Nicoletti, Gonson, Spinner, LLP

Second Department Reverses Summary Judgment Ruling in Suspected Staged Accident Case

A. Johnson, et. al. v. U-Haul, New York App. Div., Second Dep’t, Docket # 2013-02149

In August 2014, Partners Kevin Pinter and Gary Greenman obtained a reversal from the Second Department of the trial court’s summary judgment ruling, which had granted pre-discovery summary judgment to plaintiffs with respect to liability.

This case involved a seemingly simple (but all too familiar) hit-in-the-rear automobile collision involving a rented U-Haul vehicle and another vehicle containing the four (4) plaintiffs. Following service of responsive pleadings on behalf of U-Haul (“UH”) and the UH operator (by separate counsel), plaintiffs filed a pre-discovery motion for summary judgment, asserting that as this was a simple, hit in the rear collision, (conveniently admitted by the UH operator in the police report) judgment on liability in favor of plaintiffs was warranted. We opposed plaintiffs’ initial motion setting forth our suspicions of fraud and asserting that discovery is necessary to explore same. The motion court initially denied plaintiffs’ motion as premature, by Order dated February 28, 2012, but upon reargument, granted summary judgment in plaintiffs’ favor.

On appeal, we argued that the court used the wrong standard in determining (upon re-argument) that evidence had not been submitted in admissible form [pursuant to CPLR 3212(b)] in opposition to the motion. We pointed out that in determining plaintiffs’ pre-discovery summary judgment motion, the correct standard is CPLR 3212(f), which allows for denial of summary judgment where there is some basis in the record for a finding that evidence to defeat the motion may exist, especially where facts lie within the knowledge of the adverse party, and discovery is in its early stages. Thus, we argued, since we pled fraud as an affirmative defense, and demonstrated that indices of a staged accident existed, plaintiffs’ motion should be denied pursuant to CPLR 3212(f).

At oral argument, the panel inquired as to whether discovery sought by UH wasn’t merely a “fishing expedition” to attempt to defeat summary judgment, and wanted to hear specifically what “evidence” we had that the accident may have been staged. We explained that the “totality of the circumstances” led us to suspect that the accident was staged, and we elaborated at argument as to such circumstances. Furthermore, we underscored that no prejudice whatsoever would inure to the plaintiffs by requiring them to appear for depositions prior to determining the motion, and, in fact, that fairness dictates that where fraud is suspected and pled in good faith, we must be permitted to question all the participants in the “accident” before summary judgment is considered.

In a decision dated August 27, 2014, (http://www.nycourts.gov/reporter/3dseries/2014/2014_05956.htm) the Second Department reversed the motion court, holding: “[UH] asserts that the accident was ‘staged’ by the plaintiffs and [the UH operator], and, thus, [UH] was not liable for negligence. Since [UH] had no personal knowledge of the relevant facts, it should be afforded the opportunity to conduct discovery, including depositions of the plaintiffs and the defendant [UH operator]. Accordingly, it was premature to award summary judgment at this stage of the action.”

This decision (and the recently decided Worley appeal (http://www.nycourts.gov/reporter/3dseries/2014/2014_05862.htm) was significant in our continued representation of UH defending staged accident cases, as a contrary ruling would have enabled the organizers of the scheme to prevent UH from obtaining substantial discovery from the participants in the accident, simply by having the UH operator admit liability for the accident at the scene, and then filing a pre-discovery summary judgment once the lawsuit is filed.