No Fault Law - a defense attorney's perspective

New location for this Blog

2009-09-27T18:44:00.000-07:00

I have relocated this blog to the following URL: http://nofault.lisquared.com/

Please let me what you think of the new site..

A default that is more than meets the eyes

2009-09-17T18:01:00.000-07:00

The one thing that we can all say about Second Department practice, whether it be at the Appellate Term or the Appellate Division, is that the decision/orders of these courts never elucidate upon the facts of a given matter. This is not necessarily a bad thing, especially when you are on the losing side of a case. But when a case has lived an interesting life, it would be nice to know what happened.

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.

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

2009-08-28T18:27:00.001-07:00

Matter of Progressive Northeastern Ins. Co. v Seaport Orthopedic Assn. 2009 NY Slip Op 31915(U)(Sup Ct NY Co. 2009)

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.

Robbing someone while they are chaging a tire is considered use and operation in Florida

2009-08-28T09:50:00.000-07:00

In light of the dearth of no-fault cases, I have devoted this week's postings to interesting issues that have arisen in Florida no-fault law. Today's case is from the Florida Supreme Court, and was decided in 1999. It should be noted that the issue of "use and operation" in New York is one that has created numerous conflicts between the Second Department and Third Department.

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).

Many thanks

2009-08-28T09:43:00.000-07:00

I would like to thank Roy Mura at coverage counsel for including this blog in his google search. The irony is that you never really know who is reading your blog until you come across something like that, while reading their blog.

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...

May a peer report be performed after the 30-day claims determination period?

2009-08-25T19:34:00.000-07:00

The District Court of Appeal, Third Division answered this question in the affirmative.

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).

The timeliness of follow-up additional verification requests will be argued before the Appellate Division, Second Department

2009-08-18T19:41:00.001-07:00

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.

http://www.courts.state.ny.us/courts/ad2/calendar/09calendars/September/Publication_Calendar_20090911_P1.pdf

The best evidence rule under fire

2009-08-13T21:04:00.000-07:00

Madison-68 Corp. v Malpass 2009 NY Slip Op 06154 (1st
Dept. 2009)

“Plaintiff's objection, made under the best evidence rule, to the admission of the lease rider was properly overruled because it had offered into evidence a copy of the same document.”

First, we saw the end of the New York rule. Now, we have a curtailment of the Best Evidence rule. I am not sure we can cite to Prince Richardson, the Farrell edition, in order to fully understand New York evidence law. Henry David Thoreau said it best: “Any fool can make a rule, and any fool will mind it.”

2309 - again

2009-08-13T21:00:00.000-07:00

Andromeda Med. Care, P.C. v Utica Mut. Ins. Co., 2009 NY Slip Op 51629(U)(App. Term 2d Dept. 2009)
“The affidavits proffered by defendant in support of its motion for summary judgment were executed out of state. Although the affidavits were accompanied by documents that purported to be certificates of conformity, the certificates did not comply with Real Property Law § 299-a and, thus, the affidavits did not comply with CPLR 2309 (c)”

Another case involving CPLR § 2309(c). Read my previous comments on this topic.

Personal knowledge as to EUO non-appearences has become a lot less personal

2009-08-13T20:56:00.000-07:00

W & Z Acupuncture, P.C. v Amex Assur. Co. 2009 NY Slip Op 51732(U)(App. Term 2d Dept. 2009)
“In opposition to plaintiff's motion and in support of its cross motion for summary judgment, defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff's EUO. Counsel alleged facts sufficient to establish that plaintiff's owner had failed to appear at counsel's law office for duly scheduled EUOs”

This case is interesting because a supervisor at a law firm may lay the appropriate foundation to satisfy the Fogel personal knowledge requirement , even though the supervisor had nothing to do with the scheduling and non appearances at the attempted EUOs. Again, a well drafted and copiously detailed affidavit, similar to that of a mailing affidavit, is a prerequisite to utilizing this method to demonstrate the Fogel personal knowledge requirement.

Claims office failure is excusable in certain instances

2009-08-12T19:44:00.000-07:00

Urban Radiology, P.C. v American Tr. Ins. Co. 2009 NY Slip Op 51734(U)(App. Term 2d Dept. 2009)

"In the case at bar, defendant's no-fault supervisor, who was also the claims representative who handled the instant claims, submitted an affidavit in which he stated that defendant had lost the file containing the summons and complaint and had not found out about the default until June 25, 2007. The record also indicates that defendant's attorney initiated the instant motion to vacate the default judgment promptly in July 2007."

It is nice to see the courts allowing the claims offices some leeway in vacating defaults. The law in the Second Department used to be that claims office failure was always fatal to the vacatur of a default. The law has steadily evolved, and now under appropriate circumstances, claims office failure may form the basis to vacate a default.

What troubled me, however, was that the default was only partially vacated. Thus, if someone brought a multisuit with many assignors, the default would be vacated only as to the causes of action where there was a meritorious defense. This makes sense in the abstract. But since the causes of action would most likely be severable had a timely answer been interposed, a defendant’s default in answering appears to give the plaintiff an inordinate advantage through promoting the joining of unrelated actions, in the first instance.

Identity fraud in the procument of the insurance policy

2009-08-12T19:35:00.000-07:00

Alexander Alperovich, M.D., P.C. v Auto One Ins. Co., 2009 NY Slip Op 51721(U)(App. Term 2d Dept. 2009)

They say many times that the devil is in the details. In this case, the defense to the payment of no-fault claims was that there was some type of misrepresentation or “fraud” in the procurement of the insurance policy. We learned last week that the Appellate Term, First Department in the misrepresentation context stated that the misrepresentations must be intentional. We also saw that settled Appellate Division case law holds that a material misrepresentation may be unintentional.

Except for the Kaplan case that was discussed awhile back, the appellate courts have not discussed the extent of third-party liability in relation to “misrepresentations” or other “fraud” in the procurement of an insurance policy.

While Plaintiff prevailed in this case, I would call this a victory for the insurance carriers. The Appellate Term has now framed the issue as to whether “plaintiff's assignor participated in or was aware of such a fraudulent scheme.”

The defense is now proved if the carrier can show participation or awareness in the so-called scheme. Prior to this case, the standard for third-party liability appeared to be “intentional” involvement in the scheme or involvement in a “conspiracy” in relation to the scheme.

Back to Workers Compensation

2009-07-30T20:40:00.001-07:00

One of the most intriguing things about this area of law is that in a matter of 6 months, the same court can make pronouncements that are apparently inconsistent with each other. Some of these inconsistencies are subtle. Some of them are more pronounced.
An example of a sublte change is the pronouncement that an uncertified police report may under certain circumstances be considered admissible evidence in accord with CPLR 4518(a). People v. Hunter, 62 A.D.3d 1207 (3d Dept. 2009); Westchester Medical Center v. State Farm Mut. Auto. Ins. Co., 44 A.D.3d 750 (2d Dept. 2007) Compare, CPLR § 4518(c).
Another subtle change involves the proof necessary to demonstrate intoxication in a civil case. A proper certified hospital record or police record will now suffice. Six months prior, it did not suffice. Compare, Westchester Medical Center v. Progressive Cas. Ins. Co., 51 A.D.3d 1014 (2d Dept. 2008)(“A blood alcohol test result, as set forth in a certified hospital record, constitutes prima facie evidence of the test result pursuant to CPLR 4518(c) Thus, the blood alcohol test results contained in a certified hospital record from Sound Shore would be sufficient to make a prima facie showing that Forthmuller was intoxicated at the time of the accident”), with Westchester Medical Center v. State Farm Mut. Auto. Ins. Co., 44 A.D.3d 750 (2d Dept. 2007)(“the defendant was unable to establish, prima facie, that Gjelaj was intoxicated at the time of the accident. The result of a blood alcohol test may be admitted on the issue of intoxication in litigation involving an exclusion in a no-fault policy provided that a proper foundation is laid. At bar, the defendant failed to lay a proper foundation for admission of the BAC report by proffering any evidence regarding the care in the collection of Gjelaj's blood sample and its analysis.”)
Then there is the question: what is a prima facie case? I will not even go there, but a NYLJ article that will be published next week will gloss on that issue.
Now we have the workers compensation defense issue. Specifically, is the workers compensation defense one of standing or is it an exclusion. Notice that I left out the word “coverage”. Coverage, as we learned in Fair Price, is only implicated in rare instances. Workers Compensation issues do not implicate coverage.
Last month, the Appellate Division, Second Department, told us that the workers compensation defense is an exclusion that needs to be preserved in a timely denial. The Appellate Term, Second Department, followed suit under principles of stare decisis. I discussed this in prior posts.
The case that triggered this post is LMK Psychological Serv., P.C. v American Tr. Ins. Co. 2009 NY Slip Op 06004 (2d Dept. 2009). The pertinent portion of the opinion is as follows:
“There has been no determination by the Workers' Compensation Board as to whether the assignors are entitled to Workers' Compensation benefits for their injuries. The Workers' Compensation Board has primary jurisdiction to determine factual issues concerning coverage under the Workers' Compensation Law. Where "a plaintiff fails to litigate that issue before the Board, the court should not express an opinion as to the availability of compensation but remit the matter to the Board'"
It is not clear whether the Appellate Division has now decided that the compensation defense is now a standing issue (id), or is precludable as was set forth in Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 (2d Dept. 2009). Without resort to the record on appeal, it is hard to tell what exactly happened here.

Intentional loss - preponderence and not fraud

2009-07-23T19:47:00.000-07:00

AA Acupuncture Serv., P.C. v Safeco Ins. Co. of Am.,

2009 NY Slip Op 29311 (App. Term 1^st Dept. 2009)

This was a really interesting decision. It is so rare that the Appellate Term, First Department writes a lengthy decision about any topic, let alone one involving a no-fault case. The law announced in this case represents established law. An insurance carrier may disclaim all no-fault benefits or other first-party benefits as to a party who makes material misrepresentations in the procurement of an insurance policy.

There was an interesting line in there, which I am not sure represents settled law:

This evidence was [*2]sufficient to establish prima facie that the insured intentionally misrepresented her address in order to obtain insurance at reduced premiums, and that the misrepresentation was material, since defendant would not have issued the policy under the same terms had it known that the insured resided in Brooklyn

Yet, the Appellate Division last year stated the following in Precision Auto Accessories, Inc. v. Utica First Ins. Co., 52 AD3d 1198 (4th Dept. 2008):

Defendant's president further stated in his affidavit that, “if [defendant] had been aware of plaintiff's true *1201 loss history ... [defendant] would not have issued a policy of insurance to plaintiff.” Contrary to plaintiff's contention, defendant is correct that it need not establish that the misrepresentations were willful in order to rescind the contract. Insurance Law § 3105(b) does not specify that a misrepresentation must be willful, and “[w]hether or not plaintiff intended to provide inaccurate statements or misrepresentations at the time [it] filled out the application is irrelevant”

Besides the above, Justice McKeon’s concurring opinion was interesting. He made an interesting observation, one I always joke about. Specifically, have you ever wondered whether the registrants of out of state vehicles, registered in non no-fault states, really reside in those states?

The standard to rebut a peer review was raised a few notches

2009-07-16T09:33:00.001-07:00

Pan Chiropractic, P.C. v Mercury Ins. Co.
2009 NY Slip Op 51495(U)(App. Term 2d Dept. 2009)

Sensing the belief that no-fault actions were starting to follow the trend in Ins Law 5102(d) actions (the no-fault threshold statute), the Defendant appealed the order finding that Plaintiff’s affidavit of merit was sufficient to raise a triable issue of fact, in opposition to Defendant’s summary judgment motion.

Factually, this case involved $660 worth of diagnostic testing. Defendant’s peer review set forth numerous reasons and cited to various authorities for the proposition that the diagnostic testing was either never necessary or not necessary in relation to the patient’s presented symptomology.

Plaintiff relied on the reports annexed to Defendant’s papers and concluded that the services were indeed medically necessary. There was no meaningful disagreement with Defendant’s doctor’s medical rationale for finding that the services lacked medical necessity.

The Court in applying the meaningful disagreement standard found in 5102(d) causation cases rightly found that Plaintiff failed to rebut the inference that the services lacked medical necessity.

I would opine that a provider, in successfully opposing this type of motion, is going to have to send these cases to their own peer doctor to perform a utilization review in their own right in order to raise a triable issue of fact in opposition to a defendant’s motion for summary judgment. This should be interesting.

Standing. All rise.

2009-07-16T09:20:00.000-07:00

Davydov v Progressive Ins. Co.
2009 NY Slip Op 29299 (App. Term 2d Dept. 2009)

The concept of standing has numerous meanings. In Civil Procedure, it refers to the existence of a case or controversy, which is a precondition to allowing a Court to hear a case. In Criminal Procedure, it addresses the ability to contest a Fourth Amendment search and seizure violation. As a matter of common law and statutory law, it involves the ability of a party to prosecute an action, even though there is a case or controversy. I would be remiss if I did not include the statement that in English parlance, standing means to be on one’s feet in an upright, vertical position. If you were playing Password and someone said, in that funny opposite like voice “sitting”, the answer would be “standing”.

In regards to the common law notion of standing, there appears to have developed two different types of standing issues. The first is a statute or a regulation vesting or stripping a party of so-called standing. For instance, 65-3.16, the regulation that Malella is predicated upon, states that improperly formed corporations, and most likely their assignors in a direct first-party suit, do not have standing to prosecute overdue no-fault healthcare-expense bills. This “standing” rule also involves corporations prosecuting actions on behalf of independent contractors; and I would argue that 65-3.19 strips a health care provider’s ability to prosecute bills where a worker’s compensation carrier is deemed “primary”. But see, Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 (2d Dept. 2009).

As to an example of a statute that vests standing, where it would not otherwise exist, one should look to GBL 349. Prior to the amendments promulgated years ago, the attorney General was the only official who could prosecute a GBL 349 (consumer fraud) claim.

The second notion of standing represents so-called technical standing. The Courts have over the last decade deemed technical standing issues, mainly as to valid assignments, to fall within this category. As to technical standing issues, the deficiencies in the assignment forms in the no-fault scenario are deemed waived if not properly addressed during the claim stage, and in non no-fault actions, the defect is waived if not properly pleaded in an answer or a pre-answer motion. See, e.g., Wells Fargo ]Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 241-243 (2d Dept. 2008)

Judge Golia’s dissent is only too logical. On a blank slate, it is correct. The type of technical defect in this matter, i.e., an assignment that assigns a claim to another entity should be a bar to a prima facie case in any type of action. This is a true standing issue, although deemed technical in nature. This statement would not hold true for issues such as missing signatures and other hyper-technical issues, where the intent to assign a claim to the proper entity may be inferred from the document. The issue of true standing should never be waivable since it addresses the fundamental right to access the courts. But the Appellate Courts have seemed to reject untimely challenges to technical defects, involving the nature of true standing.

I lastly wonder why Davydov, M.D., was not impleaded in a third-party contribution action in this case. This would most likely address the issue of proper standing and would protect the carrier from a subsequent action that Davidof M.D., could possibly bring against the carrier.

Collateral Estoppel may not apply in no-fault arbitrations – so says the Fourth Department

2009-07-08T21:40:00.000-07:00

In a very interesting case, the Appellate Division, Fourth Department held that principles of collateral estoppel do not apply in arbitration.

Matter of Falzone v New York Cent. Mut. Fire Ins. Co. 2009 NY Slip Op 05423 (4th Dept. 2009)

In this case, a Claimant initially arbitrated a no-fault claim between himself and his insurance carrier. The issue that was arbitrated involved whether Claimant’s injuries were causally related to the motor vehicle accident. A no-fault arbitrator found the injuries to be causally related to the motor vehicle accident and awarded benefits.

The Claimant after obtaining an award for no fault benefits then sought to obtain SUM benefits arising from the same loss. Accordingly, Claimant commenced a second arbitration between himself and the same carrier upon which he was awarded no-fault benefits. The insurance carrier’s defense to payment in this SUM arbitration, similar to that in the no-fault arbitration, was that there was a lack of a causal nexus between the motor vehicle accident and the alleged injuries.

