On September 19, 2013 Demetrio Vasquez was driving an SUV on Broadway through its intersection with 135th Street in Manhattan when a left-turning vehicle struck his driver’s side doors.

There was no question as to liability for the crash and the other driver’s insurance carrier, State Farm, paid its $25,000 policy limits to settle Mr. Vasquez’s claims for shoulder, neck and back injuries.

Mr. Vasquez, then 58 years old, was driving in the course of his employment as a supervisor for a building maintenance company which had in effect $1,000,000 of supplementary underinsured motorist (“SUM”) coverage with Hanover Insurance Company (here, a primer on SUM coverage from the New York State Bar Association).

Vasquez asserted a claim under the SUM policy for damages he allegedly sustained in excess of the $25,000 received from State Farm. The parties could not settle upon a reasonable additional amount for his claims so the matter had to be resolved under the auspices of the American Arbitration Association (the “AAA”).

At the AAA hearing on November 19, 2015, the only witness to testify was Mr. Vasquez (the “claimant”). Medical records were also submitted in evidence. Following the hearing, an arbitration decision was issued awarding nothing based upon the arbitrator’s findings that Mr. Vasquez had been adequately compensated by the $25,000 previously received and he testified falsely as to his injuries.

Vasquez sought to vacate the arbitration award and a Manhattan judge agreed with claimant that the award should be vacated because it failed to substantiate its findings and ignored medical records that showed a causal connection between the trauma and the injuries claimed.

In Hanover Ins. Co. v. Vasquez (1st Dept. 2016), the appellate court reversed and confirmed the award because (a) it was “rationally supported by the record” and (b) there was sufficient evidence that claimant’s injuries had resolved. Furthermore, the appellate judges upheld the arbitrator’s findings as to claimant’s lack of credibility.

Here are the details of the injury claims Mr. Vasquez asserted in this case:

• Right Shoulder: extensive tear of subscapularis tendon, supraspinatus tendon, proximal biceps tendon and glenoid labrum, requiring arthroscopic surgery to repair the rotator cuff subscapularis tendon
• Neck: disc herniation at C6-7
• Back: disc herniations at L1-2 and L5-S1

While medical records appeared to substantiate his injury claims, the arbitrator found that Mr. Vasquez testified falsely at the hearing as to substantial matters and that finding was the basis for her decision to award nothing.

There was an issue as to whether claimant’s shoulder was injured at all in the crash in view of the facts that:

1. he did not seek and medical attention at the scene and
2. when he first sought treatment (a day later at an emergency room) records indicate that he complained only of neck and back pain

Claimant testified that photographs his girlfriend took showed bruises to his shoulder from the impact, bandages placed the next day at the hospital and “blood accumulated resulting from the hit, from the injury.” The arbitrator, though, examined claimant’s shoulder and it appeared to her that surgical scars she saw were the same as those on the photographs. She concluded that Vasquez falsely testified that the photographs were taken a day after the crash when in fact they were taken just after his shoulder surgery 10 months later.

Claimant’s false testimony led the arbitrator to conclude that his “willingness to lie under oath to advance his litigation claims severely tainted his credibility.” She stated that “an opinion as to proximate cause is necessarily at least partially reliant on the history of the onset and nature of the symptomatology.” Since claimant was “an exceptionally unreliable historian,” the arbitrator found that there was no causal connection between the accident and the shoulder injury.

The arbitrator stated that claimant’s material lie under oath warranted the application of the principle Falsus in Uno which permits the trier of fact to disregard completely the entire testimony of a witness who willfully testifies falsely as to an important material fact.

The arbitrator concluded:

I did not believe Claimant’s testimony about his complaints and disability immediately after the accident or at the present time. I did not believe the testimony about his inability to work … [or] that he was let go from work due to his physical condition … [or] that he accurately informed his treating doctors about his physical condition after the instant accident.

Inside Information:

• In his closing argument, claimant’s attorney requested the arbitrator to award all ($975,000) or substantially all of the SUM benefits available after the $25,000 offset for the underlying settlement.
• As set forth in claimant’s arbitration memo, Vasquez claimed (unsuccessfully) damages for lost earnings (in the sum of $363,560) and lost household services (in the sum of $135,732).