Staged accident – Triable issue of fact

Matter of Global Liberty Ins. Co. v Eveillard, 2019 NY Slip Op 02521 (2d Dept, 2019)

(1) Procedural issue: ” Although this Court denied Global’s motion to stay all proceedings pending hearing and determination of its appeal from the order dated May 30, 2018 (see Matter of Global Liberty Ins. Co. of New York v Eveillard, ___ AD3d ___, 2018 NY Slip Op 79786[U] [2d Dept 2018]), Global nonetheless has preserved its right to appellate review of this order by virtue of its motion for such temporary judicial relief (see Matter of Commerce & Indus. Ins. Co. v Nester, 90 NY2d 255, 264). ” – You’re welcome. Most of you out there did not know this rule.

(2) ” In support of its petition, Global submitted its investigative report of the loss, in which Global identified “numerous fraud red flags'”; an affidavit from its manager of the Special Investigation Unit; a letter from Liberty Mutual Insurance Company confirming that the insurance policy on the other vehicle was cancelled prior to the date of the loss; and a sworn statement from the driver of the insured livery vehicle detailing the events leading up to, during, and after the collision, including his observation that the passengers in his vehicle did not appear to be injured.”

(3) ” Here, contrary to the Supreme Court’s determination in the order dated May 30, 2018, Global set forth evidentiary facts and submitted documentary evidence sufficient to establish a preliminary issue as to whether the collision giving rise to the claim for uninsured motorist benefits was an accident or an intentional act orchestrated, in part, by Eveillard (cf. Matter of American Protection Ins. Co. v DeFalco, 61 AD3d 970, 972; Matter of AIU Ins. Co. v Nunez, 17 AD3d 668, 669). Since Eveillard submitted evidence sufficient to rebut Global’s evidentiary showing, a temporary stay of arbitration pending a framed-issue hearing is warranted (see Matter of Hertz Corp. v Holmes, 106 AD3d 1001, 1003).

Conclusion: My evidentiary submission appears to have been sufficient to obtain a permanent stay of the hearing. In normal parlance, that would be a prima facie case. The affidavit in opposition raised an issue of fact. This appears to be perhaps the second time this has occurred in papers at the Appellate Division. I think SF v. Laguerre was the first, but I am not checking for purpose of this post. Let’s hope my memory is correct.

This is a very interesting case and another “road map” for practitioners to observe as to whether they have “the goods” to prove the accident is indeed staged, whether on paper or at hearing/trial/arbitration.

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.

Collateral estoppel in the declaratory judgment action does not necessarily apply to the underlying no-fault action

Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 20130 (App. Term 2d Dept. 2010)

“Plaintiff herein was neither named nor served in the declaratory judgment actions nor, at the time, was it in privity with someone who was, and plaintiff otherwise had no full and fair opportunity to appear and defend its interests in those proceedings. Accordingly, the judgments do not collaterally estop plaintiff from recovering in this action (Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481 [1979]; Mid Atl. Med., P.C. v Victoria Select Ins. Co., 20 Misc 3d 143[A], 2008 NY Slip Op 51758[U] [App Term, 2d & 11th Jud Dists 2008]; see also Green v Santa Fe Indus., 70 NY2d 244, 253 [1987]). Moreover, as the declaratory judgments were obtained on default, there was no actual litigation of the issues and, therefore, no identity of issues”

Much can be said about this case.  Had Plaintiff Assignee been named and a default was entered, then this would be a closer call.  My concern about this case is the line “[n]or, at the time, was it in privity with someone who was…”

Assume that Claimant, after executing an assignment, violates one of the several conditions precedent to coverage, and the claims are timely and properly denied based upon a violation of a condition precedent to coverage.  I am thinking of  IME no-shows, EUO no-shows and possibly the 30-day written notice rule.

I would posit that those defenses would not apply if the majority’s privity rule is taken to its logical conclusion.  I also have grave reservations about the applicability of the “standing in the shoes” rule, which the Appellate Division, Second Department has asserted numerous times in these types of cases.

Justice Golia’s dissent, besides recounting a fact pattern that leads the reader to the conclusion that the accidents in this matter were intentional and probably offends most people on both sides of the bar, makes some good points.  He pretty much says what I have said above and have always believed, to wit, that the no-fault law and regulations somewhat modify the traditional notions of the common law assignment.

The Courts realize this fact and even said so in A&S Medical, P.C. v. Allstate Ins. Co., 196 Misc.2d 322 (App. Term 1st Dept. 2003), aff’d, 15 AD3d 170 (1st Dept. 2005), whose ultimate outcome I agreed with, when the following was held: “To the extent defendant seeks to invoke the general rule that an assignee is subject to the same defenses as would be available against its assignor (see, General Obligations Law § 13-105), the rule, as codified, finds no application in circumstances where, as here, the assigned claim is “regulated by special provision of law” (id.).

I tend to believe that this case probably should not be appealed any further since the Plaintiff Assignee providers were not named in the complaint.  This is an issue, however, that on proper papers needs to be addressed by the Appellate Division.