HAEM HOSPITAL MEDICAL P.C., TC AMBULANCE CORP., PRESTIGE MEDICAL DIAGNOSTICS,

Transcription

1 SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. F. DANA WINSLOW, PROGRESSIVE INSURNCE COMPANY, Justice TRIAL/IAS, PART 6 Plaintiff, MOTION DATE: 9/16/09 MOTION SEQ. NO.: 001 LENN VENTUR AIA LENN VENTUR-PENA, MANEL MATIAS, DANIEL VENTUR, OLVI CASTRO, EDWIN BONILLA AIA GERMAN BONILLA, EPIC AUTO LEASING LLC, FRANK CABRAL, JOSE SUED- MERCADO, MAUEL BAEZ, E. VARGAS MERCADO, JOSE SANCHEZ, FRAK ACEITUNO AIA FRACK ACEITUNO, RAFAEL ACEITUNO, AVA ACEITUNO, AND ROSA ESPINAL, -against- -and- Individual Defendants. INEX NO.: 20693/08 GZ MEDICAL AND DIAGNOSTIC, P. C., KIGS HWY PSYCHOLOGICAL, P.C., MOSAD MEDICAL, P.C., 3 STAR ACUPUNCTUR, P.C., ALROF, INC., US DIAGNOSTIC SERVICES, INC., BLR CHIROPRACTIC, P.C., BROOKLYN HEIGHTS PHYSICAL THERAPY, P.C., NEW HYDE PARK IMAGING, P. C. D/B/A US, BLR MEDICAL CENTER, MATTAN MEDICAL IMAGING, P.c., HAEM HOSPITAL MEDICAL P.C., TC AMBULANCE CORP., PRESTIGE MEDICAL DIAGNOSTICS, Provider Defendants. Defendant(s). The following papers read on this motion (numbered 1): Notice of Motion... In this declaratory judgment action, plaintiff PROGRESSIVE INSURNCE CPLR COMPANY ("PROGRESSIVE") moves for an Order: (i) pursuant to 3215 granting a default judgment against LENNY VENTUR AI A LENNY VENTURA-PENA, MANUL MATIAS, DANIEL VENTUR, OL VIN CASTRO EDWI BONILLA AI A GERMN BONILLA, EPIC AUTO LEASING LLC, JOSE

2 SUED-MERCADO, E. VARGAS MERCADO, JOSE SANCHEZ, FRANK ACEITUNO AI A FRANCK ACEITUNO, RAFAEL ACEITUNO, AVA ACEITUNO, ROSA ESPINAL, GZ MEDICAL AND DIAGNOSTIC, P., MOSAD MEDICAL, P., 3 STAR ACUPUNCTUR, P., ALROF, INC., US DIAGNOSTIC SERVICES INC., BLR CHIROPRACTIC, P., BROOKLYN HEIGHTS PHYSICAL THERAY, P., MANHATTAN MEDICAL IMAGING, P., HAREM HOSPITAL MEDICAL P.c., and TC AMULANCE CORP., who, plaintiff alleges, have failed to CPLR ~306-b and CPLR answer or otherwise appear in this action; and (ii) pursuant to ~308(5) granting an extension of time to effectuate service and for substituted service upon defendants FRANK CABRAL, MANUL BAEZ, NEW HYDE PAR IMAGING, C. D/B/A US, and BLR MEDICAL CENTER. The Court notes that stipulations of discontinuance have been signed with respect to defendants KINGS HWY PSYCHOLOGICAL, P.C. and PRESTIGE MEDICAL DIAGNOSTICS. The Court automatically adjourns all motions that are submitted without opposition for one month, whether or not there was either an administrative delay or excusable neglect. Such adjournent is made without prejudice to the moving par to have the merits of such an adjournment considered in the event that there is a subsequent submission. PROGRESSIVE seeks a determination of its rights and obligations pursuant to two separate policies of automobile insurance issued to two different insureds: policy number (the "Ventura Policy ), issued to LENNY VENTURA AlA LENNY VENTUR PENA ("VENTURA"), covering a 1993 Toyota Suburban (the "Ventura Vehicle ), and policy number (the "Sanchez Policy ) issued to JOSE SANCHEZ ("SANCHEZ"), covering a 1993 Chrsler sedan (the "Sanchez Vehicle On February 3, 2008, a motor vehicle collsion occurred between the Ventura Vehicle, owned by VENTUR and operated by MANUL L. MATIAS, and a 2007 Ford four-door sedan owned by EPIC AUTO LEASING, LLC and operated by FRANK W. CABRA (the "2/3/08 Collsion ). On Februar 6, 2008, a motor vehicle collsion occurred between the Sanchez Vehicle, owned and operated by SANCHEZ, and a 2008 Honda four-door sedan owned and operated by ROSA A. ESPINAL (the "2/6/08 Collsion PROGRESSIVE seeks to be relieved of the obligation to provide no- fault, liabilty, or uninsured motorist benefits pursuant to the Ventura Policy and the Sanchez Policy, for injuries allegedly resulting from the 2/3/08 Collsion and the 2/6/08 Collsion respectively, upon grounds that the two collsions were intentionally caused and hence there was no coverage under the terms of the policies.

