An intentional act is precluded if not raised in a timely denialJune 6, 2011

Nyack Hosp. v Allstate Ins. Co.,  2011 NY Slip Op 04644 (2d Dept. 2011)

This Medicaid crisis has spurred judicial activism from the Appellate Division, Second Department.  Now an intentional act, both a coverage issue and a policy exclusion has been deemed to be the latter, to the exclusion of the former.

I swear people who practice other areas of law or PIP outside New York must look at the decisions and either laugh or cry.  It is decisions like this that undoubtedly created the Unitrin monster.

Anyway, I guess I have to create a new category for precludable coverage defenses.

24 Responses

  1. Raymond Zuppa says:

    Where was the outrage when the First Department called a pre-condition a coverage defense and cited to Chubb; which decision stated that a pre-condition is not a coverage defense.

    I’ll be at the First Department tomorrow at 2:00.

    I expect the same:

    Court: “How dare you say that the law must be enforced … just because the plainly worded statute commands enforcement via the word “shall” and the statute is remedial in nature and should be expounded to its fullest extent to protect the public — there is corruption — excuse me … strike that from the record — there is discretion”

    RZ: Discretion is where corruption is born and lives. So you were right the first time.

    Court: Get out of here. Leave. Court Officers rough him up a little bit on the way out.

    Court Officers: No … he’s too big and nasty looking.

  2. mitchell s. lustig says:

    I am not sure I understand this decision. Is this decision limited to a fact pattern where an insured attempts to committ suicide? But then again, how is attempting to committ sucide different than an intentionally staged loss. In both cases, there is not a true accident and the event is outside the scope of coverage. This is the Second Department’s Unitrin fiasco.

  3. Raymond Zuppa says:

    Mr. Lustig. Good to hear from you. I missed you. I really did and I have a place for you in my heart. I do for Rogak too. Sorry to include Rogak with you Mitchell.

    Anyway let me explain. Attempted suicide is very different from a staged loss. A staged loss is meant to profit the stager in some way. An attempted suicide does not have the fraudulent mens rea. In an attempted suicide the person crashing the car wants to die and therefore is not eligible for benefits.

    Also someone who commits suicide via crashing a car is obviously mentally ill. That is an intervening factor. The lack of death leaves an injured person who should not have to languish about without benefits.

  4. Raymond Zuppa says:

    Let me clarify: in a suicide attempt via crashing the auto scenario the goal is death, not the collection of benefits which death negates. Therefore there is no fraud. Just a sick person that is innocent of wrongdoing.

    And you cannot deny benefits to someone because of a medical condition — obviously depression or worse — caused the accident.

    Can you deny coverage to someone if they crash the car because of seizure. I ask you …

  5. Raymond Zuppa says:

    Thank you J.T. Of all the healths mental health is the one I pride myself most on. As such I attend regular counselling and ingest large amounts of medications prophylatically to stave of any incipient mental illness that may be lurking.

    I can insure you that I will not intentionally crash my car unless it is to run over someone fleeing from the commision of a crime, etc.

  6. Larry Rogak says:

    To say that all suicide is the result of mental illness is a fallacy. There are plenty of people who commit suicide for objectively rational reasons. No-fault is supposed to compensate people for injuries sustained in accidents — it is not a health insurance plan for people who attempt suicide but fail (or to provide a death benefit for those who succeed). In any event, if a person can form the intent to commit suicide — rational or not — no-fault should not be read so expansively as to pay benefits. Even irrational intent is still intent — not an accident.

  7. kurt lundgren says:

    Ray, there is a fine line between genius and insanity. In your case, you have to be a little bit of insane to be you. Pure genius!!!

    Is it intent if the insured didnt intend to survive the crash!!!

    Larry, suicide is seldom an act of rational mind, nor is it irrational. Its mental illness. But should no-fault pay for it – absolutely, unless the defense is preserved in a timely denial.

    But I expect that this is the next line of defense by the carrier after staged accidents – the accident was caused by the suicidal acts of the driver. Anything to deny a claim.

  8. DMG says:

    Can an insurance co have the body exhumed for verification?

  9. Raymond Zuppa says:

    Larry. Life is a gift. You know that. You have a wonderful life and family. Only severe chemical/electrical and genetically passed down diseases such as depression can cause one to take their own life.

    In fact there is no rational decision to end a life via crashing a vehicle. It is inefficient. Painful. And could leave one crippled but alive — unable to commit suicide but now having to contend with depressing circumstances along with a horrible disease — a stark jejune world of helpless suffering.

    The crashing of the car is not planned. It is an uncontrollable impulse brought on by the disease. Barbara Bush suffered from Depression. In her memoirs she talked of having these very impulses while driving her car.

    A rational suicide is a jump off an incredible height. Injestion of a cyanide. Kurt Cobain’s shotgun under the chin, etc.

    Do you want to push the mentally ill back into vile institutions Larry. Shame on you.

