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IF AT FIRST YOU DON’T SUCCEED . . .
By: Charles W. Benton, Esq.

FOR THE DEFENSE


IF AT FIRST YOU DON’T SUCCEED . . .


By: Charles W. Benton, Esq.
Bruno, Gerbino & Soriano, LLP
Melville, New York


We all know that proving fraud can be an arduous task. Even showing sufficient indicia of fraud when opposing a no-fault plaintiff’s motion for summary judgment can be tricky. Some lower court judges do not pay sufficient attention to factual circumstances uncovered by insurance carriers which indicate fraud. But appellate courts, armed with the ability to review both facts and law, can be persuaded to focus on fraud allegations and to use them to deny a medical provider’s motion for summary judgment.

In Ocean Diagnostic/Matveyev v. Utica Mutual Insurance Company, 6 Misc. 3d 131A (Appellate Term 2nd Dept. 2005) the Appellate Term reversed a lower court order granting the plaintiff’s motion for summary judgment based on the fact that the NF-10 denials were not timely sent. The lower court’s decision essentially ignored the indicia of fraud offered by Utica in opposition to plaintiff’s summary judgment motion.

Two passengers in the car insured by Utica refused medical treatment at the scene of the alleged accident, but then proceeded to treat in an excessive manner with various medical services providers. Utica’s Special Investigation Unit (SIU) determined that the parked car allegedly hit by Utica’s insured vehicle was involved in a prior accident in which the parked car was totaled. Utica’s SIU unit compared photos taken of the car immediately after the prior accident with photos that Utica had taken of the vehicle after the alleged accident under investigation and determined that the alleged damage to the vehicle was the same damage suffered in the prior accident. Utica’s SIU unit also determined that the mileage on the vehicle at the time of the alleged second accident was only one mile more than the odometer reading when title to the totaled vehicle was transferred prior to that alleged accident. Such a nominal mileage increase is consistent with a situation where a salvaged vehicle is purchased for the purpose of facilitating additional physical damage and personal injury complaints.

The passengers in Utica’s vehicle who sought treatment from the medical providers failed to appear at their requested Examinations Under Oath. Also, further investigation revealed that Utica’s insured had gone to college with the son of the passenger in the parked vehicle which was allegedly hit by Utica’s insured. During his Examination Under Oath, Utica’s insured stated that the parked vehicle which he allegedly hit contained a male passenger whom he did not know and with whom he did not speak at the accident scene. He then testified that, after the accident occurred, the son of the struck vehicle’s occupant, to whom he also did not speak, appeared at the accident scene. When asked how he knew that the individual appearing at the accident scene was the son of the parked vehicle’s occupant when he had not spoken to anyone at the accident scene, after a lengthy pause Utica’s insured stated that he assumed that they were father and son. Further casting doubt on Utica’s insured’s Examination Under Oath testimony was his statement that he had purchased the insured vehicle a few weeks before the alleged loss from a man he could not identify with funds he could not prove had been paid to this unknown individual.

In reversing the trial court’s order granting the plaintiff summary judgment, the Appellate Term determined that Utica established that its denial of the no-fault claims in question was based upon a founded belief that the alleged injuries did not arise out of an insured accident. Thus, Utica demonstrated the existence of triable issues of fact as to whether there was a lack of coverage based upon fraud.

This case shows that appellate courts can be persuaded not to rubber-stamp decisions regarding issues of fraud and, given sufficient indicia, will overturn lower court rulings where clear-cut evidence of fraud is presented.

Editors Note: Charles W. Benton is a graduate of Fordham University School of Law and an associate of the Appeals Division at Bruno, Gerbino & Soriano, LLP, located in Melville, New York.

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