Wednesday, December 27, 2006

2007: What the *%$! is Going On?

The reader is directed to No-Fault Paradise, a new entry in the highly-specific genre of New York no-fault automobile insurance law blogs from David M. Gottlieb, Esq., an attorney at Edward Shapiro, P.C., a prolific no-fault plaintiff's firm. Mr. Gottlieb's Civil Court, Queens County, Room 101 Seating Chart is both completely accurate and incredibly funny.

Thanks much also to a recent anonymous poster for some lively debate on the recent Appellate Division, 2d Dep't decision in Fogel v. Progressive.

In a bit of housekeeping news, please note that Erik B. Lutwin, Esq. has moved on in his professional career. Your humble blawger wishes Mr. Lutwin well. For the time being, I am the sole contributor to this blawg, but Mr. Lutwin was the one who got the ball rolling here, and he also devised the catchy title. Not having a fellow contributor makes the device of using the royal "we" that much more of a contrivance, so you'll forgive me if I continue to do so now and again.

Happy various holidays to all, and a Happy New Year, as well. Thanks especially to the two biggest long-running supporters of my site, Matthew S. Lerner, Esq. of New York Civil Law and Nicole L. Black, Esq. of Sui Generis. They provide much more traffic my way than the other way around, I'm sure, and I'm grateful for how often they feature my posts.


It's that time again, right
Kick out the old, welcome the new
Make your New Year's resolutions now!


(And a very Happy New Year from BBC1)

Wednesday, December 20, 2006

Fogel: Out

As 2006 draws to a close, the Appellate Dvision, 2d Department has given us one of the most important no-fault decisions of the year. In Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 2006 NY Slip Op 09604 (App. Div, 2d Dep't, 2006), a unanimous Court overturned that portion of the prior Appellate Term, 2d Dep't decision that held that an assignor's failure to appear for an independent medical examination ("IME") prior to the subject services having been rendered results only in a rebuttal of the presumption of medical necessity in the favor of the plaintiff provider. Instead, although agreeing with the concurrence/dissent of Golia, J. in the App. Term Fogel case and the Appellate Term, 1st Department decision in Inwood Hill Med., P.C. v General Assur. Co., 2005 NYSlipOp 25437 (App. Term, 1st Dep't, 2005), the App. Div. has gone even further. They now hold that failure to appear at an IME is a violation of a condition precedent to no-fault coverage, regardless of when the no-show occurred as compared with the date(s) of service of a given claim. Indeed, the App. Div. now holds that a carrier may deny claims "retroactively to the date of loss" when a no-show occurs.

This has numerous potential implications. A denial of coverage retroactive to the date of the loss should render the defense one that survives preclusion regardless of whether it is preserved in a timely denial of claim form. See generally, Central General v. Chubb, 90 N.Y.2d 195 (1997). Other explicit conditions precedent to coverage listed in the PIP Endorsement (11 NYCRR § 65-1.1) should also be subject to the same rule.

Tuesday, December 12, 2006


A special thanks to JDjive for passing along a bunch of traffic this morning to my incredibly lame blog. Many of the visitors who clicked over here have spent a significant amount of time looking at various posts, reading the cited case law, etc. I'm thinking the intended insult had the opposite effect, but I'm sure I'm too lame to understand the difference...

In other news, the Appellate Division, Second Department will hear the appeals in Fair Price a/a/o Novelo v. Travelers on 12/14/06 and Mandarino v. Travelers on 12/19/06.

Tuesday, December 05, 2006

Keeping It Real, Part II

By way of a long-overdue sequel in this occasional series of posts, the reader is directed to the recently-published decision in Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 2006 NYSlipOp 26483 (App. Term, 2d Dep't, 2006) as the latest example of the Appellate Term applying real law rather than fashioning some other rule purportedly designed to conform to the legislative intent of no-fault.

In particular, the Dan Med. decision stands for the proposition that a motion for summary judgment must be supported by evidence in admissible form sufficient to demonstrate the absence of any triable issues of fact. As a result, in order to demonstrate prima facie entitlement to summary judgment, a no-fault plaintiff must proffer the relevant claim forms in a manner that complies with the business record exception to hearsay in CPLR R. 4518. Upon a failure to proffer such evidence in support of plaintiff's motion for summary judgment, same is to be denied. This is true regardless of whether plaintiff has proven that such forms were submitted to and received by the insurance carrier; while something may have been submitted and received, that something must also be put forth in admissible form.

Note that, in order for the issue to be preserved for appeal, a defendant must raise those defects in plaintiff's proof in their written opposition. Should defendant fail to raise such defects on the record, an appellate court is unable to review a lower court's determination that plaintiff's motion was sufficient. See Bath Med. Supply, Inc. v Allstate Indem. Co., 2006 NYSlipOp 52273(U) (App. Term, 2d Dep't, 2006), concurring opinion of Weston Patterson, J.

On the other hand, in certain circumstances, the Appellate Term still continues to impose artificial (unreal?) law that appears to have no particular basis in statutory law or the regulations, and indeed may even be contrary to the plain text of such. See, e.g., Boai Zhong Yi Acupuncture Servs. P.C. v Progressive Cas. Ins. Co., 2006 NYSlipOp 26485 (App. Term, 2d Dep't, 2006). The reader is directed in particular to the lengthy (purported) concurrence therein of Golia, J.

Wednesday, November 29, 2006

'Blawg' sounds somewhat onomatopoeic

The reader is directed to the search engines at and Justia Blawg Search, both of which have been kind (smart? gullible?) enough to list us.

I hope everyone had a nice Thanksgiving, but sadly it's time to hunker down and deal with a month's worth of rush items until things quiet down once again at the end of December. Of course, we'll continue to provide all relevant updates, but there has not been much to report as of late.

Updates on the ongoing litigation in Matter of Carothers v Insurance Cos. Represented by Bruno Gerbino & Soriano LLP & Freiberg & Peck LLP will be forthcoming as appropriate.

Monday, November 20, 2006

Yeah, well, you know, that's just, like, your opinion, man.

The reader is directed to an Opinion Letter from the Office of the General Counsel to the NYS Insurance Department, entitled "Electronic Record Retention of No-Fault Insurance Claim Forms," and dated October 25, 2006.

The following is an excerpt from the Opinion, and presents the basic issues involved:

Questions Presented:

1. Do the New York State Electronic Signatures and Records Act ("ESRA") and the federal Electronic Signatures in Global and National Commerce Act (E-Sign) obligate an insurer to accept electronic records and signatures in connection with No-Fault insurance claim forms?

2. May a digitally reproduced NF-AOB serve as an original document for purposes of a verification request by an insurer under Section 65-3.11(c) of N.Y. Comp. Codes R. & Regs. tit. 11, Part 65 (Regulation 68)?


1. No. Neither E-Sign nor ESRA obligates an insurer to accept electronic records or signatures.

2. Yes, provided that it is accurate and accessible as required under Section 7001(d)(1) of E-Sign and the insurer consents to the use of an electronic record as an original document.

The Opinion is rather thorough, so all interested are recommended to read it in full. Note that the question is presented on behalf of "MRI Corporation X" and that particular entity uses digital signatures of its doctors to 'sign' various documents. "MRI Corporation X" basically appears to be asking for permission to use scanned-in signatures of its doctors, a practice it is already admittedly employing. One can only wonder who "MRI Corporation X" is.

On what is surely an entirely unrelated matter, here is an update for all those interested regarding Andrew Carothers, M.D., P.C. Please note that the plaintiff in Matter of Carothers v Insurance Cos. Represented by Bruno Gerbino & Soriano LLP & Freiberg & Peck LLP, 2006 NY Slip Op 26372 (Civ. Ct., Richmond Cty., 2006) recently brought a motion, by Order to Show Cause, described therein as one to renew and reargue said decision. Prior to the return date (this past Friday, November 17, 2006 at 2:30 PM), however, plaintiff withdrew the motion. Both a Notice of Appeal and a purported Amended Notice of Appeal are currently pending. No stay has been granted either by the Appellate Term or the Civil Court. Under the terms of the subject Order, today is the final day by which Dr. Carothers is to be produced for an EBT. Anyone taking bets?

Thursday, November 16, 2006

Far to Go

Sorry for the lack of recent updates, but the undersigned has been swamped this week, and there haven't been any developments of note. The Appellate Term, 2d Department, for example, hasn't published any decisions since October 25. Wherefore art thou, Golia? (And Pesce, and McCabe, and Weston Patterson, and Belen, and Rudolph, and...)

Friday, November 10, 2006

Direct Access to Physical Therapy

Currently, physical therapy treatment (as rendered by a licensed physical therapist) must be provided pursuant to a referral by a licensed physician, dentist, podiatrist or nurse practitioner. See Education Law § 6731(c). Effective November 23, 2006, however, § 6731(c) is being amended, and subsection (d) is being added, to read as follows, allowing patients some limited direct access to P.T.:

"c. Such treatment shall be rendered pursuant to a referral which may be directive as to treatment by a licensed physician, dentist, podiatrist or nurse practitioner and in accordance with their diagnosis, except as provided in subdivision d of this section.

d. Such treatment may be rendered by a licensed physical therapist for ten visits or thirty days, whichever shall occur first, without a referral from a physician, dentist, podiatrist or nurse practitioner provided that:

  1. The licensed physical therapist has practiced physical therapy on a full time basis equivalent to not less than three years.

  2. Each physical therapist licensed pursuant to this article shall provide written notice to each patient receiving treatment absent a referral from a physician, dentist, podiatrist or nurse practitioner that physical therapy may not be covered by the patient's health care plan or insurer without such a referral and that such treatment may be a covered expense if rendered pursuant to a referral. The physical therapist shall keep on file with the patient's records a form attesting to the patient's notice of such advice. Such form shall be in duplicate, with one copy to be retained by the patient, signed and dated by both the physical therapist and the patient in such form as prescribed pursuant to regulations promulgated by the commissioner."

