The No-Fault (most of March 2011)

I just realized that I haven't posted a no-fault case in over a month.

Appellate Division, Second Department

Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 2011 NY Slip Op 02379 (App. Div., 2nd 2011)

The plaintiff hospital, as assignee of Bartolo Reyes, was awarded judgment against the defendant in the principal sum of $416,039.42, in this action to recover no-fault medical benefits under a contract of insurance entered into between the plaintiff's assignee and the defendant. The defendant thereafter moved to modify the judgment pursuant to CPLR 5015(a), belatedly asserting that the judgment exceeded the coverage limit of the subject policy due, in part, to payments previously made under the policy to other health care providers. In the order appealed from, the Supreme Court properly denied the defendant's motion to modify the judgment.

The defendant failed to specify on which of the five subdivisions of CPLR 5015(a) its motion was based, much less establish its entitlement to relief on any of the enumerated grounds. To the extent that the defendant sought modification pursuant to CPLR 5015(a)(2) based upon "newly-discovered evidence," the defendant failed to demonstrate that the evidence offered in support of the motion, i.e., an affidavit of an employee setting forth the policy limits and the amount of benefits paid for alleged prior claims, "was not available at the time of the prejudgment proceedings" (Jonas v Jonas, 4 AD3d 336, 336; see Sicurelli v Sicurelli, 73 AD3d 735).

Moreover, although courts possess inherent discretionary power to grant relief from a judgment or order in the interest of justice, this "extraordinary relief" is not appropriate under the circumstances presented (Jakobleff v Jakobleff, 108 AD2d 725, 726-727; see Selinger v Selinger, 250 AD2d 752). The plaintiff previously moved for summary judgment on the complaint, seeking a certain amount of benefits, in accordance with the no-fault billing statement sent to the defendant, and this Court reversed the denial of that motion and granted the plaintiff's motion for summary judgment on the complaint (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045). Only after the plaintiff obtained, upon this Court's order, a judgment from the Clerk of the Supreme Court, Nassau County, representing, inter alia, the amount of benefits sought in the complaint, did the defendant raise the issue of exhaustion of the policy limits. Under these circumstances, modification of the judgment in the interest of justice is not warranted.

Manuel v New York City Tr. Auth., 2011 NY Slip Op 02362 (App. Div., 2nd 2011) ("Alighting")

For the no-fault statute to apply, the vehicle must be a proximate cause of the injury (see Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215). To be a proximate cause of the injury, the use of the motor vehicle must be closely related to the injury (see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597; Elite Ambulette Corp. v All City Ins. Co., 293 AD2d 643). Also, the injury must result from the intrinsic nature of the motor vehicle as such, and the use of the vehicle must do more than merely contribute to the condition which produced it (see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597; Republic Long Is., Inc. v Andrew J. Vanacore, Inc., 29 AD3d 665; Duroseau v Town of Hempstead, 117 AD2d 579).

Here, the negligent operation of a motor vehicle was the proximate cause of the plaintiff's injuries. The plaintiff's theory of liability is that her injuries resulted from the manner in which the bus driver operated the bus, specifically his positioning of the bus next to a hole in the street when he pulled over at the bus stop. Moreover, this is not a case in which the plaintiff was completely outside of the vehicle when the accident occurred (see Walton v Lumbermens Mut. Cas. Co., 88 NY2d at 215; Santo v Government Empls. Ins. Co., 31 AD3d 525; Elite Ambulette Corp. v All City Ins. Co., 293 AD2d 643), or in which the plaintiff was the victim of an intentional tort (see Lancer Ins. Co. v Peterson, 175 AD2d 239; Locascio v Atlantic Mut. Ins. Co., 127 AD2d 746; Matter of Manhattan & Bronx Surface Tr. Operating Auth. [Gholson], 71 AD2d 1004).

This case is analogous to Hill v Metropolitan Suburban Bus Auth. (157 AD2d 93). In Hill, the plaintiff fell while descending the stairs of the rear exit of a bus, when she tripped on a nail or tile on the bus staircase and fell into a hole in the sidewalk. This Court agreed with the defendant's assertion that the no-fault law applied, because the accident arose from the use or operation of a bus (see Matter of Celona v Royal Globe Ins. Co., (85 AD2d 635).

NYCTA was not estopped from arguing that the accident arose from the use or operation of the insured vehicle, as NYCTA never did anything to lead the plaintiff to believe that it would not argue that the accident arose from the use or operation of a motor vehicle (see Walsh v Prudential Ins. Co. of Amer., 101 AD2d 988). NYCTA stated at trial that first-party benefits had been denied because it had no record of the accident.

