Intentional Acts Exclusion Smith v Geico Ins. Co. v Liberty Mutual Insurance Co.

This is an action to recover nofault insurance benefits, including outstanding medical bills and  loss of  earnings, from Geico.  It  appears that, on or  about September 2, 2008, the plaintiff was injured when he was  involved in  an accident with a motor vehicle operated by nonparty Edward J . Conrad. Geico insured the plaintiff’s vehicle, and Liberty Mutual Insurance Company insured the Conrad vehicle.  The facts and circumstances surrounding the happening of the accident are not clear. Geico moves for summary judgment dismissing the complaint on the grounds that the plaintiff failed to submit the prescribed no-fault insurance billing forms, that the plaintiff’s intentional actions are excluded from no-fault coverage, and that the plaintiff was a pedestrian who may  only seek no-fault benefits from Liberty.   In support of its motion, Geico submits the pleadings, the affirmation of  its attorney, affidavits from two employees of Geico, and a copy of the police accident report, Form MV-105, regarding this incidcnt.  The police accident report record relied on by Geico is plainly inadmissible and has not been considered by the Court in making this determination. Geico fails to include an affidavit by  someone with personal knowledge as to how this  accident  happened and how the plaintiff was injured. Initially, Geico argues that the plaintiff cannot satisfy his prima facie burden in an action to recover no-fault benefits that  the prescribed statutory billing forms have been mailed by him and received by the insurer, and that  payment of no-fault benefits is overdue.  In support of this contention, Geico submits the affidavit of Roxanne McCarville, an employee in Geico’s claims division.  In her affidavit McCarville swears that she made “several repeated  and unsuccessful attempts to obtain the relevant bills.”  She  further swears to the detailed procedure followed by Geico in mailing denial of claims forms to its insureds, and that the copies o f the “relevant Denial of Claim forms … if  applicable and as referred to below, are attached hereto.”  Despite the fact that a denial of claim form was issued by Geico regarding this incident on October 3, 2008, Geico fails to include a copy in its submission. However, the plaintiff has supplied the Court with a copy of said denial of claim. It has been held that once an insurer repudiates liability by  issuing its denial of coverage, an insured is excused from any of his obligations under the policy (State Farm Ins. Co. v  Domotor, 266 AD2d 219, 697 NYS2d 348).  Therefore, Geico’s contention herein is without merit. In addition, Geico has failed to establish its entitlement to summary judgment regarding its contention that the plaintiff’s in tentional  acts exclude liim from nofault coverage.  It is undisputed that Geico issued a Family Automobile Insurance Policy to the plaintiff on August 8, 2008,  effective June 3, 2005 to December 3, 2008.  The  Policy, Section VI – Amendments and Endorsements, Form A30NY, provides, in pertinent part: Exclusions This coverage does not apply to personal injury sustained by (e) any person who intentionally causes his or her own personal injury Without submitting admissible proof of the facts, Geico nonetheless contends that the plaintiff was involved in  a “road rage” incident with Conrad, that he stopped his vehicle, got out of the vehicle, jumped on the hood of the Conrad vehicle, and was injured.  It is well established that when an insurance company intends to exclude certain coverage from its obligation under a policy, the insurance company must use clear and unambiguous language. In addition, “such exclusions or exceptions from policy Coverage must be specific and clear in order to be enforceable, and they are … to be accorded a strict and narrow construction.  Thus the insurance company bears tlie burden of establishing that the exclusions apply in a particular case” (Lee v State Farm, 32 AD3d 902, 822 NYS2d  559). The Court finds that, even if it were to consider the police accident report submitted herein, there are multiple issues of fact regarding the actions of Conrad and the plaintiff including, but not limitcd to, whether the plaintiff exited his vehicle, and whether he jumped on the hood of Conrad’s vehicle.  Thc issues of fact present herein preclude a finding as to what actions of the plaintiff were intentional, or that any intentional actions caused his alleged injuries. The issues of fact herein also preclude a finding that Geico is entitled to summary judgment finding Liberty liable to the plaintiff for no-fault benefits “based on the doctrine of striking vehicle.”  It  has been held that a person who has left his or her car is considered a pedestrian covered under nofault insurance law with regard to the insurance covering the striking vehicle. This is true even where the person left his or her vehicle with the intention to return shortly. Here, Geico has failed to establish the facts surrounding this accident, and whether the plaintiff was a pedestrian at the  time of his alleged injuries.  