3 , p., " In support of its motion for a default judgment, PROGRESSIVE has submitted a copy of the summons and complaint, affidavits of service, the affirmation of counsel regarding the defendant' s default, and an affidavit made by the part of the facts constituting the claim. Although this proof nominally satisfies the requirements of CPLR ~3215(f) and the motion is unopposed, the Court finds that further scrutiny is required paricularly in view of the breadth of the relief sought. Close examination reveals defects in jurisdiction with respect to several of the defendants, and an insufficient demonstration of a prima facie right to declaratory relief. See Merchants Insurance Company of New Hampshire Inc. v. Long Island Pet Cemetery, 206 AD2d 827; Mount Vernon Fire Ins. Co. v. NIBA Construction Inc., 195 AD2d 425; Joosten v. Gale, 129 AD2d 531. Jurisdiction The Court finds that the affidavits of service attached as Exhibit B to the motion demonstrate prima facie proper service of the summons and complaint upon all defendants except: MATIAS, OLVIN CASTRO, FRANK CABRA, MANUAL BAEZ NEW HYDE PAR IMAGING, P., D/B/A US, and BLR MEDICAL CENTER. MATIAS was purportedly served pursuant to CPLR ~308(2) by delivery to Flores Ventura, a person of suitable age and discretion, at 1325 Edward L. Grant Apt. 2B Bronx, NY, with a subsequent mailng to the same address. This is the address at which service was made upon VENTUR. It is also the aparment building in which MATIAS resides, but it is not the correct apartment. MATIAS has stated that he resides at 1325 Edward L. Grant Highway, Apt. 3E, not 2B. See Examination Under Oath dated April (Motion Exhibit IJ. Where the defendant lives in a multi-family residence, the requirement that process papers be delivered to the defendant' s actual dwellng place or usual place of abode generally is not satisfied by delivery to a neighbor occupying a different apartment, even when the person receiving the papers promises to redeliver them. Johnson v. Motyl, 202 A. 2d 477 citing Biological Concepts v Rudel, 159 AD2d 32; see also Macchia v Russo, 67 NY2d 592. OL VIN CASTRO was purportedly served pursuant to CPLR ~308(2) by delivery to "John Doe" at 475 East 140th Street Apt 5E, Bronx NY. "John Doe" is described as a male, aged 36-, with olive skin and brown hair, 5-9" to 6' tall, weighing Ibs. According to the affidavit of service John Doe confirmed that the defendant was not in the miltary service. The delivery to "John Doe" was followed by a mailng to the same address. On its face, the proof of service described above meets the requirements of CPLR ~308(2). However, the failure to identify the recipient of the papers and the relationship of that person to the defendant, together with the inexact description of the

