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.


Anonymous said...

Considering some of the other wonderful decisions that have been made by the Appellate Term 2nd department regarding No-Fault Fair Price Medical Supply Corp., a/a/o Nivelo v Travelers was no surprise to me.

Anonymous said...

Thank goodness for Golia is all I can say. Hopefully the inevitable reversal of this horrible decision will cause the Appellate Term in the Second Department to "put brain in gear before putting pen to paper"