Geico’s remaining contentions are either not established sufficiently to warrant summary judgment, without merit, or raised prematurely. Liberty moves for summary judgement dismissing the third-party complaint on the grounds that the plaintiff’s intentional actions are excluded from no-fault coverage, that Geico is liable to the plaintiff for no-fault insurance benefits because the plaintiff’s alleged injuries were the result of his “use or operation”’ of his vehicle, and that the Court is an improper forum to resolve the dispute between the insurers regarding no-fault coverage. Liberty has also failed to submit any admissible evidence, or affidavits from an individual with personal knowledge, indicating how this accident occurred.  The issues of fact regarding the plaintiff’s actions and the cause of  his alleged injuries remain.  Thus,  Liberty has failed to establish its entitlement to summary judgment regarding the first two grounds of its motion. However, Liberty also contends that the dispute between Geico and Liberty over who might be responsible to pay no-fault (first-party) benefits must be determined in an arbitration proceeding. Insurance Law $ 5I05 (b) requires that mandatory arbitration be used to resolve all disputes between insurers as to their responsibility for the payment of first-party benefits.  11 NYCRR 65-4.11 (a) (6) provides that mandatory arbitration shall not apply to any claim for recovery rights to which an insurer in good faith asserts a defense of lack of coverage of an alleged covered person on any grounds, … [h]owever, any controversy between insurers involving the responsibility or the obligation to pay first-party benefits (i.e., priority or payment or sources of  payment as provided in section 65-3.12 of this Part) is not considered a coverage question and must be  submitted to mandatory arbitration under this section.” 11 NYCRR 65-3.12 (b) provides that “If  a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the  first insurer to whom notice of claim is given . . . by or on behalf of  an eligible injured person, shall be  responsible for payment to such person. Any such dispute shall be  resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law and section 65-4.11  of this Part.” Geico contends that the plaintirf is not an “eligible injured person’’ by virtue of his allegedly intentional acts.  However, the facts surrounding the plaintiff’s  actions, and the cause of his injuries, have not been detemined, and Geico’s contention is essentially that there is a question of coverage, which does not require mandatory arbitration.  It has been held that when an insurer denies the plaintiff‘s claim on the ground that no-fault  benefits are payable by another insurer, that insurer has raised an  issue as to which insurer was obligated to pay first-party benefits, subject to mandatory arbitration ( M.N. Dental Diagnostics v Geico,  81AD3d 541, 916 NYS2d 598. Accordingly, Liberty’s motion for summary judgment is granted, and the third-party complaint is dismissed. The Court directs that the causes of action as to which summary judgment was granted are hereby severed and that the remaining causes of action shall continue (see CPLR 3212 [e] [ 11). Comment:  So many issues, so little time.  So apparently Geico presented this case as a road-rage injury where Smith got out of his car for some reason and jumped on the hood of Conrad’s car and got hurt. Geico sought to deny benefits on the grounds that Smith was injured due to an intentional act; that Smith did not respond to verification requests; and that Liberty Mutual (the insurer of Conrad’s car) was the proper source of PIP payments. To support their case, Geico used a police report which was not admissible, and from the way this case reads, they did not obtain any affidavits from witnesses.  Next, Geico alleged that the plaintiff did not send in his bills, and yet they issued a denial. Oops.  That’s not a winning strategy. Finally, Geico third-partied Liberty Mutual into the case on the theory that Liberty, not Geico, owes the benefits.  Although I see a lot of cases where Geico uses the impleader strategy to shift PIP coverage to another insurance company, that strategy does not work.  It has been rejected by the Appellate Division, and as the court here points out, PIP coverage disputes between insurers are subject to arbitration.  I would also note that I disagree with Geico’s position that if an injury is caused by an intentional act, it becomes a “no coverage” case. There is a difference between a lack of coverage and an exclusion.  Intentional injury is an exclusion to PIP, not a lack of coverage.   The distinction is important in several ways.  One of those way is that, as in this case, until you prove that the claim falls within the exclusion, you have to arbitrate inter-company coverage disputes.