However, and most importantly for readers of this blog, it should be noted that the Insurance Law is being modified in such a way as to make P.T. rendered without a referral ineligible for no-fault reimbursement. § 5102(a)(1)(ii) currently defines "basic economic loss" (that which is reimbursable under no-fault) as, inter alia, necessary expenses incurred for "psychiatric, physical and occupational therapy and rehabilitation." Effective November 23, 2006 (the same date as the above-mentioned amendment to the Education Law), however, § 5102(a)(1)(ii) is amended to refer to necessary expenses incurred for "psychiatric, physical therapy (provided that treatment is rendered pursuant to a referral) and occupational therapy and rehabilitation." The end result is that, for no-fault reimbursement purposes, P.T. will still require a referral. Providers, patients, claims examiners, and attorneys should all be aware of these changes and protect their interests accordingly.

Wednesday, November 08, 2006

You Keep Me Hangin' On

Following up with yesterday's post, it appears, from vote tallies released in the media, that the following Civil and District Court judges have been elected to the Supreme Courts in the following counties:

Hon. Karen B. Rothenberg
Hon. Jack M. Battaglia

This leaves the role of Supervising Judge of Civil/Kings open, as Judge Rothenberg currently holds that position. Note also that Hon. Delores J. Thomas appears to have not been elected, and two Republicans actually won seats on the Court.

Hon. Kevin J. Kerrigan
Hon. Howard G. Lane

Hon. Joel Asarch
Hon. Randy Sue Marber

In District/Nassau, Hon. Valerie J. Bullard and Hon. Scott Fairgrieve have been re-elected to the seats they currently hold.

If I have missed the election results pertaining to any other judges that commonly handle no-fault matters, please let me know.

Tuesday, November 07, 2006

The Supremes

Today, of course, is Election Day. Please be advised that various New York City Civil Court and County District Court judges from Long Island are running for the Supreme Court. Please be further advised that, if elected, they will rarely handle any further no-fault matters. One is tempted to suggest that you vote accordingly... ;)

Friday, November 03, 2006

The Two Ships Peerless

Although not a no-fault matter, the decision in Egon J. Salmon, Inc. v Tamarin, 2006 NY Slip Op 26443 (Civ. Ct., Richmond Cty., 2006) may be of interest to NYC no-fault practitioners. In a show of jurisprudential fortitude that would surely overcome a lesser jurist, Hon. Philip S. Straniere has analyzed New York City Civil Court Act § 1815. It should be pointed out that there are actually two entirely different sections numbered 1815 in the NYCCCA. Lexis, for example, has a footnote pointing out this fact if you attempt to retrieve it. It should also be noted that this is the least of the absurdities involved with that section.

Long story short, Judge Straniere found the section unconstitutional.

And, in a no-fault-related matter, this is not the first time that Judge Straniere has held a section of the NYCCCA to be unconstitutional. See Richmond Pain Mgt. v State Farm Mut. Auto. Ins. Co., 2004 NY Slip Op 50288(U) (Civ. Ct., Richmond Cty., 2004). Although causality is difficult to determine (just ask an engineer preparing a low-impact study for a no-fault case), Article 4 of the NYCCCA was eventually amended by the Legislature. Perhaps Judge Straniere's opinion in Egon J. Salmon, Inc. v Tamarin will remind the Legislature that § 1815 (one of them, anyway) is also ripe for amendment.

Wednesday, November 01, 2006

Form of a...

Many visitors to this blog come here in search of the no-fault forms promulgated by the Insurance Department. To that end, please refer to this PDF file at the Ins. Dep't's website. It contains the following (titles are provided for the more commonly-used ones): NF-1A, NF-1B, NF-2 (Application for Benefits), NF-3 (Verification of Treatment), NF-4 (Verification of Hospital Treatment), NF-5 (Hospital Facility Form), NF-6 (Employer Wage Verification), NF-7 (Verification of Self-Employment), NF-8, NF-9, NF-10 (Denial of Claim Form), NF-11, NF-12, NF-13, and NF-AOB (Assignment of Benefits). For litigation purposes, at least, the typical no-fault medical claim will require an NF-2, NF-3 (or NF-4/5 if a hospital rendered treatment), NF-10 (if the claim was denied), and an NF-AOB. Beware of providers who modify the NF-3 and NF-AOB forms.

Re: the title of this entry: kudos to anyone who can come up with the most appropriate Wonder Twins power.

Chewing Away at the Basic Fabric of Civilization

As usual, the late Long Island-native author William Gaddis puts it all in perspective. In A Frolic of His Own, a 1994 novel consisting of deposition transcripts, court opinions, etc., the main protagonist, Oscar Crease, provides us with the following tirade. His words are directed at an adjuster from his insurance carrier and describe his frustration with his carrier's professed immunity from liability for non-economic damages after, somehow, Oscar made his own car drive over himself. I'll leave that mystery, and many more treasures, for the adventurous among us.

The protection of the No Fault statutes do you think I can't see through that? They're not protecting me they're protecting you insurance people with this No Fault idea it's not even an idea, it's a jerrybuilt evasion of reality of course someone's at fault. Someone's always at fault. It's all a cheap dodge chewing away at the basic fabric of civilization to replace it with a criminal mind's utopia where no one's responsible for the consequences of his actions, isn't that what the social contract is all about?
* * *
I see all around us the criminal mind at large appropriating, literally stealing the fruits of the creative mind and the dedicated labours of others without even blinking, isn't that what's at the heart of this cancerous No Fault epidemic? this license for delinquency? Society created the criminal, society's responsible and so no one's responsible, isn't that the size of it? demolishing the pillar civilization rests upon, each individual's responsibility for the consequences of his own actions? and the natural law which frames the concept of negligence, let alone deliberate transgression goes out the window and the Constitution with it, are you aware of that? Are you aware that you're toying with one of the first laws of physical nature itself?

- pgs. 222-3, New York: Scribner (trade edition, 1995) (all spelling, punctuation, capitalization, etc. as in the original).

So, dear readers, fellow attorneys, insurance company representatives, judicial staffers, medical providers and management companies, factoring (and 'secured loan') company employees, and others: have fun today as you toy with one of the first laws of physical nature itself. And, please, be careful.

Tuesday, October 31, 2006

Dr. Butcher, M.D. (Medical Deviate)

So am I the only one who dressed up as a no-fault-related character for Halloween? Three guesses as to which doctor I am portraying as a zombie...

And, yes, Dr. Butcher, M.D. is a real movie title.

Sunday, October 29, 2006

Will Wisdom Prevail?

Sources tell me that a decision in Fair Price v. Travelers should be expected early next year. What do you think the decision will be? You can let us know by clicking below or commenting to this post.

Do you think that Fair Price v. Travelers will be overturned?
Free polls from

Friday, October 27, 2006

Marvelous Shlomo S. Hagler

The reader is directed to the October 13, 2006 edition of the New York Law Journal for an article entitled 'The Thicket of First-Party No-Fault Benefits Actions' by The Hon. Shlomo S. Hagler of the Civil Court, New York County. I recommend it highly.

Judge Hagler was also the author of the decision in Inwood Hill Med. v Allstate Ins. Co., 2004 NY Slip Op 50565(U) (Civ. Ct., New York Cty., 2004). I still give copies of the decision to new associates as a primer on no-fault.

In other news, Fair Price Medical Supply Corp., a/a/o Nivelo v Travelers is still in the briefing stage before the Appellate Division, Second Department. Respectfully, the Appellate Term decision in Fair Price Med. Supply Corp. v Travelers Indem. Co., 2005 NYSlipOp 25343 (App. Term, 2d Dep't, 2005) is a perhaps the most frustrating example of that Court overreaching in applying the preclusion rule. In short, the idea that no-fault requires a carrier to pay a claim where the very submission of such constitutes a Class E felonly (see Penal Law § 176.15, as the bill in Fair Price was $1,628.98) simply cannot be correct, and requiring carriers to seek restitution after the fact is, as dissenting Judge Joseph G. Golia points out, "[c]old comfort indeed." Moreover, services never rendered cannot have treated any injuries that were causally related to a covered incident, and thus preclusion cannot apply. Indeed, given that (the relevant portion of) no-fault only covers necessary medical expenses, unrendered services are not subject coverage. It would make no sense to hold that Central General v. Chubb allows a carrier to avoid preclusion where services are rendered but does not treat an injury causally related to a loss, but requires preclusion where no services are rendered at all - the latter has more fatal defects than the former in terms of coverage, not fewer. There simply is "no contractual relationship" with respect to unrendered services. Zappone v. Home Ins. Co., 55 N.Y.2d 131, 137 (1982).

The preclusion rule is designed to penalize carriers for stalling in their duty to pay or deny a claim within 30 days, but penalizing a carrier for failing to realize through psychic powers that a claim was false in its entirety serves no public policy. Indeed, it hurts the public by raising insurance premium rates and providing an incentive for criminal activity.

But I digress. Perhaps I will post a larger analysis of Fair Price once the time for oral argument comes closer.

Wednesday, October 25, 2006

More...than the simple words I try to say...

(With apologies for the title to Ortolani/Oliviero/Newell.)

Further punctuating yesterday's post, the Appellate Term, 2d Dep't posted an opinion today in SpineAmericare Med., P.C. v State Farm Mut. Auto. Ins. Co., 2006 NYSlipOp 52035(U) (App. Term, 2d Dep't, October 5, 2006). Therein, the Court held that "plaintiff's moving papers were insufficient to establish the mailing of the appended forms to defendant. Plaintiff's corporate officer did not state that he actually mailed the claims to the defendant nor did he describe his office's standard practice or procedure designed to ensure that items are properly addressed and mailed." Id., citing to New York & Presbyt. Hosp. v Allstate Ins. Co., 29 A.D.3d 547 (2d Dep't, 2006). Once again, there was no mention of an "ensured compliance with" requirement, although perhaps it was unnecessary to mention same, as there was no description of the practice or procedure, anyway.

