An Insurer Mistakenly Providing Benefits Does not Bind Insurer After it Discovers Error
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Dymond Ottey sued Maya Assurance Company for a judgment declaring that the defendant is obligated to provide insurance coverage. Ottey appealed from an order of the Supreme Court, Queens County (Pam B. Jackman-Brown, J.), dated June 27, 2019. The order, insofar as appealed from, granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint.
In Dymond Ottey v. Maya Assurance Company, 2022 NY Slip Op 03397, No. 2019-09825, Index No. 701656/16, Supreme Court of New York, Second Department (May 25, 2022) the appellate court affirmed the trial court’s decision.
FACTS
The plaintiff allegedly was injured on February 14, 2010, when a livery cab from which she was exiting suddenly sped away, causing her to fall to the ground. The livery cab was owned by nonparty ABC Global Limo Corp. (hereinafter ABC Global). The plaintiff commenced an action against ABC Global to recover damages for her personal injuries, and obtained a default judgment therein against ABC Global in the principal sum of $75,000.
The plaintiff also applied to the defendant insurer for no-fault benefits, alleging that it had insured the livery cab. Initially, the defendant paid certain benefits, but it subsequently determined that the livery cab was not covered by it and informed the plaintiff that the payments had been made in error.
The plaintiff then sued for a judgment declaring that the defendant is obligated to provide insurance coverage.
The defendant moved for summary judgment dismissing the complaint. In support of its motion, the defendant submitted evidence which demonstrated that it had insured the livery cab until August 14, 2009, when the insured, ABC Global, submitted a request to remove coverage from the livery cab and transfer coverage to a replacement vehicle. Upon presentation of certain forms by ABC Global, the defendant removed coverage from the livery cab and transferred coverage to the replacement vehicle.
In support of its motion, the defendant argued that, since the livery cab was not covered at the time of the subject accident, it had no obligation to provide coverage.
The plaintiff argued that the defendant should be estopped from disclaiming coverage because it had failed to timely deny coverage, it had begun the representation and assumed the defense of the policy by paying certain benefits, it had lulled the plaintiff into sleeping on her rights, and the plaintiff had been prejudiced thereby as she was now precluded from seeking alternative remedies, such as a claim with the Motor Vehicle Accident Indemnification Corporation (hereinafter the MVAIC).
The Supreme Court (trial court) granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint. The court found that the defendant was not required to issue a disclaimer because the livery cab was not covered on the date of the accident. The court further found that the plaintiff was not prejudiced by the partial payment, since she had 180 days from the date that she received notice of the defendant’s denial to pursue a claim with the MVAIC.
DISCUSSION
The plaintiff argued that the defendant should be equitably estopped from denying coverage because it was complicit in ABC Global’s insurance fraud. She further contends that she was prejudiced by the defendant’s failure to issue a disclaimer and partial payment because the statutory maximum she could receive if she filed a claim with the MVAIC is $25,000, and, therefore, she could not recover the full $75,000 default judgment amount. These arguments are raised for the first time on appeal, and are not properly before the court.
Accordingly, the order is affirmed insofar as appealed from.
ZALMA OPINION
There is no way to force an insurer to provide benefits to an injured person when it had no insurance in effect at the time of the accident. The fact that the insurer provided some benefits until it determined the policy had been deleted before the accident, it promptly advised the plaintiff who then – rather than take advantage of the MVAIC sued and by so doing lost the opportunity to collect a part of the default judgment she obtained from the operator of the vehicle that caused her injury.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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Concurrent Cause Doctrine Does Not Apply When all Causes are Excluded
Post 5119
Death by Drug Overdose is Excluded
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Southern Insurance Company Of Virginia v. Justin D. Mitchell, et al., No. 3:24-cv-00198, United States District Court, M.D. Tennessee, Nashville Division (October 10, 2024) Southern Insurance Company of Virginia sought a declaratory judgment regarding its duty to defend William Mitchell in a wrongful death case pending in California state court.
KEY POINTS
1. Motion for Judgment on the Pleadings: The Plaintiff moved for judgment on the pleadings, which was granted in part and denied in part.
2. Duty to Defend: The court found that the Plaintiff has no duty to defend William Mitchell in the California case due to a specific exclusion in the insurance policy.
3. Duty to Indemnify: The court could not determine at this stage whether the Plaintiff had a duty to ...
GEICO Sued Fraudulent Health Care Providers Under RICO and Settled with the Defendants Who Failed to Pay Settlement
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Post 5119
Default of Settlement Agreement Reduced to Judgment
In Government Employees Insurance Company, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company v. Dominic Emeka Onyema, M.D., DEO Medical Services, P.C., and Healthwise Medical Associates, P.C., No. 24-CV-5287 (PKC) (JAM), United States District Court, E.D. New York (July 9, 2025)
Plaintiffs Government Employees Insurance Company and other GEICO companies (“GEICO”) sued Defendants Dominic Emeka Onyema, M.D. (“Onyema”), et al (collectively, “Defendants”) alleging breach of a settlement agreement entered into by the parties to resolve a previous, fraud-related lawsuit (the “Settlement Agreement”). GEICO moved the court for default judgment against ...
ZIFL – Volume 29, Issue 14
Post 5118
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You can read the full 20 page issue of the July 15, 2025 issue at https://lnkd.in/giaSdH29
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
This issue contains the following articles about insurance fraud:
The Historical Basis of Punitive Damages
It is axiomatic that when a claim is denied for fraud that the fraudster will sue for breach of contract and the tort of bad faith and seek punitive damages.
The award of punitive-type damages was common in early legal systems and was mentioned in religious law as early as the Book of Exodus. Punitive-type damages were provided for in Babylonian law nearly 4000 years ago in the Code of Hammurabi.
You can read this article and the full 20 page issue of the July 15, 2025 issue at https://zalma.com/blog/wp-content/uploads/2025/07/ZIFL-07-15-2025.pdf
Insurer Refuses to Submit to No Fault Insurance Fraud
...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