4 recipient and the lack of documentar support for the assertion of non-miltary status, cast doubt upon the efficacy of such purported service. Plaintiff states that it was unable to effect service upon FRANK CABRA MANUEL BAEZ, NEW HYDE PAR IMAGING, P., D/B/A US, and BLR MEDICAL CENTER. Accordingly, plaintiff seeks an order extending the time to effectuate service and permitting service by publication or other means of substituted service upon these defendants. Before directing an alternative method of service, the Court must find that service pursuant to CPLR ~308(1), (2), or (4) was impracticable. See Cooper-Fry v. Kolket, 245 AD2d 846. "Although a showing of impracticabilty does not require proof of due dilgence or actual attempts to serve a part under each and every method prescribed in CPLR the movant wil be required to make a competent showing as to the actual prior efforts that were made to effect service." Id. at 847 internal citations omitted. competent showing of impracticabilty should include specific, detailed and substantiated evidence of the efforts made to locate and serve defendants. Compare Astrologo v. Serra, 240 AD2d 606; Gibson v. Salvatore, 102 AD2d 861. Plaintiff claims to have attempted service upon the above-named defendants at their last known addresses, as gleaned from the police reports or No-Fault applications. With respect to each of FRANK CABRA, NEW HYDE PAR IMAGING, P.C. D/B/A US and BLR MEDICAL CENTER, plaintiff submits a form of Affidavit of Due Dilgence which lists one attempt at personal delivery and indicates, by a check in the applicable box, that the defendant either was unkown at the address, or moved with no forwarding address. The Affidavit of Due Dilgence with respect to defendant MANUL BAEZ lists three attempts at personal delivery and indicates that the current resident at the address stated that he did not know the defendant. No other evidence is provided. This is not a competent showing of impracticabilty. With respect to defendants FRANK CABRA, NEW HYDE PARK IMAGING P.C. D/B/A US and BLR MEDICAL CENTER, plaintiff does not provide the source of the information relied upon by the process server to determine that these defendants moved or were unkown at the premises. With respect to all of the un-served defendants, plaintiff has not shown that it has undertaken even the most perfunctory investigation to locate the current addresses of these defendants. There is no evidence of a computer search, postal deparment inquiry, motor vehicle deparment inquiry, or even the opening of a telephone book. To justify an order of substituted service, personal service must be more than inconvenient; it must be impracticable.

5 Merits The Court turns to the question of whether or not plaintiff is entitled to relief as against the defendants found to be within its jurisdiction. The Ventura Policy and the Sanchez Policy provide liabilty, uninsured motorist and no- fault coverage for bodily injuries resulting from a motor vehicle accident. There is no coverage ab initio if the incident in question was not an accident. PROGRESSIVE claims that the purported automobile collsion was intentionally caused by some of the defendants for purposes of generating fraudulent insurance claims. If the incident was deliberate (Le., not an accident), then none ofthe defendants is entitled to coverage, regardless of the innocence of any paricular defendant, and regardless of whether or not the incident was motivated by fraud or malice. See Matter of Allstate Ins. Co. v Massre, 14 AD3d 610; Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484, State Farm Mut. Automobile Ins. Co. v. Laguerre, 305 AD2d 490; Geico v. Shaulskaya, 302 AD2d 522; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 2d 751; Progressive Northwestern Ins. Co. v. Van Dina, 282 A. 2d 680. Evidence of fraud should be considered in determining the question of whether or not the collsion was deliberate. Matter of Eagle Ins. Co. v. Davis, 22 AD3d 846. The Court has found no controllng authority that addresses the quantum and nature of proof required to establish a prima facie right to judgment in the so-called staged accident" context. A leading Second Deparment case holds that where two out of three collsions occurring within weeks of the policy s inception have been found to be part of a fraudulent scheme, the insurer is entitled to judgment with respect to the third. Laguerre, 305 AD2d 490. Some guidance is offered by the trial courts, which have articulated several factors as indicia of fraud, including: (i) more than one collsion within a short time of the policy s inception, (ii) cancellation of the policy shortly thereafter for non-payment of premiums, (ii) similarities among the collsions and interrelationships among the parties and (iv) inconsistencies in testimony regarding the circumstances of the subject collsion and the identities of the individuals involved. Such factors, in various combinations, have been held to constitute a "compellng and persuasive body of circumstantial evidence that the underlying loss resulted from an intentional collsion staged for the purpose of insurance fraud." Matter of National Grange Mut. Ins. Co. v. Vitebskaya, 1 Misc.3d 774. See also S. Medical Services, P.C. v. Allstate Ins. Co., 11 Misc.3d 334; Matter of Progressive County Mut. Ins. Co. v. McNeil, 4 Misc.3d 1022(A).