More on Mailing

I've discovered that, on October 2, 2006, NYLJ published an article entitled 'Proper Proof of Mailing Under N.Y. No-Fault Law' by Mitchell S. Lustig and Jill Lakin Schatz. Although quite well-written, I think the authors missed the boat on the quiet death of the "ensured compliance with" requirement, as discussed in yesterday's post, although the authors do cite to and discuss Ava Acu. and Gribenko. I also think, respectfully, that the authors are out of their cotton-pickin' minds to suggest that the carriers obtain a USPS Certificate of Mailing for every NF-10. It's one thing for a carrier to do so for VTL § 313 policy cancellation, as the volume there is surely a tiny fraction of the number of NF-10s that get processed and mailed throughout New York on a daily basis. I think the Certificate of Mailing idea is so impractical as to be of no utility. Nevertheless, I certainly do appreciate the effort put into the article and the opportunity to hear differing opinions.

Tuesday, October 24, 2006

Dissed Miss1

On May 30, 2006, the Appellate Term, 2d Dep't, dismissed the plaintiff's appeal of the February 7, 2006 order in AVA Acupuncture P.C. v ELCO Admin. Servs. Co., 2006 NY Slip Op 50158(U) (Civ. Ct., Kings Cty., 2006). For whatever reason, on October 4, 2006 (and just published online today), the App. Term reiterated the previous dismissal.

It is perhaps a shame that Ava Acupuncture was untimely in their appeal. Judge Battaglia's February 7 order is quite interesting, and it tackles two recurring no-fault disputes: the level of proof required to create a presumption of the mailing of a no-fault denial of claim form (NF-10) by a carrier and the issue of the lack of a fee schedule for acupuncture performed by a licensed acupuncturist.

Click here to toggle viewing the rest of the post...

Taking them in order, the specific dispute on proof of mailing in Ava Acu. was whether a presumption of mailing could be created by the affidavit of one who, although having knowledge of the standard practice and procedure of mailing by an office, was not in a supervisory position with regard to same. The problematic App. Term case law, relied upon by the plaintiff in Ava Acu., was Contemp. Med. Diag. & Treatment, P.C. v Government Employees Ins. Co., 2005 NY Slip Op 50254(U) (App. Term, 2d Dep't, 2005 and Gribenko v Allstate Ins. Co., 2005 NYSlipOp 52201(U) (App. Term, 2d Dep't, 2005).

The Court in Contemp. Med., in holding that the defendant carrier failed to prove the mailing of its denial, noted that the affidavit of the claims examiner "was conclusory and failed to specify either that it was the duty of the claims examiner to ensure compliance with said office procedures or that the claims examiner had actual knowledge that said procedures were complied with." Out of sympathy to the Court, I'll decline to criticize the use of a preposition to end a sentence. However, there is a bigger problem. Shortly after the sentence I've just quoted, the App. Term cited generally to Residential Holding Corp. v. Scottsdale Ins. Co., 286 A.D.2d 679 (2d Dep't, 2001). The problem is, though, Residential Holding says nothing about proof of mail coming from a deponent whose position it is to ensure compliance with the relevant practices and procedures. The App. Div. formulated the rule as being that "[t]he presumption [of mailing] may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed." Id. at 680, citing to Tracy v. William Penn Life Ins. Co., 234 A.D.2d 745 (3d Dep't, 1996) and Pardo v. Central Coop. Ins. Co., 223 A.D.2d 832 (3d Dep't, 1996).

The App. Term seemingly compounded the error in Gribenko by noting, when holding that the plaintiff had failed to create a presumption of the mailing of its claim forms, "the affidavits [did not] state that it was the duty of the affiants to ensure compliance with said office procedures or that the affiants had actual knowledge that said office procedures were complied with." 2005 NYSlipOp 52201(U), citing to Contemp. Med.

Subsequent to Gribenko, the Appellate Division issued its decision in New York & Presbyt. Hosp. v. Allstate Ins. Co., which quoted Residential Holding directly and held that "[t]he presumption [of mailing] may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed." 29 A.D.3d 547 (2d Dep't, 2006). Since that time, the App. Term has, curiously and without explicitly mentioning it, dropped the "ensure compliance with" rule from Contemp. Med. and Gribenko. Interestingly, the last time that the App. Term cited to Contemp. Med. or Gribenko, they found simply that "[t]he affidavit submitted by defendant's no-fault specialist was sufficient to establish that defendant followed a standard office practice or procedure designed to ensure that denial of claim forms were properly addressed and mailed," and failed to address the "ensured compliance with" rule at all. A.M. Med. Servs., P.C. v New York Cent. Mut. Ins., 2006 NYSlipOp 51662(U) (App. Term, 2d Dep't, 2006).

In Ava Acu., Judge Battaglia eloquently described the "ensured compliance with" issue and proof of mailing in general, and ultimately (and understandably) concluded that such a requirement did, indeed, exist. Judge Battaglia also found the affidavit submitted by the defendant carrier to be conclusory, anyway, so presumably the same result would have been reached whether or not the requirement existed. So, too, on appeal, the App. Term could have avoided even tackling the issue by finding it to be insufficient under any standard. Nevertheless, it would have been nice to have the App. Term explicitly disavow Gribenko, as plaintiffs' attorneys still argue for it throughout the Civil Courts with some success. See, e.g., Judge George Silver's opinion in Y&J Intertrade v. Utica Mut. Ins. Co., 236 N.Y.L.J. 41 (Civ. Ct., Kings Cty., 2006).

As for the second interesting portion of the Ava Acu. decision, the issue of the lack of a fee schedule for acupuncture performed by an acupuncturist has been a troubling one for some time. This is especially true in Civil Court, Kings County in acupuncture cases where plaintiff's counsel is the Law Offices of Gary Tsirelman, attorneys for Ava Acu. In short, Mr. Tsirelman's clients, along with many other acupuncturists, would have it that licensed acupuncturists are allowed to charge a rather substantial amount per modality, usually somewhere in the neighborhood of $120. However, there is a fee schedule for acupuncture rendered by chiropractors and physicians, and the resultant fees, at the high end, are about $43. Unfortunately for the acupuncturists, the Insurance Department issued an opinion letter on October 6, 2004 in which they opined that "licensed acupuncturists do not have a right to reimbursement at the prevailing regional fee rate in effect" prior to the physician and chiro fee schedules being put into effect, and that "it would be consistent with the regulation for an insurer to limit the reimbursable fee for necessary services provided by a licensed acupuncturist to the rates established for doctors and chiropractors performing a similar service."

Although he avoided doing so in Ava Acu., Judge Battaglia later tackled this issue on the merits in Power Acupuncture P.C. v State Farm Mut. Auto. Ins. Co., 2006 NY Slip Op 50393(U) (Civ. Ct., Kings Cty., 2006). I'm not quite sure how he pulled it off, but he both acknowledged the October 6, 2004 opinion letter and concluded that it "was wrong" for State Farm to reduce the bills submitted to a lower "fee [that] was calculated according to the...Schedule for Medical Fees." Id. I'm still mystified by the Power Acu. decision, and especially in light of the fact that Ava Acu. had its appeal dismissed, I hope that State Farm chose to prosecute an appeal in that matter.

1 The title of the post explained: it's a cheap pun, as Ava Acu. is owned by Valentina Anikeyeva. Actually, given that she is married to Andrey Anikeyev, I might have more approrpiately titled the post 'Dissed Mrs.,' but that misses (mrs.?) the point. Then again, I could have gone neutral - and also avoided embarrassing myself in case the pair has split - and called it 'Dissed Ms.' I chose not to use this version, as it removed the subtle reference to 'Swiss Miss,' but I digress. For more fun adventures with the Anikeyevas, I direct the reader to Circle Intl. Group, Inc. v Anikeyeva, 2005 NY Slip Op 50979(U) (Sup. Ct., Kings Cty., 2005).

Quis custodiet ipsos custodes?

Many judges throughout the New York City Civil Court system - and possibly beyond - have been out yesterday and today for conferences. There is no truth to the rumor that the Courts have been issuing better decisions as a result of the absence. ;)

Tuesday, October 17, 2006


Your humble affirmant is currently knee-deep (quite literally, were you to see my office) entrenched in the ever-ongoing litigation between various no-fault insurance carriers and the medical facilities purportedly owned by Dr. Robert Scott Schepp, M.D.: Deajess Medical Imaging, P.C., Boston Post Road Medical Imaging, P.C., and Preferred Medical Imaging, P.C. As noted recently on this blog in "Carothers, Part CLXXXVI," those 3 Schepp facilities eventually became Andrew Carothers, M.D., P.C. The Schepp facilities have recently filed suit against approximately 25 insurance carriers seeking a declaration that, inter alia, they were and are in compliance with the "Business Corporate Law" [sic] and thus entitled to no-fault reimbursement. The suit is Deajess Medical Imaging, P.C., et al., v. AIG Insurance Company, et al. (Sup. Ct., Nassau Cty., Index No. 013569/06). The action is related to a previously-commenced Nassau Cty. action, AIU v. Deajess, which is described in the prior post here concerning Carothers.

Anyway, I say all of this in apology for the lack of substantial updates thus far this week. The irony is not lost on me that I am unable to make posts of any value while holed up at my computer, yet am able to do so when engaging in a more vigorous schedule of appearances.

Your condolences for my plight will be accepted by PayPal, etc. ;)

Monday, October 16, 2006

Save the Date

For what it's worth, the appeal in Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090(U) (Sup. Ct., Nassau Cty., 2006) is set to be heard before the Appellate Division, 2d Dep't on November 2, 2006.

