In 2007, the Court of Appeals reaffirmed the longstanding Appellate Division case law "that a carrier's failure to seek verification or object to the adequacy of claim forms pursuant to 11 NYCRR 65-3.5 precludes it from interposing any defenses based on such deficiencies." Hospital for Joint Diseases v. Travelers Property Cas. Ins. Co., 9 N.Y.3d 312, 318 (2007). The Appellate Division had long held that this rule precluded defenses related to, inter alia, the assignment of benefits form. The Court of Appeals therefore held "that the failure by Travelers to seek verification of the assignment in a timely manner prevents the carrier from litigating the issue now." Id. at 319.
Left open was the question of whether proof of the assignment is a part of a no-fault plaintiff's prima facie case. Travelers contended before the Court of Appeals that proof of the assignment was, indeed, a necessary component of a plaintiff's proof. The Court avoided the issue by holding that, "[e]ven assuming that this is true, we conclude that an assignment form stating that the patient's signature is 'on file' satisfies that burden where the carrier does not timely take action to verify the existence of a valid assignment." Id. at 320.
The Appellate Term, 2d Dep't, has since taken the Hospital for Joint Diseases decision and run with it. In Westchester Neurodiagnostic, P.C. v. Allstate Ins. Co., decided last month, the App. Term held that "proof of the assignment of benefits form is not an element of plaintiff's prima facie case." ___ Misc.3d ___, 2009 NY Slip Op 51385(U) (App. Term, 2d Dep't, 2009). I believe this is the first time an appellate court has explicitly announced this rule.
This month, in Davydov v. Progressive Ins. Co., the Appellate Term dealt with the situation of an assignment form existing, but not actually naming the proper parties. ___ Misc.3d ___, 2009 NY Slip Op 29299 (App. Term, 2d Dep't, 2009). In that case, the assignee was misidentified as "Dr. Albert Davydov, DDS, P.C. rather than Dr. Albert Davydov, DDS." Id. Nevertheless, citing to Hospital for Joint Diseases, and over a dissent by Justice Golia, the Appellate Term held that even this issue was waived.
I wouldn't be surprised if the carriers in Westchester Neurodiagnostic and Davydov try taking their arguments to the Appellate Division, but these decisions represent the current state of the law on assignments. It would thus appear now that, without having made verification requests, no assignment-related defense will hold any water. Indeed, in such situations, the assignment form should not even be subject to production through the discovery process, as discovery demands related to precluded defenses are palpably improper. See Midborough Acupuncture, P.C. v. State Farm Ins. Co., 21 Misc.3d 10, 12 (App. Term, 2d Dep't, 2008).
On the other hand, I have no question in my mind that many trial court judges will continue to consider the assignment a necessary part of a plaintiff's burden. Some judges still continue to hold that an assignor's signature on the assignment form must be authenticated in order for a plaintiff to make out its prima facie case, even though the Appellate Term has held otherwise for years. See A.B. Medical Services PLLC v. Prudential Property & Cas. Ins. Co., 7 Misc.3d 14 (App. Term, 2d Dep't, 2005). That being said, any judge reading this would necessarily be too well-informed to make such an error.
And, of course, many defense attorneys who know better still continue to make such frivolous arguments while feigning ignorance of the last decade of no-fault jurisprudence. I've had defense attorneys tell me, with a straight face, that Hospital for Joint Diseases doesn't preclude them from questioning the validity of the language of the assignment form for the first time at trial.
If anyone believes that, in the absence of relevant verification requests, any assignment-related defenses still survive, please feel free to share.