6 This Court believes that it must look to the totality of the circumstances to determine whether an inference can reasonably be made that the 2/3/08 Collsion and 2/6/08 Collsions were deliberately caused. The Court is not compelled to adopt the formulae suggested by insurance investigators or companion Courts. The evidence in this case, however, does not even rise to the level deemed persuasive by those groups. Rather with respect to each of the Ventura Policy and the Sanchez Policy, the plaintiff provides only of a list of inconsistencies or uncertainties in the testimony of some of the allegedly injured paries. There is no evidence that either vehicle was involved in multiple collsions within a short period of time, and within a short period after the policy inception. There is no evidence that either policy was cancelled shortly after inception for non-payment of premiums. There is, in short, no compellng and persuasive body of circumstantial evidence demonstrating that the collsions were intentional. In the Court' s view, there appears to be no reason that the claims regarding the two individual occurrences and policies were joined together in a single declaratory judgment action, except, perhaps, in an attempt to fill an evidentiary void. Plaintiff has established no interrelationship between the two collsions. The two collsions occurred on different dates in different locations, and involved different insureds, different drivers, different occupants, and, according to the police reports, different circumstances. (Although both collsions were broadly characterized as sideswipes, the descriptions in the police reports show that each occurred in a different manner. Plaintiff points to similarities between the collsions (both involved 1993 vehicles containing multiple passengers unrelated to the insureds) and insureds ' payment histories (both insureds attempted to make electronic payments which were returned as invalid). The only purported link, however, is that the Ventura Policy and the Sanchez Policy were purchased over the internet, using the same computer (as identified by the " Internet Protocol" or IP address). This proves nothing more than that the insureds had access to the same computer, which may have been located at a public place, such as a library or internet cafe. It is inappropriate to infer any further relationship between the paries the incidents on this evidence alone, particularly insofar as it may be attributable to coincidence. The Court believes that this case should have been brought as two separate actions under two different index numbers. Although the claims with respect to the two insurance policies arguably involve a common question of law - whether or not a collsion is a covered occurrence - the factual contexts are totally distinct. Joinder affords no economy of judicial resources, but rather, serves only to obfuscate the issues and foster an ilusion of conspiracy without basis in fact. When and if this case proceeds