Since the parties and issues to be resolved in this SUM matter were the same as that in the no-fault matter, i.e., whether the injuries were causally related to the motor vehicle accident, you would think that principles of collateral estoppel would come into play and bind the SUM arbitrator to the same decision as that of the no-fault arbitrator. As we saw in a previous post involving the matter of Lobel v. Allstate, a no-fault arbitrator’s decision on causation will collaterally estopp a party from re-litigating a previously arbitrated issue in Court. Yet, the SUM arbitrator, aware that the prior arbitrator found a causal nexus existed between the motor vehicle accident and the injuries, nonetheless ruled that there was no causal connection between the injuries and the motor vehicle accident.

An Article 75 challenge was lodged in the Supreme Court. The Supreme Court granted the petition, reversed the SUM arbitrator’s decision and properly found that the results of the no-fault arbitration collaterally estopped the parties from contesting the causal relationship between the motor vehicle accident and the injuries at the SUM arbitration. Thus, the SUM arbitratror, as a matter of law, had to find that there was a causal relationship between the motor vehicle accident and the loss. The carrier appealed and the Fourth Department surprisingly reversed the order and judgment of the Supreme Court as set forth herein:

“We agree with respondent that Supreme Court erred in granting claimant's motion. The fact that a prior arbitration award is inconsistent with a subsequent award is not an enumerated ground in either subdivision (b) or (c) of CPLR 7511 for vacating or modifying the subsequent award (see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848). As the court properly recognized, "[i]t was within the [SUM] arbitrator's authority to determine the preclusive effect of the prior arbitration on the instant arbitration" (Matter of Progressive N. Ins. Co. v Sentry Ins. A Mut. Co., 51 AD3d 800, 801). The court erred in noting, however, that it was unable to determine whether the SUM arbitrator even considered claimant's contention with respect to collateral estoppel. Arbitrators are not required to provide reasons for their decisions (see Matter of Solow Bldg. Co. v Morgan Guar. Trust Co. of N.Y., 6 AD3d 356, 356-357, lv denied 3 NY3d 605, cert denied 543 US 1148; Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40, 41), and thus the SUM arbitrator was not required to state that he had considered that contention. “

Two points need to be considered. First, the Fourth Department cites a 2007 Second Department case entitled Matter of Progressive N. Ins. Co. v Sentry Ins. A Mut. Co. for its rule of law. Yet, the Progressive case actually held that collateral estoppel should be given effect to prior arbitration awards involving the same parties and the same issue. Second, there was a two Justice dissent, which as a matter of right brings this case to the Court of Appeals.

For the sake of commonsense, this case should be reversed. Otherwise, there will be too many instances where inconsistent decisions will arise in post-ime cases, other policy violation cases and coverage cases, among others. It would be a fair assessment to say that no-fault and other first-party practitioners will not benefit from the uncertainty and some could say absurdity that this case could rein upon the arbitral process.

What do CPLR § 2309 and CPLR § 2106 have in common?

2009-07-07T17:08:00.000-07:00

The answer, unfortunately, is that too many practitioners fail to understand how to utilize and work with these statutes. It seems that in the field of no-fault and commercial debt collection, attorneys are forever mangling the application of these statutes.

Crossbridge Diagnostic Radiology v Encompass Ins., 2009 NY Slip Op 51415(U)(App. Term 2d Dept. 2009)

The above case, which was decided this week, demonstrates the special hazards that CPLR § 2309 presents. In fact, this case appears to be especially problematic for the insurance carrier since monies in excess of the no-fault policy limits are now due and owing because of an attorney’s misunderstanding of this statute. We learn this fact through Justice Golia’s thoughtful dissent.

The following quote from the Appellate Term says it all:

“However, the affidavit proffered by defendant, in which defendant's claims representative asserted that the available coverage had been exhausted, was not in admissible form. Defendant's affidavit was not in conformity with CPLR 2309 (c), which fact was duly objected to by plaintiff in the Civil Court”

Just remember that if you are executing an affirmation, executing an out of state affidavit or are in receipt of papers containing these documents, you should really be familiar with the procedural nuances of 2106 and 2309(c). The failure to appreciate the nuances of these statutes may lead to a deleterious and unfortunate result.

May an insurance carrier's expert offer an opinion beyond the confines of his peer or IME report?

2009-06-30T18:02:00.000-07:00

In affirming the denial of plaintiff's summary judgment motion, the Appellate Term, First Department in Krishna v Liberty Mut. Ins. Co. 2009 NY Slip Op 51312(U)(App. Term 1st Dept. 2009) reiterated its position (Response Medical Equipment v. General Assur. Co.13 Misc.3d 129[A][App. Term 1st Dept. 2006]; Mollins v. Allstate Ins. Co.20 Misc.3d 141[A][App. Term 1st Dept. 2008]) that an insurance carrier's expert may comment on medical evidence not contained in a peer report or IME report in support of its lack of medical necessity defense.

The pertinent portion of the Krishna opinion states the following: "The initial peer review report relied upon by defendant, as amplified upon defendant's receipt of additional documentation from plaintiff regarding his claim, set forth sufficient facts to raise a triable issue as to the medical necessity of the health services and diagnostic tests performed by plaintiff. "

Priority of payment disputes must be adjudicated through Ins. Law 5105 intercompany arbitration

2009-06-30T17:54:00.000-07:00

The law is simple: Disputes involving whether an insurance carrier in a no-fault coverage dispute is primary, secondary, or tertiary must be resolved through intercompany arbitration. This fact pattern was presented four years ago in SZ Medical, P.C. v. Lancer Ins. Co.7 Misc.3d 86 (App. Term 2d Dept. 2005) and was again presented in M.N. Dental Diagnostics, P.C. v Government Employees Ins. Co. 2009 NY Slip Op 29266(App. Term 1st Dept. 2009).

Workers Compensation defense

2009-06-30T07:02:00.001-07:00

I would be remiss if I did not thank Dave Barshay for the citation to this blog in his article. I also must thank David Gottlieb for posting Mr. Barshay's citation to this article on his blog. While I am not sure it is really critical that you read this blog, despite what Mr. Gottlieb says to the contrary, I thank him for the compliment nonetheless. Now that the peremptory "thank yous" are out of the way, now onto the cases.

A.B. Med. Servs., PLLC v American Tr. Ins. Co., 2009 NY Slip Op 29271 (App. Term 2d Dept. 2009)

A.B. Med. Servs., PLLC v American Tr. Ins. Co., 2009 NY Slip Op 51262(U)(App. Term 2d Dept. 2009)

A.B. Med. Servs., PLLC v American Tr. Ins. Co., 2009 NY Slip Op 51263(U)(App. Term 2d Dept. 2009)

Inwood Hill Med., P.C. v Metropolitan Prop. & Cas. Ins. Co. 2009 NY Slip Op 51264(U)(App. Term 2d Dept. 2009)

The day after the no-fault wrap up, the Appellate Term, Second Department issued a slue of opinions regarding the Workers Compensation defense, which was consistent with what Mr. Barshay's article stated. Again, I discussed this issue on a previous blog post.

However, when the issue is phrased in light of the "exceptional" circumstance of non-coverage, as recently opined upon by the Court of Appeals in Fair Price, the Workers Compensation defense is waivbale.

However, when this issue is evaluated through the prism of "standing", the Appellate Division's conclusion may not be correct. As the law stands right now, a service rendered by an independent contractor or an improperly formed medical corporation is not subject to the "preclusion" sanction, through the failure to timely or properly deny a claim. This is because an independent contractor and an improperly formed corporation lacks standing to prosecute a no-fault claim. It thus follows that based upon 65-3.19, the Workers Compensation defense, in relation to a claim for medical benefits, should not be subject to the 30-day pay or deny rule. This follows from the simple conclusion that an injured person and his or her assignee lack standing to prosecute such a first-party no-fault claim for medical benefits.

The above standing analysis in no way applies to wage benefits, since the regulations explicitly state that no-fault wage coverage is secondary to Workers Compensation wage coverage.

Conclusory affidavits will not defeat an insurance carrier's summary judgment motion

2009-06-18T16:23:00.000-07:00

Bronze Acupuncture, P.C. v Mercury Ins. Co.
2009 NY Slip Op 51219(U)(App. Term 2d Dept. 2009)

This case hints at what a medical provider must proffer in its answering papers to stave off an insurance carrier's summary judgment motion, based upon the lack of medical necessity of a rendered service.

In this case, a conclusory or boilerplate affidavit attesting to a service's lack of medical necessity is insufficient to raise an issue of fact.

Here is the holding:

"The papers submitted by defendant in support of its motion, including the affirmed IME [*2]report and an affidavit executed by the acupuncturist who performed the IME, established, prima facie, a lack of medical necessity for the services at issue. The opposing affidavit submitted by plaintiff's treating acupuncturist merely stated that she disagreed with the results of the IME report without setting forth any facts to support her conclusion. Consequently, the opposition papers failed to raise a triable issue of fact as to medical necessity."

This should be compared to the operative language inPark Slope Medical and Surgical Supply Inc. v. New York Central Mut. Fire Ins. 22 Misc.3d 141(A)(App. Term 2d Dept. 2009) , where the court held the following: "[p]laintiff submitted an affidavit from Dr. Shapiro in which he stated that he disagreed with the peer review report and affidavit furnished by defendant because he concluded that the supplies provided were medically necessary. Since the affidavit of Dr. Shapiro demonstrated the existence of an issue of fact as to medical necessity."

The next question will be what facts are sufficient to support the conclusion that a service is medically necessary. I guarantee it is not going to be the regurgitation of the documents a peer review doctor examined. I also guarantee it is not going to be the boilerplate one size fits all affidavit we saw in Park Slope, which we can probably now say is bad law.

I know there will be many more of these types of appeals, and this issue will be answered at some time in the future.

Nunc pro tunc under the former serve and file regime

2009-06-18T16:10:00.000-07:00

J.R. Dugo, D.C., P.C. v New York Cent. Mut. Ins. Co.,
2009 NY Slip Op 29261 (App. Term 2d Dept. 2009)

I suspect that if this case was decided in 2005, it might have been more relevant to the practice of law. As it is, it explains one of the reasons why the serve and file system was abolished in the lower court system. I would only say that the Civil Court, City Court and District Court clerks routinely allowed Plaintiffs to purchase index numbers well after the 14 or 21 day period after service was complete.

The practice of law under the now-abolished serve and file system was nightmarish from the aspect that the defendant who wanted to move on a case within 60-days of joinder of issue had to either: (1) purchase an index number; or (2) wait until Plaintiff served Defendant with the index number. This gave the Plaintiff the clear advantage, since the Defendant was many times at the mercy of the Plaintfif to inform the said Defendant of the index number.

It also was a rare event when nunc pro tunc relief would not be afforded to the Plaintiff. In any event, this case explains why the public policy of the state is advanced through the lower courts, save the justice courts, following the Superior Courts' method of commencing a case.

An angry Appellate Division strikes a complaint based upon discovery violations

2009-06-13T18:55:00.000-07:00

Northfield Ins. Co. v Model Towing & Recovery
2009 NY Slip Op 04878 (2d Dept 2009).

While this case represents nothing unique, the path the Appellate Division took was. The facts, as relayed to the reader, are that the following discovery orders were in place and in some way were violated:

1. Preliminary conference (7/28/05)- discovery was ordered to be completed prior to the Compliance Conference (12/19/06) .

2. Compliance conference (12/19/06) - discovery was ordered to be completed by 2/14/07.

3. There were various status conferences in between the dates of 2/14/07 and 12/12/07.

4. At the 12/12/07 status conference, discovery was ordered to be completed on or before 1/16/08.

5. Discovery was not completed on 1/16/08 .

6. A motion was interposed based upon the failure to comply with the 1/16/08 order. The Court in this order set forth a discovery schedule, and stated that it was to be obeyed under penalty of a 3126 remedy, upon a subsequent motion. In English, it looked as if the violation of this order would result in a conditional order of preclusion or a conditional order of dismissal.

Excluding status conferences and the P.C. order, there were 2 orders. Moreover, only one resulting order was the result of a motion made on notice.

The Defendant appealed the 1/16/08 order on the basis that the Court should have stricken the complaint. What happened next is something that is very rarely seen in downstate New York practice: The Appellate Division reversed the order of Supreme Court and struck the complaint.

Now for those of us who have practiced in Supreme Kings (my favorite example) as defendants and have had the opportunity to make discovery based motions in CCP, you will observe that it is almost impossible to obtain an order containing conditional preclusion or dismissal language, let alone an order that will unconditionally strike the complaint. Almost 10 discovery orders can be violated and a conditional order of dismissal, conditional order of preclusion or an absolute order of preclusion or dismissal will never occur. That is life, and we accept it because when these orders get appealed, the Appellate Division will usually not find an abuse of discretion and affirm the order of the Supreme Court, with the Defendant paying one bill of costs and disbursements to the recalcitrant Plaintiff.

Here, there were 3 disobeyed orders (including the P.C. order) and some status conferences that appeared to be disregarded. The Appellate Division, on appeal, reversed Supreme Court and struck the complaint. Since the SOL probably expired, the dismissal order was with prejudice. My question is as follows: are we going to see this type of vigilance in other cases, or is this case just an anomaly?

A no fault claim representative's affidavit may cure inaccuracies in the NF-10 form

2009-06-11T08:58:00.000-07:00

We kind of saw it in a previous post involving a Mercury case where a claim representative's sworn affidavit could explain typographical errors in a resulting NF-10. Some wondered why the Appellate Term never expounded on this point. Now, they have.

Bath Med. Supply, Inc. v Country Wide Ins. Co.
2009 NY Slip Op 51145(U)(App. Term 2 Dept. 2009)

The highlights are as follows:

"Plaintiff contends that defendant's opposing papers did not establish that the claim determination period was tolled because, while the affidavit of defendant's no-fault litigation supervisor sets forth the dates on which the verification requests were mailed, the denial of claim forms set forth incorrect dates as to when final verification was requested. However, the unsworn denial of claim forms do not purport to state the dates on which defendant first requested verification, whereas, in the sworn affidavit, defendant's no-fault litigation supervisor states the dates on which verification was first requested, the dates on which the verification was received and the dates on which the denial of claim forms were mailed. To the extent the unsworn denial of claim forms suggest that defendant may have sent a further request for verification after receiving the verification it initially sought, they do not contradict the sworn statement by defendant's no-fault litigation supervisor or otherwise nullify defendant's position that the claim determination period was tolled."

My observation is that the days of challenging denials for typographical errors have ended. We saw this starting with AB v. Liberty and extending through Al Correa v. State Farm, as well as other cases decided subsequent to Al Correa.

I suppose the best questions to ask are as follows. First, how much of an NF-10 needs to be filled out in order to preserve the defense(s) on it? Second, how many mistakes are allowed to be present on the NF-10, so as to preserve the defenses on the denial? We shall await the answer to these questions.

It is prima facie day

2009-06-11T08:45:00.000-07:00

I suppose to the extent the Appellate Term, Second Department has been on the 4518 band wagon, it is nice to see the rule that certain evidentiary objections need to preserved in order to raise them on appeal. According to my count, there were 11 prima facie challenges in the June 10, 2009, posted cases. The preserved challenges were successful in all but one case. I suppose the question is: what must an affidavit contain to satisfy a medical provider's prima facie case, and does it matter which branch of the Appellate Term, Second Department is adjudicating the issue?

Motion to Reargue - the 30 day period is not absolute

2009-06-07T08:25:00.001-07:00

From a procedural standpoint, a question that has arisen is whether a motion seeking leave to reargue or, in certain cases, leave to renew is timely made. Following the 1999 amendment to the statute, there has been debate as to whether the 30-day period to make the motion will be tolled when a timely notice of appeal is filed. This was answered in the negative a few times, but the recent trend has been to answer this inquiry in the affirmative. A recent case highlights this point.

