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No good deed goes unpunished: The insurance cover can not be created by Estoppel



Dymond Ottey sued the Maya Assurance Company for a judgment declaring the defendant liable to provide insurance coverage. Ottey appealed against a decision of the Supreme Court, Queens County (Pam B. Jackman-Brown, J.), dated June 27, 2019. The decision, in so far as it was appealed, granted the part of the defendant’s claim relating to the summary judgment. reject 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) upheld the appellate court’s decision.

FACTS

The plaintiff is alleged to have been injured on February 14, 2010, when a lifestyle cab she left suddenly rushed away, causing her to fall to the ground. Livryhytten was owned by non-party ABC Global Limo Corp. (hereinafter referred to as ABC Global). The plaintiff initiated an action against ABC Global to recover damages for her personal injuries and received a third-party judgment against ABC Global in the amount of USD 75,000.

The plaintiff also applied to the defendant’s insurer for benefits without fault, claiming that it had insured the livry cabin. Initially, the defendant paid certain benefits, but it later established that the livry cabin was not covered by it and informed the plaintiff that the payments had been made incorrectly.

The plaintiffs then brought an action for a judgment declaring that the defendant is obliged to provide insurance cover.

The defendant requested that the complaint be dismissed as inadmissible. In support of its claim, the defendant provided evidence showing that it had insured the lifeboat until 14 August 2009, when the insured, ABC Global, submitted a request to remove the cover from the lifeboat and transfer the cover to a replacement vehicle. After presenting certain forms to ABC Global, the defendant removed the cover from the delivery cab and transferred the cover to the replacement vehicle.

In support of its action, the defendant contended that, since the cabin was not covered at the time of the accident in question, it had no obligation to provide cover.

The plaintiff argued that the defendant should be prevented from renouncing coverage because it had failed to deny coverage in a timely manner, it had commenced representation and taken over the defense of the insurance by paying certain benefits, it had lulled the plaintiff to sleep on her rights, and the plaintiff had been affected by this because she was now barred from seeking alternative remedies, such as a claim by the Motor Vehicle Accident Indemnification Corporation (‘MVAIC’).

The Supreme Court (trial court) upheld the part of the defendant’s claim relating to the summary judgment and dismissed the complaint. The court found that the defendant was not obliged to issue a disclaimer because the livry cabin was not covered on the day of the accident. The court further found that the plaintiff was not affected by the installment payment, as she had 180 days from the date on which she was notified of the defendant’s refusal to pursue a claim with MVAIC.

DISCUSSION

The plaintiff argued that the defendant should justly be prevented from denying coverage because it was complicit in ABC Global’s insurance fraud. She further claims that she was injured by the defendant’s failure to issue a disclaimer and partial payment because the statutory maximum amount she could receive if she filed a claim with MVAIC is $ 25,000, and therefore she could not get back the full $ 75,000 for the third-party judgment. . . These arguments are raised for the first time on appeal and are not correct before the Court.

Consequently, the decision is upheld in so far as it is being appealed.

There is no way to force an insurer to provide benefits to an injured person when they had no insurance in force at the time of the accident. The fact that the insurer provided certain benefits until it determined that the insurance had been deleted before the accident, immediately informed the plaintiff who then – instead of taking advantage of MVAIC sued and thus lost the opportunity to collect part of the payment notice she received from the operator of the vehicle that caused her damage.


(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his internship to the position of 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 a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

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