Oh, and Happy Monday to all. ;) There seem to be quite a few silent readers out there, so please drop a line (or anonymous comment, if need be) and inform us as to whether or not you found this prior week's posts to be useful/readable/etc.

Edit @ 2:22PM - I've realized I might've had my settings goofed up for commenting. If you tried and failed previously, give it another shot. :)

Friday, October 13, 2006

Facts and Amounts

I've spoken with a number of attorneys who have expressed confusion to me as to whether a plaintiff's prima facie burden for a summary judgment motion (the subject of most Appellate Term decisions) differs from the applicable burden at trial. According to the App. Term, 2d Dep't, they are identical.

As to motions, the landmark App. Term decision on the matter is Amaze Med. Supply v Eagle Ins. Co., 2003 NY Slip Op 51701(U) (App. Term, 2d Dep't, 2003). As per the most recent App. Term decisions, the rule has now boiled down to the following: "In an action to recover first-party no-fault benefits, a plaintiff establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue." Delta Diagnostic Radiology, P.C. v Country-Wide Ins. Co., 2006 NYSlipOp 51877(U) (App. Term, 2d Dep't, 2006) (citations omitted).

In Damadian MRI in Canarsie, P.C. v General Assur. Co., 2006 NYSlipOp 51048(U) (App. Term, 2d Dep't, 2006), the Court was called upon to determine the plaintiff's burden at trial, and they held that "[i]t is well settled that a health care provider establishes its prima facie entitlement to judgment as a matter of law by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue." (Citations omitted).

Thus, although methodology of proof will necessarily differ due to the procedural mechanics of each, plaintiff maintains the same burden at trial as it does when seeking summary judgment.

Thursday, October 12, 2006

Keeping It Real, Part I(a)

As implied yesterday, the decision in West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 2006 NYSlipOp 51871(U) (App. Term, 2d Dep't, 2006) will be interesting in light of the decision just a few months prior in Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090(U) (Sup. Ct., Nassau Cty., 2006). I know my posts are getting a bit long as of late, so I'll provide a cut for quicker readability of the front page here.

Click here to toggle viewing the rest of the post...

Indeed, in Long Is. Radiology, Justice Phelan made explicit his understanding that West Tremont was under appeal. Moreoever, West Tremont is not binding authority upon the Supreme Court, the latter being a court of original jurisdiction. See, e.g., Westchester Med. Ctr. v. Liberty Mut. Ins. Co., 2006 NY Slip Op 50382U (Sup. Ct., Nassau Cty., 2006).

Nevertheless, at the very least, a split amongst courts has been presented to the Appellate Division, as Long Is. Radiology is currently under appeal. See, e.g., App. Div. Motion No. 2006-05943.

In his decision, Justice Phelan explains the background of the case as follows:

Plaintiff is a radiology office that performs MRI testing for persons involved in motor vehicle accidents and allegedly eligible for no-fault benefits. MRI testing is done pursuant to a prescription issued by the injured person's independent treating physician. For payment plaintiff receives an assignment of no-fault benefits from the injured person, and submits claims directly to one of the defendants. Defendants deny numerous claims for payment on the ground of an alleged "lack of medical necessity."

On this motion defendants argue that in the context of the no-fault statute and the regulations thereunder, "medical necessity" is a prerequisite for payment. They conclude therefore, that they have every right to deny plaintiffs' claims on the ground of "lack of medical necessity." This Court agrees with defendants' argument, but not their conclusion.
2006 NY Slip Op 51090(U).

The final sentence is not as hopeful for the carriers as it might appear. Although it was found that carriers could, indeed, defend the claims on the basis of a lack of necessity, it was held that they cannot do so against the radiology facilties directly. Instead, "[a]n insurer who can prove that a radiology test is unnecessary or duplicative, should be able to challenge through subrogation the treating physician or medical provider who prescribed the test." Id.

The Supreme Court based its holding upon the following rationale:

It is this Court's opinion that the results in West Tremont and Omega Diagnostic comport with the underlying intent of the no-fault statute, that claims be processed quickly and efficiently, and that economic losses be fully compensated. As noted in West Tremont, there is no statutory or regulatory pre-approval requirement for radiology tests requested by treating physicians in no-fault cases. Furthermore it makes no sense to argue "lack of medical necessity" against radiologists, because they do not assess medical necessity. Radiologists neither examine the no-fault patient, nor render a pre-test diagnosis. Any diagnostic opinion is based on the radiological test. To require radiologists to render a pre-test diagnosis would cause significant delay in treating the injured.

Under this rationale, if a no-fault patient (who we will assume is a layperson with no medical training) paid for her medical treatment out-of-pocket and then submitted timely and proper claims thereafter seeking reimbursement for same, a carrier could never defend on the basis of a lack of medical necessity. One can imagine the formulation of the argument: it makes no sense to argue "lack of medical necessity" against lay patients, because they do not assess medical necessity; that's why they go to doctors in the first place. This is an absurd conclusion that cannot stand without taking the entirety of the no-fault scheme down with it.

It also seems odd to your affirmant that the Court would give an ultimate finding that would, if implemented, double the amount of litigation in certain massive categories of no-fault claims while, as a predicate, recognizing that "[t]he court system is inundated with no-fault claims litigation." Id. Presumably, if the Long Is. Radiology decision became the rule, the court system would then be inundated with both no-fault claims litigation and subrogation claims litigation.

Can Long Is. Radiology withstand appeal? I either can't imagine so, don't want to imagine so, or both. To the extent that West Tremont is a factor, it should serve as a succinctly damning argument in favor of reversal. The Appellate Term said it all when they noted that "while it may be argued that a diagnostic center is in no position to establish the medical necessity of a prescribed MRI, it is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor. If a claim is not assigned, and is submitted to the insurer directly by the eligible injured person, the insurer may assert a defense of lack of medical necessity which, if established, will shift the burden to the eligible injured person to provide his or her own evidence of medical necessity. If the defense may be asserted against the eligible injured person, it follows that it may be asserted against the provider as well." 2006 NYSlipOp 51871(U). Vague appeals to the underlying goals of no-fault, which could easily be molded to reach any conclusion under the sun,1 pale in comparison to the actual law.

Really, it's a shame that radiologists don't independently assess medical necessity and yet still face the lack thereof as a defense. It's also a shame that doctors also usually don't assess whether a patient's injuries were the result of an intentional collision,2 yet the appellate courts of this state have repeatedly held that they still must face the defense that such a thing occurred. See, e.g., Central General v. Chubb, 90 N.Y.2d 195 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751 (2d Dep't, 2002).

Does a no-fault fact pattern get any more heartbreaking than the following?:

On August 31, 2000, Aferdita Suljovic, a passenger in a vehicle operated by her husband, was injured when her husband intentionally caused the vehicle to go over an embankment while he exited the driver's side of the vehicle. Mr. Suljovic was indicted, inter alia, for attempted murder and ultimately pleaded guilty to assault in the second degree.[3]

Mrs. Suljovic was hospitalized at Westchester Medical Center (hereinafter WMC). As her assignee, WMC sought to recover no-fault benefits from the defendant, Mr. Suljovic's automobile insurer, for the services it rendered. The defendant issued a denial of coverage on the grounds, insofar as relevant to this appeal, that the occurrence was not an "accident" within the meaning of the no-fault endorsement in the policy and that Mrs. Suljovic's injuries did not arise out of the "use or operation" of a motor vehicle.
Westchester Med. Ctr. v. Travelers Prop. Cas. Ins. Co., 309 A.D.2d 927, 928 (2d Dep't, 2003).

The poor woman was almost murdered in a horrific manner and the hospital did the very thing hospitals are supposed to do. To be sure, the hospital had no part in the attempted murder, and it would have been cruel (and possibly some other things) for them to have refused to treat as soon as they found out her injuries were the result of an intentional act. But do they get reimbursed through no-fault? No. "The assault, committed through the use of a vehicle, was an intentional act, not an accident. Consequently, the...cause of action should have been dismissed." Id. The ability of a no-fault claimant or her assignees to assess a potential defense their claims has no relationship to the properness of a carrier employing such defenses. If the claims do not qualify, and the carrier has proven such in accordance with the applicable laws for proving a defense, that is the end of the judicial inquirty.

No-fault isn't just something where money gets tossed around for equitable reasons. It is based upon a contract, the terms of which are promulgated by the government. The contract has provisions. Those provisions are to be followed. The contract does not provide reimbursement for unnecessary services. The contract does not get changed around depending on whether those provisions would kinda sorta stink a little bit for an assignee of one of the parties thereto. Is this a revelatory stance? I think not, given decisions such as Westchester Med. Ctr. v. Travelers. And while the Appellate Term, 2d Dep't is no stranger to such wholesale no-fault contract re-writing,4 as I said yesterday, recent decisions appear to reverse that trend, or at least provide some balance. And, really, regardless of which party one is representing in a no-fault suit, is strict adherence to the laws and regulations really that bad of an idea?

MRI facilities giving a no-fault patient three MRIs a week after an accident are in no more of a sympathetic position than Mrs. Suljovic and Westchester Medical Center, and, in reality, are surely far less sympathetic. To hold that medical necessity defenses should be unavailable as against such MRI facilities due to unfairness is simply untenable in light of the result in Westchester Med. Ctr. and innumerable similar Appellate Division holdings. Well, it ain't keeping it real, at least.

1. Really, does requiring subrogation against the referring provider after losing a no-fault suit shorten or lengthen the claim procedure? One could argue for the opposite result of Long Is. Radiology without changing the rationale.

2. Though maybe psychologists can if they broach that subject.

[3. Presumably, Justice Phelan would have the carrier subrogate against Mrs. Suljovic's incarcerated husband.]

