Opinion
INDEX NO. 151238/2019
04-19-2021
STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff, v. ALFA REHAB PT, P.C., ANESTHESIA PROFESSIONALS, PA, AZCARE, INC., CENTRASTATE MEDICAL CENTER, INC., COMPREHENSIVE MEDICAL ASSIST, P.C., CONEY ISLAND PSYCHOLOGY, P.C., CVS RX, INC., EPILEPSY AND NEUROLOGY GROUP LIMITED LIABILITY COMPANY, GARDEN STATE HEART CARE, P.C., JJL CHIROPRACTIC, P.C., MANALAPAN SURGERY CENTER, INC., METROPOLITAN SURGICAL SERVICES, LLC, NOVA MEDICAL DIAGNOSTIC, P.C., PRINCETON RADIOLOGY ASSOCIATES. P.A., PROTECHMED, INC., SHERMAN-ABRAMS LABORATORY, INC., SP ONE SERVICES, INC., SUFFICIENT CHIROPRACTIC CARE, PLLC, ANDERSON JOSEPH, MELISSA BOUCHER, SABAS NY SERVICES, INC. and BETTY ACUPUNCTURE, P.C., Defendants.
NYSCEF DOC. NO. 130 PRESENT: HON. VERNA L. SAUNDERS Justice MOTION SEQ. NO. 003
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 003) 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107 were read on this motion to/for SUMMARY JUDGMENT.
In February 2019, plaintiff STATE FARM FIRE AND CASUALTY COMPANY commenced this action by summons and complaint against Anderson Joseph ("Joseph") and Melissa Boucher ("Boucher") (collectively "claimants"), as well as, several medical provider defendants, seeking a declaration that it is not required to make no-fault payments to defendants for medical treatment allegedly provided to claimants relating to a July 15, 2018 multiple vehicle collision ("the accident"). As alleged in the complaint, prior to the accident, Joseph mispresented to plaintiff that he was residing in Douglasville, Georgia to procure a Georgia state personal automobile insurance policy for a 2015 Nissan Altima ("the insured vehicle"), covering any occupants for injuries sustained as a result of accidental collisions. On July 15, 2018, in Brooklyn, New York, the insured vehicle, while driven by Joseph and occupied by claimants and their daughter, was struck by another vehicle. Although the loss was allegedly minor, plaintiff received notice thereafter that claimants reported serious bodily injuries as a result of the subject accident and that they were being treated by the medical provider defendants. Plaintiff assigned claim number 11-4919-H58 to all claims arising from the subject accident and, on December 7, 2018, claimants both appeared for an examination under oath ("EUO"). (NYSCEF Doc. No. 1, summons and complaint).
Plaintiff now moves, pursuant to CPLR 3212, for an order granting it summary judgment against defendant NOVA MEDICAL DIAGNOSTIC, P.C. ("Nova"), a medical provider, on the basis that Joseph made a material misrepresentation when he procured the policy insofar as plaintiff would not have issued the policy under the same terms and conditions had it known that Joseph resided in Brooklyn or that the insured vehicle was being garaged there as opposed to in Douglasville, Georgia. Additionally, plaintiff maintains that there is a founded belief that claimants alleged injuries did not arise from an insured accident. (NYSCEF Doc. Nos. 91-104).
In support of its motion, plaintiff submits, inter alia, the affidavit of Elena Grossman ("Grossman"), its claim specialist, who avers that an initial investigation by plaintiff revealed a strong likelihood that Joseph resided and garaged the insured vehicle in Brooklyn when he procured the insurance policy. Specifically, Grossman affirms that the accident occurred in Brooklyn, not far from the claimants' likely home; that searches in Insurance Services Office ClaimSearch ("ISO") and Accurint revealed that claimants likely resided in Brooklyn; that the insured vehicle was parked in front of the Brooklyn address on October 3, 2018; that a representative from plaintiff visited the Georgia address and that the owner of said property denied ever renting to Joseph; the vehicle was titled in New York on June 21, 2017 and title was transferred to Georgia on November 14, 2017; the insured vehicle was ticketed in Brooklyn on June 30, 2017; a license plate search revealed that the insured vehicle was sighted in Brooklyn twenty-seven (27) times between February 8 and August 29, 2018 and was never sighted outside of Brooklyn; and the policy was cancelled when plaintiff began investigating the claims. Furthermore, despite being unable to provide any proof of residence in Georgia, Joseph's name was on the lease in Brooklyn and other facts allegedly supported the conclusion that he was living there. Grossman maintains that claimants' testimony regarding Joseph's residence in Georgia was not credible.
ISO and Accurint are insurance databases that hold individuals' personal information.
Grossman further represents that plaintiff maintains a founded belief that claimants' alleged injuries did not arise from an insured accident because their testimony about the subject accident and the events that followed differed in several respects; there was minor loss reported at the scene of the accident, consisting of a minor scratch to the insured vehicle, but claimants nevertheless underwent significant medical treatment, including shoulder surgery and psychological treatment; and, at their respective examinations under oath, claimants could not recall the names of the medical providers that treated them. (NYSCEF Doc. No. 92 at 4-21, Grossman's Affidavit).
Dawn Thompson ("Thompson"), an employee in plaintiff's underwriting department, asserts that plaintiff "would not have issued the subject policy under the terms and conditions of the contract to . . . Joseph" had it known that he resided in New York and not Georgia. (NYSCEF Doc. No. 92 at 22-25, Thompson's affidavit).