    What if I am the driver of a car. Terrorists car jack me and the car. They put high explosives in the trunk. They get in. They instruct me to drive at gun point. I discover they are going to have me drive into a house of worship — Church or Temple. I think to myself “no way.” I intentionally crash the car into a solid concrete divider. By some miracle I survive, the evil plan thwarted.

    I just saved thousands of People. Americans. Worshippers. You and your insurance company cronies would refuse to pay for my medical benefits under no fault. “Claim Denied: Zuppa Intentionally Crashed the Car”

    How un-American. My family would get you Larry.

  10. Larry Rogak says:

    @Ray: I would endorse an amendment to Reg 68 that made an exception to the intentional act exclusion for “carjacked claimant who intentionally crashes car to thwart terrorist act.” That should take care of your scenario.

    But since you bring up terrorism, let’s take a realistic scenario: a Jihadist Muslim packs a car full of explosives and blows it up in Times Square with the intent to kill as many people as possible. He survives but is badly injured. Shall he receive no-fault benefits? Since it is a realistic possibility, give me your realistic answer.

  11. mitch lustig says:

    You guys can’t get any lower, move on.

  12. Raymond Zuppa says:

    Absolutely not Larry. Under your scenario the Jihadist is 1)with intention and in full possession of his mental capacity, faculties and abilities blowing up the insured vehicle; (2) this is no accident Larry, this man blew up the car — he did not crash it; (3) the insured vehicle was being used to assist the Jihadist in the commission of a felony.

    I would not worry too much Larry. Stop with the color alerts.

    Thankfully George W. Bush is no longer in office. So while we may have to suffer with a wimpy President he is at least not friends with the Bin Laden family and in fact ordered the death of Bin Laden. Secondly our own men and women — New York law enforcement — knows not to rely on the Federal government for our defense.

    Don’t want to be an American Idiot Larry.

  13. slick says:

    The terrorist is going to the secured wing of Bellevue regardless of whether he has no-fault coverage or not. Even if it was an intentional event, the hospital will still have to patch them up. The real question is whether the hospital will be paid. My vote is yes.

    To me, there should be an emergency exception for intoxication and intentional act defenses. Insurers can chase after the assignors for reimbursement to the degree they are able.

  14. raymond zuppa says:

    I do agree with the emergency exception and think it is brilliant. Why should the hospital be stuck with the bill for doing what we want doctors to do: save lives.

    In the end it’s just another way of having the public pay if the hospital gets stiffed.

  15. J says:

    With regard to the recent holding in Nyack Hospital a/a/o Ferguson v. Allstate, that an intentional act requires a timely denial, when considering staged loss cases and DJs, couldn’t the holding in Unitrin switch the defense back to a lack of coverage defense which does not require a timely denial where participant defendants/assignors and/or provider defendants/providers were noticed for EUO?

  16. kurt lundgren says:

    Bottom line …. doctor performs bone fide services and doesnt get paid. Insurance companies profit and doctor/hospital gets stiffed. Insurance is good until you need it.

  17. J says:

    Your all assuming the assignor was a driver or passenger in a vehicle, but nowhere in the decision does it state that.

  18. Raymond Zuppa says:

    Well in theory here — and correct me if I am wrong — the assignor has to be injured. So it can only be a driver or a passenger in the covered vehicle or some poor citizen pedestrian/cyclist that was run down by the subject vehicle.

    Are you trying to say that the decision was driven by the fact that the covered vehicle hit an old lady on the sidewalk?

  19. Raymond Zuppa says:

    Imagine there is a craps game on a Brooklyn sidewalk. Rogak, Bugsy Seigal and Meyer Lansky stick it up. A suicidal driver decides to end it all. The car strikes Rogak thwarting the stick up because Seigal and Lansky flee.

    But Rogak is hurt bad.

    Do you want to see a man argue for coverage.

  20. Raymond Zuppa says:

    The assignee had to be the driver. I read the case. How else could it be alleged that she attempted suicide. She was a pedestrian that jumped in front of the car. I doubt it.

    This is a very big case for me and the law and extremely timely. We shall see why.

  21. slick says:

    I’ve seen more than one case where an insurer argues that a pedestrian was hit because he or she intentionally got in the way of the car.

  22. Raymond Zuppa says:

    I had one where they presented this stupid hand written statment wherein the driver basically states that the pedestrian must have plunged into the windshield on purpose because the driver did not see the pedestrian.

    What in God’s name is a driver going to say given that the driver is undoubtedly being sued.

    Fortunately the Judge was good that day because the judge said: “Where did this guy come from if the driver did not see him before he ended up on the windshield. Did he fall out of the sky.” We won that one. Amazing they didn’t appeal. I am sure the App Term would have said “question fo fact.”

  23. J says:

    Zuppa, with no disrespect at all, “slick” has a valid point, I think you will be very surprised . . .

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