The loss was not intentional

Matter of Progressive Advanced Ins. Co. (Widdecombe), 2018 NY Slip Op 00061 (3d Dept. 2018)

(1)

“Initially, it is undisputed, as Supreme Court correctly determined, that Germain is an uninsured motorist as none of his automobile policies, including a prior policy with Hartford, was in effect on the date of this incident. Thus, any exclusion in Germain’s former policy with Hartford is irrelevant to this incident. Further, given Germain’s uninsured status, Widdecombe properly filed a claim for SUM coverage under his own policy with petitioner. To the extent that the court held that petitioner’s disclaimer of coverage was proper based upon an intentional acts exclusion in Widdecombe’s policy, this was clear error. Widdecombe’s policy, in effect on the date of this incident, does not contain an intentional acts exclusion for uninsured motorist coverage or anything similar to it (compare New York Cent. Mut. Fire Ins. Co. v Wood, 36 AD3d 1048, 1049 [2007])^[FN3]. Thus, this did not provide a proper basis for permanently staying arbitration of Widdecombe’s claim for SUM benefits.”

(2)

“We now turn to the dispositive question on appeal, which is whether Widdecombe’s injuries were caused by an accident within the meaning of his policy with petitioner. Widdecombe’s policy included SUM coverage, for which he paid a premium, providing for payment of “all sums that the insured . . . shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury . . . caused by an accident arising out of such uninsured motor vehicle’s ownership, maintenance or use” (emphasis added). ”

(3)

“Thus, whatever Germain’s intent and criminal liability,^[FN4] this incident was an accident from Widdecombe’s perspective. Contrary to petitioner’s contention, Widdecombe’s uncontroverted testimony established that the incident “happened so fast” and, after he attempted to grab the keys, Germain said that “he was going to cut [Widdecombe’s] leg off” and, as Widdecombe tried to get his leg out of the car, Germain “threw the car in drive” and “screeched” away, dragging Widdecombe. As in State Farm, this event “was clearly an accident from the insured’s point of view,” since having his leg trapped and being dragged was sudden and “unexpected, unusual and unforeseen” (State Farm Mut. Auto. Inc. Co. v Langan, 16 NY3d at 355-356; see Matter of Utica Mut. Ins. Co. v Burrous, 121 AD3d 910, 911 [2014]; Matter of Progressive Northeastern Ins. Co. v Vanderpool, 85 AD3d 926, 927 [2011]). Consequently, Supreme Court erred in granting the stay of arbitration and Widdecombe’s claim should proceed to arbitration.”

Oh Progressive – not very Progressive?  My question – and I posed this to somebody – is whether the result would be different if this matter was guided under the intentional loss exclusion as opposed to whether there was coverage under the accident clause of the policy.  I do not know the answer, but it has me thinking,

A staged accident raises an issue of fact

Easy Care Acupuncture, PC v Hartford Ins. Co., 2017 NY Slip Op 51470(U)(App. Term 1st Dept. 2017)

This first party, no-fault action is not susceptible to summary disposition. The evidentiary proof submitted by defendant-insurer in support of its motion for summary judgment, while sufficient to demonstrate that defendant had a “founded belief” that the assignor’s injuries were sustained, if at all, in a staged accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), was insufficient to demonstrate as a matter of law that the injuries did not arise out of an insured incident so as to warrant summary judgment dismissing the complaint (see A.B. Med. Servs., PLLC v Clarendon Natl. Ins. Co., 25 Misc 3d 139[A], 2009 NY Slip Op 52383[U] [App Term, 9th and 10th Jud Dists 2009]; Capri Med., P.C. v Progressive Cas. Ins. Co., 15 Misc 3d 143[A], 2007 NY Slip Op 51158[U] [App Term, 2nd and 11th Jud Dists 2007]). In particular, the affidavit of defendant’s investigator, who relied upon certain inconsistencies among the statements of the vehicle’s three occupants regarding events of the day of the collision, rather than the events of the collision itself, and other “red flags” common in staged accident cases, raises issues of fact that should be explored at trial (see Martinez v Pioneer Transp. Corp., 48 AD3d 306 [2008]; Oliverio v Lawrence Pub. Schools, 23 AD3d 633 [2005]).

What is interesting here is that the Court stressed that events of the collision itself (if properly described in the investigator affidavit) along with the red flags could (in the right case) prima facie prove an intentional loss.

It appears the Court found that the “certain inconsistencies” and “red flags” warrant a trial.  Is there a bright line rule here?  Don’t know yet.