Terio v. Spodek, 2009 N.Y. Slip Op. 04412 (2d Dept. 2009)

"Contrary to the plaintiff's contention, the Supreme Court providently exercised its discretion in granting that branch of the motion...which was for leave to reargue. Reich's appeal from the Supreme Court's order dated December 17, 2007, was pending and unperfected as of the time that the motion for reargument was made. Under these circumstances, the Supreme Court providently entertained that branch of Reich's motion which was for leave to reargue notwithstanding that it was made beyond the 30-day limit set forth in CPLR 2221(d)(3)"

It follows that as long as a Notice of Appeal has been filed and the appellate brief is unperfected, the 30-day time period to move to reargue or to take advantage of the "change in law" provision in the leave to renew statute remains tolled.

EBT's in no fault practice - "laches does not apply"

2009-06-03T17:22:00.000-07:00

Queens Chiropractic Mgt., P.C. v Country Wide Ins. Co. 2009 NY Slip Op 51073(U)(App. Term 2d Dept. 2009).

In yet another defeat to the Plaintiff's bar in no-fault actions in the Second Department, the Appellate Term has now held that the passage of time will not in and of itself act to waive the right of an insurance carrier seeking to take an EBT of the Plaintiff.

While the facts do not state it, an EBT in no-fault is conditioned on the EBT not being palpably improper, which outside the corporate structure world, would mean that the insurance carrier has presumably presented proof of a timely and valid denial. The case law has already discussed this point.

This decision, as many know, is in contrast to Accurate Medical, P.C. v. Travelers Ins. Co. 13 Misc.3d 133(A)(App. Term 1st Dept. 2006), which held that:

"the record reveals that defendant served plaintiff with a notice of deposition and written discovery demands in August 2004. Defendant did not object to plaintiff's written interrogatories nor did it avail itself of the opportunity to conduct plaintiff's deposition prior to plaintiff filing a notice of trial in April 2006. Under these circumstances, and in view of defendant's failure to show the need to conduct a deposition, the motion to vacate the notice of trial was properly denied."

Accurate Medical did not cite to any authority for its rule of law, whereas the Queens Chiropractor Court cited to Kornblatt v Jaguar Cars, 172 AD2d 590 (2d Dept. 1991). The pertinent section of Kornblatt states the following:

"Finally, the plaintiff's invocation of laches to prevent the production of the records lacks merit. In a deposition on March 9, 1988, JCI had requested the tax returns, but the plaintiff refused. Possessing the knowledge that JCI wanted the returns, then, any prejudice suffered by the plaintiff a year later when the court compelled their production was of his own making, and he cannot now complain."

Yet, a reading of Kornblatt shows that a party resisting an EBT demand can assert laches, provided he or she demonstrates prejudice. But, it is hard to imagine how a showing of "prejudice" would be proved in a majority of litigated no-fault cases.

Cornell

2009-05-29T06:57:00.000-07:00

Cornell Med., P.C. v Mercury Cas. Co.
2009 NY Slip Op 29228 (App. Term 2d Dept. 2009)

This case is extremely complicated. There are two points of law that came from this case. The first point of law that came from this case, and it is significant, is that a prima facie demonstration of failure to bill in accordance with the fee schedule raises an inference that a plaintiff attorney is not entitled to an attorney fee. The plaintiff attorney must then prove the two exceptions that are set forth in 65-4.6(i). Secondly, a counterclaim for monies paid in excess of the fee schedule is untenable.

Acupuncture may be paid at the chiropractor rates as a matter of law

2009-05-29T06:51:00.000-07:00

AVA Acupuncture, P.C. v GEICO Gen. Ins. Co.
2009 NY Slip Op 51017(U)

It is amazing that Plaintiffs are still fighting what the proper reimbursement is for acupuncture services that are paid at the chiropractor rate. Some Plaintiffs are still arguing that the "geographic reasonable value" is the proper basis for no-fault compensation. Others are arguing that the defendant's claims representative needs to affirmatively state that the insurance carrier's standard practice is to pay claims at the chiropractor rate.

This case holds that reimbursement at the chiropractor rate is proper as a matter of law. Period. No strings, no streamers and no conditional statements to the contrary. From a point of practice, this case only discusses reimbursement under CPT Code 97780. Thus, a case coded with CPT Code 97780 and paid at the physician rate ($42.84) or at the chiropractor rate ($29.30), should allow the insurance carrier to prevail on motion or at trial.

Once the Appellate Term breaks down the proper amount of compensation for CPT Codes 97810, 97811, 97813 and 97814, then the paradigm will be completed.

Stricken v. dismissed

2009-05-29T06:40:00.000-07:00

V.S. Med. Servs., P.C. v Travelers Ins. Co.
2009 NY Slip Op 29226 (App. Term 2d Dept. 2009)

I am not sure why this case did not receive a (u) or Misc.3d(A) citation, but I take it the Appellate Term is trying to remind people what the difference is between an action that is sticken from the calendar verses an action that is dismissed due to a party's non-appearance. If a non-superior court case is stricken, you have one year to restore it. Restoration needs to be made by motion (or so-ordered stipulation) and a reasonable excuse needs to be set forth as to why the matter was stricken. Compare, CPLR 3404 (Superior court actions can be revived as a matter of right within one year from the Note of Issue being stricken). After one year, you need to satisfy the four factors that defendant and the Civil Court argued needed to be satisfied. Contrariwise, if a case is dismissed, then the traditional 5015 factors need to be proved in order to revive the case.

Strategically, a no-fault plaintiff many times would prefer to have a case dismissed for non-appearance provided the six year SOL has not expired, than have it marked off the calendar. A dismissed case can be refiled, as long as it is without prejudice which is usually the case in the Civil Courts. A case marked off the calendar is not dismissed. And, in the Second Department, it probably can never be dismissed since 3404 does not apply.

A plain disaster

2009-05-29T06:28:00.000-07:00

A.M. Med. Servs., P.C. v GEICO Ins. Co.
2009 NY Slip Op 51029(U)(App. Term 2d Dept. 2009)

Simply put, you have to read this case. It looks to be a real disaster. Three points of law seem to come from this case.

First, if you have an order that conditionally dismisses or precludes a party should an EBT not be performed on or before a certain date, the party wishing to give effect to that order needs to follow the Appellate Term's Fogel decision. Yes Fogel.

The Appellate Term has previously applied Fogel, in a 5102(d) action, when it denied an EBT dismissal motion on the basis that the Defendant failed to offer evidence from someone with personal knowledge that EBT was attempted to be scheduled and did not occur. It is the same principle here or even in EUO cases. You need to obtain an affidavit from someone with personal knowledge that the EUO did not occur. This could be from a calendar clerk or attorney, provided the right foundation is laid in the affidavit or affirmation. That was probably missing in this case.

Second, late papers will be accepted provided there is no prejudice. The effect of this is self explanatory.

Third, Golia's dissent is priceless and explains why we now have a different crop of attorneys (on both sides) fighting the appellate wars. I will leave it at that.

Six year SOL

2009-05-29T06:13:00.000-07:00

Spring World Acupuncture, P.C. v NYC Tr. Auth.
2009 NY Slip Op 29229 (App. Term 2d Dept. 2009)

Finally, someone convinced the Appellate Term that no-fault actions created by statute have a six year SOL. The lead case on this one, Elrac v. Suero, clearly held that a first-party action, created by statute but contractual in nature from the eyes of the injured person should trigger the 6 year SOL that pertains to contractual actions.

Whether or not one agrees with Suero, it is binding precedent. But until the Appellate Division or the Court of Appeals says otherwise, this is the law.

What seemed bizarre in the three years since Suero was that the Appellate Term, in actions against MVAIC, routinely held that the SOL was three years, based upon the portion of the CPLR which states that actions pursuant to a statute have a 3-year SOL. Yet, if a self-insured entity that is forced to provide first-party benefits by statute is bound by the contractual 6-year SOL, why should MVAIC be any different?

Good job to the Plaintiff's attorneys on this one.

In the Rehab of Interboro

2009-05-28T04:31:00.000-07:00

Matter of Interboro Mut. Indem. Ins. Co.
2009 NY Slip Op 29225 (Sup. Ct. Nasaau Co. 2009)

This case, despite how simple it appears, involved an extremely complicated analysis of Article 73 of the Insurance Law, Article 74 of the Insurance Law (Companies involved in rehabilitation/liquidation), Article 51 of the Insurance Law (No-fault), CPLR Section 2221 (leave to renew), and why established precedent from the 1930s should guide this matter, as opposed to the plethora of modern no-fault law cases.

The case may be best summarized as follows. A company exiting rehabilitation is in a completely different position than a company that never entered rehabilitation. Similar to an entity that succeeds in fulfilling its obligations under a Chapter 11 or Chapter 13 bankruptcy plan, an entity that successfully exits rehabilitation will play by a different set of rules. That is really what this case is about, and within the confines of commercial practice, this makes sense.

Damages.

2009-05-26T18:18:00.001-07:00

While there is a drought in the well of new no-fault cases, here is a case that garnered my attention.

Liberty Mut. Ins. Co. v Perez
2009 NY Slip Op 50993(U) (App. Term 1st Dept. 2009).

The facts are simple. Defendant, who admitted dozing off while driving a vehicle, hit a legally parked vehicle, insured by Liberty, on a street. The Liberty vehicle was totalled. Plaintiff Subrogee insurance carrier (Liberty) paid out $19,000 in property damage benefits to its insured and sued Defendant, presumably under theories of equitable and contractual subrogation.

Procedurally, Plaintiff subrogee moved for summary judgment on both liability and damages. Defendant did not put up a fight as to liability but opined that Plaintiff did not demonstrate its damages as a matter of law. Civil Court granted Plaintiff summary judgment as to liability and damages. Defendant appealed. The Appellate Term modified, and remanded to Civil Court for an assessment of damages.

Plaintiff in its motion apparently did not "conclusively establish the market value of the vehicle prior to the accident." Furthermore, the court held that on remand, "defendant will have the opportunity to present evidence challenging plaintiff's decision to declare the vehicle a total loss."

So, I take it that Plaintiff would have met its burden had it: (a) presented an affidavit that in accordance with the insurance regulations, the vehicle was a total loss because the cost of repairing it would be in excess of the percentage of loss that is required before a vehicle may be deemed a total loss; and (b) offered competent evidence as to the market value of the vehicle prior to the loss.

In all honestly, this is not a difficult burden at all, when you think about it. It probably requires a form affidavit with certain variables that could be adjusted on a case by case basis. What is interesting is that I was always of the belief that "damages" in property damage matters always required an inquest (on default) or a hearing on damages (when the defendant answered the complaint). I guess according to the Appellate Term, damages can even be adjudged as a matter of law on motion papers.

There is a no-fault relationship here, actually. But, it has nothing to do with the usual "medical provider v. carrier" fight that we deal with on a daily basis. Rather, in a rear-end or uncontested liability case, it would appear that within the confines of an APIP subrogation case or Basic PIP subrogation case (in the limited circumstances this type of action is allowed), an insurance carrier's proof of receipt of the bills and the amount it paid out to its Subrogor or the Subrogor's assignee, would conclusively establish an insurance carrier's damages.

Thus, while general practitioners have always grumbled about how no-fault decisions procedurally impact them, we in the world of no-fault, again, can say that a non no-fault case has now impacted some segment of the no-fault bar. No, not the one you drink at.

A court system not so uniform

2009-05-15T22:37:00.000-07:00

There was an interesting decision that came out from The Long Beach City Court. Judge Smolkin, one of the two City Court Judges out here, wrote a very good opinion as to transferring cases from one lower court to another. I will not attempt to elucidate on the relevancy of this topic. In my mind, it is self evident.

The lesson to be learned from this case, in a nut shell, is that if you wish to consolidate or remove a case from one "court system" to another "court system", you will need to commence a Supreme Court of County Court action. As to the mechanics of executing this procedure as well as its practicability and viability, I will leave these topics for another day.

People v. Rome, 2009 NY Slip Op 29200 (City Ct. Long Beach 2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_29200.htm

Lastly, this is a criminal case so various references are made to the CPL and the Penal Law. But, from a pragmatic standpoint, this case describes how vexatious a journey it is to change the venue of where civil cases are lodged.

Forget the insurance carriers. How about the banks?

2009-05-12T18:59:00.000-07:00

There has been a dearth of no-fault news out in the most recent decision website. This is not to say that more earth shattering or technical challenges to either virgin or somewhat settled points of law are not on the horizon. I have first-hand knowledge in telling you that some interesting decisions will be coming down the pike in the next few months. I just hope they go my way.

With that introduction, there was a case that came from the District Court Nassau County that caught my attention. It makes me think that whatever prejudices or problems any of us might have had with insurance carriers at one point, there is much worse out there

Meet Judith Lawrence.

And lastly, next time you bash an insurance company, remember that trillions of dollars went to support, in part, institutions like the Petitioner below.

Deutsche Bank Natl. Trust Co. v Oliver
2009 NY Slip Op 29197 (Dis. Ct. Nassau Co. 2009)

In an era when tent cities and new Hoovervilles are rising from the ashes of a foreclosure crisis all across America (NY Times, 3/26/09, p.1), the petitioner, Deutsche Bank National Trust Co., asserts a direct legal challenge to the Court's equitable authority to consider a request for "more time" by a family facing a post-foreclosure eviction. For the reasons stated hereinafter, the Court rejects the challenge, and reiterates that the Court retains the power and equitable discretion to consider claims of genuine hardship in the face of an imminent eviction."

...........................................................................................................................................................

"Respondent, Judith Lawrence, made a timely application to this Court for "more time" by filing her request for an Order to Show Cause on March 10, 2009. Her affidavit, on a form provided by the Court, appears to ask for nothing more than "more time." Although the Court form includes broad, boilerplate language, respecting general requests for relief from a default, it also includes language through which the applicant may seek "such other and further relief as may be just and proper" as well as language providing that, "pending the determination of this motion that the . . .warrant of eviction be stayed."
.................................................................................................................................

"Judith Lawrence's moving affidavit presents an extremely compelling equitable case for "more time." In simple, indeed moving terms, she states: "I need more time as my mom lives with me - she is 92 years. I am getting her in a nursing home and SS documents are delayed as she has dementia. I just need more time. Thank you."

.................................................................................................................................................................
"According to petitioner, the “sole equitable relief” permitted on application of a holdover occupant after a judgment of possession “is the statutory authority to grant a stay of issuance or execution of a warrant of eviction for a period not greater than six months from the date of entry of judgment,” further conditioned upon payment “for the occupation of the premises for the period of the stay and such deposit shall also include all rent unpaid by the occupant prior to the period of the stay” (citing RPAPL §753). *3 Based on the provisions cited, petitioner contends that “the relief in the Order was beyond the jurisdiction of this Court to grant except upon condition of payment of $10,000.00 [for five months' use and occupancy] to the Owner or into the Court."

...................................................................................................................................................................
The Court must reject the petitioner's contentions. CPLR 2201 broadly empowers the Court to grant a stay of proceedings “in a proper case, upon such terms as may be just.” The propriety of granting a stay in any given case is limited only by “the Court's own sense of discretion, prudence and justice”

..................................................................................................................................................................

"Considering Ms. Lawrence's decades-long occupancy of the subject premises (dating back to 1990), the circumstances under which the premises were lost and then sold to petitioner for $500.00, respondent's need to care for her 92 year old mother, her *4 mother's dementia, the practical difficulties she has encountered arranging for nursing home care for her mother, and her apparently good-faith, honest request for “more time”, the Court believes it can properly afford respondent a reasonable amount of additional time to locate suitable accommodations for herself and her mother without violating petitioner's rights or the Court's oath of office"

The first of hopefully many

2009-05-07T17:33:00.000-07:00

Bongiorno v State Farm Ins. Co.
2009 NY Slip Op 50860(U)(App. Term 2d Dept. 2009)

This case is not remarkable in any way, except according to my calculations, it is the first time a judge in Civil Richmond was overturned on a denied lack of medical necessity summary judgment motion. Actually, I think it is the first time I have seen an appeal from Civil Richmond in a no-fault case in awhile.

