Proof insufficient to prove the accident was intentional

Infinity Health Prods., Ltd. v American Tr. Ins. Co., 2011 NY Slip Op 50195(U)(App. Term 2d Dept. 2011)

“Defendant’s proof consisted of the affidavit of its special investigator and the police accident report. As the police accident report did not constitute proof in admissible form (see LMS Med. Care, P.C. v State Farm Ins. Co., 15 Misc 3d 141[A], 2007 NY Slip Op 51072[U] [App Term, 2d & 11th Jud Dists 2007]), and the special investigator’s affidavit relied, in part, upon the police accident report, such proof did not establish, as a matter of law, that the alleged injuries did not arise from an insured incident”

It appears – and do not quote me please- that police reports do not generally need to be certified to be admissible.  There is a legion of recent case law which dances around the 4518(c) requirement but does not explicitly reject it.  The better practice, when possible, is to obtain a certified police report.  Yet, that can be a challenge when dealing with NYC police reports.  Go onto the DMV police report site- you will see what I am referencing.

I suspect the substance of the police report was insufficient to raise an issue of fact.

Default Judgment seeking a declaration of non-coverage is denied based upon the failure to adduce any non-hearsay evidence

This is a most interesting case.  I will discuss my thoughts in some detail because this case seems to possibly support the inference that a default judgment in a declaratory judgment involving a staged or non-loss may never be viable.  I do not think that is the case at all.  I also am not sure this case is consistent with the cases to which it cited.

The above being said – I was taught an early age that if you can do something to avoid a trip to the Appellate Division, despite what the correct view of the law is, then you should do what is necessary to avoid appellate intervention.

Consequently, how come Plaintiff never procured the affidavit of the adverse driver?  This would have allowed a default to be entered.  It also would have made complete sense since the investigator had contact with the adverse driver!  This seems like a bout of doing the least to get the most – and getting burnt.

On to the case:

New S. Ins. Co. v Dobbins, 2010 NY Slip Op 01773 (2d Dept. 2010)

“The Supreme Court properly, upon renewal and reargument, adhered to so much of its original determination as denied the plaintiff leave to enter judgment against the defendants James Dobbins, Jr., and Felita Dobbins, upon their default in answering the complaint. In support of its motion, the plaintiff offered the complaint, which was verified by plaintiff’s counsel, and an affidavit of the plaintiff’s investigator, neither of whom possessed personal knowledge of the facts constituting the claim (see CPLR 3215; Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71; Hosten v Oladapo, 44 AD3d 1006; Finnegan v Sheahan, 269 AD2d 491). The statements from the driver of the other vehicle that the plaintiff’s investigator relied upon in his affidavit constituted inadmissible hearsay (see CPLR 4518[a]; Hochhauser v Electric Ins. Co., 46 AD3d 174, 179-183; Metropolitan Cas. Ins. Co. v Shaid, 23 Misc 3d 1140[A]).”

The issue of “personal knowledge” as set forth in 3215(f) has confused me for years.  What is sufficient personal knowledge?  In a breach of contract for goods sold and delivered, this would be satisfied through the affidavit or verification of the plaintiff who is the victim of the breach.  In a negligence case, this would be the plaintiff’s affidavit or verification stating that he was in a motor vehicle accident.  The conclusion of negligence would flow from the act of the accident.  For no-fault benefits (in the second department as of now), this would be the affidavit or verification of a billing manager or the president of the corporation.

So what is necessary in a staged accident or “not in the car” case to satisfy the 3215(f) threshold?  It would seem that some affidavit, which presupposes an inference that the event is intentional or did not exist, would be what is required.  The Court of Appeals matter the Appellate Division cited to (Woodson v Mendon Leasing Corp., 100 NY2d 62) is interesting, because it does not really support the Dobbins court’s reasoning, as seen below:

“Having concluded that Supreme Court abused its discretion in vacating the default judgment, we also reject ATIC’s argument that, as an initial matter, plaintiff’s submissions in support of her motion for a default judgment were insufficient. CPLR 3215 (f) requires that an applicant for a default judgment file “proof by affidavit made by the party of the facts constituting the claim.” A verified complaint may be submitted instead of the affidavit when the complaint has been properly served (see CPLR 3215 [f]). Given that in default proceedings the defendant has failed to appear and the plaintiff does not have the benefit of discovery, the affidavit or verified complaint need only allege enough facts to enable a court to determine that a viable cause of action exists (see 7 Weinstein-Korn-Miller, NY Civ Prac ¶ 3215.24, at 32-326). Indeed, defaulters are deemed to have admitted all factual allegations contained in the complaint and all reasonable inferences that flow from them.”

To me, I believe that Plaintiff’s presenting conflicting certified EUO transcripts in its motion for leave to enter a default should be enough to raise an issue of fact as to whether a viable cause of action exists.

