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.

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).

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.

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Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].

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