Framed-Issue Hearing Ordered on Whether SUM Claimant's Injuries Arose from a Motor Vehicle Accident and While Claimant Was Occupying His Vehicle

AUTO – SUM – ACCIDENT – OCCUPYING – EVIDENCE SUFFICIENT TO WARRANT FRAMED-ISSUE HEARING
Matter of American Protection Ins. Co. v. DeFalco
(2nd Dept., decided 4/28/2009)

Claimant, a Suffolk County police officer, was injured while placing a motorist under arrest.  He settled his personal injury claim against the motorist and made this SUM claim under his own personal auto policy to American Protection, which commenced this special proceeding to stay the arbitration of that SUM claim and sought a framed hearing on whether claimant's injuries arose from: (1) an accident; (2) the "use and operation" of the underinsured motor vehicle; and (3) while claimant was "occupying" his patrol car.

Although he claimed in an affidavit that his injuries occurred when he was exiting his vehicle as it was struck by the motorist's vehicle, this description contrasted with claimant's prior statement, recorded in a "Suffolk County Police Department Injured Employee Report," in which he stated that he was injured "while attempting to subdue and place a violently struggling suspect under arrest."

In REVERSING the motion court's denial of American Protection's petition and remitting that matter back to Nassau Supreme for a framed-issue hearing, the Second Department held:

SUM benefits are not recoverable if the injuries were intentionally caused and not the result of an accident (see State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281; Met Life Auto & Home v Kalendarev, 54 AD3d 830; Matter of Allstate Ins. Co. v Massre, 14 AD3d 610, 611). It is also clear that DeFalco would not be entitled to SUM benefits under the American policy if he was not "occupying" a vehicle when he was injured. Thus, the occurrence of an accident and the "occupation" of a vehicle are conditions precedent to SUM coverage herein.

"The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay" (Matter of Liberty Mut. Ins. Co. v Morgan, 11 AD3d 615, 616; see Matter of Eagle Ins. Co. v Viera, 236 AD2d 612). Here, American submitted documentary evidence which indicated that DeFalco's injuries did not arise from the "use or operation" of a vehicle. Although DeFalco submitted an affidavit in opposition to the petition, wherein he claimed that his injuries occurred when he was exiting his vehicle as it was struck by the Bell vehicle, this description contrasted with his prior statement, recorded in a "Suffolk County Police Department Injured Employee Report," in which he stated that he was injured "while attempting to subdue and place a violently struggling suspect [Bell] under arrest." At the very least, the two explanations of how DeFalco incurred his injuries raise a question as to his credibility, and thus a framed-issue hearing on the issue of coverage is warranted (see Matter of Eagle Ins. Co. v Lucia, 33 AD3d 552; Matter of Travelers Prop. Cas. Co. v Landau, 27 AD3d 477).

Similarly, American submitted documentary evidence which indicated that the collision could have been the result of an intentional act on Bell's part. Although this same evidence may be consistent with a conclusion that the collision was accidental, under all of the circumstances presented, American met its burden of tendering evidence sufficient to warrant a framed-issue hearing with respect to this issue as well (see Matter of Country-Wide Ins. Co. [Law], 97 AD2d 699).

New York State Insurance Department Releases Report on Investigation Regarding Compliance with Insurance Law § 2610 (Anti-Steering Statute)

The New York State Insurance Department has released the report of its investigation dating back to May 2007 regarding automobile insurer's compliance with New York Insurance Law § 2610, New York's "anti-steering statute", which provides:

(a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefore shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern.

(b) In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern.

The Insurance Department conducted its investigation in three phases:

Phase One entailed a review of controls that insurers have put in place to ensure for compliance with Section 2610 and review of insurer tapes and file notes from a business day selected at random.

Phase Two consisted of an on-site review of randomly sampled tapes and file notes of two insurers.

Phase Three consisted of a review of all complaints filed with the Department's Consumer Services Bureau (CSB) related to alleged violations of Section 2610.

Inquiries and examinations were made of the conduct of 12 auto insurance companies or sets of companies, identified by letter only, and the report details the Department's findings in each of the three phases, concluding overall:

CSB’s review did not reveal any systemic violation of Section 2610. Nevertheless, insurers should be vigilant and take steps to clearly inform insureds that they have a right to choose the location for both the inspection and repair of the damaged vehicle. Further, insurers should take all necessary measures to assure that their claim representatives do not recommend a repair facility unless requested by the insured.

 To read the entire report, click here.

Negligently Opening a Car Door Found to Fall Within Meaning of "Auto Accident"

AUTO – "AUTOMOBILE ACCIDENT" – DUTY TO DEFEND
Henderson v. New York Cent. Mut. Fire Ins. Co.
(4th Dept., decided 11/14/2008)

Henderson reenacted, or Monday morning before the NYC medical mills open?



New York Central's insured was sued for personal injuries allegedly caused when he negligently opened his car door and struck the underlying plaintiff. New York Central denied liability coverage under the plaintiffs' personal automobile policy based on its position that the incident was not an "automobile accident", and the plaintiffs commenced this declaratory judgment action for defense and indemnification coverage.

In REVERSING Oneida County Supreme's order granting summary judgment to New York Central and declaring that New York Central has a duty to defend the Hendersons in the underlying personal injury action, the Fourth Department held:

"It is well settled that an insurance company's duty to defend is broader than its duty to indemnify. Indeed, the duty to defend is exceedingly broad and an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest . . . a reasonable possibility of coverage . . . If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be" (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [internal quotation marks omitted]; see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310). Here, the complaint in the underlying action alleges negligent conduct covered by the policy issued by NYCM, and thus we agree with plaintiffs that NYCM has a duty to defend them in that action. We reject NYCM's contention that the allegations in the underlying complaint do not fall within the meaning of the term "automobile accident" in the policy. Indeed, the policy does not define that term, and all insurance policies covering vehicles in New York must, at a minimum, cover "injuries to person or property resulting from negligence in the use or operation of such vehicle" (Vehicle and Traffic Law § 388 [1]; see § 388 [4]; see also 11 NYCRR 60-1.1 [a]). We note in any event that the "act of opening the [vehicle] door in order to exit the vehicle constitutes use and operation' of a vehicle pursuant to Vehicle and Traffic Law § 388" (Cohn v Nationwide Mut. Ins. Co., 286 AD2d 699, 700; see generally Argentina v Emery World Wide Delivery Corp., 93 NY2d 554, 558-561), and thus that act " suggests . . . a reasonable possibility of coverage' " that invokes NYCM's duty to defend plaintiffs in the underlying action (Automobile Ins. Co. of Hartford, 7 NY3d at 137).

The court further erred in declaring that NYCM has no duty to indemnify plaintiffs. As noted, the complaint in the underlying action alleges negligent conduct on the part of James Henderson and, if he accidentally or negligently caused Prave's injuries while opening the driver's door, that event may be considered an "automobile accident" within the meaning of the policy (see generally Argentina, 93 NY2d at 558-560; Cohn, 286 AD2d at 700-701). The remaining evidence submitted by NYCM in support of its cross motion is insufficient to meet its burden of establishing that it has no duty to indemnify plaintiffs (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324), and we thus conclude that the court erred in determining as a matter of law that NYCM had no such duty. Rather, "that determination will abide the trial" in the underlying action (Automobile Ins. Co. of Hartford, 7 NY3d at 138).