No-Fault Insurer's Denial Based on Rate Evasion Upheld in Arbitration

NO-FAULT – RATE EVASION – AAA ARBITRATION DECISION

Matter of Classic Medical Diagnostic Rehab, P.C.  aao SI and State Farm Fire & Cas. Co.
(AAA Case No. 17-18-1095-2802, issued 1/7/2020)

Here's another AAA award/decision that upholds our client's denial of no-fault benefits based on the assignor's proven rate evasion:

In its written submission, Respondent submitted the following evidence and made the following contentions in support of its position: 

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6. Assignor appeared for an EUO on 12/11/17 at which she testified that she lived in Albany, New York with her three children, two of whom attend school in Brooklyn, but that she could not remember if they had a different residence listed for their school in Brooklyn. Assignor testified that she moved to Albany in 2015 but that she and her children commute to Brooklyn four or five days per week and that they drive about 2 1/2 hours "coming and going." Assignor testified that she presently works full-time in Brooklyn, and that her previous jobs were also located in Brooklyn. The Albany address which she provided in her application for insurance benefits and at which she stated she lived in her deposition is a home owned by her aunt to whom she pays rent. Assignor testified that the home is in the middle of the block, she could not recall its color, and stated that there was a covered porch in the front of the house. Respondent revised her testimony on the errata sheet to reflect that the house is on the corner and that there is no porch. Assignor could not fully describe the route she takes from Brooklyn to Albany on her commute. Assignor is registered to vote at her old address in Brooklyn and voted in the last election at a school in Brooklyn.

At the hearing of this matter, counsel for Applicant asserted that the EUO transcript alone is not sufficient to substantiate the alleged discrepancies contained therein without additional information, and further asserted that Assignor stated that she was in fact living in Albany New York. I am not convinced by Applicant's position, however.  Assignor provided sworn testimony under oath. Assignor subsequently amended her testimony with respect to the location of the house in which she purportedly resides in Albany, and whether it had a porch. Respondent submitted a form NF 2 executed by Assignor which lists her address in Brooklyn, New York. Likewise, the Assignment of Benefits form executed by Assignor on 10/24/17 lists an address in Brooklyn, New York. In addition, I find that Applicant's testimony that she drives 4 to 5 days per week from Albany to Brooklyn to get to her job in Brooklyn and to bring her children to school in Brooklyn is not credible, given the distance such a commute would involve, as described in Respondent's submission.

Upon consideration of the arguments of counsel and upon a review of the evidence submitted in this case, I find that Respondent has submitted sufficient evidence to meet its burden of demonstrating that Assignor made material misrepresentations in the procurement of the underlying automobile insurance policy. Applicant's claims for reimbursement are therefore denied. 

In this case, the assignor's EUO, which my office conducted, proved to be key in supporting the insurer's rate evasion-based denial of first-party benefits.

Do you know the color of your home and where it sits on its street/block?