On Aug. 8, 2019, Gov. Andrew Cuomo signed legislation amending the Penal Law of New York, which for the first time will specifically criminalize staged accidents and their outcomes. The law takes effect on Nov. 1, 2019.

The law is named after Alice Ross, a 71-year-old Queens grandmother who was killed in 2003 after the vehicle she was in was deliberately rammed in a fraud scheme. The perpetrator was convicted of manslaughter and conspiracy in 2006 and was recently released on probation.

Alice's Law

The new law states as follows:

Section 1. This act shall be known and may be cited as "Alice's Law".

§2. The penal law is amended by adding two new sections 176.75 and 176.80 to read as follows:

§176.75 Staging a Motor Vehicle Accident in the Second Degree.

A person is guilty of staging a motor vehicle accident in the second degree when, with intent to commit and in furtherance of a fraudulent insurance act, he or she operates a motor vehicle and intentionally causes a collision involving a motor vehicle. Staging a motor vehicle accident in the second degree is a class E felony.

[Note: Generally, a class "E" felony in New York is punishable by a prison term of up to four years with a one year minimum.]

§176.80 Staging a Motor Vehicle Accident in the First Degree.

A person is guilty of staging a motor vehicle accident in the first degree when he or she commits the offense of staging a motor vehicle accident in the second degree and thereby causes serious physical injury or death to another person, other than a participant in such offense. Staging a motor vehicle accident in the first degree is a class D felony.

[Note: Generally, a class "D" felony in New York is punishable by a prison term of up to seven years with a one year minimum.]

What the Law May Not Cover

A reading of the act reveals that a staged accident that results in "serious physical injury or death" will be punished more harshly. Interestingly, a participant in such a staged accident scheme will not be protected by the statute, as such an individual is specifically exempted from the laws protection. Also of interest is the requirement that a serious "physical" injury need occur, arguably excluding psychological based injuries.

What Is a Staged Accident?

The legal issues attendant with this new law will revolve around the as yet uninterpreted meaning of the phrase "staged accident" within the statute as well as the meaning of a "serious physical injury." ("Death" needs no legal interpretation … it is not a pre-existing condition.) While there is not a plethora of cases that discuss the indicia of what constitutes a staged accident, there is some guidance in reported lower court decisions such as V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc. 334 (Civil Court Kings County 2006 Bluth, J.).

The court listed several factors in determining that a valid case for a staged accident was made. The first factor is that the court determined that the motive for the staged accident was irrelevant. The court explained: "It does not matter whether the accident was staged in furtherance of an insurance fraud scheme or was deliberately caused under some other circumstances. The relevant inquiry is whether the collision was a true accident—that is, was it unintentional? Quite simply, if it was not an accident, then it falls outside the scope of the No–Fault policy." See V.S. Medical, 11 Misc. at 335; see also State Farm Mutual v. Laguerre, 305 A.D.2d 490 (2d Dep't 2003).

The court in V.S. Medical next reviewed the quality of the evidence presented in support of the assertion of a staged accident. The court noted the experience and expertise of the claims representative who worked for the Special Investigations Unit. The court stated that the examiner "testified that she has been employed for 38 years by defendant, and for 11 years in her current position. Her job includes the review of files referred by the claims department for suspicion of fraud (meaning a non-covered incident), and making the ultimate determination of whether to pay or deny those claims after investigation." See id. at 336.

The court next reviewed the factual proof established by various Examinations Under Oath (EUOs), which in summary showed that the subject occurrence fit a pattern of accidents, had significant contradictions in testimony of the various passengers, contradictions with the events recorded in the police report and the number and identity of the of the individuals in the subject vehicle. Notably the court determined: "(b)ased on all of these factors … (the examiner) determined that the accident was staged and therefore not a covered incident, and had the subject claims denied on that basis. She also duly notified the National Insurance Crime Bureau and the New York State Insurance Fraud Bureau." See id. at 336.

What Is a 'Serious Personal Injury'?

The separate issue as to what constitutes a "serious physical injury" may turn on whether the judicially determined definitions promulgated over many decades in the auto accident personal injury field (under Insurance Law §5102(d)) will be used in the context of this new law. Section 5102(d) defines a serious injury as follows: "a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment."

Another alternative is whether the more stringent definitions of a physical injury under the Workers Compensation Law will hold sway in defining that phrase under the new law (familiar to Labor Law practitioners under Worker's Compensation Law §11 as a "grave injury").

Under Worker's Compensation Law the definition of a "grave injury" is: "death, permanent and total loss of use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger or an acquired injury to the brain caused by an external physical force resulting in permanent total disability." See Worker's Compensation Law §11.

Conclusion

In the years to come, the bench, bar and public all hope that this new enforcement tool will curtail the potential horrors associated with the staged accident phenomenon. Years from now it is hoped that the answer to this article's title question will be a resounding "yes."

Steven Balson-Cohen is the principal attorney at the Law Offices of Steven Balson-Cohen.