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Supreme Court of New York, Appellate Division, First Department
December 10, 2020, Decided; December 10, 2020, Entered
Appeal No. 12589-12589A, Case No. 2019-3806, 2019-3807
[**6] [*519] Judgment, Supreme Court, New York County (Andrea Masley, J.), entered April 19, 2019, dismissing the complaint, and bringing up for review an order, same court and Justice, [*520] entered on or about April 3, 2019, which, to the extent appealed from, granted defendants-respondents' motions to dismiss the second amended complaint, unanimously reversed, on the law, with costs, the judgment vacated, and plaintiff granted leave to file a third amended complaint and replead its cause of action pursuant to the New York False Claims Act (State Finance Law art XIII) to the extent not time-barred. Appeal from aforesaid order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
] Abandoned Property Law article VII requires the proceeds of life insurance policies that have been unclaimed for three years to be escheated to the State. A prior version of this statute was previously held to be constitutional in Connecticut Mut. Life Ins. Co. v Moore (187 Misc 1004, 65 N.Y.S.2d 143 [Sup Ct, NY County 1946], affd 271 App Div 1002 [1st Dept 1947], mod 297 NY 1, 74 N.E.2d 24 , affd 333 US 541, 68 S. Ct. 682, 92 L. Ed. 863 ). At each level of review, the Courts in that case rejected the argument, raised by defendants life insurers herein, that [***3] life insurers had no duty to escheat unclaimed life insurance proceeds in the absence of proof of death of the insured (see 187 Misc at 1021; 297 NY at 10; 333 US at 546-547).
In the early 2010s, the State undertook to investigate the manner in which life insurers tracked policyholders and found that life insurers were not adequately verifying whether their policyholders had died in the absence of a claim from a beneficiary. The investigation allegedly resulted in nationwide payments by life insurers of over $250 million, including almost $100 million to New Yorkers. This investigation was followed by the promulgation of regulations requiring life insurers to take certain measures to identify deceased policy holders (see Department of Insurance Regulations [11 NYCRR] part 226) as well as statutory amendments to achieve that goal (see L 2013, ch 10; L 2012, ch 495).
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
189 A.D.3d 519 *; 139 N.Y.S.3d 3 **; 2020 N.Y. App. Div. LEXIS 7675 ***; 2020 NY Slip Op 07480 ****; 2020 WL 7250206
[****1] Total Asset Recovery Services LLC, on Behalf of the State of New York, Plaintiff/Relator-Appellant, v Metlife, Inc., and its Subsidiaries and Affiliates, et al., Defendants-Respondents, Brighthouse Financial, Inc., and its subsidiaries and affiliates, et al., Defendants. State of New York, Nonparty Respondent. Index No. 115336/10
Notice: THE LEXIS PAGINATION OF THIS DOCUMENT IS SUBJECT TO CHANGE PENDING RELEASE OF THE FINAL PUBLISHED VERSION.
THIS OPINION IS UNCORRECTED AND SUBJECT TO REVISION BEFORE PUBLICATION IN THE OFFICIAL REPORTS.
Subsequent History: Counsel Amended December 17, 2020.
escheat, life insurer, abandoned property, life insurance proceeds, false claim, policyholders, allegations, false report, unclaimed
Business & Corporate Compliance, Insurance Company Operations, Company Ownership, Mutual & Stock Companies, Insurance Law, Types of Insurance, Life Insurance, Assignments & Transfers, Real Property Law, Ownership & Transfer, Death & Incapacity, Escheat, Estate, Gift & Trust Law, Estate Administration, Intestate Succession, Nonprobate Transfers, Life Insurance, Governments, State & Territorial Governments, Claims By & Against, Labor & Employment Law, Employer Liability, False Claims Act, Burdens of Proof, Civil Procedure, Pleadings, Complaints, Requirements for Complaint, Scope & Definitions, Qui Tam Actions, Bankruptcy Law, Case Administration, Unclaimed Property, Amendment of Pleadings, Leave of Court, Legislation, Interpretation, Statute of Limitations, Time Limitations