[*1]

District Court of Nassau County, Third District, May 13, 2005

APPEARANCES OF COUNSEL

Freiberg & Peck, LLP, New York City, for defendant. Israel, Israel & Purdy, LLP, New York City, for plaintiff.

OPINION OF THE COURT

Scott Fairgrieve, J.

The defendant moves for an order pursuant to CPLR 3042 (c) compelling the plaintiff to respond to the defendant’s demand for a bill of particulars and for an order pursuant to CPLR 3124 compelling the plaintiff to produce a witness for examination before trial, or, in the alternative, to strike the plaintiff’s pleadings for noncompliance. The plaintiff opposes the defendant’s motion.

The defendant’s motion to strike the plaintiff’s complaint for plaintiff’s failure to respond to the defendant’s demand for a bill of particulars is denied as moot, as the plaintiff has since answered the defendant’s bill of particulars. Moreover, contrary to the defendant’s assertion in its reply affirmation, the court finds said responses to be sufficient.

The defendant also seeks to dismiss the plaintiff’s complaint upon the failure of the plaintiff’s treating physician to appear for an examination before trial (EBT).

The court has broad discretion in limiting or regulating the use of disclosure devices (see, Brignola v Pei-Fei Lee, M.D. P.C., 192 AD2d 1008 [3d Dept 1993]).

UDCA 1101 (a) requires that the Nassau County District Court adopt all of the procedures set forth in the CPLR with regard to disclosure. [*2]

CPLR 3101 states, in pertinent part, that:

“(a) Generally. There shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by:

“(1) a party, or the officer, director, member, agent or employee of a party;

“(2) a person who possessed a cause of action or defense asserted in the action . . . .”

Accordingly, pursuant to CPLR 3101 (a), in the Nassau County District Court there shall be “full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” (Emphasis added.) The words “material and necessary” should be interpreted liberally to “require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test [to determine if the information sought is material and necessary] is one of usefulness and reason” (see, Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]; see also U.S. Ice Cream Corp. v Carvel Corp., 190 AD2d 788 [2d Dept 1993]). The term “necessary” has been construed to mean “needful” rather than “indispensable” (see, Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 407 [1968], supra). “If there is any possibility that the information [was] sought in good faith for possible use as evidence-in-chief or in rebuttal or for cross-examination, it should be considered ‘evidence material . . . in the prosecution or defense’ ” (Matter of Comstock, 21 AD2d 843, 844 [4th Dept 1964]). However, the Allen case makes clear that disclosure extends to all relevant information calculated to lead to relevant evidence not just information that can be used as evidence-in-chief (see, CPLR 3101; Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3101:7, at 18, citing West v Aetna Cas. & Sur. Co., 49 Misc 2d 28 [1965], mod 28 AD2d 745 [3d Dept 1967]; see also Wiseman v American Motors Sales Corp., 103 AD2d 230 [2d Dept 1984]). “If the data elicited is within the broad scope of CPLR 3101 (a) as construed in the Allen case, the excursion should be called a ‘relevant inquiry’. That would leave [the term] ‘fishing expedition’ to describe the inquiry that goes beyond that extended compass” (Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3101:8, at 19). Furthermore, matters relating to disclosure lie within the broad discretion of the trial court, as it is in the best position to determine what is material and necessary (see, Allen v Crowell-Collier Publ. Co., 21 NY2d 403 [1968], supra; see also, Andersen v Cornell Univ., 225 AD2d 946 [3d Dept 1996]).

Applying the principles established in the Allen case to the issue of an insurance carrier’s right to an EBT of a medical provider in a no-fault case, the court finds that, provided certain conditions are met by an insurance carrier, the carrier is entitled to an EBT of a medical provider. The Court of Appeals has clearly held that, pursuant to the no-fault regulations, in a case in which no additional verification is timely sought, an insurance carrier must pay or deny a claim of no-fault benefits within 30 days from the receipt of a claim or be precluded from interposing a defense to the denial of the claim, with limited exceptions (see, Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., [*3]90 NY2d 274 [1997]). In the case of a defense of “medical necessity,” the courts have held an insurance carrier is precluded from raising a defense of “medical necessity” where the denial was not timely and that summary judgment in favor of the medical provider is appropriate in such situations, provided the plaintiff submits proper proof of the claim and the amount of the loss (see, Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997], supra; Howard M. Rombom, Ph.D., P.C. v Interboro Mut. Indem. Ins. Co., 186 Misc 2d 847 [App Term 2000]). Thus, when the insurance carrier has failed to issue a timely denial, no further discovery, which includes an EBT of the medical provider, is permissible on any defense, except if the insurance carrier’s defense falls within limited exceptions. The limited exceptions set forth in the Presbyterian case are where untimely denials are of no consequence because the insurer is not required to pay the claim and where the claim is ultimately deemed invalid (see, Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997], supra). Such situations include, inter alia, fraud and a lack of coverage defense based upon a belief that the alleged injury does not arise out of the insured accident (see, Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [2d Dept 1999]).

