Geico Insurance Company v. Williams

Full title: GEICO INSURANCE COMPANY, GEICO INDEMNITY INSURANCE COMPANY and GEICO…

Court: Supreme Court of the State of New York, Nassau County

Date published: Jan 27, 2011

2011 N.Y. Slip Op. 30326 (N.Y. Sup. Ct. 2011)

Opinion

015804/10.

January 27, 2011.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] RANDY SUE MARBER, Judge.

Papers Submitted:

Order to Show Cause ......................................... x

Upon the foregoing papers, it is ordered that this unopposed motion by the Plaintiffs seeking an order, pursuant to CPLR § 2201 and § 6301, seeking an immediate stay of all future proceedings, including but not limited to, uninsured/supplementary uninsured motorist lawsuits and arbitrations, arbitrations and lawsuits seeking to recover no-fault benefits and third-party lawsuits and arbitrations, involving any and all of the Defendants, concerning the Plaintiffs, GEICO INSURANCE COMPANY, GEICO INDEMNITY INSURANCE COMPANY and GEICO GENERAL INSURANCE COMPANY's policies issued to the following individual Defendants: JIMMY JOSEPH (#4167930124); MARK A. WILLIAMS (#4176597211); MILTON WILLIAMS (#4176473355); CHARLES T. THOMPSON (#4176469551); SAMUEL R. JOSEPH (#4176515619); MATTHEW N. EDWARDS (#4176322438); OBY JEAN (#4151924364); ANDERLINE THOMAS (#4155394184); FRANTZKY JULES (#4157599921); JONATHAN S. FRANCIS (#4155391453); DAVID A. BOYD (#4172685598); KEVIN A. GILBERT (#4167706037); RICARDO FLEURMOND(#4170778205); GREGORY D.STEPHENSON(#4148474614); ROSELIE LOUBEAU (#4082862410); ROSELIE LOUBEAU (#4148198395); CHRISTIAAN TAYLOR (#4150877654); RANDOLPH MORANT (#4159273327); NYLISHA HALL (#4158907636); ANDRAY C. DAVIS (#4167876525); DONOVAN D. HUMPHERY (#4177424878); KENNETH J. DUDLEY (#4170772901); ANNA VASILECOZZO (#4185554716); JEAN SAINT-CYR (#4142971532); and KAREN A. MAYNARD (#0326214004), arising from the alleged accidents that occurred on 03/23/2007; 01/02/2009; 01/07/2009; 02/04/2009; 02/10/2009; 02/28/2009; 03/03/2009; 03/22/2009; 03/26/2009; 04/08/2009; 06/23/2009; 06/29/2009; 07/12/2009; 07/23/2009; 07/24/2009; 07/27/2009; 08/23/2009; 10/04/2009; 10/09/2009; 10/09/2009; 10/20/2009; 10/20/2009; 11/17/2009; 01/29/2010 and 01/12/2010, is GRANTED.

The branch of the Plaintiffs' motion enjoining the parties from prosecuting or defending any new lawsuit or arbitration between the Defendants and the Plaintiffs, filed after the entry date of this Order, involving reimbursement for health care services purportedly rendered to said Defendants' assignors pursuant to New York State Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law § 5101, et seq.) (the "No-Fault law") until the determination of this action, is DENIED.

