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N.Y. Judge: Summary Judgment Barred in Fake Auto Accident Case
New York Law Journal
June 06, 2008
A per se rule bars granting summary judgment to insurance companies that claim they are not responsible for payments under a no-fault policy because an automobile accident was faked, a Manhattan judge has ruled.
Applying such an approach, Civil Court Judge Arlene P. Bluth denied a request for summary judgment from State Farm Mutual Insurance Co. in a case where there was "uncontradicted, overwhelming circumstantial evidence" that an accident had been staged.
The denial of the summary judgment motion means State Farm must establish at trial its defense that the accident was staged.
Patrick McDonnell of McDonnell & Adels in Garden City, N.Y., whose firm is representing State Farm, said an appeal is under consideration.
The plaintiffs in the lawsuit are three medical providers who are suing to recover nearly $4,000 for treating a woman who claimed to have been injured in the alleged accident.
The medical providers -- AA Acupuncture Service, Performance Plus Chiropractic and Right Care Medical -- sued State Farm directly because the woman had assigned to them her rights to recover under the no-fault policy. State Farm had issued a no-fault policy to the owner of the automobile involved in the alleged accident.
A detailed affidavit submitted by a State Farm investigator "certainly" tends "to show the underlying incident was staged, and thus not covered by the policy," Bluth wrote in AA Acupuncture Service v. State Farm Mutual Insurance Company, 2765/08.
"The only evidence more convincing than the circumstantial evidence presented here would be if the driver and passengers admitted under oath that they fabricated their stories," Bluth added.
But the attorney representing the three medical providers, Michael C. Rosenberger of the Law Office of Edward Shapiro in Wantagh, N.Y., said State Farm will not be able to sustain its burden of proving the accident was staged because the investigator's affidavit "relies heavily upon inadmissible hearsay evidence."
Pointing to the strength of the investigator's affidavit, Bluth further noted that "if there were cases where summary judgment could be granted, this would be one of those cases."
But she said that applicable precedent leads to the conclusion that summary judgment is "simply unavailable" to an insurance company seeking to defend a case upon the ground that an accident has been staged.
Bluth relied on A.M. Medical Services v. Nationwide Mutual Insurance Co., 12 Misc.3d 143 (2006), a decision of the New York Appellate Term, 2nd Department.
In A.M. Medical Services, Bluth wrote, the Appellate Term upheld the denial of the insurance company's motion for summary judgment even though the passenger and driver, claiming injuries, "admitted under oath that they faked the accident and withdrew their claims with prejudice."
The court in A.M. Medical had denied the insurance company's request for summary judgment even though it concluded there was enough evidence of wrongdoing to order a hearing to determine whether the attorney for the medical provider in that case should be sanctioned, the judge noted.
Rosenberger said that it is his firm's practice "to discontinue any case in which it is presented with the slightest evidence of fraud in an admissible form against an insurance company." He still represents the medical providers.
State Farm is represented by Joseph A. Schwarzenberg of the McDonnell firm.
Applying such an approach, Civil Court Judge Arlene P. Bluth denied a request for summary judgment from State Farm Mutual Insurance Co. in a case where there was "uncontradicted, overwhelming circumstantial evidence" that an accident had been staged.
The denial of the summary judgment motion means State Farm must establish at trial its defense that the accident was staged.
Patrick McDonnell of McDonnell & Adels in Garden City, N.Y., whose firm is representing State Farm, said an appeal is under consideration.
The plaintiffs in the lawsuit are three medical providers who are suing to recover nearly $4,000 for treating a woman who claimed to have been injured in the alleged accident.
The medical providers -- AA Acupuncture Service, Performance Plus Chiropractic and Right Care Medical -- sued State Farm directly because the woman had assigned to them her rights to recover under the no-fault policy. State Farm had issued a no-fault policy to the owner of the automobile involved in the alleged accident.
A detailed affidavit submitted by a State Farm investigator "certainly" tends "to show the underlying incident was staged, and thus not covered by the policy," Bluth wrote in AA Acupuncture Service v. State Farm Mutual Insurance Company, 2765/08.
"The only evidence more convincing than the circumstantial evidence presented here would be if the driver and passengers admitted under oath that they fabricated their stories," Bluth added.
But the attorney representing the three medical providers, Michael C. Rosenberger of the Law Office of Edward Shapiro in Wantagh, N.Y., said State Farm will not be able to sustain its burden of proving the accident was staged because the investigator's affidavit "relies heavily upon inadmissible hearsay evidence."
Pointing to the strength of the investigator's affidavit, Bluth further noted that "if there were cases where summary judgment could be granted, this would be one of those cases."
But she said that applicable precedent leads to the conclusion that summary judgment is "simply unavailable" to an insurance company seeking to defend a case upon the ground that an accident has been staged.
Bluth relied on A.M. Medical Services v. Nationwide Mutual Insurance Co., 12 Misc.3d 143 (2006), a decision of the New York Appellate Term, 2nd Department.
In A.M. Medical Services, Bluth wrote, the Appellate Term upheld the denial of the insurance company's motion for summary judgment even though the passenger and driver, claiming injuries, "admitted under oath that they faked the accident and withdrew their claims with prejudice."
The court in A.M. Medical had denied the insurance company's request for summary judgment even though it concluded there was enough evidence of wrongdoing to order a hearing to determine whether the attorney for the medical provider in that case should be sanctioned, the judge noted.
Rosenberger said that it is his firm's practice "to discontinue any case in which it is presented with the slightest evidence of fraud in an admissible form against an insurance company." He still represents the medical providers.
State Farm is represented by Joseph A. Schwarzenberg of the McDonnell firm.
