Staged Collision not an Accident

Those who attempt insurance fraud and are caught will often attempt to disappear rather than litigate to recover for a claim an insurer can prove is fraudulent. Others will sue and attempt to force the insurer into a settlement rather than pay defense costs.

In Progressive Northwestern Insurance Co. v. Derrick Burnett, et al., Case No.: 2:18-cv-04243-NKL, United States District Court Western District of Missouri Central Division (August 27, 2019) Progressive Northwestern Insurance Co.’s moved for summary judgment against defendants Travis Bush and Laquent Palmer.

FACTS

The case arose out of a vehicle collision that occurred at approximately 11:36 p.m. on July 14, 2018 in Columbia, Missouri involving Defendants Derrick Burnett, Jeanette Allen, Lorell Lawhorn, Courtney Lawhorn, Javion Lawhorn, Travis Bush, Laquent Palmer and Dakota Fogle. Plaintiff Progressive Northwestern Insurance Company sought a declaratory judgment regarding any duty it has to indemnity and defend under the liability provisions of its insurance policy with Allen.

DISCUSSION

On motion, a court must grant summary judgment when the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

Typically, the moving party submits a statement of facts that support judgment in the movant’s favor, and any opposing party responds by admitting or denying those facts. Local Rule 56.1 additionally provides that “[u]nless specifically controverted by the opposing party, all facts set forth in the statement of the movant are deemed admitted for the purpose of summary judgment.”

Neither Mr. Bush nor Mr. Palmer responded to or contested Progressive’s statement of facts or filed opposition of any kind to Progressive’s motion. Thus, all admissible facts asserted by Progressive were deemed admitted by Defendants, and the Court adopted the Statement of Uncontroverted Material facts submitted by Progressive.

The Uncontroverted facts established that Progressive is entitled to judgment as a matter of law. The Progressive Policy only affords liability coverage for injury or damage resulting from an “accident” and specifically excludes coverage for damage or injury resulting from intentional or criminal acts, including fraud or misrepresentation, and requires persons seeking coverage to fully cooperate with Progressive during its investigation.

The uncontested evidence submitted by Progressive showed that the July 14, 2018 collision was staged, and therefore not an “accident.” Courts generally define an “accident” as an event that takes place without one’s foresight or expectation.

Moreover, the uncontested facts showed the court that the Defendants staged the collision with the intention of committing insurance fraud, which is a criminal act. In Missouri, statutes criminalizing the act of knowingly making a statement or submitting documentation which contains material false information as part of an insurance claim.

Finally, the uncontested facts show that Defendants also misrepresented information, made false statements regarding the nature and circumstances of the collision, and failed to cooperate with Progressive during its investigation.

Therefore, the court concluded, no liability coverage under the Policy applies to the July 14, 2018 collision.

It was therefore ordered, adjudged and decreed: that the Progressive Policy which is the subject of this action does not provide coverage regarding any claim by Defendants Bush and Palmer arising out of the July 14, 2018 collision; and Plaintiff Progressive has no duty to defend or indemnify Defendants Bush and Palmer for any damages which may be claimed by or awarded to any of the Defendants as a result of claims arising from the July 14, 2018 collision.

ZALMA OPINION

Many fraud perpetrators force insurers to litigate hoping that the costs of defending against a fraudulent claim will settle to avoid the costs of defense. In this case, Progressive, refused to be scared into a settlement, proved that the crash was staged and was created to defraud the insurer. Bush and Palmer decided it would be best to ignore the motion for summary judgment and pursue frauds against other insurers who are not as aggressive against fraud.


© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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