Insurer Fails to Establish Fraud in Summary Judgment Motion (NY)

An intentional and staged auto collision caused in furtherance of an insurance fraud scheme is not a covered accident under a policy of insurance.  However, the challenge when seeking to prove a claim for fraud is to be able to establish admissible evidence. Recently, in Nationwide Gen. Ins. Co. v Linwood Bates III, Nationwide was unsuccessful in establishing on summary judgment that they had no duty to provide coverage and the policy issued was null and void due to a fraudulent scheme involving three intentional, staged accidents.

A prima facie entitlement to judgment as a matter of law required admissible evidence that the collisions were deliberately caused to fraudulently obtain insurance benefits. Here, Nationwide asserted that several defendants failed to attend their scheduled Examinations Under Oath which was purportedly a breach of the insurance contract with the plaintiff but failed to submit evidence from someone with personal knowledge of the mailings of the examination requests. In addition, the uncertified police accident reports submitted by the plaintiff were also inadmissible. Further, the unsigned and unsworn transcript of one of the defendants was inadmissible. Nationwide submitted an affidavit of its investigator, but the investigator relied primarily on inadmissible evidence, and lacked personal knowledge of the facts surrounding the three collisions. Accordingly, the Court found the insurer failed to meet its burden and the summary judgment motion as denied.

Thanks to Poona Sethi for her contribution to this post and please write to Mike Bono for more information.