If an insurance carrier has made a timely denial, based upon “medical necessity,” then its objective in seeking an EBT of the medical provider is not a means of harassing the medical provider, but rather the insurance carrier is trying to obtain relevant information on its defense of “medical necessity.” Certainly in cases where an insurance carrier timely denied the no-fault claim, based upon the ground of “medical necessity,” the carrier is entitled to explore why the medical provider or treating physician determined the treatment to be necessary. However, if an insurance carrier seeks an EBT of a medical provider, to inquire about the “medical necessity” of the treatment provided to the plaintiff’s assignor, when the insurance carrier has failed to timely deny the medical provider’s claim, such failure will preclude an EBT of plaintiff and any other defenses not raised. The defendant must satisfy the following standard expressed in Socrates Psychological Servs., P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 642, 654 [Civ Ct, Queens County 2005]) which, in relying on Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co. (7 Misc 3d 675 [2005]), stated:

“[T]he lodestar for determining a no-fault first-party benefits case is the denial of claim, the NF-10. To avoid a plaintiff’s successful motion for summary judgment, an insurer must state, with a high degree of specificity, in its NF-10, any applicable defense, except for fraud (presently defined only as a staged accident) or lack of coverage, and must stand or fall upon those defenses. If not raised in a timely fashion and with specificity, those defenses will not be entertained later, no matter how meritorious they may be in substance (Metropolitan Radiological, [7 Misc 3d 675] [2005], supra [citing cases]; see, Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d Dept 2004]; Socrates Psychological Servs., P.C. v Lumbermans Mut. Cas. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50690[U] [App Term, 1st Dept 2004] [per curiam]).”

The court in Metropolitan Radiological continued that the NF-10 is the only appropriate yardstick for measuring a discovery device’s propriety, not a perusal of any number of the “separate and complete” or “separate and distinct” affirmative defenses contained in the defendant insurer’s answer. The court stated:

“In none of the six motions did the movant attach a copy of a denial of claim, the NF-10, or a timely demand for verification. Interestingly, each insurer’s counsel appended the pleadings, including its answer so as to demonstrate, seemingly and superficially, that the demanded discovery of information and documents must surely come within some affirmative defenses contained therein. The discussion above, however, highlights that what is essential is not some invocation of a defense or the inclusion of an answer containing numerous affirmative defenses, but proof that a particularized defense was stated in a denial of claim with a high degree of specificity and was done so timely . . .

“Review of the NF-10 is indispensable; it is the appropriate yardstick for measuring the legitimacy of the demanded discovery.” (Metropolitan Radiological, 7 Misc 3d at 679.)

The reasoning of Metropolitan Radiological applies equally to the present situation of the appropriate scope of an EBT. This court holds that, apart from eliciting appropriate pedigree and background information of the witness, the subject matter of a deposition in a no-fault first-party benefits case is to be limited to the defenses that were specifically raised in the NF-10. The four corners of the denial of claim form, the NF-10, and defenses there stated with a high degree of specificity (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979] [per curiam]) should yield the examining attorney at an EBT with sufficient and fertile avenues of disclosure.

In the instant case, neither party addresses the issue of whether the defendant has issued a timely denial and the basis for denial of plaintiff’s claim.

Accordingly, the defendant’s motion is denied.

District Court, Nassau County

32030/02

Randy Sue Marber, J.

Before this Court is another motion for summary judgment pursuant to CPLR §3212

brought by the plaintiff. In addition, the defendant cross-moves, pursuant to CPLR §3216, for an order dismissing the above entitled action for want of prosecution, and pursuant to CPLR 3212 dismissing the plaintiff’s complaint for failure to provide proof of its claim. Although not set forth in the Notice of Cross-Motion, the defendant also seeks to dismiss the complaint because the services were provided by independent contractors hired by the plaintiff, a professional corporation. The plaintiff cross-moved to compel discovery. The Court notes that by a stipulation of the parties, the plaintiff’s motion for summary judgment was withdrawn.