Appellate Division, FIrst Department

Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 2011 NY Slip Op 01948 (App. Div., 1st 2011)

The motion court properly determined that plaintiff insurer may retroactively deny claims on the basis of defendants' assignors' failure to appear for independent medical examinations (IMEs) requested by plaintiff, even though plaintiff initially denied the claims on the ground of lack of medical necessity (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721-722 [2006]). The failure to appear for IMEs requested by the insurer "when, and as often as, [it] may reasonably require" (Insurance Department Regulations [11 NYCRR] § 65-1.1) is a breach of a condition precedent to coverage under the No-Fault policy, and therefore fits squarely within the exception to the preclusion doctrine, as set forth in Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]). Accordingly, when defendants' assignors failed to appear for the requested IMEs, plaintiff had the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued (see Insurance Department Regulations [11 NYCRR] § 65-3.8[c]; Fogel, 35 AD3d at 721-22).

It is of no moment that the retroactive denials premised on failure to attend IMEs were embodied in blanket denial forms, or that they were issued based on failure to attend IMEs in a different medical speciality from that which underlies the claims at issue. A denial premised on breach of a condition precedent to coverage voids the policy ab initio and, in such case, the insurer cannot be precluded from asserting a defense premised on no coverage (see Chubb, 90 NY2d at 199).

There is likewise no merit to defendants' contention that the IME request notices were invalid. Plaintiff satisfied its prima facie burden on summary judgment of establishing that it requested IMEs in accordance with the procedures and time-frames set forth in the No-Fault implementing regulations, and that defendants' assignors did not appear. In opposition, defendants failed to raise an issue of fact that the requests were unreasonable (see generally Celtic Med. P.C. v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d 13, 14-15 [2007]; A.B. Med. Servs. PLLC v USAA Gen. Indem. Co., 9 Misc 3d 19, 21 [2005]).

Defendants' argument that plaintiff was required to demonstrate that the assignors' failure to appear for the IMEs was willful is unpreserved and, in any event, without merit. The doctrine of willfulness, as addressed in Thrasher v United States Liab. Ins. Co. (19 NY2d 159 [1967]), applies in the context of liability policies, and has no application in the No-Fault context, where the eligible injured party has full control over the requirements and conditions necessary to obtain coverage (cf. id. at 168).

I think this is an absolutely terrible decision.  The language of the decision permits an insurance policty to be voided ab initio as a result of the actions of someone other than the insured.  So if the insured has an accident and a passenger gets hurt, but does not attend an IME, the insured's policy goes bye bye.  It also expands the scope of a coverage defense beyond the Court of Appeal's definition.  And the decision is in conflict with longstanding law from the Second Department.  Hopefully the Court of Appeals will take this one.

For a much longer discussion of this decision and what it spells for the future of no-fault, head over to No-Fault Defender where there are 60 comments and counting.

Appellate Term, Second Department

The Appellate Term denied leave for Belt Parkway Imaging, P.C. v State Wide Ins. Co., 2010 NY Slip Op 52229(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

Gateway Med., P.C. v Progressive Ins. Co., 2011 NY Slip Op 50336(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2011).

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to dismiss the complaint for lack of personal jurisdiction since the purported service of the summons and complaint under CPLR 312-a was never completed, as defendant never signed and returned an acknowledgment of service. Plaintiff opposed the motion, arguing that defendant should be compelled to sign the acknowledgment or, in the alternative, that plaintiff should be permitted to serve the summons and complaint by another manner. The Civil Court denied defendant's motion, and this appeal ensued.

The record reveals that an acknowledgment of receipt was never signed by defendant and returned to plaintiff. "If the acknowledgment of receipt is not mailed or returned to the sender, the sender is required to effect personal service in another manner" (Dominguez v Stimpson Mfg. Corp., 207 AD2d 375 [1994]; see also Patterson v Balaquiot, 188 AD2d 275 [1992]). Plaintiffs did not effect service in another manner. Accordingly, the service was defective and defendant's motion to dismiss the complaint should have been granted.

JT had an interesting take on the case.