Defense attorneys in some courts are told that medical necessity summary judgment motions are not welcome and will be summarily denied.

My hope is that some of the holdout judges in the Second Department, who refuse to grant summary judgment to a carrier's lack of medical necessity motion-when same is not rebutted with any affirmative medical proof- will now follow suit.

Time will tell, as will more appeals should the rule of law not be followed.

Note - this reference does not apply to the First Department - as of now

A minus v. Mercury

2009-05-01T20:24:00.000-07:00

I can't comment much on this matter, but if you read the record on appeal in this matter and the record on appeal in the matter of CPT v. NYCM, then you will see that the Appellate Term, First Department, is having trouble figuring out how to resolve an issue that the Appellate Term, Second Department resolved 2 years ago in A Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131(A)(App. Term 2d Dept. 2007).

Lastly, this case only gives a Plaintiff more of a reason to file his or her cases in the Bronx.

2106 again...

2009-04-29T17:32:00.000-07:00

In the world of appellate practice, there are three types of appeals you can take up. The first type of appeal involves the instance where you know you are going to lose, but there is some overriding interest which compels you to file and perfect the appeal. I think this is usually relegated to the criminal side of the arena or issues involving large monetary awards that need to be challenged. These are the shot in the dark appeals. In order to win this type of appeal, spin around three times, throw a dart, and see if you can hit the bulls eye.

The second type of appeal you could take up is one where you believe the law should be a certain way, and there is case law or other sources of law out there, which if favorably construed, could support your position. This is also the category of appeal where I think if you repeat yourself a few thousand times, you might get heard. This is probably where the Dan Medical line of cases came from. I also believe that this is how the "AB v. Liberty" line of cases and the "old" Appellate Term, Fogel line of cases eventually died a well deserved death at the Appellate Division.

And then there is the third type of appeal. This is the one where the law is established, the facts are properly presented to the lower court and, for whatever reason, the lower court chooses to depart from settled precedent.

And now...
St. Vincent Med. Care, P.C. v Mercury Cas. Co., 2009 NY Slip Op 50810(U)(App. Term 2d Dept. 2009)
http://www.nycourts.gov/reporter/3dseries/2009/2009_50810.htm

In this case, Defendant moved for summary judgment based upon a prima facie showing that the contested services lacked medical necessity. There was approximately $6,000 in disputed billing, involving all types of modalities of treatment. The fourth cause of action, which was not disputed, involved a $71.49 office visit, if memory serves correct.

Plaintiff cross-moved and opposed the underlying summary judgment. Plaintiff, in opposition to Defendant's motion argued that: (Issue #1) a business record predicate was not set forth in Defendant's moving papers; (Issue #2) the denials were not timely and properly mailed; and (Issue #3) the services were medically necessary. The Appellate Term, for the first time, commented on Issue #1, finding that Defendant's papers set forth a business record predicate for the admission of the denials into evidence. Those who have followed the law know that the Appellate Division, Second Department, has ruled on this issue, albeit the last time in 2006 and the first time 2004.

Issue #2 was quickly disposed of since the affidavit that was presented has previously been held to adequately describe the mailing procedure.

Issue #3 is the reason this case went up the appellate ladder. Plaintiff, in her opposition papers, presented an affirmation of Dr. Zakharov. Upon a search of the Office of Professional Responsibility (OPR) website, it was learned that Dr. Zakharov was the President of this corporation. CPLR 2106 expressly disallows a party to "affirm" to the truth of matters set forth in the litigation, and at least three cases previously held that a member of a business organization who is a party to the litigation may not use the CPLR 2106 affirmation process.

A proper objection along with the printout of the OPR site were set forth in Defendant's reply papers. Incidentally, some have argued (and there was merit to this argument) that the OPR record needed to be certified. CPLR 4518(c). I think we can all agree that after Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co. 2009 NY Slip Op 00351 (2d Dept 2009), this objection is palpably without merit.

Plaintiff's papers were properly excluded. Having failed to raise a triable issue of fact, summary judgment was awarded to Defendant.

45-days...and then what?

2009-04-28T11:51:00.001-07:00

Upon a medical provider's or Claimant's violation of the 30-day rule or 45-day rule, and an insurance carrier's timely denial thereto, what happens if a Plaintiff/Claimant subsequent to this denial proffers a reasonable justification for the late submission?

It would appear that the Carrier would have a real problem, since its only defense to payment of the otherwise valid claim would not be sustainable.

Such appears to be the case in the recent Appellate Term matter of:

Bronx Expert Radiology v Clarendon Natl. Ins. Co.
2009 NY Slip Op 50747(U)(App. Term 1st Dept. 2009)

In Bronx Expert, a triable issue of fact was set forth as to the excuse for the late submission. Should the excuse for a late submission be deemed reasonable and sustained at trial or even on summary judgment, as a matter of law, then the carrier will have to pay the entire bill.

I suspect that the shrewd carrier, upon deciding to deny a bill for a 30-day rule or 45-day rule violation, would also adjust the bill from the standard medical management perspective. Accordingly, should the 30 or 45 day rule denial not hold, then a substantive defense could still be interposed.

My car was not there damnit!

2009-04-22T17:44:00.000-07:00

Mid Atl. Med., P.C. v Harleysville Worcester Ins. Co.
2009 NY Slip Op 50736(U)(App. Term 2d Dept. 2009)

One of the biggest problems medical providers dealing with assigned claims have is defending against certain coverage issues. This usually involves in hit and run cases, "it never happened cases" and even causation defenses, predicated upon a degeneration claim.

If a carrier's papers are satisfactory on its motion for summary judgment and sufficient to shift the burden to the Assignee provider, then the provider many times needs to procure the assistance of its Assignor. And we all know the effort and sheer impossibility it many times takes to locate the Assignor.

That is what appears to have happened here. I would opine that this happens frequently on the "my car did not make contact with that person" or "It was not me" defense.

Here are the facts:

"In support of its motion, defendant annexed affidavits from its insured and its insured's wife in which they stated that although they own a 1995 Oldsmobile, they live in Fredonia, New York and neither they nor their vehicle was involved in an accident in Brooklyn. They further stated that they are the only individuals who have access to their vehicle and that they have not been to Brooklyn in over 30 years."

Plaintiff could not or did not procure an affidavit or other admissible proof to raise an issue of fact. Summary judgment was granted to Defendant.

Not only did Plaintiff lose, but here comes the real rub.

Plaintiff Assignor, who was probably a pedestrian, will probably be collaterally estopped from contesting in his or her BI or even UM case that he or she was hit by the 1995 Oldsmobile. This is classic Lobell.

I guess my thought, and you can tell me if I am wrong, is that you need to be really careful when litigating certain coverage issues in the context of an assigned no-fault case. You just never know when a potential malpractice claim may be brought by the Assignor, who is in privity with the Assignee, when that Assignor learns that he or she is collaterally estopped from bringing or succeeding on his or her BI or UM case.

I would go so far as to say that the minute a coverage issue that can really hurt an Assignor arises in an assigned no-fault action, execute a stip of discon. If the Defendant will not consent, then move to discontinue without prejudice.

Ortho Med Supply - more than meets the eye

2009-04-22T17:26:00.000-07:00

The recent trend in Appellate Term jurisprudence involving cases with (u) or Misc (a) cites is to take the approach that the Appellate Division, Second Department takes in terms of reasoning a case. The Court will cite to other precedent which, on their facts, should guide the reader as to what the law is in the matter sub judice. The other trend is for the courts to deem certain challenges "unpreserved" or unpreserved, yet without merit if preserved.

Ortho-Med Surgical Supply, Inc. v Mercury Cas. Co.
2009 NY Slip Op 50731(U)(App. Term 2d Dept. 2009)

If you read the facts of this case, you would think this is another "medical necessity" summary judgment motion that another carrier interposed. Yet, if you read the record on appeal, you would see something different.

This case involved a denial that on its face was dated one month previous to its generation date. Therefore, the denial was dated prior to the receipt date of the bill. The carrier, in their motion for summary judgment, presented an affidavit from someone with personal knowledge that this was a scrivener's error and based upon a review of the computer records and the paper file, the denial was generated one month following the date set forth on the denial. The affidavit then went on to state that it was mailed in the manner consistent with properly dated denials. Thus, it was mailed on the date it should have been dated or the next business date, in accordance with the carrier's standard mailing procedures.

Plaintiff opposed the motion and cross-moved, arguing that the denial was fatally defective. The carrier prevailed on its motion and the plaintiff appealed.

On appeal, the plaintiff then went on to argue, besides its preserved argument, that the denial could not be considered a business record since it had the wrong date on it. If a denial is not deemed a business record, it may not be considered by the Court. Hospital v. Elrac and Montifiore v. Liberty stand for those propositions of law.

The carrier argued that a proper foundation was laid and any defects in the "business record" would go to the weight - not the admissibility - of the business record.

Following consideration of all the proofs, the Appellate Term affirmed the grant of summary judgment to the carrier.

Now if only the entire procedural history of this whole case were set forth in the opinion, it might be worth something more than a (u) cite.

But what I can say is that if a defect is not numerous and you spell it out in a decent affidavit, the Appellate Term will give you a pass.

Pine Hollow - dead

2009-04-16T18:24:00.000-07:00

It is nice to see the death of a case, which was improperly decided in the first instance. In many ways, it is a vindication to those of us who believed Pine Hollow created a scenario that left the business record rule, naked and without potency. Caruthers pretty much fixes up the mess Pine Hollow created.

But, the better question is whether one really needs to satisfy CPLR 4518(a) to make a prima facie case?

To be Lobelled

2009-04-13T19:51:00.001-07:00

I have always said that to understand no-fault, you need to understand bodily injury law. This is typified through instances where the result of an assigned no-fault case can fatally destroy the personal injury case for the assignor.

This issue I think rears its ugly head most often times in the so-called "causation" scenarios, where the defense to the no-fault claim is that the injuries are not causally related to the underlying motor vehicle accident. The question that arises is what happens to the corresponding personal injury claim of the assignor if the insurance carrier succeeds in proving this defense?

This is when one must understand the term: "to be lobelled". Here is the case:

Lobel v. Allstate Ins. Co. 269 A.D.2d 502 (2d Dept. 2002).

"The defendant moved to dismiss the cause of action to recover no-fault benefits on the ground that it was barred by a prior arbitration proceeding between the plaintiff's assignee and the defendant, which resulted in a determination that there was no casual connection between the plaintiff's lower back condition and the subject automobile accident. The defendant demonstrated that the issue in the **489 arbitration proceeding was identical to and decisive of this cause of action. The plaintiff failed to establish the absence of a full and fair opportunity to litigate the issue in the prior matter".

I think the bolded words speak for themselves.

Oh yes, what about the IME cut-off that is upheld? How does this impact the assignor's personal injury case? Barnett v. Ives 265 A.D.2d 865 (4th Dept.1994).

In Barnett, the Appellate Division held that an arbitration award which found that an injured person was not longer injured as a result of the accident, whether phrased as a causation or medical necessity determination, is collateral estoppel to the injured person in a personal injury case. As observed from the facts should you pull the case up, it is potentially catosrophic in terms of proving the two most potent 5102(d) categories: (a) Significant Limitation; and (b) Permanent Consequential. Furthermore, even if you can prove Significant Limitation or 90/180, an adervse arbitration ruling would knock out future damages, which many times is the crux of the BI case. It may also call into question the degree of actual injury, which may limit damages for past pain and suffering and past economic injury.

TImely submissions and MVAIC - a real problem

2009-04-11T09:33:00.000-07:00

Bronx Expert Radiology, P.C. v Motor Veh. Acciden Indem. Corp.
2009 NYSlipOp 50621(U)(App. Term 1st Dept. 2009)

"Defendant's motion for summary judgment should have been granted. Even assuming that plaintiff's submission of the claims for no-fault benefits to Seminole Casualty Insurance Company was inadvertent and justified plaintiff's initial delay in submitting the claims to defendant (see 11 NYCRR 65-3.5[l]), plaintiff has failed to provide a "reasonable justification" for the six-month delay between the date it was apprised of Seminole Casualty's denial of benefits and its submission of the claims to defendant"

The 45-day rule and MVAIC.

It seems a little disconcerting that an agency that our tax dollars supports plays by its own set of rules and appears to be exempt from paying no-fault claims, by operation of law. A scenario that seems to play out here is that MVAIC first declares that you must demonstrate through affidavits that you were not covered by any other source of insurance. This is what we can call the condition-precedent to coverage we see so much of in the decisional law from the Appellate Term, Second Department.

Admittedly, sometimes the condition precedent for being eligible for MVAIC is obvious. Examples of this include when a New York pedestrian, who has no other source of coverage, is run-down by a hit and run vehicle, or where a passenger in an uninsured vehicle who does not have other sources of coverage seeks coverage from MVAIC.

More often, I suspect there are issues as to the possible existence of other sources of coverage, or issues involving whether a policy of insurance may be canceled or ever existed. These are issues that need to be investigated and may take time to sort out.

In many of the above instances, I would think that by the time you sort out whether or not an injured person is qualified, the 45-day time period to submit bills to MVAIC has expired.

Yet, the Courts then come back and say that you did not act diligently enough in demonstrating a reasonable excuse for your late submission. In my survey of all 45-day rule appellate cases, I have yet to find a court that has held that a late submission was excusable. This says a lot, I think. I believe there needs to be special time frames set forth in the MVAIC scenario.

It is a two way street

2009-04-09T19:52:00.000-07:00

In reading the Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 2009 NY Slip Op 02589 (2d Dept. 2009) case that involved the validity of a denial based upon workers compensation primacy, it appeared (at first blush) that the providers obtained a true victory against the carriers. Whereas compensation is somewhat consistent with managed health care, no-fault is the exact opposite. Furthermore, the scope of medical services compensated under no-fault is far greater than the services reimbursed under Workers Compensation. One only needs to ask a certain bunch of attorneys who are fighting this exact issue in the context of whether a Licensed Massage Therapist may receive compensation under no-fault for rendered services inasmuch as the same services are not compensable under Workers Compensation. This same battle arises in the realm of acupuncture that an L.AC performs and services a chiropractor renders outside the chiropractor fee schedule.

But, does this also mean that "priority of coverage" issues may also be subject to the 30-day pay or deny rule? Let me rephrase this statement. Does this mean that a primacy of coverage defense may be adjudicated in court or arbitration against a Claimant, because another insurance carrier might be primary?

Here are two examples. 1) John Doe, a Geico insured, is involved in a motor vehicle accident while occupying an Elrac rental vehicle in New York. Or, 2) John Doe, while in a Elrac vehicle is in an accident in Montana.

Under scenerio "1", Elrac is primary. Under scerio "2", Geico is primary. Simply put, the rule in New york is that coverage follows the vehicle, except that when the accident occurs outside NEw York, it follows the person.

Medical provider submits bills to Geico under scenerio #1 and Elrac in scenerio #2. Both of the carriers the bills were submitted to are not the first in line under a priority of payment analysis. Geico in example #1 and Elrac in example #2 timely denies the bills. Now what?

Under conventional wisdom, issues involving primacy of payment must be adjudicated in 5105 mandatory arbitration. See, 65-3.12; SZ Medical, P.C. v. Lancer Ins. Co., 7 Misc.3d 8 (App. Term 2d Dept. 2005). In other words, the secondary carrier must adjust the claim in the normal and ordinary course of business and then seek reimbursement against the primary carrier through intercompany arbitration. The SOL would be three years from the payment, so it cannot be said that the carrier should be too unhappy with this result. Motor Vehicle Acc. Indemnification Corp. v. Aetna Cas. & Sur. Co. 89 N.Y.2d 214 (1997).

