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EIP’s payment of assigned billings confers standing back to EIPOctober 31, 2018

Abruscato v Allstate Prop., 2018 NY Slip Op 07279 (2d Dept. 2018)

However, the Supreme Court should have denied that branch of the defendant’s motion which was to dismiss so much of the first cause of action as sought to recover no-fault insurance benefits for medical expenses. The defendant contends, inter alia, that the plaintiff lacked standing because he had assigned his right to no-fault insurance benefits for medical expenses to his medical providers. Although the defendant submitted evidence that the plaintiff assigned his right to no-fault benefits to two medical providers (hereinafter the assignees), the plaintiff’s evidentiary submissions showed that other medical providers had also billed him for their services.

Moreover, upon the defendant’s determination that the injury was not causally related to the motor vehicle accident, the assignees were no longer precluded from seeking payment from the plaintiff (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199; Rotwein v Stancil, 15 Misc 3d 19, 21). Since there was a failure of insurance coverage rendering the plaintiff personally responsible for the medical bills (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199; Rotwein v Stancil, 15 Misc 3d at 21), the plaintiff has a cause of action to recover no-fault insurance benefits for medical expenses from the defendant (see Guggenheimer v Ginzburg, 43 NY2d at 275).

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Two things can happen to revive the EIP’s right to have standing.  First, the EIP pays the billings that were sent to it.  Or – Second, the insurance carrier determines the injuries are not related to the motor vehicle accident.  Allstate’s counsel’s position on these cases (same counsel always) is plainly obnoxious.  I am glad to see the Appellate Division bring some common sense to the plight of the EIP who is left defenseless, i.e, getting sued from the assignee medical providers and told from the insurance carrier that there is nothing they can do.  Alas, there is a legal remedy.

4 Responses

  1. Nathan says:

    On what legal basis can an assignment be nullified because the provider billed the EIP? This makes no sense as the assignor is no longer a party in interest when it comes to the claim. His remedy is against the provider for breach of contrast (the assignment is for consideration, its not revocable retroactively). This is not legally sound

    • jtlawadmin says:

      Take off your defense hat for a moment. I spotted you as a plaintiff in a slip and fall appeal, so you have it in you. Consider the EIP that was sued by a hospital because the hospital had a lien. The hospital chose to collect against the EIP as opposed to filing an arbitration or lawsuit against the carrier. Assume the hospital does not give you a release of AOB. Now what? Cases like this make sense when you look at this from a different perspective. Consider this case: Vazquez v. Aetna Casualty & Sur. Co., 112 Misc. 2d 126. It is illuminating

  2. Nathan says:

    Pardon the typos – auto correct is non functioning on this site

  3. Nathan says:

    Unless this holding is limited to circumstances of lack of coverage, where revocation is limited to lack of coverage

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