7 to trial, the Court shall consider severance of the claims. At this juncture, however, the Court finds it sufficient to consider each set of claims separately. Ventura Policy Claims. The evidence regarding the circumstances of the 2/3/08 Collsion does not establish intentional conduct or fraud with respect to the nature of the occurrence. According to the police report, the vehicle driven by FRANK CABRAL was pullng out of a parking spot into the westbound lane when it was struck on the side by the V entura Vehicle traveling in the same lane, in the same direction. That is the only evidence concerning the manner in which the collsion occurred. The scenario is equally, if not more, consistent with an accident as it is with an intentional occurrence. The testimony of the allegedly injured parties contains some vagueness and discrepancies regarding non-essential details, including where the passengers were seated in the V entura Vehicle, and their itinerary on the date of the collsion. Further, the vehicles involved in the 2/3/08 Collsion contained multiple passengers whose relationship or knowledge of each other is not clear. The totality ofthe evidence is insufficient however, to support a finding of fraud with respect to the nature of the occurrence. The Court finds that PROGRESSIVE has not met its burden to demonstrate prima facie that the 2/3/08 Collsion was not an accident. The inconsistent testimony and conduct of the alleged injured parties does raise suspicion, paricularly regarding the existence and extent of the injuries alleged. However it does not give rise to an inference let alone establish, that the collsion itself was intentional. Sanchez Policy Claims. Similarly, the evidence regarding the circumstances of the 2/6/08 Collsion does not establish intentional conduct or fraud with respect to the nature of the occurrence. The Police Report indicates that the vehicle driven by ROSA ESPINAL was driving southbound in the right lane when it was sideswiped by the Sanchez Vehicle, which was driving southbound in the left lane. The Sanchez vehicle contained Sanchez and three passengers, all related to each other but not to Sanchez. According to a sworn statement given by ROSA ESPINAL, her vehicle was stopped at a red light, and when the light turned green, the Sanchez vehicle came "speeding up " on her left and hit the driver s side of her vehicle. (Motion Exhibit Q. J This is the only evidence concerning the manner in which the collsion occurred. Although the allegation that SANCHEZ was "speeding" could support an inference of intent, it could equally support an inference of negligence, particularly since it is unknown whether the Sanchez Vehicle was speeding for any length of time (reaching the light as it turned green), or suddenly accelerated from a slow or stopped position before it struck the vehicle ifit driven by ROSA ESPINAL. Absent any other evidence relating to the nature or circumstances of the occurrence, the Court canot decide in favor of either inference.

8 As discussed above with respect to the claimants under the Ventura Policy, inconsistences in the testimony and conduct of the claimants under the Sanchez Policy raise suspicion, particularly regarding the existence and extent of the injuries alleged. The suspicion is heightened by the sworn statement of ROSA ESPINAL, in which she observed that the allegedly injured passengers did not appear to be hurt at the time of the accident. She stated that "I believe this accident to be very suspicious on behalf of the occupants of Mr. Sanchez s vehicle and feel that any injuries sustained are exaggerated. (Motion Exhibit Q. This evidence, if anything, may cast doubt upon the validity of the individual claims. Without more, however, it does not permit a finding that the collsion was intentional, so as to justify the relief sought here. Conclusion Based upon the foregoing, the Court finds that PROGRESSIVE has not established its right to a declaratory judgment on default, paricularly in view of its failure to give effective notice to several defendants, and the preemptive and widesweeping relief sought. The Court recognizes, however, that to the extent that the difficulty in locating defendants or eliciting the defendants ' paricipation in PROGRESSIVE' s investigation or in this action has hampered PROGRESSIVE' s abilty to present a fully-substantiated application, PROGRESSIVE may not yet have had a full and fair opportnity to litigate the issue at this time. Accordingly, this decision does not preclude PROGRESSIVE from asserting a defense to coverage with respect to any paricular claims as they arise, upon adequate and appropriate proof. Accordingly, it is ORDERED, that PROGRESSIVE' s motion pursuant to CPLR 3215 for a denied. It is further declaratory judgment upon default is ORDERED, that PROGRESSIVE' motion for an order pursuant to CPLR ~306- and CPLR ~308(5) granting an extension oftime to effectuate service and for substituted service upon defendants FRANK CABRAL, MANUL BAEZ, NEW HYDE PARK IMAGING, P.C. D/B/A US, and BLR MEDICAL CENTER is denied. This constitutes the decision and Order of the Court. Plaintiff shall serye a copy of this Order with tice of Entry upon all parties, forthwith upon receipt fro ' y source. Dated: DEC i 0 "'''H...,., V". I\; COTY CLERK' S OFFICE