4. "While the holding of the majority results in a plenary trial on the issue of lack of medical necessity, the insurer will have no evidence to present on the issue of 'medical necessity,' as the eligible injured person never appeared for the IME and consequently the company never examined that person. The eligible injured person would not be entitled to summary judgment but the insurer has no possibility to defend at trial. This, of course, ignores 11 NYCRR 65-1.1 (d) which provides that "No action shall lie against the Company..." Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins., 7 Misc. 3d 18, 25 (App. Term, 2d Dep't, 2004), dissent of Golia, J.

Wednesday, October 11, 2006

Almost Infamous

Much thanks for Nicole L. Black, Esq., she of the Sui Generis blawg, not only for pointing out to us that we are linked in a post today on, but also apparently for providing the method by which we got noticed in the first place.

Also a hearty welcome to the 3 people in the world that will read the post and be unable to resist checking out "a blog on New York no-fault auto law." ;)

Keeping It Real, Part I

The Appellate Term, 2d Department has been in engaging in some rather groundbreaking decision-making as of late: the application of "real" law (as opposed to solipsistic citation to prior no-fault decisions that had no particular basis in law on their own). For your consideration, we present the decision in West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 2006 NYSlipOp 51871(U) (App. Term, 2d Dep't, 2006). The "real" rule of law in question: "[I]t is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor." Id., citing to Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121 (1975).

In the trial court opinion, Judge Judith R. McMahon held that "in a matter, such as the instant case, wherein the usual and customary medical procedure was utilized by the examining physician in referring a patient involved in a motor vehicle accident for radiological tests after a physical examination, and the patient assigned her rights to the diagnostic radiological establishment for reimbursement of No-Fault benefits, the affirmative defense of lack of medical necessity should not be available as the diagnostic center does not make an independent medical evaluation of the patient and the denial of benefits to the diagnostic establishment is in derogation of the intent of the Insurance Law 5106." West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 8 Misc. 3d 423, 427 (Civ. Ct., Richmond Cty., 2005). In sum, a carrier cannot deny MRI bills based upon a lack of medical necessity. This conclusion was based on that most vague and useless of arguments: that "the purpose and intent of the Insurance Law No-Fault Benefits statute which is expedient payment of benefits to automobile victims." Id.

The meat of the App. Term's rationale for overruling the Civil Court's order is as follows:

Under the Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law art 51), more commonly known as the No-Fault Law, "first party benefits" are available to reimburse persons for "basic economic loss" resulting from injuries "arising out of the use or operation of a motor vehicle" (Insurance Law § 5102 [b]). Insurance Law § 5102 (a) (1) defines "basic economic loss" as including, inter alia, "[a]ll necessary expenses incurred for: (i) medical, hospital . . ., surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services" and "(iv) any other professional health services." The Mandatory Personal Injury Protection Endorsement (11 NYCRR 65-1.1 [d]) defines "medical expenses" as consisting of "necessary expenses" for the services which are enumerated in the statute. Nowhere in the statutory or regulatory scheme is there any suggestion that services rendered by diagnostic centers or, for that matter, medical equipment suppliers, laboratories, or radiological facilities, all of which rely upon prescriptions or referrals from treating or examining medical providers, be exempt from the requirement that said services be "medically necessary." While it may be argued that a diagnostic center is in no position to establish the medical necessity of a prescribed MRI, it is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor (see Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121 [1975]). If a claim is not assigned, and is submitted to the insurer directly by the eligible injured person, the insurer may assert a defense of lack of medical necessity which, if established, will shift the burden to the eligible injured person to provide his or her own evidence of medical necessity. If the defense may be asserted against the eligible injured person, it follows that it may be asserted against the provider as well. Moreover, "[t]o permit medical providers to receive reimbursement even when the insurer has proven that the service provided was not medically necessary would encourage fraud, rather than combat it . . . . In fact, the construction urged by plaintiff would require insurers to pay for MRIs of the entire spine when the insured suffered a broken toe, or for full body scans for broken arms" (Precision Diagnostic Imaging, P.C. v Travelers Ins. Co., 8 Misc 3d 435, 439 [2005]). 2006 NYSlipOp 51871(U).

This makes sense for a number of reasons, not the least of which is that the limitation of basic economic loss in § 5102 to "necessary [medical] expenses" doesn't have a subsection containing an exemption for instances where it would stink for the provider. To be sure, no one ever wants to write in a general exception to the laws and regulations when application of same would stink for the carrier.

Also, I think the end result of such a rule would be even worse than what the Civil Court posed in Precision Diagnostic: a no-fault applicant could have a single examination by a physician at which everything under the sun was prescribed, and then the resulting tens of thousands of dollars of no-fault claims would not be defensible on the basis of lack of necessity.

Indeed, I think the Court of Appeals has actually already decided the matter, anyway. The factual basis of Central General v. Chubb, 90 N.Y.2d 195 (1997) was as follows:

Central General Hospital provided medical treatment to Pamela Mandresh on four separate occasions for injuries allegedly sustained in an automobile accident. Chubb insured the automobile Mandresh was driving at the time she was allegedly injured. The hospital submitted standard requests for payment of no-fault billings totaling $ 2,403.50. Chubb rejected them on the grounds that the injuries were not related to the accident and the treatments were excessive. Chubb insists that Mandresh's injuries were sustained in a separate work-related accident about a year prior to the automobile accident. Id. at 198.

Although there was an allegation by Chubb that Ms. Mandresh had treated with the same physician for both injuries, this appears to be unrelated to the services rendered by the hospital. Either way, when a patient presents injuries and a given explanation to a physician, unless the injuries are somehow so blatantly unrelated that they cannot possibly have arisen as explained, the physician is in no position to determine the causality of the injuries. Nevertheless, the Court of Appeals concluded that "an insurer...may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident." If Judge McMahon's conclusion in the West Tremont trial decision was the correct rule, Central General should have held that carriers are precluded from raising the defense of lack of causality (unless the medical provider was actually a personal witness to the event that caused the injuries, I suppose).

Possibly more later on the potential effects of the App. Term's decision in West Tremont on the pending litigation in Long Is. Radiology v. Allstate Ins. Co., 12 Misc. 3d 1167A (Sup. Ct., Nassau Cty., 2006).

Saturday, October 07, 2006

Fee, Fi, Ho, Hum

As Matthew S. Lerner, Esq. of the New York Civil Law blawg recently posted1, Judge Peter Paul Sweeney of Civil Court, Richmond County has issued an opinion on the proper calculation of attorney's fees. See Marigliano v NY Cent. Mut. Fire Ins. Co., 2006 NY Slip Op 26395 (Civ Ct., Richmond Cty., 2006).

Judge Sweeney (now sitting once again in Civil Court, Kings County, and in fine spirits concerning the move as per conversations between His Honor and the undersigned yesterday) adopted the interpretation of the attorney's fees portions of the Regulations opined upon by the NYS Insurance Department on October 8, 2003. As the Ins. Dep't concluded therein:

The minimum amount of attorney's fees awarded to an assignee health provider who has prevailed in a court action brought against a No-Fault insurer is based upon the aggregate amount of payment required to be reimbursed based upon the amount awarded for each bill which had been submitted and denied. The minimum attorney fee amount of $60 is not due and owing for each bill submitted as part of the total amount of the disputed claim sought in the court action.

In Marigliano, plaintiff favored a calculation whereby each individual bill would be entitled to a separate fee calculation, each with its own $60/$850 boundaries (actually, plaintiff probably argued for a minimum of $80, but that's a recurring issue for a future post on No-Fault Urban Legends). Given that there were three (3) assignors in the suit, the Court's ruling will result in three (3) separate fee calculations, with the same $60/$850 bounds. Without having seen the underlying briefs, I am guessing that plaintiff's preferred calculation would have led to attorney's fees in excess of $1,200. Using the calculation set forth by the Ins. Dep't, attorney's fees probably didn't even exceed $850 (although the theoretical maximum for fees in a suit with three separate assignors would actually be $2,550, it is unlikely that the bills for each assignor reach that level).

This has been a pressing issue for some time, and I almost hope that the plaintiff appeals so that we can get a an on-point determination from the Appellate Term. Plaintiffs often break up very small bills into multiple causes of action in a Complaint in order to multiply their attorney's fees (and plaintiff's counsel in Marigliano is certainly no exception). Any bill lower than $300 will bring in attorney's fees at the $60 minimum, so sometimes plaintiffs will have 20+ causes of action per assignor, each with bills of around $150, in order to greatly boost the fees. Whereas using the calculation on which the Ins. Dep't has opined might not even result in fees that hit the $850 ceiling, using the plaintiffs' preferred calculation can far exceed $850, as seen in my rough guesses re: Marigliano above. It's obviously very frustrating when negotiating on behalf of a carrier that is otherwise dead in the water on their defense in a given action - a carrier either must face paying the full amount of the bills plus interest, fees (with a calculation likely done by the plaintiff and accepted by the clerk, anyway), and costs or give in to a demand that flouts regulatory limits. This often hardly constitutes a "settlement."

I am inclined to believe that if the Appellate Term of the 2d Dep't hears this matter, faced with a very clear opinion letter from the Insurance Department and no contrary and on-point Appellate Division holdings, they will be likely to uphold the Civil Court determination and memorialize the opinion letter as binding common law. In the absence of contrary Appellate Division holdings, the Appellate Term appears to favor adopting the opinions of the Ins. Dep't, as seen on the matter of whether providers can be reimbursed for services performed by independent contractors. See A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc. 3d 36 (App. Term, 2d Dep't, 2005).2 The Appellate Term also seems concerned of late with systemic abuses by no-fault medical providers and their attorneys, another factor weighing in the carriers' favor. See, e.g., the fairly recent scheduling of sanctions hearings by the Appellate Term for Marylou A. Paolucci, Esq. and Alden Banniettis, Esq.3 Of course, the Appellate Term is highly unpredictable, and I have surely been wrong before.

