Sunday, September 27, 2009
Thursday, September 17, 2009
While the Appellate Division’s decision tells a different story, a review of the record of appeal in Mercury Cas. Co. v. Surgical Center at Milburn, LLC, 2009 N.Y. Slip Op. 06516 (2d Dept. 2009), shows us that this is not your every day run of the mill “default” case.
This case started as a $12,000 no-fault AAA arbitration, where the Defendant sought to recover for surgery services performed on its Assignor. Plaintiff denied the claim on the basis that the surgery was not causally related to the motor vehicle accident. In support of this defense, Plaintiff presented the report of a radiologist who, upon a review of the applicable MRI films, found that the injuries were pre-existing, degenerative and not related to the underlying motor vehicle accident.
The lower arbitrator, upon a review of the record, did not find the Plaintiff's proof convincing and awarded Defendant the principle sum of $12,000, along with interest, costs and attorney fees. It is not uncommon these days for an insurance carrier to lose in arbitration.
Plaintiff, as would be expected, filed a master arbitral demand and perfected its master arbitral brief. Similarly, Defendant proceeded to perfect his master arbitral brief. Following due deliberation, the master arbitrator upheld the award of the lower arbitrator, finding that the award was not defective as a matter of law. This decision was probably correct.
Since the amount in controversy, however, exceeded $5,000, Plaintiff sought a trial de-novo. In this regard, a summons and complaint, fashioned as an action seeking a declaration that the surgery was not related to the motor vehicle accident, was filed with the Supreme Court and served upon Defendant. The action seeking a declaratory judgment spelled out the procedural history and the nature of the defense to the underlying no-fault claim.
Defendant failed to timely answer or move, and Plaintiff moved for leave to enter a default judgment against Defendant. Defendant opposed the motion, but failed to set forth a reasonable excuse or any evidence to support a potentially meritorious defense. All Defendant attached to his answering papers were the proofs he presented at the lower arbitration. In order to raise a potentially meritorious defense, Defendant would have had to obtain a radiology review that contradicted, point by point, Plaintiff’s own film review. As to the proof necessary to defeat a causation defense predicated upon a radiology review, please see my prior posts.
The Supreme Court denied Plaintiff's motion. A notice of appeal was promptly filed. At the Appellate Division, Plaintiff moved to stay the Supreme Court case, pending the outcome and determination of the appeal. This motion was granted. The appeal was then perfected. Following due deliberation, the order of the Supreme Court was reversed and Plaintiff’s motion was granted. Consequently, the matter was remitted to the Supreme Court for the purpose of entering a judgment, declaring that the surgery was not causally related to the motor vehicle accident.
Here are a few thoughts. First, it would appear that the collateral estoppel consequences of this type of a decision are huge, as I have opined in previous posts. The second thing, and one of a practical matter, is that a demand for a trial de-novo, in this type of proceeding, should be commenced as a declaratory judgment type of action. There are other ways to commence a trial de-novo, but these methods are not as effective or efficient as commencing it through a declaratory judgment action.
Friday, August 28, 2009
The failure to serve a demand for master arbitral review in the manner set forth in the regulations will foreclose review of the underlying award
In this case, a master arbitrator failed to consider the merits of the insurance carrier’s appeal since there was insufficient proof as to whether the demand for master arbitral review was sent via certified mail, return receipt requested, in accordance with 65-4.10. Petitioner commenced an Article 75 proceeding in Supreme Court, New York County, to vacate the award of the master arbitrator.
The Supreme Court confirmed the award of the master arbitrator. The Court found the following:
“Courts are reluctant to disturb the decisions of arbitrators lest the value of this
method of resolving controversies be undermined.” Goldfinger v. Linger, 68 N.Y.2d 225,230 (1986)(citations omitted). The Notice failed to set forth compliance with 11 N.Y.C.R.R. 65-4.10(d)(3) in that it failed to set forth the manner of service. There is no basis to vacate the award under CPLR § 7511. From the face of the Notice, the Master Arbitrator was within his power to hold that service was improper, and refuse to reach the merits of the decision of the lower arbitrator.”
The above rationale appears to be based upon the more deferential standard that applies to non-compulsory arbitrations, as opposed to the Article 78 standard that applies to the review of PIP arbitrations. It also appears that the Appellate Division, First Department, in Travelers Indem. Co. v. Rapid Scan Radiology, P.C., 61 A.D.3d 466 (1st Dept. 2009), already held that the failure to comply with certain service provisions in 65-4.10, is deemed de minimus, as recognized below:
“The master arbitrator did not exceed his authority and his determination was not arbitrary or capricious. As to petitioner's claim that respondent did not comply with the filing requirements of 11 NYCRR 65-4.10 (d) (2) because it failed to state the nature of the claim and grounds for review and failed to include a copy of the lower arbitrator's award, this was not the basis of their challenge before the master arbitrator. Further, no prejudice has been shown since the parties submitted memoranda fully apprising the master arbitrator of the issues at hand and of the lower arbitrator's decision
While it is conceded that Rapid Scan served its request by regular mail, not certified mail as required by 11 NYCRR 65- *467 4.10 (d) (3), as the Supreme Court found, petitioner participated in the master arbitrator's review and recognized in its own submission that the defect could be viewed as “de minimus and/or harmless.”
