A number of years ago, a couple purchased a three-story house in Woodside, Queens, that contained three separate dwelling units, each with its own kitchen, bathroom and separate entrance. Thereafter, the couple applied for and obtained a fire insurance policy from Otsego Mutual Fire Insurance Co., indicating on their application that the house was a two-family dwelling. After the house was damaged by fire, Otsego rescinded its policy on the ground that the couple had made a material misrepresentation of fact by stating on their insurance application that the house was a two-family dwelling.

The couple sued, but Supreme Court, Queens County, granted the insurer’s motion for judgment as a matter of law. The case reached the Appellate Division, Second Department. The appellate court affirmed, finding that the insurer had the right to rescind the policy due to the policyholders’ material misrepresentation of fact in asserting that the house was a two-family dwelling when, in fact, it was a three-family home. Estate of Chu v. Otsego Mutual Fire Insurance, 148 A.D.3d 677 (2d Dep’t 2017).

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