Under the current system, money from the secondary insurer would have to be paid out on the front end, but may be recovered on the back end.

Now, because of the Westchester Case, it appears that priority of payment issues may be raised and defended at any time through a timely denial. Thus, next time I receive a denial when there is a primary of payment issue, maybe I actually have a defense? So, you can say this is the other side of the two-way street...

Be careful what you wish for.

The Workers Comp Mess

2009-04-03T19:28:00.001-07:00

Westchester Med. Ctr. v Lincoln Gen. Ins. Co.
2009 NY Slip Op 02589 (2d Dept. 2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_02589.htm

This case has a few issues. The first issue can be resolved relatively easily. Factually, the carrier apparently failed to indicate to the provider the specific person from whom verification was sought. This defect rendered the EUO scheduling letters and the ensuing denials improper. The cases the Westchester court cited explain this principle quite well. To explain for those unfamiliar with this concept, a delay letter has to say what you are delaying for and who you are seeking the information from. The letters have to be highly specific, lest you wish to be subject to Presbyterian preclusion.

The better issue is the Workers Comp issue. The Court, for the first time that I can remember, is apparently holding that a Workers Comp denial must be timely. The Court fails to consider Workers Comp as a coverage issue. This is problematic, because I believe the law is clear.

In O'Hurley-Pitts v. Diocese of Rockville Centre 57 A.D.3d 633 (2d Dept. 2008), the Court held as follows:

"The Court of Appeals has held that the Workers' Compensation Board “has primary jurisdiction over the issue of the availability of [workers' compensation] coverage,” and if a plaintiff fails to litigate that issue before the Board, “the court should not express an opinion as to the availability of compensation but remit the matter to the Board,” since “[t]he compensation claim is a jurisdictional predicate to the civil action” (Liss v Trans Auto Sys., 68 NY2d 15, 21 [1986]; see Botwinick v Ogden, 59 NY2d 909 [1983]; O'Rourke v Long, 41 NY2d 219 [1976]). Accordingly, in considering the defendants' motion, the Supreme Court should not have entertained their contention that the plaintiff was barred from recovery pursuant to Workers' Compensation Law § 11. The case must be referred to the Workers' Compensation Board for a determination as to whether the plaintiff has a valid cause of action for damages or whether he is relegated to benefits under the Workers' Compensation Law"

The Regulation states the following:

11 NYCRR Sec. 65-3.9(a)(9): "Pursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers' compensation benefits due to the same accident, the workers' compensation carrier shall be the sole source of reimbursement for medical expenses."

I believe the Appellate Division messed up. I just hope a good record was preserved.

LMK will never go away

2009-04-03T18:58:00.000-07:00

LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co.
2009 NY Slip Op 02481 (2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_02481.htm

Everybody now knows the LMK decision. Many people have posted and blogged about it. I could discuss it here at length, but it would be fruitless. I will share a few observations. First, the decision was poorly written. When I say poorly written, I mean this in the sense that modern no-fault jurisprudence is nuanced. Does anybody remember the entire line of cases which construed interest tolling based upon a definition of the word "Applicant"?

The Court of Appeals, in a cavalier fashion, used the words: "insured", "claimant", and "cause of action" all throughout their opinion. These phrases have created hundreds of court decisions from the lower courts up through the Appeals Courts. I will highlight the examples of the internally inconsistent language that the Court of Appeals used in this decision:

1) "the Superintendent stated

"[that provision] makes it clear that the amount of attorneys' fees awarded will be based upon 20% of the total amount of first party benefits awarded. That total amount is derived from the total amount of individual bills disputed in either a court action or arbitration, regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured."

2) "For purposes of calculating attorneys' fees, the Superintendent has interpreted a claim to be the total medical expenses claimed in a cause of action pertaining to a single insured, and not — as the courts below held — each separate medical bill submitted by the provider."

3) "Thus, this Court accepts the Insurance Department's interpretation of its own regulation and, upon remittitur, directs Supreme Court to calculate attorneys' fees based on the aggregate of all bills for each insured"

So now, we have different interpretations of this rule. Does the LMK rule involve each "cause of action" no matter how pleaded? Does this rule involve the "aggregate of all bills" for the insured? Or, does LMK stands for what it means: "Because this interpretation is neither irrational, unreasonable, nor runs counter to the clear wording of the statute, it is entitled to deference."

I will take option #3. The Appellate Terms will inevitably clean this mess up, and hold that option #3 is the most logical path to follow. But LMK at all levels just goes to show how careful things need to be expressed, or else unintended consequences will be abound.

Wagman?

2009-04-03T18:36:00.000-07:00

In the matter of PLP Acupuncture, P.C. v Progressive Cas. Ins. Co., 2009 NYSlipOp 50491(U)(App. Term 2d Dept. 2009) http://www.courts.state.ny.us/reporter/3dseries/2009/2009_50491.htm, the Appellate Term observed the following:

Defendant's affirmed peer review report and the affidavit of its peer review acupuncturist established prima facie that there was no medical necessity for the services provided by plaintiff. We note that as some of the medical reports relied upon by defendant's acupuncturist in his peer review report were prepared by plaintiff, plaintiff could not challenge the reliability of its own medical records and reports (see Cross Cont. Med., P.C. v Allstate Ins. Co., 13 Misc 3d 10 [App Term, 1st Dept 2006]; see also Home [*2]Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139[A], 2007 NY Slip Op 50302[U] [App Term, 1st Dept 2007]). Furthermore, since it has been held that an "expert witness's testimony of reliance upon out-of-court material to form an opinion may be received in evidence, provided there is proof of reliability" (Wagman v Bradshaw, 292 AD2d 84, 85-86 [2002]), the fact that defendant's peer reviewer relied upon medical reports from other medical providers in forming his opinion as to the medical necessity of the service performed does not render the peer review report insufficient to establish a lack of medical necessity.

Two observations:

1) There was no reason to reach, rely or discuss Wagman. It is hornbook law that the Defendant may use the Plaintiff's [whether it be assignor or assignee] medical records against him or his assignee. I have dedicated numerous posts on this point.

2) Can Plaintiffs in threshold cases get around the current requirement that the reports their experts rely on be "affirmed" or "sworn to", because of the Appellate Term's interpretation of Wagman?

3) Has the spill-over effect of no-fault litigation once again contaminated other areas of law?

Dangerous case. Proper result, poorly reasoned.

Choice of law - and the deemer statute - it is just the beginning

2009-03-21T18:40:00.000-07:00

Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 2009 NYSlipOp 29109 (App. Term 2d Dept. 2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_29109.htm

I think someone out there knew it would be a matter of time before a "Trans-Hudson" (a term involving a New Jersey policy and New York loss) no-fault case would find its way into the court system. It just did. Not surprisingly, the court ruled New Jersey law would apply.

Factually, the case involved a New Jersey policy, New Jersey insured and a New York accident. There is a legion of case law out there that made this result preordained. There are, however, broader issues that this case represents. Arguably, a case predicated upon New Jersey law must be brought within two years of the last payment or two years fromthe date of loss, which ever is greater (New Jersey PIP Law). Stranger pedestrians, consistent with NJ Pip law, are exempted from coverage, upon the presentation of a proper policy endorsement. Furthermore, a provider must make a prima face case of medical necessity and causation to be entitled to no-fault benefits under New Jersey law.

But under New Jersey law, there are pre-certification requirements and sizable deductibles. While the standard New Jersey policy offers $250,000 in first-party benefits, the New Jersey fee schedule rules, in accordance with New Jersey's 1998 Automobile Insurance Cost Reduction Act (AICRA), do not allow certain services to be compensable. Case and point: CPT services and video fluoroscopy services are per se not compensable under New Jersey law. We all know this is not the case in New York. I will leave the policy determination as to whether these tests should be compensable to somebody else.

But, the deemer statute (Ins Law 5107) adds some wrinkles to this paradigm.

In fact, wouldn't the deemer statute mandate that the injured person (or his assignee) receive the benefit of the vast array of services, without the co-pays and pre-certs, that the New York fee schedule offers? Otherwise, the deemer statute is without force.

Consider the hypothetical no-fault statute that allows unlimited benefits, yet charges a 90% co-pay up to some indeterminate sum. Clearly, the deemer statute would mandate New York style benefits up until the first $50,000 that is paid out under the policy.

Therefore, it follows that in these "Trans-Hudson" cases, benefits up until the first $50,000 should be paid in accordance with the greater of the New Jersey or New York fee schedule. Should the sister-state's policy allow for first-party no-fault benefits in excess of $50,000 (this includes only New Jersey and Michigan), then that state's fee schedule rules would be in effect from dollar $50,0001 up until the policy limit. But, if the sister state's fee schedule rules are more beneficial to the Claimant that New York's fee schedule rules, then it would follow that the sister state's fee schedule rules would need to be followed.

But you can see that we have just touched the surface with these Trans Hudson cases... The details will need to be filled in at a later time.

Is it medically necessary?

2009-03-18T18:36:00.000-07:00

In an indiscreet case which garnered a "u" cite, the Appellate Term, Second Department made its first foray into determining what evidence is sufficient to raise an issue of fact as to a service's medical reasonableness in opposition to a well supported peer review. The case on point is Park Slope Med. & Surgical Supply, Inc. v New York Cent. Mut. Fire Ins. Co. 2009 NY Slip Op 50441(U)(App. Term 2d Dept. 2009). The pertinent portion of the opinion went as follows:

"[i]n response to defendant's cross motion, plaintiff submitted an affidavit from Dr. Shapiro in which he stated that he disagreed with the peer review report and affidavit furnished by defendant because he concluded that the supplies provided were medically necessary. Since the affidavit of Dr. Shapiro demonstrated the existence of an issue of fact as to medical necessity"

It bears in mind that the "Dr. Shapiro" affidavit is boilerplate in nature, having seen a few of them. Yet, under the circumstances of this case, I cannot say the court was wrong in its holding.

Assume for argument sake that Defendant failed to annex the documents his expert relied upon in forming his file based review. This is probably a valid assumption knowing what these motions tend to look like. In this instance, the Court should have found that Defendant did not meet its burden, and should have actually granted Plaintiff summary judgment. A peer report in opposition to a summary judgment motion that does not disclose the peer documents the reviewer relied upon simply fails to raise a triable issue of fact. Yet, until the Appellate Term addresses that issue, it is fair to say that the Court really did not have a choice but to find that Plaintiff raised an issue of fact. Bewteen the lines, the court was asking how a Plaintiff could honestly oppose a file review without the file? Hopefully, the Court in the future will cite to Cariddi v. Hassan and skip the step of finding a medical provider's conclusory affidavit to be sufficient to oppose a non-supported peer report.

I suspect that this is just the beginning of the development as to this discreet area of no-fault law.

I would add this remark. The trend in New York practice has been to transform summary judgment motions from the traditional of "issue finding" into an exercise in "issue determination". In other words, the courts used to deny summary judgment motions should there be a specter of a factual issue lurking somewhere. Now, the motion court will determine the merits of the issue on a motion for summary judgment.

This above trend is remarkable since every lower court decision that discusses an SJ motion always cites to the Court of Appeals cases, which hold that even the specter of a triable issue of fact should defeat a summary judgment motion. Shakepearean overtones I suspect - appearance verses reality.

But in the modern realities of life, the courts are telling the litigants that if you want a plenary trial, you need to earn it. In no-fault we had this shoved down our throats through "Dan Medical" and "Contempt v. Geico" prior to "Delta v. Chubb" and "St. Vincent v. Geico." In the analogous 5102(d) land, "Toure" and "Pommels" proved this point too well. The list goes on and on...

Thus, we shall see how the lack of medical necessity jurisprudence develops. I just hope it does not suffer the same inconsistencies that we have found in the "EUO" default contexts.

MRI SCANS - from the NY Times

2009-03-05T18:26:00.000-08:00

Since many PIP disputes center around MRI scans, it seems fit to discuss a New York Times article that involves the efficacy of MRI Scans. The piece was published on March 1, 2009 and is entitled: "Good or Useless, Medical Scans Cost the Same"

My question: Will this allow "discovery" or "additional verification requests" in relation to certain MRI's. For example, if a knee or shoulder MRI is a pre-requisite for surgery, will an insurance carrier seek the make, model and quality of the MRI machine as well as the actual films and deny the MRI (as well as the surgery) based upon the poor quality of the MRI machine and the films that result from the same? Read this article and ponder the above....

When Gail Kislevitz had an M.R.I. scan of her knee, it came back blurry, “uninterpretable,” her orthopedist told her.

Skip to next paragraph

Enlarge This Image

Images From Dr. Freddie Fu/University of Pittsburgh

A poor-quality scan of a ligament, left, and one of high quality. Many scans are done by machines that are a decade old.

Readers' Comments

Readers shared their thoughts on this article.

Read All Comments (40) »

Her insurer refused to pay for another scan, but the doctor said he was sure she had torn cartilage that stabilizes the knee and suggested an operation to fix it. After the surgery, Ms. Kislevitz, 57, of Ridgewood, N.J., received a surprise: the cartilage had not been torn after all.

She had a long rehabilitation. And her insurer paid for the operation. But her knee is no better.

More than 95 million high-tech scans are done each year, and medical imaging, including CT, M.R.I. and PET scans, has ballooned into a $100-billion-a-year industry in the United States, with Medicare paying for $14 billion of that. But recent studies show that as many as 20 percent to 50 percent of the procedures should never have been done because their results did not help diagnose ailments or treat patients.

“The system is just totally, totally broken,” said Dr. Vijay Rao, the chairwoman of the radiology department at Thomas Jefferson University Hospital, in Philadelphia.

Radiologists say a decent M.R.I. scan should have clearly shown whether the cartilage in Ms. Kislevitz, a meniscus, was torn. But bad scans, medical experts say, are part of a growing problem with medical imaging.

Many factors contribute. Insurers pay the same for a scan done on a 10-year-old machine as one on the latest model, though the differences in the images can be significant.

Insurers do not distinguish between scans that are done poorly or done well or read by less- or more-qualified doctors. Aside from mammography, whose standards were established by a law that went into effect more than a decade ago, the field is largely unregulated. And increasingly, doctors refer patients to scanning centers they own and profit from.

Ten years ago, the age of a scanner might not have mattered so much. Now, said Dr. Gary Glazer, the chairman of radiology at Stanford, technology has advanced so much that the older scanner “is not the same machine.”

“I can tell you from my experience that between those extremes the gap is huge,” Dr. Glazer said.

Yet, he added, many scanning machines used today are a decade old.

Imaging centers can, if they choose, become accredited by the American College of Radiology. That requires, among other things, scanning a phantom, a device that simulates a body part. Technologists must also be certified, and there are standards for supervising physicians. And the scanners must be regularly assessed to ensure they are properly functioning.

But many centers are not accredited, although the percentage is not known because there is no national registry of imaging centers.

Accrediting will be partly addressed by a little noticed aspect of a wide-ranging Medicare law passed last year. After it goes into effect in 2012, Medicare will pay only for scans done at accredited centers. But imaging experts say the law fixes only part of the problem. High-tech scanning is complicated, and there is no consensus on objective measures to ensure quality. Even with the new law, there is still little assurance that scans will be appropriately ordered and interpreted or that a scanner will be up to date.

Radiologists are struck by the wide variation in the quality of scans, and they say there is little patients can do other than to ask why the scan is necessary and, if it is, to ask about accreditation, the credentials of the person reading the scan and the age of the scanner.

“The studies I see coming from the outside vary from marginal quality to very good quality,” said Dr. Chris Beaulieu, a Stanford radiology professor. “Some of it is related to equipment, and some is related to people with very good equipment who don’t know how to use it right. And on the interpretation side, there is also a very wide range of quality or accuracy, in my opinion.”

Interpretation can be crucial, Dr. Beaulieu added. “A good radiologist can sometimes accurately read scans off of a lower-quality scanner,” he said. “I see that all the time. A good radiologist and a lower-quality scan could be better than a bad radiologist and a good scan.”