Staged accident stay

Matter of Liberty Mut. Ins. Co. v Young, 2015 NY Slip Op 00377 (2d Dept. 2015)

“A deliberate collision by an insured is not a covered event under an insurance policy (see Matter of Liberty Mut. Ins. Co. v Goddard, 29 AD3d 698, 699; State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490, 491;Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 751-752). Here, the strong circumstantial evidence at the framed-issue hearing established that [*2]Trotman intentionally caused the collision between his vehicle and Young’s vehicle. In finding otherwise, the Supreme Court focused entirely on whether Trotman’s vehicle suffered any damage, rather than on the totality of the evidence (see generally A.B. Med. Servs., PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822 [Civ Ct, Kings County]). Accordingly, because the evidence at the hearing established that Trotman intentionally caused the collision with Young’s vehicle, the collision between the two vehicles was not a covered event under Trotman’s policy with GEICO. Therefore, the Supreme Court erred in entering a judgment granting Liberty Mutual’s petition for a permanent stay of arbitration of Young’s claim for uninsured motorist benefits on the ground that Trotman’s vehicle was insured and directing GEICO to defend and indemnify Trotman with respect to the subject accident (see Matter of Liberty Mut. Ins. Co. v Goddard, 29 AD3d at 699).”

By the way, you should note in this case that Geico (third party liability carrier) disclaimed coverage.  Liberty Mutual (first-party UM carrier) lost its Petition despite proof that it was a staged accident.  This may very well limit the application of “from the eyes of the injured person perspective” to first-party coverage.

From the eyes of the insured has its limits

Nationwide Gen. Ins. Co. v Pontoon, 2014 NY Slip Op 09001 (2d Dept. 2014)

“The referee incorrectly concluded that GEICO was required to submit evidence that Pontoon was involved in staging the collision in order to support a disclaimer of coverage. Contrary to the referee’s conclusion, if GEICO can prove that the collision was staged by Robinson, its insured, it would not be obligated to provide coverage under the policy regardless of whether Pontoon was an innocent third party (see Matter of Travelers Indem. Co. v Richards-Campbell, 73 AD3d 1076, 1077; Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522, 523; Morris v Allstate Ins. Co., 261 AD2d 457, 458; see also Matter of Liberty Mut. Ins. Co. v Goddard, 29 AD3d 698, 699; State Farm Mut. Auto Ins. Co. v Laguerre, 305 AD2d 490, 491)”

Perhaps we can call this the staged accident exception to Langan.  I think this is wrong since under Langan, an intentional act is looked at through the perspective of the Claimant.  Here, Pontoon said he had nothing to do with the staged accident.  Under Langan, it would appear that Claimant would be entitled to a framed issue hearing to protest his innocence.  Yet, the Court here is saying that where there is evidence of a staged accident scheme, anyone seeking coverage is barred (regardless of whether they were aware of it).  All I can say is wow.

An Application of Langan

Matter of Utica Mut. Ins. Co. v Burrous, 2014 NY Slip Op 06986

“From the eyes of the decedent”

“Contrary to the Supreme Court’s determination, Utica is not entitled to a permanent stay of arbitration, and that branch of its petition should have been denied. In State Farm Mut. Auto. Ins. Co. v Langan (16 NY3d 349), the Court of Appeals held that, for the purposes of an uninsured motorist endorsement, when an occurrence is “unexpected, unusual and unforeseen,” from the insured’s perspective, it qualifies as an “accident” (id. at 355 [internal quotation marks omitted]). Here, from the decedent’s perspective, her collision with Demoliere’s vehicle was unexpected, unusual, and unforeseen. Therefore, the occurrence constituted an “accident” within the meaning of the uninsured motorist endorsement of the decedent’s policy (see State Farm Mut. Auto. Ins. Co. v Langan, 16 NY3d at 355-357; see Matter of Progressive Northeastern Ins. Co. v Vanderpool, 85 AD3d 926, 927)”

It is an inquiry of whether the recipient of PIP benefits or seeking UM benefits was part of the intentional loss.  In a staged loss scenario, this is colloquially stated a “no-brainer.”  When the issue involves the victim of someone on a death wish (who is not Charles Bronson), it is a different story.

Verdict sustaining that the loss was intentional sustained

V.S. Med. Servs., P.C. v State Farm Mut. Ins. Co., 2014 NY Slip Op 50615(U)(App. Term 2d Dept. 2014)

“Prior to trial, the parties stipulated that the sole question for the jury’s determination was whether the motor vehicle collision at issue was the result of an intentionally caused event. An investigator from defendant’s Special Investigation Unit was the only witness called to testify. Thereafter, plaintiff moved, pursuant to CPLR 4401, for judgment as a matter of law or, in the alternative, to declare a mistrial. Defendant opposed, and the Civil Court denied plaintiff’s motion. The jury unanimously returned a verdict in favor of defendant, finding that the motor vehicle collision was the result of an intentionally caused event.”