W & Z Acupuncture, P.C. v Allstate Ins. Co., 2010 NY Slip Op 52385(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

Subsequent to that [discovery] order, the Civil Court issued an order dismissing the action since plaintiff failed to produce the court-ordered discovery. The dismissal of the action rendered the instant appeal academic (see Livny v Rotella, 305 AD2d 377 [2003]; Delta Diagnostic Radiology, P.C. v Allstate Ins. Co., 15 Misc 3d 131[A], 2007 NY Slip Op 50673[U] [App Term, 2d & 11th Jud Dists 2007]; Fair Price Med. Supply Corp. v ELRAC Inc., 13 Misc 3d 33 [App Term, 2d & 11th Jud Dists 2006]).

The bracketed word is mine.

Jamaica Med. Supply, Inc. v Kemper Cas. Ins. Co., 2011 NY Slip Op 50315(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

The billing records submitted by plaintiff in support of its motion for summary judgment do not assert that the supplies at issue had been delivered to plaintiff's assignor. Nor did plaintiff's affiant state that he had delivered the supplies to plaintiff's assignor. Indeed, he stated that it is his general practice to either (1) deliver his supplies directly to the eligible injured person or to (2) deliver them to the prescribing healthcare providers for subsequent delivery to the eligible injured person. He did not specify in his affidavit which method of delivery was used in this case. Accordingly, plaintiff's moving papers failed to demonstrate its prima facie entitlement to summary judgment. 

We note that the holding in Fair Price Med. Supply Corp. v Travelers Indem. Co. (10 NY3d 556 [2008]) does not impact our decision in this case because, in that case, the issue of whether the plaintiff had made out a prima facie case was not dealt with by either the Appellate Division (42 AD3d 277 [2007]) or the Court of Appeals (10 NY3d 556). The Court of Appeals held that a defense that the billed-for services or supplies were never provided is precluded if the insurer fails to timely deny the claim, and both courts limited their discussions to the preclusion issue. Here, we are asked to consider whether plaintiff's moving papers made out a prima facie case in the first instance so as to even shift the burden to defendant to raise a non-precluded defense (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]), and we conclude that they did not.

The Court distinguishes Fair Price in a way that renders the Court of Appeals' decision meaningless.

Quality Health Prods. v Country-Wide Ins. Co., 2011 NY Slip Op 50328(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

Plaintiff established that defendant did not pay plaintiff's claim. However, plaintiff failed to establish that the claim was not denied within 30 days (see New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2006]; see also Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]). Plaintiff attached a copy of a portion of defendant's denial of claim form to its motion papers, but this copy did not establish that defendant did not deny the claim within 30 days, since the date of the denial of claim form was not contained in the portion of the form annexed to plaintiff's papers. Moreover, plaintiff's affiant did not provide the date on which the denial of claim form was received by plaintiff. Furthermore, the reason for defendant's denial of the claim was also not included in the annexed portion of the form. As plaintiff failed to show that the claim was not denied within 30 days or that the basis for the denial was conclusory, vague or had no merit as a matter of law, it failed to make a prima facie showing of its entitlement to judgment as a matter of law (see Westchester Med. Ctr., 78 AD3d 1168). As a result, we need not consider the sufficiency of defendant's paper's submitted in opposition to the motion (see Westchester Med. Ctr., 78 AD3d 1168). Accordingly, the order denying plaintiff's motion for summary judgment is affirmed, albeit on a different ground.

Westchester doesn't quite say what they cite it to say.

Exoto, Inc. v Progressive Ins. Co., 2011 NY Slip Op 50329(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

On appeal, plaintiff asserts that it provided defendant with the NF-3 form it requested as additional verification. Plaintiff did not subsequently respond to defendant's follow-up request seeking the same verification because defendant failed to clearly state why the previously submitted NF-3 form was insufficient. Consequently, plaintiff argues, it is not in default in providing the requested verification.

A review of the record indicates that each of defendant's requests for NF-3 forms states, in pertinent part, that "Every box must be fully completed, blank boxes will not be accepted." It is uncontroverted that the box on the NF-3 form plaintiff provided in response to defendant's initial verification request – – wherein the provider's signature should be placed – – was left blank. Therefore, when defendant issued its follow-up request which, again, informed plaintiff that "Every box must be fully completed, blank boxes will not be accepted," defendant clearly apprised plaintiff of why the submitted NF-3 form did not satisfy its request for verification.

Since plaintiff did not demonstrate that it had provided defendant with the requested verification prior to the commencement of the instant action, the 30-day period within which defendant was required to pay or deny the claim did not begin to run (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [a]; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]). Consequently, the Civil Court properly granted defendant's motion for summary judgment dismissing the complaint as premature and denied plaintiff's cross motion for summary judgment. Accordingly, the judgment is affirmed.

