Court of Appeals – Breach of contract: Hobish, et al. V. AXA Equitable Life Insurance Co.

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New York State Court of Appeals

Breach of contract — Universal variable life – Ambiguity — Restitution

Hobish, et al. V. AXA Equitable Life Insurance Co.

No. 124

Judge Troutman

Background: The plaintiff’s alleged breach of contract and violation of General Business Law Section 349 against the defendant in connection with the purchase of a universal life insurance policy and the defendant’s decision to increase the effective cost of the policy eight years later. The plaintiff’s appealed from the grant of summary judgment to the defendants.

Ruling: The Court of Appeals affirmed. The court held that it was proper to deny the plaintiffs’ request for summary judgment as the contractual term “given class” was ambiguous, noting that the policy at issue uses the term “class” twice each in different contexts. Thus, per the four corners of the contract the term could have two meanings. The extrinsic evidence presented did not resolve the ambiguity. The Court of Appeals further held that the plaintiffs’ claim that they are entitled to sue for the full value of the policy because they had a right to terminate the contract due to the defendant’s breach misconstrued the record. They did not terminate the policy but rather opted to enforce it, which allowed them to take the surrender value of the policy.

Gary J. Malone for the appellants; Karry H. Krantz for the respondent.

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