“Thus, the branch of plaintiff’s motion seeking judgment as a matter of law and the motion to set aside the verdict as contrary to the weight of the evidence and for a new trial were properly denied by the Civil Court.”

If I had to guess, I would say it was  a link chart showing that the 1995 Pontiac was involved in 5 prior losses and the loss here occurred immediately after policy inception and the policy was cancelled for non-payment.  I just recall seeing that fact pattern often and the plaintiffs’ attorneys arguing that the carrier was off based for making the leap that this fact pattern circumstantially proved that the loss was less than legitimate.   Certain judges, probably desensitized to the volume of cases, had a similar thought process.  Thus, it took jury trials to bring a semblance of sanity – that it is illogical for a vehicle to be used as a FHA crash dummy surrogate and for the loss to be anything except intentional.

So, my hats off to counsel for defense and to an Appellate Term that allowed the jury verdict to stand.

Successful summary judgment: Plaintiff Assignor jumped on a parked car and walked away and the complaint was dismissed

New York Hosp. Med. Ctr. of Queens v Utica Mut. Ins. Co., 2012 NY Slip Op 52388(U)(App. Term 2d Dept. 2012)

In this case, the Plaintiff Assignor jumped on a parked car and walked away and the complaint was dismissed

“In support of its cross motion, defendant submitted an affidavit by its insured who stated that plaintiff’s assignor had jumped on the hood of the insured’s car, while it was parked, and got off of the car without incident or injury. The insured, according to his sworn statement, drove away without further contact with plaintiff’s assignor. Consequently, defendant argued that plaintiff’s assignor’s alleged injuries did not arise out of an insured incident.”

In opposition Plaintiff offered a non certified police report and what appear to be non-certified hospital records, which District Court found was sufficient to warrant a trial.

Holding #1: The police report offered by plaintiff did not constitute proof in admissible form, as it was not certified pursuant to CPLR 4518 (c) and no foundation establishing its authenticity and accuracy was offered (see Cheul Soo Kang v Violante, 60 AD3d 991, 991 [2009]). In any event, “the statements in the report attributed to the [plaintiff’s assignor] constituted inadmissable hearsay” (id. at 991-992).”

Holding #2: “The hospital records that plaintiff submitted to the court purport to include a description of the alleged accident as reported to hospital staff by plaintiff’s assignor. Such statements are considered reliable only when they are relevant to diagnosis or treatment (see Williams v Alexander, 309 NY 283, 286 [1955]). Here, the hospital records do not contain any allegations that rebut the allegations contained in defendant’s insured’s sworn statement. Furthermore, plaintiff failed to lay the requisite foundation for the hospital records (see CPLR 4518 [a], [c]).”  Following this the court gave an “assuming arguendo” passage when they said: “even assuming the hospital records were admissible at all, and therefore could be used as proof that plaintiff’s assignor was injured by a motor vehicle, they still did not raise a triable issue of fact as to whether defendant’s insured was involved, thereby triggering defendant’s liability.”

End of the day: Plaintiff loses.  Two case cites: St. Vincent’s Hosp. & Med. Ctr. v Allstate Ins. Co., 69 AD3d 923 [2010]; Andromeda Med. Care, P.C. v NY Cent. Mut. Fire Ins. Co., 26 Misc 3d 126[A], 2009 NY Slip Op 52601[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).”

Staged accident and non-payments of premiums

21st Century Advantage Ins. Co. v Cabral

Look, 21st Century did their homework.  Someone admitted to defrauding the insurance companies.  Yet, Mr. All Boro, a distant relative of of Mr. Five Boro felt the need to put in gratuitous opposition to the preliminary injunction motion.  As such, more paper and judicial resources were were wasted on a case that has no value.  More can be said, but I will leave it that.

On a more serious note, it seems that a lot of companies are binding contracts over the internet without performing any due diligence.   Perhaps the ability to cancel policies based upon non-payment needs to be amended to allow retroactive rescission.    This will at least mandate that some payment is made before the insurance companies have to investigate these types of incidents.

An intentional act is precluded if not raised in a timely denial

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.

From your perspective – not mine

State Farm Mut. Auto. Ins. Co. v Langan, 2011 NY Slip Op 02437 (2011)

It is Langan again.  That bad dream that does not go away.  Well this time, the Court of Appeals held that for both lines of first-party automobile coverage, PIP and UM/SUM/UIM, an intentional act should be looked at through the viewpoint of the injured person.  If you remember, the Second Department limited that holding to PIP coverage.  It is an interesting opinion.