Court deems insurer's misrepresentation claim in avoidance of policy obligations "frivolous"
The Novus Centuriae Reinsurance Company and its alter-ego, Robert Feala, apparently attempted to void their insurance obligations to a third-party by claiming that its policy was underwritten only because Smith & Associates Insurance Agency, Inc., had included misrepresentations in the application for the policy. The trial court determined that it was irrelevant whether the application was entirely accurate because the plaintiff insurer did not exist at the time the application was written. Since the insurer didn't exist at the time of the application, and since it had no relationship of any kind with the Defendants at that time, any alleged misrepresentations were not made to, or relied upon by, the plaintiff insurance company. On that basis the Court of Appeals upheld sanctions against both the insurer and its attorneys for filing a frivolous claim.