This declaratory judgment action was commenced by the Plaintiffs based upon alleged fraudulent acts committed by the Defendants. Specifically, the Plaintiffs allege that the Defendants are part of a structured scheme of staging accidents in order to file fraudulent insurance claims for personal injuries and property damage. See Verified Complaint, dated August 17, 2010, attached to the Plaintiffs' Order to Show Cause as Exhibit "A". The Plaintiffs' allege that Defendants, JIMMY JOSEPH (#4167930124), MARK A. WILLIAMS (#4176597211), MILTON WILLIAMS (#4176473355), CHARLES T. THOMPSON (#4176469551), SAMUEL R. JOSEPH (#4176515619), MATTHEW N. EDWARDS (#4176322438), OBY JEAN (#4151924364), ANDERLINE THOMAS (#4155394184), FRANTZKY JULES (#4157599921), JONATHAN S. FRANCIS (#4155391453), DAVID A. BOYD (#472685598), KEVIN A. GILBERT (#4167706037), RICARDO FLEURMOND (#4170778205), GREGORY D. STEPHENSON (#4148474614), ROSELIE LOUBEAU (#4082862410), ROSELIE LOUBEAU (#4148198395), CHRISTIAAN TAYLOR (#4150877654), RANDOLPH MORANT (#4159273327), NYLISHA HALL (#4158907636), ANDRAY C. DAVIS (#4167876525), DONOVAN D. HUMPHERY (#4177424878), KENNETH J. DUDLEY (#4170772901), ANNA VASILECOZZO (#4185554716), JEAN SAINT-CYR (#4142971532) and KAREN A. MAYNARD (#0326214004), materially misrepresented themselves to the Plaintiffs as twenty-three (23) of the twenty-five (25) claims that are the subject of the declaratory judgment action. The foregoing Defendants had their down payments rejected, using a fictitious bank account or the identical pre-paid credit card, which were ultimately canceled by the Plaintiffs for non-payment of premiums shortly after the staged "accidents" occurred. The remaining two (2) Defendants where the Plaintiffs did receive payment of premiums were long standing policy holders that were intentionally struck by adverse vehicles.

The Plaintiffs further allege that thirty-three (33) of the named medical provider Defendants submitted bills to the Plaintiffs for no-fault reimbursement in more than one of the subject twenty-five (25) staged losses. The Plaintiffs allege that the named medical provider Defendants acted in concert with the named individual Defendants to set up the staged "accidents" and purported resulting losses by virtue of assigned no-fault benefits from the individual Defendants.

The Plaintiffs commenced this action for a declaratory judgment and, thereafter, the instant Order to Show Cause for a stay and injunction ensued.

The Plaintiffs seek a judicial determination that they are not obligated to provide coverage for the purported staged motor vehicle "accidents" that occurred on the above referenced dates and related policies. Counsel for the Plaintiffs submits an Affirmation, supporting the Order to Show Cause, which seeks a judicial determination that the foregoing policies issued to the Defendants are null and void and that the Plaintiffs have no contractual duty to defend or indemnify any person under said policies in any action or proceeding brought for damages arising out of the alleged personal injury or property damage. See Affirmation in Support, dated September 14, 2010, attached to the Plaintiffs' Order to Show Cause. The Plaintiffs also seek a judicial determination that the Plaintiffs have no duty to provide coverage for any claims for no-fault and/or uninsured motorist coverage made by or on behalf of any person or entity in connection with the accident dates and policies referenced herein. Id. Further, the Plaintiffs request that the named medical provider Defendants may not collect against any patient-assignors personally and that any liens between the named medical provider Defendants and the patient-assignors be deemed null and void.

In support of the Order to Show Cause, the Plaintiffs submit the Affidavit of Sharyl Derenthal, a Special Investigative Unit Manager of the Plaintiff, GEICO INSURANCE COMPANY, who is responsible for the administration of the claims submitted to the Plaintiffs in this action. Ms. Derenthal states in her Affidavit that she was personally involved in the investigation into a scheme of an ongoing ring of fraudulent activity, that involves twenty-five (25) staged "accidents". Ms. Derenthal supports the allegations in the complaint regarding the individually named Defendants acting in concert with the named medical provider Defendants in order to file and collect on fraudulent claims for personal injuries and property damage.

Counsel for the Plaintiffs cites in his Affirmation in Support, Agway Insurance v. Alvarez, 258 A.D.2d 487 (2nd Dept. 1999), for the proposition that the underlying actions should be stayed until such time as the declaratory judgment action between the parties is determined. Plaintiffs' counsel argues that the Plaintiffs are entitled to injunctive relief as all of the required elements for injunctive relief have been satisfied here. In that regard, Plaintiffs' counsel posits that the Plaintiffs are likely to succeed on the merits, that they will suffer irreparable injury in the absence of the injunction and that the balancing of the equities favors its position.