The plaintiff, a health care provider, commenced this action to recover the sum of $4,020.66, in first party no-fault benefits for medical services rendered to its assignor.

The defendant has complied with the statutory requirements of CPLR §3216(b), in that issue has been joined, one year has elapsed since the joinder of issue, and the defendant has served by certified mail/return receipt request a ninety (90) day written demand to the plaintiff to proceed with the action.

The ninety (90) day notice was sent to the plaintiff on May 14, 2004. Accordingly, the [*2]plaintiff had until August 16, 2004 to file a notice of trial or request more time within the prescribed time period.

Page 2

Index No. 32030/02

On or about September 28, 2004, after the ninety (90) day period had expired, the plaintiff served a motion for summary judgment and further asserted that it did not file a notice of trial because there was outstanding discovery.

To withstand the defendants’ motion to dismiss, the plaintiff was obliged to demonstrate both a justifiable excuse for failing to file a notice of trial within ninety (90) days of the defendant’s demand and a meritorious cause of action (see, CPLR 3216[e]; Nichols v. Agents Serv. Corp., 133 AD2d 912, 913). The plaintiff has not demonstrated a justifiable excuse for failing to file a notice of trial. The plaintiff claims that the reason for the delay was that there was a pending summary judgment motion that has not yet been decided and that discovery remains outstanding. The proffered excuse is insufficient to justify the delay (cf., Carmen v. West Hudson Hosp., 129 AD2d 868; MacLeod v. Nolte, 106 AD2d 860). If additional time was required, the plaintiff’s remedy was a motion either to vacate the ninety (90) day notice or to secure an extension of the ninety (90) day period (see, Mason v. Simmons, 139 AD2d 880, 881). Moreover, the summary judgment motion was not filed until after the ninety (90) day period.

Accordingly, the plaintiff’s action is hereby dismissed.

This constitutes the decision and order of this Court.

Dated: April 20, 2005

ENTER:

_________________________________

Randy Sue Marber, District Court Judge

District Court, Nassau County

14015/04

Sondra K. Pardes, J.

The defendant’s motion and the plaintiff’s cross motion for summary judgment pursuant to CPLR 3212 are decided as follows.

FACTS OF THE CASE

This is an action for recovery of No-Fault Insurance benefits for medical services provided to the assignor in connection with an automobile accident that occurred on September 20, 2003. It is uncontroverted that the plaintiff medical provider provided medical services to the assignor and submitted bills for same, along with an assignment of benefits form dated October 25, 2003, to the defendant. The bills and Assignment of Benefits (“AOB”)form were received by the defendant on November 17, 2003. By letter dated November 19, 2003 the defendant requested that the plaintiff submit an AOB form signed by the plaintiff. The plaintiff forwarded a second AOB, (also dated October 25, 2003), which was received by the defendant on January 8, 2003. The defendant has not [*2]paid or denied the claim.

The defendant now moves for summary judgment on the grounds that the plaintiff failed to obtain a properly executed assignment of benefits pursuant to 11 NYCRR 65-3.11(b)(I). The defendant maintains that its requests for additional verification remains outstanding and therefore its time to pay or deny the claim has not run and this action must be dismissed as premature.

The plaintiff cross moves for summary judgment on the grounds that the AOB form received by the defendant on January 8, 2003 satisfied the request for additional verification and the defendant’s time to pay or deny the claim ended thirty days after that date.

No-Fault Insurance regulations 11 NYCRR 65-3.11(b)(2) provide, in pertinent part, that in order for a health care provider to receive direct payment from an insurer, it must submit “a properly executed assignment on: (i) the prescribed verification of treatment by the attending physician or other provider of service form (N.Y.S. form NF-3), or (ii) the prescribed verification of hospital treatment form (N.Y.S. form NF-4), or the prescribed hospital facility form (N.Y.S. form NF-5), or (iii) the prescribed no-fault Assignment of Benefits form (N.Y.S. form NF-AOB) contained in Appendix 13, infra, or an equivalent form containing nonsubstantive enhancements, but no changes may be made to the assignment language itself…”.

