The Voyager, owned by Issifou Traore, had been reported stolen prior to the incident.

Brown and Holme sought medical treatment in connection with the accident and assigned their rights to various medical providers, which submitted no-fault billing claims to Global Liberty.

Global Liberty alleged that Brown and Holme had staged the accident, based on an investigation conducted by its agent, John Stewart.

According to Global Liberty, Uzosike, the driver of the livery vehicle, submitted recorded statements and an affidavit attesting that, prior to hailing him, he had observed Brown and Holme near the Voyager, which had been idling in the vicinity. Uzosike stated that shortly after Brown and Holme entered his car and after driving a few blocks, the Voyager sideswiped his vehicle.

Uzosike said that both vehicles pulled over, with the Voyager parking in front, at which time it suddenly reversed and made contact at a high rate of speed with Uzosike's vehicle before fleeing the scene.

Uzosike said that he attempted to take photographs of the Voyager with his cell phone. He also asserted that when he sought to obtain Brown and Holme's aid in taking pictures, he asked if they had observed the incident, so they could act as his witnesses. Uzosike stated that they immediately claimed that they were both injured, that he should call the police, and that they had not seen anything.

Uzosike said that he gave chase, with Brown and Holme still in the vehicle, finding the Voyager abandoned a short distance away, at which time he called the police and took additional photos.

He alleged that from Brown and Holme's behavior, he knew they were involved, and he informed them that he was aware that the accident had been staged and that he would ensure that they were arrested for their part in it.

When the police arrived, neither Brown nor Holme sought medical treatment at that time.

Stewart, the investigator, arranged meetings with the livery driver, Uzosike, who provided statements expressing his certainty that the incident had been intentional, that Brown and Holme had participated in the staging, that they had not sought medical attention at the scene, and that they had adopted a "subdued" manner due to their fear of being arrested.

Based on the gathered evidence, Stewart determined that the accident met the company's fraud bureau criteria and had been staged.

Global Liberty filed an action against Brown and Holme and against two medical providers as assignees of Brown and Holme, seeking a determination that the medical provider defendants were not entitled to reimbursement for medical services rendered to Brown and Holme for their alleged injuries.

Global Liberty moved for summary judgment.

In opposition to Global Liberty's motion, the medical provider defendants claimed that Global Liberty had not produced evidence in an admissible form to demonstrate that the incident had been staged or had been intentional. They asserted that Global Liberty had to establish proof of fraud by clear and convincing evidence, that it had failed to do so in relying on "highly speculative allegations and hyperbole," and that substantial discovery remained outstanding.

The Trial Court's Decision

The trial court granted Global Liberty's motion.

In its decision, the court explained that, in New York, an insurer may disclaim all insurance coverage based on "the fact or founded belief that the alleged injury [did] not arise out of an insured incident." The court added that a "deliberate collision by an insured" was "not a covered event under an insurance policy."

In meeting this burden, the court continued, a no-fault insurer (such as Global Liberty) was not required to establish that the alleged collision was the product of fraud, which would require proof of all elements of fraud, including scienter, by clear and convincing evidence, but, rather, had to demonstrate the facts elicited during an investigation that made up its founded belief.

According to the court, circumstantial evidence was "sufficient to prove such facts" if a party's conduct may be "reasonably inferred" based on "logical inferences to be drawn from the evidence."

Here, the court reasoned, there was an affidavit from Stewart, who was the actual investigator of this incident, and an additional affidavit from the driver of the insured vehicle that indicated the "suspicious nature of the incident."

In the court's opinion, the evidence further reflected "contradictory and inconsistent [examination under oath ("EUO")] statements [by Brown and Holme] regarding what transpired leading up to and following the accident." The court noted that Brown and Holme had provided "multiple, differing addresses to the police and in their claim forms, one of which [was] a common address, yet defendant Brown denied living there at his EUO."

The court found that the medical providers had not offered to its satisfaction any arguments sufficient to establish a material question of fact such that summary judgment should be denied. Their claim that summary judgment would be premature because there still were matters for discovery was "unsubstantiated," the court ruled. The court added that the medical providers had not indicated what evidence they could come upon through discovery that could help overcome the fact that the "logical inferences to be drawn from the evidence" were that this was a "staged accident."

Accordingly, the court concluded that Global Liberty had established its entitlement to judgment as a matter of law by tendering admissible evidence demonstrating that the accident was the product of a staged collision, thereby vitiating Global Liberty's obligation to provide coverage.

The case is Global Liberty Ins. Co. v. Brown, No. 24661/2016E (N.Y. Sup. Ct. Bronx Co. Oct. 9, 2019).