The Court finds that, in the interest of judicial economy, the relief requested by the Plaintiffs is appropriate under these circumstances. The Plaintiffs are correct in their assertion that in the event the Defendants are permitted to continue to litigate the above referenced claims against the Plaintiffs, policy limits which would otherwise be available to the Plaintiffs' insureds for legitimate claims may be depleted. Moreover, litigating each alleged fraudulent claim separately would create an undue burden for the Plaintiffs and could result in significantly varying outcomes. As such, the Plaintiffs clearly established that irreparable harm would be suffered if the stay is not granted.

The Plaintiffs' counsel also successfully demonstrated a likelihood of success on the merits. The sworn Affidavit of the Plaintiffs' employee, Ms. Derenthal, sufficiently details the alleged fraudulent acts of the Defendants as a result of an investigation conducted by the Plaintiffs.

In balancing the equities, and in light of there being no opposition to the instant application, the Court finds equity clearly favors granting the preliminary injunction requested by the Plaintiffs.

While the Court grants the Plaintiffs' request to stay all currently pending lawsuits between the Plaintiffs and the Defendants, and all future proceedings regarding the specific insurance policies referenced herein, the Court declines to grant a stay as to new lawsuits and arbitrations between the Defendants and the Plaintiffs filed after the entry date of this Order. If a new lawsuit or arbitration is commenced regarding insurance policies other than those referenced herein, the Plaintiffs may thereafter seek a stay of any new proceeding allowing the defendant(s) an opportunity to be heard. The Court declines to grant a stay of matters not yet filed that are not directly related to the policies referenced herein as any such application is premature.

Accordingly, it is hereby

ORDERED, the Plaintiffs' Order to Show Cause, pursuant to CPLR § 2201 and § 6301, seeking an immediate stay of any and all current and future proceedings, including but not limited to, uninsured/supplementary uninsured motorist lawsuits and arbitrations, arbitrations and lawsuits seeking to recover no-fault benefits and third-party lawsuits and arbitrations, involving and all of the Defendants, concerning the Plaintiffs' policies issued to the individual Defendants, JIMMY JOSEPH (#4167930124); MARK A. WILLIAMS (#4176597211); MILTON WILLIAMS (#4176473355); CHARLES T. THOMPSON (#4176469551); SAMUEL R. JOSEPH (#4176515619); MATTHEW N. EDWARDS (#4176322438); OBY JEAN (#4151924364); ANDERLINE THOMAS (#4155394184); FRANTZKY JULES (#4157599921); JONATHAN S. FRANCIS (#4155391453); DAVID A. BOYD (#4172685598); KEVIN A. GILBERT (#4167706037); RICARDO FLEURMOND(#4170778205); GREGORY D.STEPHENSON(#4148474614); ROSELIE LOUBEAU (#4082862410); ROSELIE LOUBEAU (#4148198395); CHRISTIAAN TAYLOR (#4150877654); RANDOLPH MORANT (#4159273327); NYLISHA HALL (#4158907636); ANDRAY C. DAVIS (#4167876525); DONOVAN D. HUMPHERY (#4177424878); KENNETH J. DUDLEY (#4170772901); ANNA VASILECOZZO (#4185554716); JEAN SAINT-CYR (#4142971532); and KAREN A. MAYNARD (#0326214004), and arising from the alleged accidents that occurred on 03/23/2007; 01/02/2009; 01/07/2009; 02/04/2009; 02/10/2009; 02/28/2009; 03/03/2009; 03/22/2009; 03/26/2009; 04/08/2009; 06/23/2009; 06/29/2009; 07/12/2009; 07/23/2009; 07/24/2009; 07/27/2009; 08/23/2009; 10/04/2009; 10/09/2009; 10/09/2009; 10/20/2009; 10/20/2009; 11/17/2009; 01/29/2010 and 01/12/2010, pending the hearing and resolution of the declaratory judgment action in the above captioned matter, is GRANTED.

All applications not specifically addressed herein are DENIED.

This decision constitutes the order of the court.