Hopefully, Progressive preserved the argument set forth in Rapid Scan and will appeal this decision since it is contrary to established First Department precedent.
But, this case is really interesting in seeing how expansive the phrase "use and operation" of a motor vehicle is in Florida.
Blish v. Atlanta Causalty Company, 736 So.2d 1151 (Fla. 1999)
Karl Blish left work on January 6, 1995, drove a coworker home, spent a few minutes at the coworker’s house, and then headed home himself. Blish’s pickup truck had a blowout on U.S. 1 in Brevard County and he pulled over to change the tire. He jacked up the truck and was loosening the lug nuts when he was attacked from behind by several assailants. The men choked and beat him (he testified that he “might have went unconscious”) and stole between eighty and a hundred dollars from his pocket. After the attack, Blish recovered his glasses, did his best to finish changing the tire, and drove home (“I just barely got the tire on and I drove home.“). He did not go to the hospital or call police because he did not think that he had been hurt badly enough (“I was just going to write it off as a loss, I guess.“).
A week later, he experienced severe abdominal pain, was rushed to the hospital in an ambulance, and was diagnosed as suffering from a ruptured spleen, which doctors removed.
Under these circumstances, the actual source of the injury-causing blow is not dispositive--whether it came from a negligent driver in a passing vehicle or a violent group of passing thugs is not decisive. It was the use and maintenance of the truck that left Blish stranded and exposed to random acts of negligence and violence, and he was in the very act of performing emergency maintenance on the vehicle when he was injured.
Acts of violence are an ageless and foreseeable hazard associated with the use of a vehicle--for once a person sets out in a vehicle, he or she is vulnerable. The highwaymen and desperados of bygone times preyed on the wayfarer, and these villains are with us still. Each Floridian today, when he or she gets behind the wheel, faces a variety of dangers: a car-jacking at a stoplight, or a strong-arm robbery at a deliberately staged rear-end collision, or a road rage assault in rush hour traffic, or even a random shooting by an anonymous sniper from an overpass.
The danger is particularly acute when the motorist is stranded as the result of a disabled vehicle. The scenario in the present case is every motorist’s nightmare. Losses resulting from a violent encounter with this ageless road hazard--i.e., the highwayman or opportunistic thug--might reasonably be said to be very much in the contemplation of Florida consumers when they are contracting to purchase auto insurance. The motivation of the assailant--whether it be to “possess or use” the vehicle, or to steal the victim’s wallet or purse, or simply to harm the victim--is a nonissue to the consumer.
Compare, e.g., Hammond v. GMAC Ins. Group 56 AD3d 882 (3d Dept. 2008); Matter of Manhattan & Bronx Surface Transit Operating Authority, 71 AD2d 1004 (2d Dept. 1979). But see, Mazzarella v. Paolangeli, 63 AD3d (3d Dept. 2009); 1420Trentini v. Metropolitan Property and Cas. Ins. Co., 2 AD3d 957 (3d Dept. 2003).
As to Dave Gottlieb's beard from nofaultparadise, my vote is for him to keep the shaved head, non-facial hair look. That beard is a public health hazard. Please leave your comments on his blog as to what you think...
Tuesday, August 25, 2009
In the matter of Millennium Diagnostic Imaging Ctr., Inc. v. United Auto Ins. Co., 975 So. 2d 1149 (Fla. 3d DCA 2009), the Court held the following:
The language in section 627.736(4)(b) pertains to PIP benefits that are “due” under the policy. If a medical bill is submitted for treatment that is not reasonable, related, or necessary, there can possibly be no benefits “due” under the policy, and therefore, that claim cannot be deemed “overdue.” Section 627.736(4)(b) provides that the insurer can assert, “at any time, including . . . after the 30-day time period for payment,” that “the claim was unrelated, was not medically necessary, or was unreasonable.”
Based on the unambiguous language of section 627.736(4)(b) and applicable case law, we answer the certified question, as phrased by the trial court, in the affirmative, and conclude that the thirty-day time period set forth in section 627.736(4)(b) does not apply to claims for unrelated, unreasonable, or unnecessary treatment. Therefore, an insurer may challenge such treatment at any time, and is permitted to rely on a report, obtained pursuant to section 627.736(7)(a), even if the report is obtained more than thirty days after the claim was submitted. The insurer, however, must keep in mind that if its challenge fails, it will be liable for interest and attorney’s fees.
Oh I forgot to add that I was referencing Florida law. Compare, Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co. 24 Misc.3d 134(A)(App. Term 1st Dept. 2009); Dilon Medical Supply Corp. v. New York Cent. Mut. Ins. Co., 18 Misc.3d 128(A)(App. Term 2d Dept. 2007).
Tuesday, August 18, 2009
The timeliness of follow-up additional verification requests will be argued before the Appellate Division, Second Department
The issue involving whether a premature follow-up additional verification request may be deemed valid is now before the Appellate Division, Second Department. The case of “Infinity Health Products v. Eveready Insurance Company”, is slated for oral arguments on September 11, 2009.