American Tr. Ins. Co. v 21st Century Pharmacy Inc. (2020 NY Slip Op 50532(U))

Index No. 159037/2018

Law Offices of Daniel J. Tucker, Brooklyn NY (Megan Harris of counsel), for plaintiff.

Law Offices of Gabriel & Shapiro LLC, Rockville Centre, NY (Joseph Padrucco of counsel), for defendant Janan S. Syed, DC.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Nonparty Tynise Watson was a passenger in a vehicle that was allegedly involved in a collision. The vehicle was covered by a no-fault insurance policy issued by American Transit. Various medical providers applied for no-fault benefits as assignees of Watson, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to the various medical provider defendants. American Transit now moves for summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, and moves for default judgment under CPLR 3215 against the properly served and non-appearing defendants [*2]who remain in the action.

American Transit’s motion for summary judgment and for default judgment is denied.

DISCUSSION

Both branches of American Transit’s motion rely on the same legal theory and supporting evidence. American Transit contends, in essence, that it has good reason to believe that the collision putatively giving rise to Watson’s need for medical treatment was staged, which is a proper ground for denying coverage.

A no-fault insurer seeking a declaration of no coverage based on a conclusion that the underlying collision was staged must establish as a “fact or founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].) Here, American Transit submits an affidavit from a claims investigator familiar with the case to support its conclusion that the collision was not genuine. That affidavit, however, is insufficient to meet American Transit’s burden. The affidavit’s account of the circumstances of the accident—and thus the various “red flag” indicators of a staged collision—it is based largely on inadmissible evidence, namely a police accident report and the unsigned transcript of Watson’s examination under oath (EUO).

A police accident report is admissible as a business record if, when prepared, it was based on the preparing officer’s personal observations at the scene, or if the information in the report came from an eyewitness with a business duty to report to the officer. (See Pena v. Slater, 100 AD3d 488, 489 [1st Dept 2012]; State Farm Mut. Auto Ins. Co. v Langan, 18 AD3d 860, 862 [2d Dept 2005].) Here, however, the police report states expressly that the preparing officer did not witness the underlying collision at issue (see NYSCEF No. 13, at 3); indeed, the report appears to indicate that the officer was not present at the scene at the time she investigated the circumstances of the collision (see id. at 1). Nor does American Transit attempt to establish that the occupants of the vehicle (the presumptive sources of the information in the report) were under a business duty to report to the investigating officer. The police report here is thus inadmissible for the hearsay purpose for which American Transit seeks to use it: establishing as fact the circumstances under which the alleged collision occurred. (See Jupa v Zaidi, 309 AD2d 606, 607 [1st Dept 2003]; accord Langan, 18 AD3d at 862.)

The affidavit of American Transit’s investigator also draws heavily on Watson’s EUO transcript. But that transcript is not signed or notarized. (See NYSCEF No. 14 at 76.) And although the transcript itself suggests that American Transit intended to send a copy of the transcript to Watson to review, sign, notarize, and return (see id.), American Transit has not met its burden to establish that it actually followed through and provided Watson the transcript, as required by CPLR 3116 (a). (See Ramirez v Willow Ridge Country Club, 84 AD3d 452, 453 [1st Dept 2011] [noting that the proponent of a deposition transcript bears the burden to show compliance with CPLR 3116 (a)].) On this record, therefore, the transcript is inadmissible hearsay as well. (See Santos v. Intown Assocs., 17 AD3d 564, 565 [2d Dept 2005].)

As hearsay, neither the police report nor the EUO transcript in this case are competent evidence to support American Transit’s motion for summary judgment. (See Jupa, 309 AD2d at 607; Santos, 17 AD3d at 565.) Nor can American Transit rely upon them to support a motion for default judgment. (See Martinez v Reiner, 104 AD3d 477, 478 [1st Dept 2013]; Zelnik v Bidermann Indus. U.S.A., Inc., 242 AD2d 227, 228 [1st Dept 1997].)

Excluding facts gleaned from the police report and Watson’s EUO transcript, the affidavit of American Transit’s investigator is based on little more than the day, time, and location of the collision. But those facts, standing alone, are not sufficient to establish a founded belief that the collision was staged—either on a prima facie basis for purposes of default judgment, or as a matter of law for purposes of summary judgment.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the remaining properly served and non-appearing defendants is denied; and it is further

ORDERED that the parties shall confer and shall prepare a joint request for a preliminary conference with this court, as set forth in the Remote Conference Protocol available on this court’s website, http://ww2.nycourts.gov/courts/1jd/supctmanh/index.shtml.

Date: 5/07/20