1. The post at bar is a modified version of a comment I posted to the subject New York Civil Law post.

2. However, the Appellate Term has never paid any attention to Ins. Dep't opinions that conflict with established appellate case law. For example, the Appellate Term has never given any weight to the January 11, 2000 opinion letter that medical necessity may be part of a plaintiff's prima facie burden (even where a carrier is precluded from raising the lack of medical necessity as a defense), as this is surely contradicted by the seminal Court of Appeals holding in Presbyterian Hospital v. Maryland Casualty Co., 90 N.Y.2d 274 (1997) and numerous appellate decisions holding that a plaintiff need only prove that it submitted claim forms to the carrier on which it stated the fact and amount of the loss sustained and that such claims have not been paid or properly denied.

3. Although the Appellate Term has published a motion decision whereby they declined to sanction Ms. Paolucci, I have not yet seen a decision either way concerning Mr. Banniettis.

Friday, September 29, 2006

Ready or Not

Today's entry at U.S. District Judge Jerry Buchmeyer's legal humor blog (taken from the archives of his column for the the Texas Bar Journal) presents the classic scenario of the strategizing one attempts at a court's calendar call. Choosing the perfect moment to let the court and your adversary know you're not ready to proceed is, indeed, an art.

The Court: Okay. Do y'all want a hearing today after 11 then?

Mr. George: No. I'm not ready today your honor.

The Court: Okay. Y'all want to put it off till next Monday.

Mr. Shumate: I can't be ready today either.

The Court: Okay.

Mr. George: Well, then I may be ready.

Have a good weekend.

Tuesday, September 26, 2006

Law & Order: SIU

One of the initial goals for this blog was to intersperse posts on recent news with a background primer on no-fault. Of course, this concept presumes that there exists a class of persons who are both a) reading this blog with sufficient interest to revisit periodically, and b) not very well-versed in no-fault. It is perhaps my own inherent self-deprecating nature that makes me inclined to believe that, to the extent that this blog is read at all (assuming that, say, Matthew Lerner, Esq. and Nicole L. Black, Esq. are real persons and not robots with high marks on their Turing tests), only those so masochistic as to already know no-fault rather well would be interested in visiting. This probably leads to postings here that assume too much with regard to the reader's knowledge. We are open to any commentary as to whether the blog is indeed too insular, what types of postings would be most useful (e.g., basic educational, statutory and case law reportage, issue-specific practice notes, etc.).

All of that being said, it has occurred to me that the previous posting assumed too much on the part of the reader's knowledge of the existence, structure, and entrenchment of no-fault fraud. To that end, an NYS OAG press release from July 31, 2006 concerning seventeen (17) grand jury indictments relative to a particular investigation may be of some value. The factual basis of the some of the charges is enlightening:

In the first indictment, three defendants, including a doctor and a medical clinic owner, are charged with Enterprise Corruption, a class "B" felony. The defendants allegedly earned millions of dollars through their operation and control of AR Medical Art, P.C. (AR Medical), a medical clinic in the Midwood section of Brooklyn that "treated" persons purportedly injured in car accidents. Other charges in the indictment include scheme to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering a false instrument for filing.
* * *
In the two other indictments unsealed today, 14 people were charged with staging car accidents throughout New York City and attending clinics, including AR Medical, for treatment of their feigned injuries. These two staged accident ring indictments charged the defendants with scheme to defraud, insurance fraud, larceny, falsifying business records, and offering a false instrument for filing.
* * *
The enterprise corruption indictment alleges that although the owner of record of AR Medical was Dr. Alexander Rozenberg, a physician specializing in physical rehabilitation, he did not control the operations or the financial affairs of the clinic. Instead, Inna Polack, who lacks a health provider license, secretly owned the clinic and decided what medical and health services were to be provided to patients. The defendants acquired patients through a network of "steerers," who were paid to refer patients to AR Medical. Steerers solicited patients by staging motor vehicle accidents and by offering the clinic’s "services" to real car accident victims.
* * *
The indictment further alleges that, following referrals of patients to AR Medical, Rozenberg conducted cursory medical evaluations, fabricated patients’ symptoms, falsely diagnosed extensive soft tissue injuries, and referred patients for prolonged, unnecessary treatment and testing. This treatment included months of physical therapy, chiropractic care, acupuncture, and psychological counseling, as well as MRIs, x-rays, and nerve testing.

The AR Medical situation brings together many of the various defenses often described collectively as "fraud" or as relating to an "SIU" issue (SIU being an acronym for Special Investigations Unit, which carriers in New York are required by regulation to operate). For example, both of the following are complete defenses to a no-fault personal injury protection ("PIP") claim: a) the monies earned by a professional medical corporation are being directed to the true lay operators of the facility rather than the licensed person who is involved on paper only (see State Farm Mut. Auto Ins. Co. v Mallela, 4 N.Y.3d 313 (2005)), and b) the alleged motor vehicle loss was not accidental (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 N.Y.2d 195 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751 (2d Dep't, 2002); State Farm v. Laguerre, 305 A.D.2d 490 (2d Dep't, 2002)). In practical litigation terms, these defenses lead to the submissions of the lengthiest motion and opposition papers, as well as the lengthiest jury trials.

Monday, September 25, 2006

Carothers, Part CLXXXVI

The latest (and surely most wide-reaching) event in the saga of the no-fault claims of Andrew Carothers, M.D., P.C. has come courtesy of Judge Peter Paul Sweeney (formerly of Civil Court, Richmond County, up until this past Friday - he has now returned to his former home of Civil/Kings). See Matter of Carothers v Insurance Cos. Represented by Bruno Gerbino & Soriano LLP & Freiberg & Peck LLP, 2006 NY Slip Op 26372 (Civ. Ct., Richmond Cty., 2006). At least Judge Sweeney has gone out with something of a bang (relative to no-fault, at least).

All of this may seem very trite (even moreso to those who aren't practicing in the no-fault world and hence aren't shocked that a court would order that a party would actually have to appear for an EBT), but it has consumed much of this past summer for the no-fault defense bar, including your humble correspondent, and most New York City Civil Court motion clerks. For example, BG&S submitted a brief in the matter (as if same was not contextually obvious from the caption), which is more or less all that I can recall about the month of June this year.1

See also, Andrew Carothers, M.D., P.C. v. GEICO Indem. Co., 2006 NY Slip Op 26326 (Civ. Ct., Kings Cty., 2006; Battaglia, J.)

Sadly, there is not much information available online addressing the background of the Carothers situation, or of the prior facilities, Deajess Medical Imaging, P.C., Preferred Medical Imaging, P.C., and Boston Post Road Medical Imaging, P.C. Judge Sweeney describes the situation a little bit, and I have a PDF of the decision in AIU Ins. Co. v. Deajess Medical Imaging, P.C., 235 NYLJ 28, p. 22, col. 1 (Sup. Ct. Nassau Co. 2/10/06). Additional information is summarized in Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 2006 NY Slip Op 50437(U) (Dist. Ct., Suffolk Cty., 2006).

To really get a feel for the entire affair, the truly dedicated might be inclined to visit the Supreme Court, Kings County and copy the pleadings in Medical Capital Corporation, et al., v. MRI Global Imaging, Inc. (Index No. 41099/04). That lawsuit concerned Deajess, Preferred, etc. suing their management company after their relationship went sour.

Anyway, stay tuned to this space in 2007 or so for a report on the results of the Appellate Term decision on the inevitable appeal.

1. The Joint Brief submitted on behalf of the defendants represented by Bruno, Gerbino & Soriano, LLP & Freiberg & Peck, LLP was authored by Craig J. Bruno, Esq., with noted contributions by Vincent F. Gerbino, Esq., Damin J. Toell, Esq., Brian M. Martin, Esq., and Craig J. Freiberg, Esq.

Sunday, September 24, 2006

Just to Show We're Alive

Summer is finally technically over, so presumably we have no further excuses left for our failure to maintain this blog. In a show of good faith, please to enjoy a new link in our blogroll to Small Town Lawyer. Joel H. Seachrist, Esq., of Beckman & Seachrist, has been kind enough to link to us in his wonderfully useful (and, not to mention, disturbingly more frequently-updated than the blog at bar) blog.

While we rev up further postings, we should all be chewing over the decision in New York & Presbyt. Hosp. v New York Cent. Mut. Fire Ins. Co., 2006 NYSlipOp 05336 (App. Div., 2d Dep't, July 5, 2006). In a very short decision, the following two (2) sentences are (potentially) the most important: "The defendant correctly contends that the plaintiff hospitals lacked standing. The proof adduced at trial included unsigned assignment of benefit forms." Id., citing to Leon v Martinez, 84 NY2d 83 (1994).

To be sure, the lack of a signature is a very deep defect in an assignment. However, with standing now being brought into the game as a necessary result of the operation of a no-fault assignment, one can only wonder what other defects might also preclude standing. Indeed, given that the Appellate Division cites to a non-no-fault case (what Hon. Philip S. Straniere formerly referred to as "real cases"), does this mean that general contract law applies to the determination of the validity of a no-fault assignment? How far can this all go? Have we perhaps entered a Twilight Zone-esque world in which even such outlandish laws and rules as those embodied within the CPLR (gasp!) apply to no-fault?! The mind boggles and the heart quivers.

On a more realistic note, what is the remaining force of the decision in Presbyterian Hosp. v. Aetna Cas. & Sur. Co., 233 A.D.2d 433 (2d Dep't, 1996)? In particular, compare the sentences quoted from New York & Presbyt. Hosp. v New York Cent. Mut. Fire Ins. Co., supra, with the following: "[The carrier] failed to allege any deficiency in the plaintiff hospital's assignment in its denial of claim. As a result, it waived any such defense." 233 A.D.2d at 433 (citations omitted). Does the newer decision overrule the older one? Or should we perhaps create a meta-rule of "a carrier waives any defense premised upon any deficiency in an assignment of benefits if it fails to allege such deficiency in a timely denial of claim form, unless such deficiency works to preclude standing"? Most pressingly, should we resolve all of this prior to the 10th anniversary of Presbyterian Hosp. v. Aetna Cas. & Sur. Co. on November 18 of this year?