But logical as it might seem to pay more for a better scan, there are problems. Health insurers have no way of knowing whether scans are good, said Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group. Doctors, not insurers, receive the images and reports, and all insurers can do is notice if there are frequent requests to redo scans from a particular center.

“We see a lot of poor-quality scans,” said Dr. Freddie Fu, the chairman of the orthopedic surgery department at the University of Pittsburgh Medical Center. “I joke with the patients: The insurance pays the same amount of money for the scan. You get a hamburger somewhere else and a prime rib here for the same price.”

Another concern is the growing number of doctors who refer patients for imaging done by scanners they own and profit from. Studies have found that up to 3.2 times as many scans are ordered in such cases

In a recent report, the Government Accountability Office said nearly two-thirds of the money Medicare paid for imaging was for scans in doctors’ offices. And, the report added, doctors were receiving an ever larger part of their income from providing scanning services. Not only were patients more likely to have scans if a doctor did this, but the quality of some of the scans was questioned.

“No comprehensive national standards exist for services delivered in physician offices other than a requirement that imaging services are to be provided under at least general physician supervision,” the G.A.O. wrote.

Private health insurers were concerned, too. “These are alarming patterns that have also been observed in the private sector,” America’s Health Insurance Plans wrote in a response to the G.A.O.

It is clear why self-referral can be tempting, said Dr. Bruce Hillman, a radiology professor at the University of Virginia.

“It’s all profits,” Dr. Hillman said, adding that a group of doctors can make an extra $500,000 to $1 million a year simply by acquiring a scanner.

For now, radiologists said, patients and insurers are often in a bind.

“If you are going to buy a car,” said Dr. Beaulieu, the Stanford professor, “and you have a certain amount of money to spend, you know what you are getting. You know what you will get if you buy a Yugo or if you buy a BMW.”

But with imaging, Dr. Beaulieu said, “you don’t know: you might get a Yugo and you might get a BMW.”

How to defeat a Lack of medical necessity motion based upon a peer review

2009-03-03T18:09:00.000-08:00

I encounter on many levels summary judgment motions predicated upon the defense that a service lacks medical necessity in accordance with a peer review which finds that a given service is medically unreasonable. Invariably, the motion only annexed the peer review.

The opponent to the motion now has to scramble to find the documents the peer reviewer examined, and then the opponent needs to retain an expert to review these records in order to conclude that the services were medically necessary.

I think we missed a step here. Why was the movant able to get away with attaching a FILE based review without annexing the file? Are we to throw caution to the wind and blindly trust the peer doctor's interpretation of the plaintiff's records? Indeed, the way plaintiffs win trials is through poking holes in the peer doctor's medical rationale viz a vi the plaintiff's medical records. Conversely, a defendant faced with a treating doctor will do the same thing to beat him or her.

Perhaps the better question is why, mister plaintiff did you not object to the defendant's putting the cart before the horse through his making a summary judgment motion without any documentaty evidence to support it?

Maybe the question that really needs to be answered is why we allow ourselves to accept shoddy practices and mediocrity under the guise of "volume"?

The Appellate Division, in 2006 believed that what has now been the norm in no-fault medical necessity motion practice was unsatisfactory in an analagous scenario and found that the movant who pulled the above stunt was unable to prima facie demonstrate his defense to the action.

In Cariddi v. Hassan 45 AD3d 516 (2d Dept. 2006), the Appellate Division held the following:

While Dr. Katz provided objective medical evidence in support of his diagnoses with respect to the plaintiff's complaints regarding **427 her ankle and lumbosacral spine, his only basis for concluding that the plaintiff's complaints regarding her hip were "unrelated" to the subject accident was that "doctors' notes reviewed do not indicate any problem to the left hip following this incident of 09/17/04 [and a]n MRI of the left hip and pelvis was not performed until 01/03/06 which is more than one year after the accident." However, Dr. Katz did not attach any of the prior medical records to his report, and the defendants otherwise failed to submit any such records in support of their motion, as they were certainly entitled to do (see Kearse v. New York City Tr. Auth., 16 A.D.3d 45, 47 n. 1, 789 N.Y.S.2d 281; Pagano v. Kingsbury, 182 A.D.2d 268, 271, 587 N.Y.S.2d 692). Therefore, Dr. Katz's report, standing alone, failed to establish, prima facie, that the plaintiff's alleged hip injury was unrelated to the subject accident

Of course, one caveat needs to be stressed. The failure to object to a moving party's reliance on materials not before the court is waived if not properly objected to. Unobjected to hearsay is competent evidence. Use it or lose it. Oh, and this does not apply to IME based motions.

Validity of EUO, Appellate Term, 2d Dept: Take two

2009-02-25T17:34:00.001-08:00

The Appellate Term, Second Department seems to be all over the place with the "EUO" cases. The analysis is really needlessly strained and hard to follow. The latest case demonstrates this... Two parts of the opinion are set forth herein.

Great Wall Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co.
2009 NYSlipOp 50294(U)(App. Term 2d Dept. 2009)

Plaintiff asserts that the EUO scheduling letters were ineffective since they were not sent to plaintiff but rather to an attorney. However, since defendant's counsel received a letter from said attorney a short time before the initial EUO scheduling letter was mailed advising counsel that the attorney represented plaintiff with respect to EUO requests which were already pending, such a contention lacks merit

A review of the record indicates that defendant established that the insurance policy in effect when the EUOs were sought contained an endorsement authorizing verification by EUO. Inasmuch as the accident in which plaintiff's assignor was allegedly injured occurred after the April 5, 2003 effective date of the emergency first amendment to revised Department of Insurance Regulation 68, contrary to plaintiff's contention, defendant was not required to schedule the EUO within 30 days of receiving plaintiff's claims but only within a reasonable time thereafter. Since the date selected for the EUO was reasonable and plaintiff did not appear for the scheduled EUO, defendant's motion for summary judgment should have been granted since the action was premature

First, while I agree that in principle an EUO scheduling letter, or any other correspondence, should only be sent to an attorney representing the Party to be deposed, when one is on notice of the same, the regulations do not agree with that proposition of law. The regulations require that the notices be mailed to the injured person and his or her authorized representatives. I am not sure solely sending it to the attorney complies with the regs. But that part of the opinion does not necesarily trouble me.

It is the second part. Why does the App. Term, 2nd Dept keep saying that the failure to attend EUO's makes the action premature? The failure to attend an EUO is a policy violation - albeit shceduled as additional verification requests - and the claim must be denied. The denial must be within the latter of 30 days of the last EUO appointment or date of receipt of the bill. This is the law. I also do not understand why the App. Term is saying that upon one failure to attend an EUO, the claim is still premature? We shall see how the Court fixes this, or if the App. Div is going to have straighten this out, similar to Fogel and AB Liberty...

"Kids, dont try this at home"

2009-02-25T17:25:00.000-08:00

I got that line from another blogger. That comment refers to a case that is anything but remarkable.

Although there was a long and very thoughtful dissent on what the probably should be, the majority made two salient points.

Continental Med., P.C. v Mercury Cas. Co.
2009 NYSlipOp 50234(U)(App. Term 2d Dept. 2009)

"Although chiropractors may not affirm pursuant to CPLR 2106 this defect was waived since plaintiff failed to object in the court below. As a result, the IME report proffered by defendant established defendant's prima facie entitlement to summary judgment on the ground that the services rendered to plaintiff's assignor were not medically necessary"

"In opposition, plaintiff proffered an unsworn medical report which was "dictated but not read." Thus, it was of no probative value. Inasmuch as plaintiff failed to rebut defendant's prima facie case, defendant's motion for summary judgment dismissing the complaint should have been granted"

I think, and this is just me, but New York should follow the Federal and New Jersey model where a party can submit a "certification", which would have the same force and effect as an affidavit. In the criminal realm, this is done all the time. But the law is what it is...

A conflict at the worst possible time for interest

2009-02-20T05:23:00.000-08:00

I will save the commentary for another time, or another blog. My thoughts of the self-destructive behavior of attorneys probably belongs in an article I should write for the "journal of sociology", which academics publish from time to time. I almost remember a theory in one of my criminology classes that was called "labeling theory". In short, people live up to their labels. This is no exception.

On the law, the Appellate Division has now held that interest commences from the filing of a lawsuit if a bill is denied. Thus, all one needs to do is demonstrate that a denial was mailed before a lawsuit is commenced and pre-suit interest has just disappeared. This is completely in variance with the regulations which state that interest will toll upon issuance of a denial and re-commence after a suit or arbitration is commenced.

Thus assume a 2003 date of service that was submitted at that time. The bill is denied in 2007 and suit is commenced in 2009. The regulations, as I always understood them, stated that Applicant would be entitled to 4 years interest. The clock would then stop until 2009. In 2009, the clock would re-commence.

The Appellate Division has now held, in the above hypothetical, that the 2007 denial now wipes out all pre-suit interest. It is an interesting interpretation. From a policy standpoint, it makes sense since quick resolutions of disputed bills are the purported hallmark of no-fault. We all know that is false, in practice. But taken to its logical apex, the decision remains faithful to that intent.

The problem is that text which is clear on its face needs to be interpreeted as written, even in the face of a legislative intent that says otherwise. Be it as it may, this was a gift nobody probably saw coming.

Now to the central holding of East Acupuncture:

East Acupuncture, P.C. v Allstate Ins. Co.
2009 NY Slip Op 01191 (2d Dept. 2009)

"Accordingly, the Appellate Term properly determined that interest pursuant to Insurance Law § 5106(a) did not begin to accrue on the claims that were untimely denied by Allstate until East Acupuncture filed its complaint. Thus, the Appellate Term properly reversed the order of the Civil Court and remitted the matter for the new interest calculation. "

A radiologist's detailed analysis of an MRI film is sufficient to show lack of causal relation

2009-02-15T07:31:00.001-08:00

Valentin v Pomilla
2009 NY Slip Op 00981 (1st Dept. 2009)

"Defendants established prima facie that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) by submitting a radiologist's affirmed report that plaintiff's MRI films revealed evidence of degenerative disc disease predating the accident and no evidence of post-traumatic injury to the disc structures (see Perez v Hilarion, 36 AD3d 536, 537 [2007]). In opposition, plaintiff failed to raise an inference that his injury was caused by the accident (see Diaz v Anasco, 38 AD3d 295 [2007]) by not refuting defendants' evidence of a preexisting degenerative condition of the spine. Missing from all of plaintiff's submissions is any mention of the congenital defect at the S1 vertebral level and degenerative condition of plaintiff's lumbar spine reported by Dr. Eisenstadt or the preexisting degenerative changes in his right knee and degenerative meniscal tears in both posterior horns of both menisci reported by plaintiff's own experts, Drs. Lubin and Rose, in their initial evaluation of plaintiff's right knee shortly after the accident (see Pommells v Perez, 4 NY3d 566, 580 [2005]).

The causal relation defense - yay and nay

2009-01-25T10:46:00.001-08:00

First as to yay - an "APPEAL AND OPINION" from the First Department
Delfino v Luzon
2009 NY Slip Op 00317 (1st Dept. 2009)

The defense radiologist's review of an MRI film of plaintiff's left shoulder, taken 17 days after the accident, showed normal osseous structures, labrum, deltoid muscle, and biceps tendon, and no rotator cuff [*2]injury, tendinitis, osteochondral defect or fracture. There was some fluid in the acromioclavicular joint, which the radiologist believed would "resolve without intervention due to the absence of any ligamentous, osseous, or tendinous etiology." An MRI film of plaintiff's lumbar spine, taken six weeks after the accident, was normal, other than dessication and bulging at the L5 transitional S1 vertebral level, which resulted from a condition with which plaintiff was born. The radiologist stated that the dessication could not have occurred during the interval between the accident and the examination, but rather was "indicative of pre-existing, degenerative change likely associated with the congenital variant." Similarly, the bulging was "related to ligamentous laxity" and was "degenerative in nature." Notably, there were no osseous, ligamentous, or intervertebral disc changes of recent or post-traumatic origin.

(Plaintiff expert does not address degenration - only 5102[d] factors - i.e., normal ROM, etc.)

Now this is where Plaintiff went wrong:

"More importantly, plaintiff's expert did not even address, let alone rebut, the objectively substantiated findings of defendant's experts that plaintiff's conditions are congenital and degenerative, and therefore did not raise a triable issue of fact as to causation (see Mullings v Huntwork, 26 AD3d 214, 216 [2006]). In addition, plaintiff's expert did not attempt to reconcile his conclusory assertion that the shoulder surgery was necessitated by accident-related injuries with the MRI report describing the shoulder as "unremarkable" other than "fluid and/or soft tissue inflammation surrounding the acromioclavicular joint.""

Now as to Nay - an "APPEAL AND OPINION" from the Second Department

Allstate's counsel argued, without a supporting affidavit from a medical expert, that these code-defined conditions could not have been related to the automobile accident or, at least, raised an issue of fact as to whether the conditions arose from the accident.

This Court determined that in applying Central General Hospital, "the question of whether an injury was entirely preexisting (i.e., not covered) or was in whole or in part the result of an insured accident (i.e., covered) is hybrid in nature, and cannot be resolved without recourse to the medical facts" (id. at 19 [emphasis added]).

While the existence of the diagnostic codes and the clinical definitions of Hafford's treated medical conditions may not be in dispute, the question of whether such conditions were wholly unrelated to his automobile accident or not exacerbated by the accident "cannot be resolved without recourse to medical facts" (Mount Sinai Hosp. v Triboro Coach, 263 AD2d at 19). Here, Allstate's counsel, in his affirmation, failed to set forth any basis on which to conclude that he was a medical expert qualified to render an opinion on causality (see Contacare, Inc. v CIBA-Geigy Corp., 49 AD3d 1215; Hofmann v Toys R Us, NY Ltd. Partnership, 272 AD2d 296). No physician or other medical expert affidavit was included in Allstate's submissions to explain the codes, the diagnoses and, most importantly, the causation or exacerbation, or lack of causation or exacerbation of conditions, in relation to the subject automobile accident. The mere deciphered codes, in and of themselves, are insufficient.

The remaining coded conditions, which on their face might appear unrelated to an automobile accident, could conceivably represent exacerbations of pre-existing conditions in the absence of expert medical opinion attesting otherwise. Exacerbations of pre-existing conditions are covered by the No-Fault Law (see Wolf v Holyoke Mut. Ins. Co., 3 AD3d 660, 660-661; Mount Sinai Hosp. v Triboro Coach, 263 AD2d at 18).

Allstate's submissions therefore suffer from an inescapable paradox. If the diagnostic codes pertain to conditions unrelated to Hafford's accident, Allstate was required to submit an affidavit from a medical expert (see Mount Sinai Hosp. v Triboro Coach, 263 AD2d at 19). If, on the other hand, the diagnostic codes represent conditions related to the accident, then Allstate was required to either pay the no-fault claim, or deny payment on other grounds, within 30 days of receiving the demand.

So here you go: You need an affidavit based upon the medical facts to prima facie demonstrate lack of causation. In opposition to a properly supported motion, you need an equally specific affidavit.

Estoppel through Box #16

2009-01-25T10:30:00.000-08:00

Some practioners called Box #16 the trap box. Hit independent contractor and you are dead. I always said wait a second. Just resubmit the bill, give a justification and you should get around the 45-day rule. However, do not make the mistake too often or the 45-day rule may become absolute. I also have said that on certain fee code issues, i.e., the "BR" codes, the same rule applies. Resubmit with the pertinent documentation and you should be alright.

Yet, there was always a displeasure I has towards Box #16 issues when the Claimant decided to fight the independent contractor issue through affidavit. The reason, as the Appellate Term said, was that all other defenses would be waived.

