At the suggestion (almost a threat, really) of David M. Gottleib, Esq., I'm reposting a comment of mine from the previous entry. An anonymous insurance defense attorney asked: "Provider fraud should NEVER be waived. When did fraud stop being fraud?" I said:
The better question is actually: when did fraud start being fraud? Answer: when catchphrases got the better of good lawyering.
You won't find the word "fraud" anywhere in the majority or concurring opinions in Central General Hosp. v. Chubb, 90 N.Y.2d 195 (1997). You'll find a single variation of the word, namely "fraudulent" in Presbyterian Hosp. v. Maryland Cas. Co., 90 N.Y.2d 274 (1997), but only in the majority opinion, and not in the way carriers like: "The tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices." New York's seminal no-fault cases don't create a solid foundation for anything that should be referred to as a "fraud defense."
Indeed, "fraud" isn't the word you want to use if you're a good insurance defense attorney. You want to say "lack of coverage." The Appellate Division, Second Department has reminded us a few times of this distinction, but it still goes basically unnoticed. Then again, "lack of coverage" isn't a catchphrase that instills fear in anyone's heart.
All of that said, I think there's a solid lack-of-coverage argument to be made in the carriers' favor in Fair Price. Nevertheless, the defense bar is getting itself wrapped up too much in the language of fraud, and to the detriment of their clients' interests.
As an addendum to those comments, I'd recommend that eager defense attorneys begin their research with App. Div. decisions such as Matter of Eagle Ins. Co. v. Davis, 22 A.D.3d 846 (2d Dep't, 2005). There, regarding an allegation, made as part of a petition to stay a UM arbitration, that an alleged collision was fraudulent in nature, the Court held: "When a petition raises an issue of fact as to whether the automobile collision giving rise to the underlying request for arbitration was deliberate or intentional, the issue of fraud is subsumed under the coverage issue. Evidence of such fraud should be considered in determining the broader coverage issue." Id. (internal citations omitted).