Anyhow, I'm open to suggestions as to where we'll all have drinks to celebrate Presbyterian Hosp. v. Aetna Cas. & Sur. Co.'s birthday (and/or to use the occasion to celebrate/mourn its demise). November 18, 2006 is a Saturday, after all.

Monday, July 10, 2006

Through No Fault of Mine - On Hiatus

In case you have not noticed, we're on hiatus for a while for the summer slow down. There have been some developments that we hope to cover in the coming weeks.

A pressing project must take precedence for the next week or so, but after that look back here for fresh posts.

Thanks for stopping by.

Sunday, May 28, 2006

To Prove Staged Accident in Judge Velasquez' Courtroom, the Standard is Preponderance of Evidence

In Universal Open MRI of the Bronx, P.C. v State Farm Mut. Auto Ins., decided on May 11, 2006, Judge Velasquez at Civil Court, Kings County ruled evidence defendant presented insufficient to prove a staged accident. While unremarkable by itself, he goes into a detailed analysis as to the standard of proof required. He ultimately adopts the standard of preponderance of evidence. The decision is worth reading.

An Example of An Effective Peer Review Defense - Where Plaintiff Does Not Produce a Witness

In Expo Med. Supplies, Inc. v Clarendon Ins. Co., 2006 NY Slip Op 50892(U), decided May 15, 2006 in Civil Court, Kings County, Judge Delores J. Thomas held that defendant's Peer Review Doctor Ronald A. Csillag's testimony was sufficient to carry their burden to prove that the supplies were not medically necessary. Plaintiff did not produce a witness, but instead relied upon the report of Dr. Barshay. The court found that no evidence was presented to refute defendant's testimony.

Affidavit Re Proof Of Mailing Must Be Specific to be Sufficient

In A.B. Med. Servs. PLLC v Specialty Natl. Ins. Co., 2006 NYSlipOp 50810(U), decided April 28, 2006, the appellate term second department vacated a judgment against defendant since among other things, plaintiff's affidavit was insufficient to prove mailing. In his affidavit, plaintiffs' "practice and billing manager" alleged that he "issued all of the billings," that he "personally billed out the claim," and that "[a]ll billing of plaintiff was sent to defendant." The court said this was not enough.

Amazing - IME No Show = No Pay

In two cases, Amaze Med. Supply Inc. v Allstate Ins. Co. and Amaze Med. Supply Inc. v General Assur. Co., the appellate department confirmed the viability of the defense that plaintiff's assignor failed to appear for IMEs. In the second case, the court also states that an affidavit by a supervisor with knowledge of the mailing procedures is enough to prove mailing of the IME letters.

Never Mind that the Regulation Requires the Endorsement, Prove to Us It's There

In yet another set-back for the defense bar, the appellate division second department held in Dilon Med. Supply Corp. v Progressive Cas. Ins. Co., 2006 NYSlipOp 50908(U), decided May 17, 2006 that requests for examinations under oath did not toll the thirty day rule as defendant failed to provide proof that the policy endorsements mandated by the new regulations were made a part of the applicable policy.

First, every policy issued or renewed is required by law to include the endorsement. Second, the claim involved appears to have arisen right when the new regulations went into effect, so it dealt with a situation where a plaintiff could call into question whether the new endorsement controlled. If plaintiff raised such an issue, defendant should have been afforded an opportunity to respond rather than ruling against them by fiat.

A Nurse's Peer Review Not Enough

In SZ Med. P.C. v Country-Wide Ins. Co., 2006 NYSlipOp 26194, decided May 17, 2006, the appellate term second department held in part that a nurse's unsworn peer review was not enough to establish lack of medical necessity,absent some proof of the ability of that nurse to give a medical opinion. I think I know at least one nurse who would disagree with the latter part of the court's reasoning.

180 Rule Viable But You Need Proof

In Continental Med., P.C. v Travelers Indem. Co. , 2006 NYSlipOp 50841(U), decided May 11, 2006, the appellate term, first department reversed summary judgment for defendant on the 180 day rule, in effect saying that insufficient proof was put forward as to the date of receipt of the notice of loss.

Track and Confirm Receipt Alone Is Not Proof of Mailing

In New York and Presbyterian Hospital, a/a/o Richard Udland, et al., v. Allstate Insurance Company, (Index No. 6510/04), 2006 NY Slip Op 03558, the Appellate Division, Second Department upheld denial of summary judgment on a cause of action where plaintiff sought to prove mailing solely based upon a Track and Confirm receipt without adequate support. "Here, no presumption of mailing was created because the affidavit of the plaintiffs' billing service representative did not state that he actually mailed the particular claim alleged in the second cause of action to the defendant ... or describe his office's practice and procedure for mailing no-fault claims to insurers."

Wednesday, May 03, 2006

And now for something off topic

Who is suing David Letterman, and why? Does it involve no-fault?
Is Dick Schaefer involved?

Plaintiff's Affidavits Must Be Specific

In A.B. Med. Servs. PLLC v Allstate Ins. Co., 2006 NYSlipOp 50746(U) decided April 27, 2006, the Appellate Term, Second Department held that plaintiff's billing manager's affidavit was not specific as to which of the provider companies he was a billing manager, and denied plaintiff's motion for summary judgment.

No Summary Judgment Before Discovery Complete

Congratulations to Jeremy Kosin of Bruno Gerbino for his win in SK Medical v. New York Central Mutual, 2006 NY Slip Op 50721(U), decided April 5, 2006 in Civil Court, Richmond County by Judge Sweeney.

Judge Sweeney held that plaintiff was not entitled to summary judgment because discovery as to non-precluded defenses was still outstanding. Judge Sweeney expanded on a ruling in A.B. Medical Services PLLC v. Utica Mut. Ins. Co., 2006 NY Slip Op. 26068[App. Term, 2nd & 11th Jud. Dists.]

Out of State Insurers Off the Hook?

If you have occasion to handle claims being made against an out of state insurer who has not filed with the insurance department to offer coverage in New York, you might want to check out Marshall v. Nationwide Mutual Company, 166 A.D.2d 852.

Thanks to Christopher A. Wong with Bruce Sommerstein & Associates for this tip.

Tuesday, April 18, 2006

Once You Go to Arbitration You Can't Come Back to Court

In A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 2006 NY Slip Op 26131, decided March 17, 2006, Civil Court, Kings County, Judge Karen J. Rothenberg ruled that certain claims that were made by plaintiffs after proceding with arbitration could not be brought in court again citing Roggio v. Nationwide Mutual Ins. Co., 55 NY2d 260, 496 N.Y.S.2d 404 [1985]

If you handle arbitrations, you better read

Better Health Med. PLLC v Empire/allcity Ins. Co., 2006 NY Slip Op 50571(U) Civil Court Of The City Of New York, New York County. In this decision by Judge Thomas, while finding that this claim arose before the new regulations went into effect, the court did not find that the master arbitrator abused its discretion in upholding the award of the arbitrator finding claimant had no standing. "This Court finds that the determination by the arbitrator that fraud may be an issue in the processing of this claim does not constitute an arbitrary or capricious ruling nor is it incorrect as a matter of law."

Plaintiff's have things to prove too - about mailing.

On April 7, 2006, the Appellate Term, Second Department in
Staten Is. Chiropractic Assoc., P.C. v Long Is. Ins. Co.,
2006 NYSlipOp 50588(U),that where plaintiff merely said that it timely mailed the bills to the defendant, where the defendant said it did not receive them, this was inadequate to prove mailing.

Plaintiff's production of an any and all denial did not prove mailing of that particular bill.

Just because they don't show at the EUO....

The Regulation giveth and the court taketh away. At least sometimes it seems that way to the defense bar. The New Regulations permit insurers to deny claims for failure of a claimant or assignor to appear for Examinations Under Oath. Courts, however, have held that the insurer must include language promising reimbursement for expenses. Now it seems that the courts are imposing an additional burden or two.

In Rigid Med. of Flatbush, P.C. v New York Cent. Mut. Fire Ins. Co., the Appellate Term, Second Department affirmed an order granting plaintiff summary judgment finding that defendant failed to attach the EUO endorsement to its papers, failed to set forth proof in admissible form as to the mailing of EUO Notices.

The Public Policy is Strong with you Defendant

In New York & Presbyt. Hosp. v Auto One Ins. Co., 2006 NY Slip Op 02509, decided April 4, 2006, defendant's seeking to vacate defaults may have gotten a little help with the Appellate Division's Second Department's decision upholding a Supreme Court decision granting defendant an order vacating plaintiff's judgment.

We're Exhausted, You're Out of Luck Plaintiff

In New York and Presbyterian Hospital v. Allstate Insurance Company, 2006 NY Slip Op 02731 (Decided April 11, 2006), the Appellate Division, Second Department reversed summary judgment for plaintiff finding that Allstate had made a prima facie showing that it was entitled to summary judgment on its cross-motion by presenting an affidavit, a timely denial and payment log to other providers.

Friday, April 07, 2006

Blogrolling, 2d Ed.

As Nicole Black points out in a comment to the previous post, her blog Sui Generis mentioned us recently and also added us to her blogroll for New York Law Blogs. Her blog, much like Matthew Lerner's New York Civil Law blog, is a terrific resource for practitioners in NY. Nicole also has lively daily Define That Term trivia questions, and the occasional cartoon/joke/etc. Both Nicole's and Matthew's blogs can be found on our blogroll on the right side of this post.

I am certain, however, that both of them will be looking to us to answer insurance law questions that are over their heads. ;)

Wednesday, April 05, 2006


Thanks to Matthew Lerner for announcing our blog on New York Civil Law. We have a permanent link to his site here, and highly recommend it.

