to the original $306 premium, brought the total premium to $505. On the same day, although Rakowski was on a“one-pay” rather than an installment paymentplan, shewassentabillfor the “minimum amount due” intheamount of$306. OnOctober 18, 2005, Rakowskiwas separatelybilledfor$199. WhileRakowskipaid $306,she didnotpaythe additional$199. OnNovember4,2005, GEICO issued a notice of cancellationfor nonpayment of premium, advising that her"insurance as indicated below is hereby Cancelled as of12:01 a.m.” on May 19, 2006. “Below” was a box containing the policy number and stating: “Please act now to preventcancellation of your insurance protection On the afternoon of May 19,2006, Rakowski loaned hercar to an employee and the carwasinvolvedinanaccident inwhichtheplaintiffwasinjured. Thefollowingday, GEICOcalled .Rakowski to attempt to collect “the premium,” but no one answered the telephone. Upon an award of damages to the plaintiff arising from the accident, the plaintiff requestedpaymentby GEICO of the amountof the judgment that remainedunpaid after exhaustion of primary insurance policies. When GEICO failed to pay, the plaintiff commenced this action ■ against GEICOpursuant to InsuranceLaw §3420torecovertheamountof the unsatisfiedjudgment - againstRakowski. GEICO movedfor summary judgment dismissing the complaint, asserting that theentireumbrellapolicywascancelledhours beforetheaccident The plaintiff responded that the additional coverage attributable to the unpaid premium of $199 was severable, and thus, there was a $1#00,000.umbrella policy, paid for by Rakowski and.in effect at the time,of the accident. The SupremeCourt denied themotion, concluding thatissues of factexistedas towhetherthepolicywas severable. “Fundamentally andprimarily, the question of divisibility orseverability rests upon the question of intention of the parties deducible from thestipulations of the contract and the rules of construction governing the ascertainment of that intention” (First Sav. & Loan Assn, of Jersey - City, N.J. v American. Home Assur, Co.,29 NY2d297, 299 [internal quotation marks omitted]; see Christian v Christian, 42 NY2d 63, 73). “As a general rule, a contract is entire when by its terms, nature, and purpose, it contemplates and intends that each and allof its parts and the consideration therefor shall be common each to the other and interdependent. On the other hand, the contract is • considered severable and divisible when by its terms, nature, and purpose, it is susceptible of division and apportionment” (First Sav. &Loan Assn,of Jersey City, NJ. v American Home Assur. Co.,29 NY2d at 299-300 [internal quotation marks omitted]). Where “‘the language of a contract is ambiguous, its construction presents a question of fact which may not be resolved by the court on a motion for summary judgment’” (Majawalla v Utica First Ins. Co.,71 AD3d 958, 960, quoting Pepco Constr. ofN.Y., Inc. v CNA Ins. Co.,15 AD3d 464, 465). June 28, 2017 Page 6. GARCIA v GOVERNMENT EMPLOYEES INSURANCE COMPANY Here, GEICO failed to eliminate triable issues of fact as to whether the parties intended their contract to be severable, such that the notice of cancellation would affect only the increasedcoverage. Inparticular,theAmendedDeclarationsprovided totheinsuredlistedaseparate premium “for additional coverage to second million.” Rakowski was then separately billed $306, the same amount as the premium for the first $1,000,000 of coverage, and $199, the amount listed as thepremium“foradditional coverageto secondmillion ” Thesefactsareequivocal asto whether thepartiesintendedthecoveragefor thefirst$1,000,000 and thecoverageforthesecond$1,000,000, “and the consideration therefor” to he “common each to the other and interdependent” or to be divisible (First Sav. & Loan Assn, of Jersey City, N.J.v American Home Assur. Co., 29 NY2d at 299; cf.Matter ofNationwideMut. Ins. Co. [Mason-LumbermensMut.Cas. Co.],37AD2d15,19; Matter of Prudential Prop. & Cas. Ins. Co. [Pearce],126 Misc 2d at 1046). The notice of cancellation was similarly equivocal. It advised that Rakowski’s “insurance as indicated below” was cancelled. ‘While thebox that appeared “below” contained the policy number, it advised Rakowski that she should “act now to prevent cancellation of [her] insuxance protection” (emphasis added) as opposed to her insurancepo/zqy. These facts make this matter distinguishable from First Sav. &Loan Assn, of Jersey City, N. J-vAmerican Home Assur: Co. (29 NY2d297),in which the Court of Appeals held that an endorsement addedto an insurance policy to increase the amount of coverage in consideration of an additional premium was not divisiblefrom the underlying policy, and thus, that a notice of cancellation for nonpayment of the additional premium affected the entire policy. In that case, the endorsement recited that it was "attached to andforming part of [the] policy” (id.at 299). Thus,-the contract in that case,imblm in - the present case, explicitly provided that the -initial-policy and the endorsement of additional coverage formed one, inseparable contract (see id. at 300). Similarly, as the Court of Appeals emphasized, the notice of cancellation in that case, as opposed to that issued in the present case, “specifically referred to [the] policy...inits entirety,” reciting“the policy . . i issued to you, is cancelled” (id. at 299). - . - Finally, the insuredinFirst Sav.&Lodnwasbilled aseparatepremiumfor additional- , . CQveragebecausefheendorsementwas addedmonthsafterthepolicyperiodbegan andthepremium was.paid Here,.in contrast, no premium had been paid at the time Rakowski requested additional coverage. Yet, eventhoughRakowski was noton an installment payment plan, rather than-sending a bill for $505, GEICO billed Rakowski $306, representing the~premium charged for the first " ... $l,000,000of coverage, and,separately, $199, representing the additional $1,000,000 of coverage. The deposition testimonyof GEICO*s representative as to the alleged reasons Rakowskiwas billed in that manner, which concerned GEICO’s automatedbillingsystem, merelyraises an issue of fact Similarly, as my colleagues in the majority point out, after Rakowski requested the* - changes to herpolicy,and,as GEICO characterizes it, rejectedits offerof therenewalpolicy,GEICO issuedanentirelynewdeclarationspage. Yet, GEICO