The attorney for the defendant argues that in the instant case the defendant elected to utilize the NF-AOB form. That AOB form, which was received by the defendant on January 18, 2003, contains a line for “Signature of Provider”. The following hand printed statement appears above that line: “- on behalf of Amy Beth Goldman, M”. There is no “signature” on that line. In addition, there is no identification of the individual who allegedly signed “on behalf of” Amy Beth Goldman. Although counsel for the defendant argues “there is no requirement” that a NF-AOB form contain a signature by the provider, the form the plaintiff elected to utilize clearly requires a “Signature of Provider”. The plain language of the No-Fault Insurance regulations requires that the provider submit a “properly executed assignment” on whatever form it chooses to submit.

It is well established that the No-Fault law is in derogation of the common law and must therefore be “strictly construed” (Presbyterian Hosp. In the City of NY v. Atlanta Casualty Co., 210 Ad2d 210, 211 [2nd Dept., 1994]). Based on the above, the court finds that the plaintiff failed to submit a properly executed AOB and therefore it has failed to comply with the defendant’s request for additional verification pursuant to 11 NYCRR 65.15(g)(I). Consequently, this court finds that the defendant’s time to pay or deny the [*3]claim has not begun to run.

Accordingly, based on the above, the plaintiff’s cross motion for summary judgment is denied and the defendant’s motion for summary judgment is granted; and it is

Ordered that the plaintiff’s complaint is dismissed.

So Ordered:

________________________

DISTRICT COURT JUDGE

Dated: March 29, 2005

CC:Friedman, Harfenist, Langer & Kraut

Freiberg & Peck, LLP

District Court, Nassau County

33887/02

Freiberg & Peck, LLP, New York City, for defendant.

Belesi, Donovan & Conroy, P.C., Garden City, for plaintiff.

Scott Fairgrieve, J.

Defendant Progressive Insurance Company moves for an order pursuant to Section 2221 of the CPLR to modify this Court’s previous order dated June 29, 2004. Previously, this Court denied defendant’s motion for summary judgment based upon plaintiff commencing this within action to recover no-fault benefits without first having responded to the verification demands sent by defendant.

This Court denied the defendant’s motion for summary judgment and instead, ordered plaintiff to respond to the verification demands within 30 days.

After plaintiff served the responses to the verification requests to the defendant’s attorney (not to the defendant insurance company), defendant allegedly failed to issue a timely denial of no-fault benefits. Based upon this failure, plaintiff cross moves and claims it is now entitled to summary judgment.

This Court has reconsidered this issue based upon a review of all papers submitted. This Court now recalls its initial decision of June 29, 2004 and grants summary to the defendant because defendant was under no duty to issue a denial until plaintiff responded to the verification requests. [*2]Thus, plaintiff’s action to recover no-fault was premature because there was no issue in controversy and the action should have been dismissed.

A case directly on point is Psych & Massage Therapy Association, PLLC v. Progressive Cas. Ins. Co., 5 Misc 3d 723, 2004 WL 2563584 (NY City Civ. Ct, 2004), wherein the court held that the failure of the plaintiff to respond to a proper verification request precludes an action to recover no-fault benefits because:

Accordingly, as defendant complied with the letter and spirit of the No Fault regulations, and plaintiff suffered no prejudice from defendant’s expeditious response to plaintiff’s claim, defendant’s verification requests are deemed timely and proper. As plaintiff never responded to defendant’s timely and proper verification requests, defendant was under no duty to issue a denial. See Westchester Medical v. Travelers Prop., 2001 WL 1682931 (Nass. S.C. 2001). Therefore, plaintiff commenced the action prematurely. As there are no issues of fact in dispute, defendant’s motion is granted. This constitutes the decision and order of the Court.

See also Westchester Medical Center v. Travelers Property & Casualty Ins. Co., 2001 WL 1682931 (Nass. Sup Ct 2001), which also dismissed a plaintiff’s action because it was premature:

Based upon the foregoing, the plaintiff’s lawsuit was premature in that a lawsuit with regard to no-fault benefits cannot be commenced until such time as there is an actual dispute with regard to the payment of the benefits. The benefits were not overdue in light of the fact that the time within which to pay or deny the claim(s) of the plaintiff was extended pending the receipt of further verification. See: 11 NYCRR Section 65.15(h). The First Cause of Action is dismissed.

Also on point is New York Presbyterian Hosp. v. American Transit Ins. Co., 233 AD2d 431, 650 N.Y.S.2d 258 (2nd Dept 2001).

CONCLUSION

Based upon the foregoing, the plaintiff’s action was filed prematurely because plaintiff had failed to properly respond to the defendant’s verification requests. The decision of this Court dated June 29, 2004, is vacated in light of the above. The plaintiff’s action is dismissed. Thus, the plaintiff’s cross motion is denied.