What is Full Faith and Credit, Counselor?

Plaintiffs might be happy to be in Judge Thomas' courtroom in Civil Court, Kings County, but others might not be so lucky.
In Capri Med., P.C. v New York Cent. Mut. Fire Ins. Co. 2006 NY Slip Op 50538(U), decided on March 30, 2006, Judge Delores J.Thomas granted plaintiff's motion for summary judgment, in part because the affidavit of the accident reconstructionist was done out of state and lacked a certificate of conformity.

Anyone know of any cases going the other way?

Tuesday, April 04, 2006

Folks in Albany are Talking About No-Fault

Those of us who practice have to deal with the law as it is, and how it develops before the courts. Most of us rarely look at the bigger picture or bills that have not yet become law. It may interest some of you to know what legislators are thinking about.

If any of this interests you, check out the bill submitted by A. Grannis in the Senate on March 31, 2006 as bill A10545 reducing the statutory interest amount to 1% and requiring all first party no-fault suits to be submitted to arbitration. Check out and put in "no-fault."

What do you think of Grannis bill?

Plaintiffs MSJ must say not denied within 30 days

In a recent case decided in Kings County, Judge Bluth held that plaintiff was not entitled to summary judgment as there was no averment in a supportive affidavit or similar paper that they claims were not denied within 30 days. In New York Craniofacial Care, P.C. v Allstate Ins. Co., plaintiff provided proof that the bill had not been paid and supportive affidavits included language to that end. They did not, however, include any mention that the claims were not denied within 30 days.

If you didn't do the work, get out of court.

Plaintiffs may not recover for services of an independent contractor.
In Craig Antell, D.O., P.C. v New York Cent. Mut. Fire Ins. Co., 2006 NYSlipOp 50521(U) on March 30, 2006, the Appellate Term, First Department affirmed a decision granting defendant summary judgment on these grounds. See also: A.B. Medical Services PLLC v Liberty Mutual Ins. Co., 9 Misc 3d 36 [2005])

Thursday, March 30, 2006

Submit an NF-3 forget about AOB?

Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co2006 NYSlipOp 50491(U) March 27, 2006 Appellate Term, 2nd Dept.
Another case where the court held in passing that "plaintiff was not required to establish the proof of mailing of its assignment of benefits form as part of its prima facie case inasmuch as plaintiff established that it submitted a proper NF-3...." The case also outlines briefly the purpose of a bill of particulars, its uses and limitations.

Be Sure to Oppose Motions in Writing

Careplus Med. Supply Inc. v Travelers Home & Mar. Ins. Co.
2006 NYSlipOp 50479(U) Appellate Term, 2nd Dept. March 27, 2006
If you do not oppose a motion in writing, you may not be able to appeal as the court may consider it an order entered on default. Perhaps this appellant should have considered making an order to show cause to vacate. Any thoughts?

Verification Requests Good For Something

Ocean Diagnostic Imaging, P.C. v Nationwide Mut. Ins. Co.
NYSlipOp 50477(U)Appellate Term, 2nd Dept.March 27, 2006
Court searches record and grants defendant's cross-motion for summary judgment based on outstanding verification citing see 11 NYCRR 65-3.8 [b] [3]) I guess those verification requests might be good for something after all.

Just Smacking on an NF-10 Not Enough Plaintiff

Magnezit Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co.
2006 NYSlipOp 50473(U) Appellate Term, 2nd Dept. March 27, 2006
Plaintiffs need to provide some proof of mailing and just smacking an NF-10 onto their motion won't work if it doesn't match the bills.

Radiology Today v. Allstate Ins. Co.

Radiology Today P.C. v Allstate Ins. Co. - what not to do as a defendant putting in opposition Appellate Term, Second Department

Appellate Term, Second Department Busy - cases

A number of cases came down from the Second Department on March 27, 2006.

Ocean Diagnostic Imaging, P.C. v Nationwide Mut. Ins. Co. 2006 NYSlipOp 50477(U)
Appeals court searches record and grants defendant's cross-motion for summary judgment based on outstanding verification citing see 11 NYCRR 65-3.8 [b] [3]) I guess those verification requests might be good for something after all.

Saturday, March 25, 2006

Two for Plaintiffs

Going back a few weeks, plaintiffs got a couple more cases to help them battle their worthy adversaries in the defense bar (including me).

In Park Slope Med and Diagnostic, P.C. as Assignee of Oleg Khabiyev, 2006 NYSlipOp 50371(U) decided March 14, 2006 , the Appellate Term First Department held that on a motion to dismiss by defendent, it is not enough just for plaintiff to have failed to appear for an EBT. The court's brief decision takes note that defendant waited three years to press its demands.

In All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co. , 2006 NYSlipOp 50318(U), decided March 3, 2006, the Appellate Term Second Department held that a peer review based solely on a lack of information, even if timely, absent a lack of verification, is not enough to defeat a motion for summary judgment by plaintiff.

If you know of any recent pro-defendant cases we should post, please send me an e-mail or comment to this post.

Friday, March 17, 2006

Plaintiff Must Complete Discovery as a Prerequisite to Moving for Summary Judgment

In a decision issued on February 17, 2006, the Appellate Term, Second Department reversed the Civil Court's granting of summary judgment to plaintiff where discovery was not complete as to defenses available to the insurance carrier. See
A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 2006 NYSlipOp 26068.

Plaintiffs A.B. Med., et al. moved for partial summary judgment on the standard basis that a claim had been submitted but not paid or denied in a timely manner. (Said motion was partial in that it appears that plaintiffs' only sought summary judgment as to a certain portion of the claims that are the subject of the Complaint.) Defendant cross-moved for an order compelling plaintiffs to provide responses to previously-served discovery demands.

Defendant further opposed plaintiffs' motion, pursuant to CPLR R. 3212(f), in that the outstanding discovery demands caused facts to be unavailable to them, and that said facts might provide a potential basis for opposing plaintiffs' motion on the merits. As to the merits, defendant also provided purported proof that the subject claims had been timely denied.

Civil Court, Kings County, by order of Judge Loren Baily-Schiffman, granted plaintiffs' motion for partial summary judgment, and denied defendant's cross-motion as to those claims for which summary judgment had been granted. As to those claims in the Complaint that were not the subject of the summary judgment motion, the Civil Court further granted defendant's cross-motion to the extent that plaintiffs were compelled to provide discovery responses concerning same.

In its decision, the Appellate Term discussed the propriety of discovery demands by an insurance carrier in a no-fault matter, which has historically been a matter of recurring dispute among parties at the trial court level. The Appellate Term reaffirmed the proposition put forth by many Civil Court judges in that any demands requesting information related to defenses that the carrier is precluded from raising are palpably improper. However, the Appellate Term broke from the general Civil Court trend by holding that demands related to defenses that are, by their nature, not subject to preclusion are proper and thus require compliance therewith.

Compare, e.g., Metropolitan Radiological Imaging v State Farm Mut. Auto. Ins. Co., 7 Misc.3d 675 (Civ. Ct., Queens County, Feb. 17, 2005) in which Judge Charles J. Markey held that "failure by an insurer to include a copy of its denial or demand for verification in a discovery motion, whether seeking to strike pleadings, preclude evidence, or compel discovery, or to furnish a justifiable, compelling reason for not including it, will be per se grounds for denial of the motion." Judge Markey does not even acknowledge the existence of non-precludable defenses, noting at various points that "an insurer will not be permitted to assert a defense not specifically made in the NF-10" and further that "[s]ince any reason for the denial of the claim must be specifically stated in the NF-10, that form must be included so that a reviewing court can pass on the propriety of the requested disclosure...."

In the post-Metropolitan v. State Farm era, the Civil Courts adopted the rationale of Judge Markey as a matter of routine. It is perhaps not pure coincidence, then, that the Appellate Term's decision in A.B. Med. v. Utica was issued on the one-year anniversary of Metropolitan.

In A.B. Med., the Appellate Term found that the carrier failed to prove that it timely dealt with plaintiffs' claims. However, they further found that some of the carrier's discovery demands concerned a non-precludable defense. In particular, they held that the decision in State Farm Mut. Auto Ins. Co. v Mallela, 4 NY3d 313 (2005), has the effect of allowing the allegation by the carrier of plaintiff's fraudulent corporate licensure to be interposed at any time, regardless of the existence of a timely denial setting forth same. It is well worth noting that this is the first time that a New York State appellate court has dealt with Mallela on the merits, and the Appellate Term now makes explicit a proposition that had previously appeared inherent and obvious to carriers, but preposterous to plaintiffs.

In light of the non-preclusion of Mallela-related defenses, the Appellate Term denied summary judgment to plaintiffs and granted defendant's cross-motion to the extent that plaintiffs must comply with certain specified demands. Thus, when plaintiff has not responded to discovery demands concerning defenses that either a carrier raised in a timely manner or may be raised at any time, it is reversible error for the Court to grant summary judgment to said plaintiff.

This discovery issue must now be taken into consideration by plaintiff prior to each summary judgment motion they seek to bring, and also by defendant each time they are served with such a motion. Defendants should be analyzing their demands for the presence of non-precludable defense concerns, as well as comparing their demands to any timely denials that may have been issued.

With regard to non-precludable defenses, the undersigned humbly suggests that Mallela is not the only game in town. To state the obvious, the classic matter of Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 (1997), provides that issues of causality and coverage are not subject to preclusion. However, it may be difficult to target discovery demands on those issues given that the medical providers are typically (allegedly) removed from the circumstances of any given loss. Still, other defenses should provide much more fertile ground for demands. As a starting point, I suggest a review (by litigants on both sides of these matters, as well as the judiciary) of the holdings in Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc. 3d 52 (App. Term, 2d Dep’t, 2005) and Ozone Park Medical Diagnostic Associates v. Allstate Insurance Company, 180 Misc. 2d 105 (App. Term, 2d Dep’t, 1999).