And in light of the default, the defaulter would be”deemed to have admitted all factual allegations contained in the complaint and all reasonable inferences that flow from them.”  Id.

So, the Appellate Division may very well have been incorrect, in my opinion, for not reversing Supreme Court.

One last thing, and I say this because I was upset when I read this case, and am really annoyed that the Appellate Division cites to it.  The Appellate Division cites for support of its “hearsay” arguments, besides its Hochhauser case Metropolitan Cas. Ins. Co. v Shaid, 23 Misc 3d 1140[A]”.

Read Shaid carefully.  I would just note that in Shaid, the declaratory judgment action was against the insured and the vehicle operator, both individually, as aiders abettors and as co-conspirators.  The statements that were made to the investigator in that case should have come in as admissions, admissions in furtherance of a conspiracy or declarations against penal interest.

In Dobbins, the statements was of a completely non-interested witness to an investigator.  This could only be admitted through the business record rule, which is now foreclosed because of Hochhauser.

An allegation of a staged accident will not result in the granting of an insurance carrier's summary judgment motion

There have been numerous cases where the Appellate Term, Second Department, has refused to grant an insurance carrier summary judgment based upon proof that a motor vehicle accident was intentional.  So, the matter of A.B. Med. Servs., PLLC v Clarendon Natl. Ins. Co., 2009 NY Slip Op 52383(U)(App. Term 2d Dept. 2009), is really of limited precedential value.  I would normally not post a case like this except I like how the Appellate Term quoted the decision of the District Court, that it was modifying:

“The District Court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion dismissing the complaint, on the ground that defendant had shown that'[t]his has all the indicia of a staged accident.’  The instant appeal by plaintiff ensued.”

“Upon a review of the record, we find that while defendant demonstrated that it possessed such “founded belief” so as to defeat plaintiff’s motion for summary judgment, it failed to submit sufficient evidence in admissible form, in support of its cross motion, to establish, as a matter of law, that the alleged injuries did not arise from an insured incident so as to warrant dismissal of the complaint.”

An allegation of a staged accident will not result in the granting of an insurance carrier’s summary judgment motion

There have been numerous cases where the Appellate Term, Second Department, has refused to grant an insurance carrier summary judgment based upon proof that a motor vehicle accident was intentional.  So, the matter of A.B. Med. Servs., PLLC v Clarendon Natl. Ins. Co., 2009 NY Slip Op 52383(U)(App. Term 2d Dept. 2009), is really of limited precedential value.  I would normally not post a case like this except I like how the Appellate Term quoted the decision of the District Court, that it was modifying:

“The District Court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion dismissing the complaint, on the ground that defendant had shown that'[t]his has all the indicia of a staged accident.’  The instant appeal by plaintiff ensued.”

“Upon a review of the record, we find that while defendant demonstrated that it possessed such “founded belief” so as to defeat plaintiff’s motion for summary judgment, it failed to submit sufficient evidence in admissible form, in support of its cross motion, to establish, as a matter of law, that the alleged injuries did not arise from an insured incident so as to warrant dismissal of the complaint.”

Intentional loss – preponderence and not fraud

AA Acupuncture Serv., P.C. v Safeco Ins. Co. of Am.,

2009 NY Slip Op 29311 (App. Term 1st Dept. 2009)

This was a really interesting decision. It is so rare that the Appellate Term, First Department writes a lengthy decision about any topic, let alone one involving a no-fault case. The law announced in this case represents established law. An insurance carrier may disclaim all no-fault benefits or other first-party benefits as to a party who makes material misrepresentations in the procurement of an insurance policy.

There was an interesting line in there, which I am not sure represents settled law:

This evidence was [*2]sufficient to establish prima facie that the insured intentionally misrepresented her address in order to obtain insurance at reduced premiums, and that the misrepresentation was material, since defendant would not have issued the policy under the same terms had it known that the insured resided in Brooklyn

Yet, the Appellate Division last year stated the following in Precision Auto Accessories, Inc. v. Utica First Ins. Co., 52 AD3d 1198 (4th Dept. 2008):

Defendant’s president further stated in his affidavit that, “if [defendant] had been aware of plaintiff’s true *1201 loss history … [defendant] would not have issued a policy of insurance to plaintiff.” Contrary to plaintiff’s contention, defendant is correct that it need not establish that the misrepresentations were willful in order to rescind the contract. Insurance Law § 3105(b) does not specify that a misrepresentation must be willful, and “[w]hether or not plaintiff intended to provide inaccurate statements or misrepresentations at the time [it] filled out the application is irrelevant”

Besides the above, Justice McKeon’s concurring opinion was interesting. He made an interesting observation, one I always joke about. Specifically, have you ever wondered whether the registrants of out of state vehicles, registered in non no-fault states, really reside in those states?