So ordered:

DISTRICT COURT JUDGE

Dated:March 22, 2005

CC:

Supreme Court, Nassau County

6715/03

Zelda Jonas, J.

Pursuant to the order of this Court dated August 19, 2003, this matter was set down for a framed-issue hearing to determine whether petitioner, Progressive County Mutual Insurance Company (hereinafter referred to as “Progressive”), is entitled to a stay of the uninsured motorist arbitration commenced by the respondents, Diandre McNeil and Tatyana Newbern, under the [*2]uninsured motorist endorsement of the insurance policy and to determine the validity of the disclaimers of coverage forwarded by respondent, State Farm Mutual Automobile Insurance Company (hereinafter referred to as “State Farm”), to its insured, Elicier Delgado, Jr., and the reported operator of the State Farm-insured vehicle, Ernesto Ortiz. State Farm has disclaimed coverage upon the ground that the collision was an intentional, staged event by its insured to defraud State Farm. The respondents, Diandre McNeil and Tatyana Newbern, were in a vehicle that was struck in the rear by the vehicle insured by Elicier Delgado, Jr. and Ernesto Ortiz on February 18, 2002.

Petitioner Progressive claims that the arbitration should be permanently stayed because the offending vehicle is insured by respondent State Farm. Petitioner claims that State Farm’s disclaimer of coverage is defective since the notice of disclaimer was issued in an untimely manner, and the injured parties were never served with the notice of disclaimer as required by Insurance Law §3420 (d). Therefore, petitioner claims that the respondents insured by Progressive cannot seek arbitration under the uninsured motorist endorsement of the insurance policy. In the alternative, petitioner claims that if the Court finds that there is no insurance because of an intentional collision, then the injured parties still cannot receive compensation under the Progressive uninsured motorist endorsement because the endorsement only covers injuries that are caused by accidents.

A bench trial was held on March 4, 2004. The parties stipulated that the rear-end collision occurred between the Delgado vehicle and the McNeil-Newbern vehicle on February 18, 2002. The sole witness to testify is Miss Fink, the investigator for State Farm. The Court credits her testimony as being credible.

Findings Of Fact

Elicier Delgado owned a 1989 Honda which was insured by State Farm on the date of the collision, February 18, 2002. The inception date of the automotive policy was January 18, 2002. The policy was a standard automobile policy under an assigned risk plan, and a premium payment was paid at the time of its inception. On February 3, 2002, Delgado’s vehicle was involved in a rear-end collision in which his vehicle struck the preceding vehicle. On February 18, 2002, Delgado’s vehicle was involved in a second rear-end collision with the respondents, McNeil and Newbern. Again, his vehicle struck the rear of the preceding vehicle, this time the respondents’ vehicle, a 1998 Dodge. There is a discrepancy over the operator of Delgado’s vehicle during the February 18th collision. Mr. Delgado informed the State Farm investigator that he was the operator of the vehicle, while the police report indicates that Ernesto Ortiz was the operator. On March 9, 2002, State Farm canceled Delgado’s insurance policy for nonpayment of the premium. Delgado never made a subsequent payment since his initial premium payment. On June 5, 2002, an investigator visited Delgado’s residence at which time Delgado informed the investigator that his vehicle had been involved in the February 18th accident. On June 6, 2002, an investigator unsuccessfully attempted to get a statement from Ortiz by visiting his home. On September 20, 2002, Delgado was scheduled for an Examination Under Oath (hereinafter referred to as EUO), but he failed to appear. On October 9, 2002, the State Farm conducted EUO’s of two passengers in the Delgado vehicle, Manano Ortiz and Eli Ramos. On October 27, 2002, Delgado was scheduled for a second EUO and once again failed to appear. Miss Fink [*3]testified that on February 5, 2003, State Farm issued letters to Ortiz, Delgado, McNeil, and Newbern to inform them that they were disclaiming coverage as they concluded that the Delgado’s vehicle was involved in an intentional fraud and not an accident.

Conclusions Of Law

Respondent State Farm is correct in asserting that the offending Delgado vehicle is not covered under the automotive policy issued by respondent if the collision was an intentional, staged event and not caused by an accident (Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751).