If you knew the facts of this case you would cringe after reading this decision.

CPLR R. 2219 Time and form of order.

Omega Diagnostic Imaging, P.C. v MVAIC, 2011 NY Slip Op 50331(U) (App. Term, 2nd 11th & 13th Jud. Dists. 2010).

Contrary to the determination of the Civil Court, MVAIC defaulted because it failed to submit written opposition to plaintiff's motion for summary judgment (see CPLR 2219 [a]; Coneys v Johnson Controls, Inc., 11 AD3d 576 [2004]; Marino v Termini, 4 AD3d 342 [2004]; Millennium Med. Instruments v MVAIC, 27 Misc 3d 127[A], 2010 NY Slip Op 50583[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Accordingly, MVAIC's motion properly sought to vacate the default judgment entered against it.

In support of its motion, under the circumstances presented, MVAIC established both a reasonable excuse for its default and the existence of a potentially meritorious defense. Accordingly, MVAIC's motion to vacate the default judgment entered against it should have been granted (see Strauss v R & K Envtl., 66 AD3d 766 [2009]; New York Univ. Hosp. Rusk Inst. v Illinois Natl. Ins. Co., 31 AD3d 511 [2006]; New York & Presbyt. Hosp. v American Home Assur. Co., 28 AD3d 442 [2006]).

Go here for some background on this appeal.

Appellate Term, First Department

Now take a look at how the First Department approaches and MVAIC appeal.  Same attorneys.

Omega Diagnostic Imaging, P.C. v MVAIC, 2011 NY Slip Op 50432(U) (App. Term, 1st 2011)

[A]ffirmed, with $10 costs.

In this action by plaintiff-provider to recover assigned first-party no-fault benefits, defendant MVAIC's motion for summary judgment dismissing the claim based on plaintiff's failure to establish that its assignor qualified for MVAIC coverage, was properly denied (see Matter of MVAIC v Interboro Med. Care & Diagnostic, PC, 73 AD3d 667 [2010]; Englington Med., P.C. v Motor Veh. Acc. Indem. Corp. (___AD3d ___, 2011 NY Slip Op 00176 [2011]). Nor has defendant established that plaintiff was required to "exhaust its remedies" prior to commencing this action (see Omega Diagnostic Imaging, P.C. v MVAIC, 29 Misc 3d 129[A], 2010 NY Slip Op 51779[U] [2010]). Defendant's argument, raised for the first time on appeal, that it is entitled to dismissal of the action as premature based on outstanding verification requests is without merit (id.).

Kind of a big deal (below).  I forgot whether I posted this before and I don't feel like checking.

Pomona Med. Diagnostics, P.C. v GEICO Ins. Co., 30 Misc 3d 141(A) (App. Term, 1st 2011)

In opposition to plaintiff's prima facie showing of entitlement to judgment as a matter of law (see Countrywide Ins. Co. v 563 Grand Med., P.C., 50 AD3d 313, 314 [2008]; Central Nassau Diagnostic Imaging, P.C. v GEICO, 28 Misc 3d 34, 36 [2010]; Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]), the report of defendant's peer review doctor, which relied on the assignor's medical records (see Cross Cont. Med., P.C. v Allstate Ins. Co., 13 Misc 3d 10, 11 [2006]; see also Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Misc 3d 140[A], 2010 NY Slip Op 50987[U] [2010]), raised a triable issue of fact as to whether the services provided by plaintiff were medically necessary (see Krishna v Liberty Mut. Ins. Co., 24 Misc 3d 128[A], 2009 NY Slip Op 51312[U] [2009]). Contrary to defendant's contention, however, its "submissions did not conclusively establish as a matter of law its defense of lack of medical necessity," and its cross motion was properly denied (A Plus Med., P.C. v Mercury Cas. Co., 23 Misc 3d 136[A], 2009 NY Slip Op 50824[U] [2009]).

Combine this decision with Abdalla v Mazl Taxi, Inc., 2010 NY Slip Op 06071 (App. Div., 2nd, 2010), Stephen Fealy, M.D., P.C. v State Farm Mut. Auto Ins. Co., 2010 NY Slip Op 51442(U) (App. Term, 2nd, 11th & 13th Jud. Dists. 2010), and Hillcrest Radiology Assoc. v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 51467(U) (App. Term, 2nd, 11th & 13th Jud. Dists. 2010), and you have something interesting.

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