In opposition to the motion, Nova submits an attorney affirmation in which it asserts that the motion must be denied because the alleged misrepresentation was immaterial as a matter of law insofar as plaintiff does not assert that it would not have issued the policy but, rather, that it would have issued a higher premium; plaintiff fails to establish intent to defraud; plaintiff failed to preserve the subject defense since it did not issue timely and proper denials as required by the Insurance Law, the Regulations and binding Court of Appeals precedent. The motion for summary judgment is also premature, asserts Nova, because discovery has not yet been conducted in this matter. (NYSCEF Doc. No. 105, affirmation in opposition).
In a reply affirmation, plaintiff contends that Thompson's affidavit establishes the materiality of the alleged misrepresentation because the difference in premiums between Douglasville, Georgia, and Brooklyn, New York, is significant. Additionally, plaintiff asserts that it has no obligation to issue a "timely" denial when the defense is premised on fraud. It also rejects Nova's argument that the motion is premature due to a lack of discovery, arguing that Nova has made no efforts to conduct any discovery in this case and that all necessary documentation has already been provided in this motion. (NYSCEF Doc. No. 106, reply affirmation).
In a motion for summary judgment, the movant bears the initial burden of presenting affirmative evidence of its prima facie entitlement to summary judgment, producing sufficient evidence to demonstrate the absence of any material issue of fact. (see Sandoval v Leake & Watts Servs., Inc., 192 AD3d 91, 101 [1st Dept 2020]; Reif v Nagy, 175 AD3d 107, 124-125 [1st Dept 2019]; Cole v Homes for the Homeless Inst., Inc., 93 AD3d 593, 594 [1st Dept 2012]). "Once this showing has been made, the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial for resolution." (Giuffrida v Citibank Corp., 100 NY2d 72, 81 [2003]).
An insurer may assert a lack of coverage based on a material misrepresentation. "A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented." (Liberty Mut. Ins. Co. v Castillo, 2020 NY Slip Op 34358[U], *2 [Sup Ct, NY County 2020]). "To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, that show that it would not have issued the same policy if the correct information had been disclosed in the application." (Schirmer v Penkert, 41 AD3d 688, 690-691 [2d Dept 2007]). Additionally, an insurer "[m]ay assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident." (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]).
As an initial matter, this Court is persuaded that the motion must be denied with respect to the material misrepresentation cause of action insofar as plaintiff has failed to establish that it has issued a timely denial of the subject claims. Although plaintiff represents that it was not required to issue a "timely" denial since its defense is premised on fraud, this argument is unavailing. While a defense of fraud may obviate the requirement of a timely denial in certain circumstances, i.e. where there are allegations that the accident was staged and, thus, not an insured incident (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 562 [2008]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), "[t]he defense that an insured made a material misrepresentation when obtaining the insurance policy is subject to preclusion if not interposed in a timely denial." (Pavlova v Ameriprise Auto & Home, 62 Misc 3d 206, 212 [Civ Ct, Kings County 2018], citing Healthy Way Acupuncture, P.C. v USAA Gen. Indem. Co., 53 Misc 3d 128[A], 2016 NY Slip Op 51342[U], *1 [App Term, 1st Dept 2016]; see Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc., 80 AD3d 603, 604 [2d Dept 2011]; see also Renelique v Natl. Liab. & Fire Ins. Co., 50 Misc 3d 144[A], 2016 NY Slip Op 50254[U], *1 [App Term 2016].) Importantly, on this motion, plaintiff has failed to proffer binding authority to the contrary.
This Court also finds, based on this record, that plaintiff fails to establish its entitlement to summary judgment on its claim based on a founded belief that claimants' injuries did not arise from an insured accident. There is no proof establishing that claimants' injuries could not have resulted from the subject collision. While this Court agrees that the police report and the claimants' EUO testimony reveal inconsistencies that may raise serious credibility issues regarding the alleged accident and the injuries sustained, viewing the evidence in the light most favorable to the nonmoving party, plaintiff fails to establish, as a matter of law, a fact or founded belief that the injuries sustained did not arise from the covered incident. (see 21st Century Sec. v All, 2018 NY Slip Op 30814[U], *1-2 [Sup Ct, NY County 2018]; Easy Care Acupuncture, PC v Hartford Ins. Co., 57 Misc 3d 147[A], 2017 NY Slip Op 51470[U], *1 [App Term 2017]; Webster Diagnostic Medicine, P.C. v State Farm Ins. Co., 15 Misc 3d 97, 98-99 [App Term 2007]). Additionally, this Court rejects plaintiff's contention that its entitlement to summary judgment against Nova is demonstrated by default judgments already obtained against several other defendants in this action by another jurist as summary judgment imposes a more exacting standard than that for a default judgment. Since further discovery in this action may clarify the issue of whether the claimed injuries in fact arise from the subject accident, plaintiff may move to renew its motion upon completion of discovery.
Thus, insofar as plaintiff has failed to meet its prima facie burden on its motion for summary judgment, this Court need not address the sufficiency of Nova's proof. (see generally Martinez v Pioneer Transp. Corp., 48 AD3d 306, 307 [1st Dept 2008]). All remaining arguments are either without merit or need not be addressed given the findings above. Accordingly, it is hereby:
ORDERED that plaintiff STATE FARM FIRE AND CASUALTY COMPANY's motion for summary judgment is denied, with leave to renew at the close of discovery; and it is further
ORDERED that, within twenty (20) days after this decision and order is uploaded to NSYCEF, defendant NOVA MEDICAL DIAGNOSTIC, P.C. is directed to serve a copy of this decision and order, with notice of entry, upon all parties; and it is further
ORDERED that all remaining parties in this action are to appear remotely for a preliminary conference on June 16, 2021, details for which will be communicated by e-mail no later than June 9, 2021.
This constitutes the decision and order of this Court. April 19 , 2021
/s/ _________
HON. VERNA L. SAUNDERS, JSC