The respondent State Farm has demonstrated that the collision that occurred on February 18, 2002 was one of two accidents that occurred over a short period of time, i.e. two weeks, that were deliberately caused to fraudulently obtain insurance benefits. An insurer asserting a lack of coverage based upon a defense of fraud must come forward with “the facts” or a “foundation for its belief” that the incident was a deliberate, staged event in furtherance of a scheme (Mount Sinai Hospital v. Triboro Coach Inc., 263 A.D.2d 11, at 19, citing Central General Hospital v. Chubb Group of Ins. Cos., 90 N.Y. 2d 195, 199; Inwood Hill Medical P.C. v. Allstate Insurance Company, 2004 WL 1381082). Where it is proven that the vehicles were involved in several collisions within a short period of time after the insurer issued insurance policies for vehicles registered to the insured, that is sufficient to satisfy the definition of “founded belief” (State Farm Mutual Automobile Ins. Co., v. Leguerre, 305 A.D.2d 490; Inwood Hill Medical P.C. v. Allstate Insurance Company, supra, at 10). It has been held that two collisions that occurred in a similar manner, coupled with discrepancies within the statements provided by the insured, constituted a “compelling and persuasive body of circumstantial evidence” that the underlying loss resulted from an intentional collision arranged for the purpose of insurance fraud (National Grange Mutual Insurance Company v. Vitebskaya, 1 Misc3d 774, at 777). The inference to be drawn from the circumstantial evidence must be logically compelling and prove that it was “more likely” or “more reasonable” that the collision was a result of a staged, intentional event rather than caused by an accident. (See, Gayle v. New York, 92 N.Y.2d 936.)

At the framed-issue hearing, respondent State Farm has established sufficient facts through the testimony of their investigator, Miss Fink, that created the reasonable inference of a founded belief that the collision on February 18, 2002 was an intentional, staged event. The State Farm-insured vehicle, a 1989 Honda, was involved in two alleged accidents within a two-week period of time and also within one month after an assigned risk policy of insurance was assigned to State Farm. In each of those incidents, the 1989 Honda allegedly rear ended another car while there were multiple individuals in the 1989 Honda as passengers. After each of these alleged accidents, the multiple individuals in the State Farm-insured vehicle made claims of injuries and no-fault claims. The insurance policy covering the 1989 Honda was cancelled shortly after these two alleged accidents as the State Farm-insured Delgado never made premium payments subsequent to the initial payment made when he procured the assigned risk policy of insurance. Finally, neither the State Farm insured nor the alleged operator of the State Farm-insured vehicle appeared for examinations under oath in connection with the investigation of this claim. Accordingly, the Court finds that State Farm presented compelling and persuasive circumstantial evidence that the collision that occurred on February 18, 2002 was an intentionally staged event. [*4]

Contrary to petitioner’s contention, State Farm was not required by Insurance Law §3420 (d) to issue a notice of disclaimer to the insured and the injured parties because its denial of coverage was based on a lack of coverage for the incident from a deliberate collision caused in furtherance of an insurance fraud scheme which is not a covered accident and, therefore, not an exclusion under the policy (State Farm Automobile Insurance Company v. Laguerre, 305 A.D.2d 490).

Because the injuries sustained by respondents, Diandre McNeil and Tatyana Newbern, were caused by an intentional collision, they also cannot recover from the uninsured motorist endorsement of the Progressive policy which provides only for compensation for injuries sustained by a covered person “caused by an accident.” This language in an insurance policy has been interpreted by the courts to exclude recovery for intentional conduct (McCarthy v. MVAIC, 16 A.D.2d 35, aff’d, 12 N.Y.2d 922; In the Matter of Progressive Northwestern Insurance Company v. Van Dina, 282 A.D.2d 680; In the Matter of Aetna Casualty & Surety Company v. Perry, 220 A.D.2d 497). In particular, it excludes coverage under the uninsured motorist policy endorsement for an intentional collision whether it was motivated by malice or fraud (In the Matter of Government Employees Insurance Company v. Shaulskaya, 302 A.D.2d 522).

The Court finds this can result in an injustice since respondents, McNeil and Newbern, appear to be without any recourse for remuneration of injuries. It is also disturbing given the fact that the line of appellate cases which constitutes precedent binding upon this Court completely overlooks that the uninsured motorist insurance was designed for the protection of the insured victims for which insurers pay an additional premium. Legislative action is necessary in order to remedy this glaring void where innocent victims of intentional collisions are left without any recourse for compensation for their injuries by the insurance industry.

Accordingly, petitioner’s application for a permanent stay of arbitration under the uninsured motorist insurance policy endorsement pursuant to CPLR §7502 is granted in its entirety.

Submit order.

________________________________

J.S.C.