A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co.
2008 NYSlipOp 28528 (App. Term 2d Dept. 2008)

"In the case at bar, the claim forms at issue state that the treating professionals were independent contractors. Contrary to plaintiff's contention, the allegation that said treating professionals were actually employees, and that the claim forms contain misinformation, is irrelevant. Plaintiff did not submit bills that entitled it to payment, and correction of the defect involved herein should not be permitted once litigation has been commenced"

The Court then said something which I found fasciniating and I think can be used in a litany of situations:

"An insurer should be able to rely on the assertions in the claim form, and, in keeping with the aim of "provid[ing] substantial premium savings to New York motorists" (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]), should be able to handle a claim for services rendered by an independent contractor accordingly without engaging in further consideration of the claim. An insurer is not obliged to issue a denial in order to assert the non-precludable, independent contractor defense. Consequently, if a provider were to be permitted to demonstrate during litigation that the claim form was incorrect and services were, in fact, rendered by an employee, not only would the insurer, which exercised its option not to expend further efforts to defend a facially meritless claim, have lost its opportunity to conduct meaningful claims verification, but also its decision not to issue a denial would result in its preclusion from introducing most defenses"

The Court offers some guidance as to the business records exception

2009-01-25T10:28:00.000-08:00

V.S. Med. Servs., P.C. v Travelers Ins. Co.
2009 NY Slip Op 50048(U) (App. Term 2d Dept. 2009)

Plaintiff offered the testimony of its former employee and sought the admission of, inter alia, its purported claim forms into evidence. Defendant objected on the ground that said documents were hearsay and that plaintiff failed to lay a foundation for their admission pursuant to CPLR 4518.

While plaintiff produced a witness to testify regarding the claim forms plaintiff sought to have admitted into evidence, because said witness did not testify at all as to the generation of such claim forms, they were not admissible as business records

Written opposition - the key to beating people on procedural defects

2009-01-25T10:10:00.000-08:00

Perhaps one of the most obnoxious things in this area of law is that firms attempt to "amplify" their respective positions through oral argument. This occurs in two scenarios: (1) A party orally argues a motion without written opposition; and (2) A party amplifies their position during oral argument through raising new objections not raised in their papers.

Dave Barshay said it best in an analogous situation: "Unobjected to hearsay is competent evidence"

Similarly, unobjected to procedural defects render incompetent evidence competent. There are certain courts that routinely entertain these type of oral objections.

With that in mind, let us look at:

Complete Orthopedic Supplies, Inc. v State Farm Mut. Auto. Ins. Co.
2009 NYSlipOp 29014 (App. Term 2d Dept. 2009)

The Civil Court held that defendant failed to establish that its denial of claim forms were timely mailed because the notary public's jurat, on the affidavits of mailing executed by defendant's claims support services supervisor and the president of the courier service utilized by defendant, did not indicate the year in which the affidavits were signed. However, this technical [*2]defect is of the type which a court should disregard since it does not prejudice a substantial right of a party, particularly, where as here, plaintiff raised no objection thereto.

I shall say no more.

CPLR 3211(a) - you may cure pleadings in opposition to a preanswer motion

2009-01-25T09:55:00.001-08:00

Haire v Bonelli
2008 NY Slip Op 10250 (3d Dept. 2008)

"When courts consider a motion under CPLR 3211, pleadings are afforded a liberal construction, with all alleged facts accepted as true (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The court may consider affidavits submitted to remedy any defects in the complaint in determining whether plaintiff has a cause of action, per CPLR 3211 (a) (7), not whether he has stated one (see id. at 88). Under CPLR 3211 (a) (1), dismissal is warranted if documentary evidence conclusively establishes a defense as a matter of law (see Beal Sav. Bank v Sommer, 8 NY3d 318, 324 [2007]; Leon v Martinez, 84 NY2d at 88)."

Med Mal and Procedural case

2008-12-27T20:32:00.000-08:00

This is similar to the cases where a peer doctor fails to review sufficient documentation before arriving at an opinion.

"Lack of Foundation to form an expert opinion"

Luu v Paskowski
2008 NY Slip Op 10135 (2d Dept. 2008)

The pertinent portion of this case is as follows:

"[Plaintiff's expert] Zola did not refer to any part of the hospital records, and did not state when the blood loss occurred or how it caused the small bowel obstruction and hematoma. Zola made no reference to any of the hospital records in his affidavit, and did not state that he had reviewed the pleadings and depositions. Zola's affidavit was conclusory and lacked a foundation (see Thompson v Orner, 36 AD3d at 792; Furey v Kraft, 27 AD3d at 418).

Procedural - default viz a vi failure to obtain an adjournment on the record

Diamond v Diamante
2008 NY Slip Op 10117 (2d Dept. 2008)

"plaintiffs and their attorney, nonparty James D. Reddy, appeal from a judgmentwhich, inter alia, upon the denial of the plaintiffs' application for an adjournment, is in favor of the defendants and against the plaintiff, dismissing the complaint, and against the nonparty James D. Reddy awarding costs and imposing sanctions."

"Where, as here, the order appealed from was made upon the plaintiffs' default, "review is limited to matters which were the subject of contest below" (Matter of Constance P. v Avraam G., 27 AD3d 754, 755 [internal quotations marks omitted]; see James v Powell, 19 NY2d 249, 256 n 3; Wexler v Wexler, 34 AD3d 458, 459; Brown v Data Communications, 236 AD2d 499). [*2]Accordingly, in this case, review is limited to the denial of the plaintiffs' request for an adjournment, on the appeal by the plaintiffs, and the award of costs and imposition of sanctions against nonparty James D. Reddy, on the appeal by the nonparty (see Matter of Paulino v Camacho, 36 AD3d 821, 822; Tun v Aw, 10 AD3d 651, 652).

Turning to the merits, "[t]he granting of an adjournment for any purpose is a matter resting within the sound discretion of the trial court" (Matter of Anthony M., 63 NY2d 270, 283; see Matter of Steven B., 6 NY3d 888, 889; Matter of Sicurella v Embro, 31 AD3d 651, lv denied 7 NY3d 717), and its determination will not be disturbed absent an improvident exercise of that discretion (see Davidson v Davidson, 54 AD3d 988). "In making such a determination, the court must undertake a balanced consideration of all relevant factors" (Matter of Sicurella v Embro, 31 AD3d at 651), including "the merit or lack of merit of the action, extent of the delay," the number of adjournments granted, the "lack of intent to deliberately default or abandon the action" and the length of the pendency of the proceeding (Belsky v Lowell, 117 AD2d 575, 576; see Matter of Claburn v Claburn, 128 AD2d 937, 938)."

The future is bright for medical necessity msj's

2008-12-27T20:14:00.000-08:00

Again, this is not necessarily a pure no-fault post. However, this is a no-fault post by analogy. I came across a doosy of a decision and order from the Appellate Division, Second Department. It kind of cuts both ways on two different issues. Hopefully you will see where I am going with this, after you see the excepts I am publishing.

Geffner v North Shore Univ. Hosp.
2008 NY Slip Op 10124 (2d Dept. 2008)

To support her allegations [of medical malpractice and in opposition to Defendant's motion for summary judgment], the plaintiff submitted the expert affidavit of Charles Phillips, a physician certified in emergency medicine. Dr. Phillips' affidavit was of no probative value, however, as it contained opinions outside his area of expertise and did not establish a foundation for his opinions (see Glazer v Choong-Hee Lee, 51 AD3d 970; Mustello v Berg, 44 AD3d 1018, 1018-1019; Behar v Coren, 21 AD3d 1045, 1046-1047)...."

"Finally, the plaintiff submitted the expert affirmations of Howard C. Adelman, a physician certified in clinical pathology and cytopathology, which alleged that the defendant doctors misdiagnosed the decedent as suffering from myelodysplastic syndrome, acute myeloid leukemia, and adenocarcinoma. Dr. Adelman's affirmations were insufficient to raise a triable issue of fact with respect to the alleged misdiagnoses since they failed to address the evidence relied upon by North Shore's experts in rendering their opinions that the diagnoses were correct (see Germaine v Yu, 49 AD3d 685, 687; Fhima v Maimonides Med. Ctr., 269 AD2d 559, 560).

Issue #1: Doctors who give opinions outside their scope of expertise.

This is a problem, however, an accounting of their skills and expertise should get one of the trouble that was wrought in this cae

Issue #2: Failure to address movant's proof.

Big problem in no-fault litigation.

Accelerated Judgment not availabe in criminal proceedings

2008-12-25T20:00:00.000-08:00

Yes, this is a no fault blog that I maintain, mostly for my own amusement. I take pride in the level of scholarship set forth in this blog. I try to avoid topics that do not apply either directly or tangentially to the arena of PIP issues. This will be a rare exception.

In my daily reading of the App. Term criminal cases, I found an interesting issue that has satisfied my curiosity. Likewise, I find the outcome disturbing.

The case that is interesting is entitled: People v Manupelli (Christine), 2008 NY Slip Op 28520 (App. Term 2d Dept. 9th and 10th Jud. Dis. 2008). It says the following:

In this prosecution based on defendants' alleged violation of local ordinances requiring landfill permits and barring the diversion of rainwater onto neighboring properties, defendants moved pretrial to dismiss the accusatory instruments pursuant to CPLR 3211 (a) (7). The Justice Court granted the motion, concluding, in essence, that there was a legal impediment to conviction (CPL 170.30 [1] [f]), finding that defendants' proof in support of the motion established both their entitlement to an exclusion from the permit requirement and the People's inability to prove, on the facts, that defendants are legally responsible for the alleged illegal diversion of rainwater onto a neighbor's property.

Defendants' motion should have been denied. With rare exceptions (e.g. CPL 60.10), the CPLR is inapplicable to criminal proceedings (CPLR 101; CPL 1.10 [1]; People v Knobel, 94 NY2d 226, 230 [1999]; People v Crisp, 268 AD2d 247 [2000]; People v Silva, 122 AD2d 750 [1986]; see generally People ex rel. Hirschberg v Orange County Court, 271 NY 151, 155 [1936]). The authority of a criminal court to dismiss an information pursuant to a pretrial motion (see CPL 170.30) does not include a motion for accelerated judgment available to civil court litigants (see CPLR 3211, 3212), and, in any event, the court had no authority to dismiss an accusatory instrument on the ground that, in its view, the People could not produce sufficient [*2]evidence to prevail at trial (e.g. People v Asher, 16 Misc 3d 89, 91 [App Term, 9th & 10th Jud Dists 2007]). Thus, on this record, there were no grounds to dismiss the accusatory instrument upon defendants' pretrial motion (see CPL 170.30).

My thought has always been this: why is it that somebody who risks going to prison or ending up with legal impediments attendant to a criminal conviction have markedly less procedural rights than a civil litigant? That has bothered me to no end and, yet in New York, that is the rule. You need not be a criminal attorney to see how wrong this all is. Yet, this is the world we live in.

Food for thought this Christmas.

I was beaten by a fellow blogger on the verification issue...

2008-12-25T19:55:00.000-08:00

I found this story a week before it was brought to life by a fellow blogger, but since the fellow blogger published it first, he gets deserved credit. the name of the case is: Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc.3d 1 (App. Term. 2d Dept. 2008).

This was the case involving a premature follow-up additional verification and the preclusion sanction due to this occurring. It is interesting to see the Second Dept taking up this issue. The dissenter at the Appellate Term observed other Appellate Division cases that found the sanction of preclusion unwarranted in this factual scenario. This is probably what lead the App. Div to grant leave as to this issue. As I have learned recently through personal experience in two recent matters, the App. Div. does not like to grant leave to no fault matters and does not like motions to reargue when a non-articulated argument, if properly preserved, would reverse their opinion and order.

That is the only case of interest on the horizon that i have seen lately...

A new day for decisions...

2008-12-09T19:27:00.000-08:00

I have an observation here that I want to share with those who read this - which I think consists of me, myself and I. The decisions in the realm of no-fault have been getting quite redundant. We used to always wait for the next big pronouncement from an appellate court, or even an observation from a lower court. Now, we just look to see when the next breaking or shattering of the status quo will occur.

With the above introduction in mind, now to the cases.

A.M. Med., P.C. v State Farm Mut. Ins. Co.
2008 NY Slip Op 28487 (App. Term 2d Dept. 2008)

Failure to properly caption - you better reject that paper within 2-days or you have waived the

Plaintiff argues that the absence of a caption setting forth the name of the court, the venue [*2]and the index number in the 90-day demand rendered it a nullity, as it was not in compliance with CPLR 2101 (c). However, the demand set forth the name of the case, including the name of the assignor, as well as the date of the loss. Consequently, in our opinion, the omissions were merely defects in form to which plaintiff's counsel could have objected by returning the demand to defendant within two days of its receipt, specifying the nature of the defect (CPLR 2101 [f]). Plaintiff's failure to do so waived any objection to the defect (see Deygoo v Eastern Abstract Corp., 204 AD2d 596 [1994]). right to challenge that defect.

Psychmetrics Med., P.C. v Travelers Ins. Co.
2008 NYSlipOp 52466(U)(App. Term 2d Dept. 2008)

This is another notice to admit case. Nothing special, right? Well, this is the first citing of Art of Healing Medicine, P.C. v Traveler's Home & Mar. Ins. Co., ___ AD3d ___, 2008 NY Slip Op 07846 [2d Dept 2008], the Appellate Division's affirmance of the Dan Medical "business record foundation" cases in order to establish a prima facie case.... Exciting, right?

My last words of the day...

I love the commentary from the Appellate Term on CPLR 2101. Realistically, how many law practices can realistically reject a non-captioned filing within two days of receipt? A better question - how many law practices can reject a "hidden" affidavit that is not captioned within a properly captioned motion within two days of its receipt? I know I cannot - and my practice pales in comparison to that of the larger firms out there - e.g., Baker, Sanders (among others)...

And then there is Art of Healing - vindication to those who have pushed through Dan Medical and its progeny...

Some newer cases

2008-11-16T15:18:00.000-08:00

It has been a real quiet few months in our world of law. Nothing too substantial has come out recently. There have been some procedural cases, which have an effect on all areas of law. Here are some of the cases I have found which have interesting overtones to them:

Stipulation of discontinuance with prejudice = presumption of res judicata

Support Billing & Mgt. Co. v State Farm Mut. Ins. Co.
2008 NYSlipOp 52226(U)(App. Term 2d Dept. 2008)

"A stipulation of discontinuance which specifies that it is "with prejudice" raises a presumption that the stipulation is to be given res judicata effect in future litigation on the same cause of action"

Discovery on a precluded defense requires proof of a timely denial - timely denial means more than it being facially timely...

Corona Hgts. Med., P.C. v State Farm Mut. Auto. Ins. Co.
2008 NYSlipOp 52185(U)(App. Term 2d Dept. 2008)

"Where a discovery demand concerns matters relating to a defense which a defendant is precluded from raising, it is palpably improper, notwithstanding the fact that the plaintiff did not specifically object thereto (see A.B. Med. Servs. PLLC, 11 Misc 3d 71). As defendant did not establish that it timely denied plaintiff's claims, to the extent defendant seeks discovery in support of its defense of lack of medical necessity, discovery of such precluded matter is palpably improper"

Court sanctions more than one discovery device being demanded simulataneously

First Aid Occupational Therapy, PLLC v State Farm Mut. Auto. Ins. Co.
2008 NY Slip Op 51963(U)(App. Term 2d Dept, 2008).

In addition, defendant is entitled to conduct an EBT of plaintiff notwithstanding the fact that defendant also served a demand for discovery and inspection of documents (see Woods v Alexander, 267 AD2d 1060, 1061 [1999]; Iseman v Delmar Med.-Dental Bldg., 113 AD2d 276 [1985]; JMJ Contract Mgt. v Ingersoll-Rand Co., 100 AD2d 291, 293 [1984]).

CCA 1201 - give us a reason for allowing an extraterritorial subpoena

Bronxborough Med., P.C. v Travelers Ins. Co.
21 Misc.3d 21 (App. Term 2d Dept. 2008)

Inasmuch as plaintiff's moving papers failed to establish that the interests of justice would be served by permitting plaintiff to serve, outside the City of New York and the adjoining counties, a subpoena which would require defendant's employee to appear at trial, and, in addition, did not set forth the location at which plaintiff sought to serve the subpoena, plaintiff's motion was properly denied.

