Law of Contracts, Not Law of Torts, Applied to Conflict of Laws Analysis Concerning Motor Vehicle Insurance Policy

The Second Department determined the law of contracts, as opposed to the law of torts, controlled which state law applied.  The case involved a car accident in Florida and an insurance policy issued in New York:

It is undisputed that this conflict of law question, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts … . Generally, “the courts apply the more flexible center of gravity’ or grouping of contacts’ inquiry, which permits consideration of the spectrum of significant contacts’ in order to determine which State has the most significant contacts to the particular contract dispute” … . “In general, significant contacts in a case involving contracts, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties” … . As to insurance contracts specifically, significance has been attached to the ” local law of the state which the parties understood was to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 [of the Restatement] to the transaction and the parties'” … . In the case of a noncommercial vehicle, which is by its nature mobile, the principal location of the insured risk is the place where the vehicle is to be principally garaged … .

Here, as the Supreme Court correctly noted, the insurance contract at issue was written to conform to the laws, rules and regulations of New York State, and was obtained in New York by Brand, a New York resident, from an insurance company doing business in New York. Furthermore, Brand served the demand for SUM [supplemental uninsured/underinsured motorist] arbitration upon the American Arbitration Association in New York. Applying the grouping of contacts inquiry to these facts, New York has the most significant contacts with the parties and the contract. Indeed, such a conclusion would be in conformity with the reasonable expectations of the contracting parties. Matter of Unitrin Direct/Warner Ins co v Brand, 2014 NY Slip Op 05887, 2nd Dept 8-20-14