Evidence of Reported Theft Found Insufficient to Overcome Presumption of Permissive Use

UM – STOLEN VEHICLE – EVIDENCE NEEDED TO OVERCOME PRESUMPTION OF PERMISSIVE USE – FRAMED-ISSUE HEARING
State Farm Mut. Auto. Ins. Co. v. Taveras
(1st Dept., decided 3/30/2010)

Alison Taveras allegedly was injured when a vehicle owned by Richard Cruz struck her.  Cruz's auto insurer denied liability coverage based on Cruz's report that his vehicle had been stolen and was being operated without his permission.  Taveras made a uninsured motorists (UM) claim to her own auto insurer, State Farm, which commenced this special proceeding pursuant to CPLR § 7503(b) for a permanent stay of Taveras' UM arbitration, naming Cruz and his auto insurer as additional respondents. 

Bronx County Supreme Court (Edgar G. Walker, J.) conducted a framed-issue hearing on the issue of whether the striking vehicle was in fact stolen or was being operated with Cruz's permission and ruled that Cruz and his auto insurer failed to submit sufficient evidence to overcome the presumption of permissive use that derives from New York Vehicle & Traffic Law § 388.  In reaching its decision, the hearing court found it significant that Cruz had delayed in calling the police to report the alleged theft, and only called after Cruz and his friends were allegedly assaulted by an angry mob. 

In AFFIRMING Supreme Court's order granting State Farm's petition to permanently stay Taveras' UM arbitration, the First Department noted that a fact-finding court's decision should not be disturbed on appeal unless it is obvious that its conclusions could not be reached under any fair interpretation of the evidence:

Additional respondents, the owner and insurer of the offending vehicle, assert that the vehicle was uninsured at the time of the accident because it was being driven by an unknown thief. No basis exists to disturb the court's finding, after a framed-issue hearing, that the evidence of such theft and nonpermissive use was insufficient to overcome the presumption of permissive use (see Murdza v Zimmerman, 99 NY2d 375, 380 [2003] ["substantial" evidence needed to overcome presumption of permissive use]; Thoreson v Penthouse Intl., 80 NY2d 490, 495 [1992] [fact-finding court's decision should not be disturbed on appeal unless it is "obvious" that its conclusions could not be reached under any fair interpretation of the evidence, especially where findings of fact largely rest on witness credibility]). In so finding, the hearing court properly took into account the owner's failure to adequately explain his substantial delay in calling the police to report the alleged theft, which call immediately followed an alleged assault on the owner and his friends by a mob of angry people (see Minaya v Horner, 279 AD2d 333 [2001]). There being no dispute that the burden of proof was initially on additional respondents to prove nonpermissive use, it does not avail them that the hearing court also rejected as incredible the testimony of one of the victims, called by petitioner, that he had seen the owner sitting in the passenger side of the car in the seconds before the car jumped the curb and knocked him down. 

Notice that in a special proceeding to stay a UM arbitration where the striking vehicle's insurer has denied liability coverage based on its insured's report that the vehicle was stolen, the initial burden of establishing the striking vehicle's nonpermissive use falls on the additional respondent insurer and owner of the striking vehicle, not conversely on the petitioning UM insurer.

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).