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ICSC Legal Database - CasesMonday, February 22, 1999 05:01 PM

Case Index:
00020

Citation:
Badillo v. Tower Ins. Co., 663 N.Y.S. 2d 207 (N.Y. App. Div. 1997).

Issue:
An insurer paid a tenant for damages caused by a fire based only on the tenant's word that there were no

encumbrances on, and no other interests in, the property. A secured party that had filed a UCC statement sued

the insurance company to recover the proceeds paid to the tenant. The court held that the insurance company

had constructive notice of the claim by virtue of the filed financing statement and could not claim lack of notice.

The court also rejected the company's claim of fraud because the tenant's only misrepresentation concerned the

 rightful recipient of the insurance proceeds and did not influence the insurer to issue a policy it would not

otherwise have issued. Because the insurance policy was valid and the insurer had constructive notice of the

perfected financing agreement, the court granted summary judgment for the creditor.

Facts:

Holding:

Publication:
Legal Update

Date:
Spring 1998

Classification 1:
Insurance

Classification 2:

Classification 3:

00020 - Legal Update - Spring 1998