Flushing Traditional Acupuncture, P.C. v. Auto Club Ins. Association, 2014-1266 K C, NYLJ 1202755803082, at *1 (App. Tm., 2nd, Decided April 11, 2016):
Medical provider appealed from a Civil Court order which dismissed the complaint on the ground of lack of insurance coverage. Insurer argued the court failed to obtain jurisdiction over it and there was a lack of coverage for the involved vehicle as a Michigan court issued an order declaring the policy invalid at inception due to rescission based on the insured’s fraud. The Appellate Term found that since the cause of action arose in New York, service of process on the Superintendent of insurance was sufficient to acquire jurisdiction over defendant:
Despite defendant’s assertions that it does not write insurance policies or conduct business in New York, it is uncontroverted that defendant’s New York certificate of authority states that defendant is licensed to engage in specified insurance business in New York. Consequently, defendant was authorized to do business in New York State, and, pursuant to Insurance Law §1212 (a), an insurer authorized to do business in the state must appoint the Superintendent of Insurance as its agent for service of process “in any proceeding against it on a contract delivered or issued for delivery, or on a cause of action arising, in this state” (emphasis added). Inasmuch as the cause of action in the case at bar arose in New York, we find that the service of process upon the Superintendent of Insurance was sufficient to acquire jurisdiction over defendant (see Insurance Law §1212 [b]).
Also, while Michigan law permitted rescission of insurance for fraud, it generally denied an insurer’s right to rescind a policy in order to avoid payment of no fault benefits to an innocent third-party. Thus, contrary to the civil court’s decision, the Supreme Court’s holding in Titan Ins. Co. v. Hyten, did not abrogate the innocent third-party rule, and insurer could no rely on a lack of coverage defense to withhold payment of benefits to plaintiff for medical services it rendered to its assignor—an innocent third-party, reversing the order and denying summary judgment dismissal.