When an Ambiguous Policy Provision Does Not Necessary Mean a Loss in the Win/Loss Columns

LIFE INSURANCE – POLICY INTERPRETATION – AMBIGUITY – GENERAL BUSINESS LAW § 349 – PUNITIVE DAMAGES 

Hobish v. Axa Equitable Life Ins. Co. 
(NY App. Div., 1st Dept., 05/25/2023) 

Although this is a life insurance, rather than a property/casualty insurance, case, there are several important #insurance coverage/policy interpretation points at work in this decision:

A policy provision is ambiguous when it is susceptible to two or more reasonable interpretations. 
A New York court is not required to resolve the ambiguity against the insurer when extrinsic evidence presented in the case is not conclusory as to the provision’s meaning. 
Unless the extrinsic evidence supports only one party’s proposed interpretation, the ambiguity should not be resolved by the court as a matter of law.The court also:AFFIRMED Supreme Court’s denial of summary judgment to the defendant dismissing plaintiff’s General Business Law § 349(h) cause of action, holding that “even if the decedent did not read the policy herself, issues of fact exist as to whether there was consumer impact in this case”; 
AFFIRMED Supreme Court’s grant of summary judgment to defendant dismissing plaintiffs’ claim for compensatory and consequential damages on the breach of contract cause of action, based on plaintiffs’ election not to terminate the contract and sue for a total breach, but instead maintain the policy with higher rates and then under protest exercise the surrender provisions of the policy;AFFIRMED Supreme Court’s dismissal of plaintiffs’ claim for “restitutionary” damages pursuant to General Business Law § 349(h), holding that such damages were “too speculative to constitute actual damages under the statute”; AFFIRMED Supreme Court’s dismissal of plaintiffs’ claim for punitive damages of $12 million on its General Business Law § 349(h) cause of action based on its observation that GBL 349(h) provides for only “limited punitive damages” in the form of “an award of actual damages or fifty dollars, although a court may increase an award up to three times, up to one thousand dollars”.