Article - June 6, 2008 - Law.com

N.Y. Judge: Summary Judgment Barred in Fake Auto Accident Case

By Daniel Wise

A per se rule bars granting summary judgment to insurance companies that claim they are not responsible for payments under a no-fault policy because an automobile accident was faked, a Manhattan judge has ruled.

Applying such an approach, Civil Court Judge Arlene P. Bluth denied a request for summary judgment from State Farm Mutual Insurance Co. in a case where there was "uncontradicted, overwhelming circumstantial evidence" that an accident had been staged.

The denial of the summary judgment motion means State Farm must establish at trial its defense that the accident was staged.

Patrick McDonnell of McDonnell & Adels in Garden City, N.Y., whose firm is representing State Farm, said an appeal is under consideration.

The plaintiffs in the lawsuit are three medical providers who are suing to recover nearly $4,000 for treating a woman who claimed to have been injured in the alleged accident.

The medical providers -- AA Acupuncture Service, Performance Plus Chiropractic and Right Care Medical -- sued State Farm directly because the woman had assigned to them her rights to recover under the no-fault policy. State Farm had issued a no-fault policy to the owner of the automobile involved in the alleged accident.

A detailed affidavit submitted by a State Farm investigator "certainly" tends "to show the underlying incident was staged, and thus not covered by the policy," Bluth wrote in AA Acupuncture Service v. State Farm Mutual Insurance Company, 2765/08.

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