Opinion ID: 2057170
Heading Depth: 2
Heading Rank: 1

Heading: The Goshen Action

Text: Plaintiffs in this action are insurance policy purchasers who claim to be the victims of a deceptive scheme contrived and implemented by defendants Mutual Life Insurance Company of New York and its wholly owned subsidiary, MONY Life Insurance Company of America (MONY). Defendants have extensive ties to New York and conduct business in the state. Plaintiffs purchased vanishing premium policies from defendants at various times before starting this action. A vanishing premium would allegedly allow consumers to make periodic premium payments at a rate that would yield investment income to permit premium payments to decline until the obligation to make payments vanished entirely without affecting coverage ( see Gaidon v Guardian Life Ins. Co. of Am., 94 NY2d 330 [1999]). Plaintiffs claim that the vanishing premium is a deceptive scheme based on the artificial inflation of projected policy dividends. Plaintiff Paul A. Goshen, a Florida resident, used the cash surrender proceeds of his MONY life insurance policy to purchase a vanishing premium policy. Plaintiff claims that a MONY sales agent induced him to surrender his prior policy in order to purchase the vanishing premium policy using a deceptive sales presentation to illustrate its potential economic benefits. Plaintiff, believing the sales information to be true, ultimately purchased a vanishing premium policy through a MONY representative in Florida. Plaintiff's complaint alleged several causes of action, including deceptive trade practices. Following commencement of the action, Supreme Court granted defendants' motion for summary judgment and dismissed the action in its entirety, and the Appellate Division affirmed. On appeal, this Court reinstated only plaintiff's General Business Law § 349 cause of action, holding that an issue of fact remained as to whether defendants' acts were misleading to a reasonable consumer, and remitted the matter to Supreme Court ( see Gaidon, 94 NY2d at 344). On remittal, defendants sought dismissal as to plaintiff Goshen. Supreme Court granted the motion and dismissed Goshen's claim because he purchased his policy in Florida. The Appellate Division affirmed, and we granted plaintiff leave to appeal (97 NY2d 609 [2002]). We now affirm.