Don't send the peer or IME upon demand - the courts will forgive you, but the DOI probably will not.

Careplus Med. Supply, Inc. v New York Cent. Mut. Fire Ins. Co.
21 Misc.3d 18 (App. Term 2d Dept. 2008)

In response to a provider seeking to preclude an insurance carrier from raising a defense of lack of medical necessity based upon the pre-suit failure to turn over the peer or IME report in accordance with the regulations, the Appellate Term said no so fast...

"The Insurance Department Regulations provide no sanction for an insurer's failure to provide a peer review report upon the written{**21 Misc 3d at 20}{**21 Misc 3d at 20} request for one by a provider (see e.g. A.B. Med. Servs. PLLC v Clarendon Natl. Ins. Co., 12 Misc 3d 143[A], 2006 NY Slip Op 51415[U] [App Term, 2d & 11th Jud Dists 2006]). While plaintiff urges the court to impose the sanction of preclusion here, we decline to do so because "[h]ad it been the intent of the Department of Insurance" to impose such a sanction, "it would have so provided"

Do not file a notice of trial without obtaining a final order of preclusion or dismissal, etc.

Iscowitz v. County of Suffolk
54 A.D.3d 725 (2d Dept. 2008)

"The plaintiffs waived any objection to the adequacy and timeliness of the disclosure by filing a note of issue and certificate of readiness prior to moving pursuant to CPLR 3126 for the imposition of a discovery sanction "

Preclusion - The Appellate Division spells out why we should not sign preclusion stipulations.

Allen v Calleja
2008 NY Slip Op 08685 (2d Dept. 2008)

To warrant preclusion, "the Supreme Court must determine that the offending party's lack of cooperation with disclosure was willful, deliberate, and contumacious" (Assael v Metropolitan Tr. Auth., 4 AD3d 443, 443; see CPLR 3126[2]; Moog v City of New York, 30 AD3d 490). Such conduct may be found where, for example, a party repeatedly fails to comply with court orders directing it to produce certain discovery without adequate excuses therefor

And when it comes to the inability to invoke "preclusion" based upon a single failure to comply with a conditional order of preclusion (when this was the first discovery order in the case), the Appellate Term, First Department said the following:

Pelham Parkway Neuro & Diagnostic, P.C. v. Liberty Mut. Ins. Co.
16 Misc.3d 130(A)(App. Term 1st Dept. 2007)

In this action to recover assigned first party no-fault benefits, the drastic sanction of precluding defendant from asserting its defense of exhaustion of policy limits was unwarranted in the absence of a showing that defendant's single failure to comply with the parties' discovery stipulation was willful and contumacious

And then the Appellate Division, Second Department spoke

2008-10-16T17:33:00.000-07:00

Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co.
2008 NY Slip Op 07846 (2d Dept. 2008)

The Appellate Division Second Department has now, in pertinent part, decided to follow Dan Medical as it relates to the necessity for the records to be entered into evidence for the truth of the matter asserted.

To quote the court: "The plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law. The plaintiffs' medical service providers failed to demonstrate the admissibility of their billing records under the business records exception to the hearsay rule (see CPLR 4518[a]"

So there goes the literal interpretation of Mary Immaculate (discussed in the prior post) that the Plaintiffs' bar has relied upon to meet a prima facie case. Indeed, the Appellate Term, First Department has been adamant that the billing forms do not need to be placed into evidence to make a prima facie case.

Yet, let us not forget that the Appellate Division, First Department, adopted the Mary Immaculate rule in Countrywide Ins. Co. v. 563 Grand Medical, P.C., 50 AD3d 313 (1st Dept. 2008), when they held as to prima facie in a trial denovo setting that:

"Defendant medical provider established prima facie its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by plaintiff insurer and that payment of the no-fault benefits was overdue"

I therefore do not think this case will represent much of a shift in the law, as it stands today. What this case opens up the door to, at some point, is a Court of Appeals ruling should the Appellate Division, First Department continue to follow Mary Immaculate. This would render a split in the Appellate Divisions, which would allow the prima facie issue to make it all the way to the top of the appellate food chain.

Prima facie: schizophrenia from the Appellate Term

2008-10-15T18:55:00.000-07:00

Mary Immaculate Hosp. v New York Cent. Mut. Fire Ins. Co.
2008 NY SlipOp 52046(U)(App. Term 2d Dept. 9th and 10th Jud. Dis. 2008)

I have been waiting for the day when a Henig Hospital case with the famous Hospital Receivable's third-party billing affidavit (which we all know is insufficient to lay a proper foundation for entry into evidence of the billing forms) to be evaluated by the Appellate Term, Second Department.

Let me explain. The famous Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 (2d Dept. 2004) case is a Appellate Division, Second Department case, which involved a Henig third-party biller affidavit. The Apppellate Division, as we all know, said that a prima facie case consists of submission of a claim form, and proof that the bill is overdue. Therefore, Mary Immaculate was granted summary judgment.

Here, the Appellate Term today ducked the prima facie issue. The Court said that the issue is not preserved since the issue was not raised in the initial answering papers of New York Central Mutual. Therefore, the issue was not before the Court.

However, the case which this case "cf" cited said that the issue of admissiblity of business records may be raised for the first time on appeal. See, Bath Med. Supply, Inc. v Deerbrook Ins. Co. , 14 Misc 3d 135(A)(App. Term 2d and 11th Jud. Dis. 2007). Yet, this case said that an appellate court may not do this. My suspicion is that the Appellate Term did not want to deal with the fact that these third-party affidavits are sufficient before the Appellate Division, yet are not acceptable before the Appellate Term.

I feel that at some point, we are going to have a prima facie showdown in the Second Department. I believe this will happen soon.

Escaping the four corners of the denial

2008-10-14T18:37:00.000-07:00

At this point in our PIP jurisprudence, it has been taken for granted that a defense of medical necessity extends to the four corners of the peer review or the medical examination which recommends cessation of treatment.

The foundation for the principle appears in 11 NYCRR Sec. 65-3.8(a)(4), which states the following: "If the specific reason for a denial of a no-fault claim, or any element thereof, is a medical examination or peer review report requested by the insurer, the insurer shall release a copy of that report to the applicant for benefits, the applicant's attorney, or the applicant's treating physician, upon the written request of any of these parties."

In construing this regulation, the Appellate Division observed in A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co. 39 A.D.3d 779 (2d Dept. 2007): "The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request. Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form, it would have so provided"

Thus, it is has been assumed that the the peer or IME is an extension of the denial. This was the methodology behind the Appellate Term, Second Department's holding in A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co. 10 Misc.3d 128(A)(App. Term 2d Dept. 2005), prior to it being reversed by the Appellate Division, Second Department. See, 39 AD3d 779. In fact, all the Appellate Division really said was that the peer report or IME report does not have to be annexed to the denial.

Therefore, recent Appellate Term, First Department cases are quite questionable. In Mollins v Allstate Ins. Co. 20 Misc 3d 141(A)(App. Term 1st Dept. 2008), the Appellate Term, stated the following: "In opposition, defendant failed to raise a triable issue since it did not submit the IME report upon which its denials were based or any other evidentiary proof to support its defense of lack of medical necessity (see Vista Surgical Supplies, Inc. Travelers Ins. Co., 50 AD3d 778 [2008]; Response Med. Equip. v General Assur. Co., 13 Misc 3d 129[A], 2006 NY Slip Op 51765[U] [2006]).

And the Appellate Term case, Response Med. Equipment said the following: "With respect to the $650 claim for assignor Edwin Milanes, defendant failed to support its defense of lack of medical necessity with the peer review upon which the denial was based, or any other competent proof in admissible form."

It therefore appears arguable that an insurance carrier may escape the four corners of the denial, as amplied by the peer review and denial. It should be interesting to see how the Appellate Term, First Department and the other courts rule when the "Cerucci" four corner rule collides with the "other competent proof in admissible form" rule.

Dan Medical is safe for now (well sort of)

2008-10-12T19:01:00.000-07:00

Bajaj v General Assurance
2008 NYSlipOp 84460(U)(2d Dept. 2008)

"Motion by the plaintiff for leave to appeal to this court from an order of the Appellate Term, Second and Eleventh Judicial Districts, dated October 22, 2007, which reversed a judgment of the Civil Court of the City of New York, Queens County, entered February 9, 2006.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is

ORDERED that the motion is denied."

Comment: Baja was the case that held that a Plaintiff cannot make its prima facie case based upon a notice to admit. This was the companion to Empire State Psychological Servs., P.C. v Travelers Ins. Co. (App. Term 2d Dept. 2007), which held that interrogatories admitting receipt and the bills being overdue was insufficient to make a prima facie case. The above cases were ruled on as they were because the Appellate Term, Second Department, has consistently opined that the billing claim forms need to be entered into evidence.

This is in contrast to the Appellate Term, First Department, which has routinely held that a prima facie case is set forth through a literal interpretation of Mary Immaculate Hospital as observed in Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc.3d 8 (App. Term 1st Dept. 2007), to wit:

"[d]efendant insurer admitted that it received the no-fault claims at issue and made partial payment on the claims. Inasmuch as defendant's verified answers to the interrogatories constituted admissions of a party, which are admissible as evidence, defendant may not now be heard to argue that plaintiff failed to submit proof that the claims had been mailed and received, and that they were overdue (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). To the extent that Empire State Psychological Servs., P.C. v Travelers Ins. Co. (13 Misc 3d 131[A], 2006 NY Slip Op 51869[U] [2006]) supports a contrary conclusion, we decline to follow it."

Had Baja made its way to the Appellate Division, Second Department, then it is likely that the world of Dan Medical would have gone the way of vicarious liability in leasehold cases following the Graves Amendment.

Appellate Division, Fourth Department opines on the issue of non-cooperation

2008-10-11T08:30:00.001-07:00

Progressive Ins. Co. v Strough
2008 NY Slip Op 07463 (4th Dept. 2008)

We further conclude that the court properly denied that part of plaintiff's cross motion for [*2]summary judgment declaring that plaintiff has no duty to indemnify defendant for claims arising from the motor vehicle accident in question, including claims for no-fault benefits. Plaintiff failed to support its motion with evidence provided by an individual with personal knowledge of the facts (see Chiarini v County of Ulster, 9 AD3d 769, 769-770), and the documents provided by plaintiff in support of the cross motion do not establish that defendant failed to cooperate with plaintiff, as alleged in the complaint.

Comment: Does the no-fault endorsement provide a non-cooperation defense? I remember a case entitled Utica Mut. Ins. Co. v. Timms, 293 AD2d (2d Dept. 2002) , which says otherwise. There is another case from the Fourth Department a few years ago, which opined on the non-cooperation defense as it relates to no-fault benefits. See, Simmons v. State Farm Mut. Auto. Ins. Co. 16 A.D.3d 1117 (4th Dept. 2005).

Causation - Be aware of seeking a trial de novo after a master arbitrator affirms an award

2008-10-11T08:29:00.000-07:00

State Farm v. Stack
2008 NY Slip Op 07651 (2d Dept. 2008)

"A no-fault arbitration tribunal twice concluded that the defendant, James Stack, was entitled to benefits arising from an automobile accident. Subsequently, the plaintiff, State Farm Automobile Insurance Company (hereinafter State Farm), commenced a de novo plenary action seeking a determination that medical expenses for Stack's hospitalization were for a condition unrelated to the accident and that Stack failed to demonstrate his entitlement to lost earnings."

"An insurer seeking to deny no-fault benefits on the basis that a claimant's condition is not causally related to an accident "has the burden to come forward with proof in admissible form to establish the . . . evidentiary foundation for its belief' that the patient's treated condition was unrelated to his or her automobile accident" (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 19-20). The testimony of State Farm's expert witness, an anesthesiologist and pain management specialist, that his opinion was based solely upon a hospital discharge summary and insurance claim form, rendered his opinion speculative and of little probative value (see Gordon v Tibulcio, 50 AD3d 460)."

"In contrast, the testimony of Stack's expert witness, a neurologist who based his opinion upon his examination of Stack and his review of Stack's relevant medical records, including, inter alia, CT scans and magnetic resonance imaging, and determined that Stack's symptoms first appeared within two weeks of the accident and progressively worsened, was sufficient to establish that Stack's condition was causally related to the accident (see Scudera v Mahbubur, 299 AD2d 535, 536)."

Comment: Another case where the Appellate Courts are loathe to sustain an insurance carrier's proof that a service is not causally related to a motor vehicle accident.

Avoid the invectives

2008-10-11T08:28:00.002-07:00

Great Wall Acupuncture, P.C. v General Assur. Co.
2008 NY Slip Op 28350 (App. Term 2d Dept. 2008)

This case has been commented on numerous times before. It is one of many Mallela discovery motions that are granted as long as there is some shred of evidence that there is an improper incorporation issue. This follows the recent Appellate Division case of One Beacon Ins. Group, LLC v. Midland Medical Care, P.C., 2008 N.Y. Slip Op. 06813 (2d Dept. 2008), which held as follows:

"However, in opposition to the motion, the plaintiffs submitted sufficient evidentiary proof to raise an issue of fact as to whether Proscan was actually controlled by a management company owned by unlicensed individuals in violation of the Business Corporation Law"Accordingly, the appellants' motion for summary judgment was properly denied with respect to all three causes of action, which allege fraudulent incorporation."

"The Supreme Court properly granted that branch of the plaintiffs' cross motion which was for disclosure of certain financial documents. Contrary to the appellants' contention, the plaintiffs were not required to make a showing of “good cause” for such disclosure"

I like this case for the following quotation: "Although plaintiff contends that the court erred in denying the cross motion for an order sanctioning defendant and defendant's counsel, in our opinion, the court providently exercised its discretion. We remind plaintiff's counsel that "[f]rivolous conduct shall include the making of a frivolous motion for costs and sanctions" (Rules of the Chief Administrator [22 NYCRR] § 130-1.1). We further caution plaintiff's counsel to refrain from including invective and ad hominem attacks in his papers."

Fee schedule defense - competent evidence?

2008-10-11T08:28:00.001-07:00

OS Tigris Acupuncture, P.C. v Liberty Mut. Insurance Co.
2008 NY Slip Op 51996(U)(App. Term 1st Dept. 2008)

"Nor did defendant produce competent evidence in support of its defense of nonconformity with the applicable fee schedule (see Continental Med. P.C. v Travelers Indem. Co., 11 Misc 3d 145[A], 2006 NY Slip Op 50841[U] [2006])"

Comment: I am going to assume that the movant did not provide a copy of the applicable portions of the fee schedule and annex the Department of Insurance Letter allowing the carrier to pay the chiropractor or physician fee schedule for acupuncture or a geographical rate it deemed proper.

Fee schedule defense - Appellate Division gives due deference to the DOI

2008-10-11T08:26:00.000-07:00

Forrest Chen Acupuncture Services, P.C. v. GEICO Ins. Co.
2008 N.Y. Slip Op. 07211 (2d Dept. 2008)

"Furthermore, the defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint by submitting evidentiary proof that no fee schedule for the reimbursement of acupuncture treatments existed in 2001, and that it properly limited payment to “charges permissible for similar procedures under schedules already adopted” (11 NYCRR 68.5[b]; see Insurance Law § 5108; Ops Gen Counsel N.Y. Ins Dept No. 04-10-03 [October 2004] ). In opposition to the cross motion, the plaintiff failed to raise an issue of fact as to whether reimbursement for its acupuncture services was properly limited."

Comment: I would opine that "competent evidence" to support a prima facie fee schedule defense would include (besides a timely denial) the following: (a) Pertinent portion of the fee schedule including conversion factor and CPT Codes with relative values; (b) DOI letter indicating it is proper; and (c) Affidavit from claims examiner indicating compliance with the foregoing.