Rozenfeld v. AAA Northeast

Background

Linda Rozenfeld sued Hartford Life and Accident Insurance Company over an accidental-death insurance policy purchased by her husband. Rozenfeld alleged breach of contract and a violation of New York Insurance Law § 3420.

Rozenfeld’s husband died after a physician assistant attempted to replace his tracheostomy tube and inserted it into a false passage rather than the trachea. The resulting drop in oxygen caused brain hypoxia from which he did not recover. The policy covered an injury that directly resulted from an accident and independently of other causes, but excluded losses resulting from sickness or disease or from medical or surgical treatment of a sickness or disease.

After Rozenfeld submitted a proof of loss, Hartford denied the claim. Hartford moved for summary judgment, which is a decision without a trial when the record shows no genuine dispute about a fact that could affect the outcome. Rozenfeld filed a cross-motion for summary judgment and asked to amend her pleadings to add policy language concerning payment within 30 days after receipt of a proof of loss.

Court’s Analysis

The court concluded that the policy’s medical-treatment exclusion applied. Relying on the cited case law, including New York decisions, the court treated the tracheostomy-tube mishap as part of the medical or surgical treatment rather than as a separate accidental event covered by the policy. The court distinguished a case involving a policy without a medical-treatment exclusion because Hartford’s policy contained that exclusion.

The court also rejected Rozenfeld’s claim under New York Insurance Law § 3420(d)(2). It held that the provision applies to liability insurance policies, not accidental-death insurance policies, and therefore does not require payment of the claimed benefits.

The court denied leave to amend the pleadings because the proposed amendment would be futile. The policy language required payment within 30 days only when Hartford determined that benefits were payable. Hartford had not made that determination and, the court held, had properly denied the claim under the exclusion. The court also stated that a delayed denial would not require payment of a claim that was otherwise properly denied, and found no basis for estoppel because Rozenfeld had not alleged reliance on Hartford’s conduct.

Disposition

The court GRANTED Hartford’s motion for summary judgment. It DENIED Rozenfeld’s cross-motion for summary judgment and DENIED Rozenfeld’s motion to amend the pleadings. The Clerk was directed to enter judgment in favor of Hartford and terminate the action.

Practical Effect

Rozenfeld did not recover benefits under the accidental-death policy. The court’s ruling resolved the action in Hartford’s favor based on the policy exclusion and its conclusion that New York Insurance Law § 3420 did not apply.