Thursday, October 23, 2008

The Danger of Um in UM Claims

Matter of Integon Natl. Ins. Co. v. Reiffert

(Sup. Ct., Suffolk Co., decided 10/22/2008)

An auto insurer seeking to stay the uninsured motorists (UM) arbitration of its insured based on the assertion that the tortfeasor was insured carries the burden of establishing the existence of that insurance. Relying on an insurance code in a police accident report and waiting 10 or more years to develop evidence of the tortfeasor's auto liability insurance proved to be Integon's undoing in this case.

When she was 11 years old in 1997, Crystal Reiffert was struck by a car owned and operated by Melissa Biondi. Ten years later, when she was 21, Reiffert demanded arbitration of her UM claim against Integon, presumably the auto insurer for her parent(s) in 1997. Integon then commenced this special proceeding against Reiffert, Biondi, Biondi's father, Biondi's unnamed uncle, and Allstate, Biondi's father's auto insurer, contending alternatively: (1) that the Biondi vehicle was insured under a policy issued to William Biondi, Melissa's father; or (2) that the Biondi vehicle was covered under an insurance policy issued to Melissa's uncle, respondent John Doe, with whom Biondi may have been residing at the time of the accident; or (3) that the Biondi vehicle was insured under a policy issued directly to Melissa Biondi.

The court conducted an evidentiary hearing in September 2008 at which Melissa Biondi and her father testified. At the hearing, Melissa testified that she was insured at the time of the accident under a policy issued to her. However, she could not recall the name of the insurer or the agency from which she purchased that policy. She further testified that she had no records which would establish any insurance coverage for her or vehicle at the time of the accident. Reiffert submitted evidence that no record of insurance coverage for the Biondi vehicle was available from the Department of Motor Vehicles due to the lapse of time.

Melissa's father's testimony, which was not controverted, was that Melissa was not a resident of his household on the accident date and that prior to that accident she had been removed as an additional insured from his auto policy with the Allstate.

Based on this evidence, Suffolk County Supreme Court Justice Thomas Whelan dismissed Integon's petition against Melissa's father, her "John Doe" uncle, and Allstate, based on the court's finding that Melissa was not insured under her father's or uncle's policy at the time of the accident, and granted petitioner and respondent Reiffert an opportunity to submit further documentation in support of their respective positions.

On further submissions, Justice Whelan denied and dismissed Integon's petition for a permanent stay of Reiffert's UM arbitration, holding:
It is well established that a petitioner seeking to permanently stay the arbitration of an uninsured motorists' claim must make a prima facie showing that the offending party was insured on the date of the accident (see Matter of Eagle Ins. Co. v Tichman, 185 AD2d 884, 586 NYS2d 1010 [2d Dept 1992]). The petitioner's production of a police accident report containing an insurance code for the offending vehicle or documentation from the Department of Motor Vehicles is sufficient to satisfy a prima facie case for a stay of arbitration (see Matter of Continental Ins. Co. v Biondo, 50 AD3d 1034, 857 NYS2d 588 [2d Dept 2008]). Once the petitioner establishes its prima facie case of coverage, the burden shifts to the respondent to rebut same, which it may do by proof that the offending vehicle was uninsured or that all reasonable efforts to obtain evidence of insurance coverage were unsuccessful (see Matter of Lumbermans Mut. Cas. Ins. Co. v Quintero, 305 AD3d 684, 762 NYS2d 82 [2d Dept 2003]; Aetna Ins. Co. v Logue, 68 Misc 2d, 841, 328 NYS2d 569 [NY County Sup Ct 1972]; Merchants Mutual Ins. Co., v Schmid, 56 Misc 2d 360, 288 NYS2d 822 [Nassau Cty Sup Ct 1968]).
Here, the petitioner produced the police accident report which identified the Allstate Insurance Company as the insurer of the Biondi vehicle. However, this court previously determined that the Allstate Insurance Company was not the insurer of Melissa Biondi under the policy it had issued to her father, William Biondi. The court also found, based upon the evidence adduced at the September 24, 2008 framed issue hearing, that there was no coverage under any policy issued to Melissa Biondi's uncle.
The petitioner's remaining claims for a stay of arbitration thus rest upon allegations that the Biondi vehicle was insured under a policy issued to Melissa Biondi directly, rather than coverage afforded her under a policy issued to her parents or her uncle. Such claims are, however, without any evidentiary support in the record as the only support therefor is Biondi's vague recollection that she was insured at the time of the accident under a policy purchased by her. Neither the identity of the issuer nor the details of any such policy was established. The record is, however, replete with evidence that all reasonable efforts to substantiate this vague recollection of coverage through the discovery and production of documentation tending to establish its existence have been unsuccessful due to the duration of time that has elapsed since the occurrence of the accident and the circumstances of the parties. Under these circumstances, the court concludes that the petitioner has failed to establish its entitlement to a permanent stay of the arbitration at issue herein.
The decision does not indicate when Reiffert notified Integon of her UM claim, but presumably it was in a timely fashion. Nor does the court's decision indicate what information regarding Biondi's auto insurance Integon had available to it at the time of first notice. If the outcome of this case teaches anything, it's that it's better to investigate and document the tortfeasor's auto liability insurance as soon after first notice of the accident or UM claim as possible, rather than waiting for 10+ years to do so and risking the tortfeasor coming to the hearing without any corroborating documents and saying, "Um..., I know I was insured under my own policy, but I don't remember the company or the agent that issued that policy."

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