The 120-day ruleNovember 24, 2019

Chapa Prods. Corp. v MVAIC, 2019 NY Slip Op 29341 (App. Term 2d Dept. 2019)

It can be called the 150-day rule. In essence the carrier has 150 days from the first verification demand to the date of denial. What i found interesting is that a late denial does not void the defense under a Domotor theory. Rather, a late disclaimer only makes the dismissal without prejudice. I agree with the central holding since it makes sense. New York has a 30-day pay or deny/die rule. So, you cannot argue with this new rule of no-fault law.

I am grateful that the Court appears not to be accepting a nondescript affidavit that certain items were mailed: “However, we agree with the Civil Court’s determination that the documentation plaintiff provided in response to defendant’s verification requests is “not in compliance with the request” (see New Way Med. Supply Corp. v State Farm Mut. Auto Ins. Co., 56 Misc 3d 132[A], 2017 NY Slip Op 50925[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017])”.

As you know, the famous non descrip affidavit has caused many carrier motions to be denied. I disagreed with those holdings.

The Court went on and held as follows:

“Historically, an insurer has not been required to pay or deny claims upon receipt of a “partial response” to a verification request (see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2002] [“(a)n insurer is not obligated to pay or deny a claim until it has received verification of all relevant information requested”]; see also Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co.,24 AD3d 492, 493 [2005]; Compas Med., P.C. v Travelers Ins. Co., 53 Misc 3d 136[A], 2016 NY Slip Op 51441[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). The current version of 11 NYCRR 65-3.8 (b) (3) also does not obligate an insurer to pay or deny a claim prior to its receipt of all requested verification—it merely provides that an insurer “may” issue a denial. Previously, when a request for verification had not been fully complied with prior to the commencement of a no-fault action, the action was dismissed as premature (see Proscan Imaging, P.C. v Travelers Indem. Co., 28 Misc 3d 127[A], 2010 NY Slip Op 51176[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Vista Surgical Supplies, Inc. v General Assur. Co., 12 Misc 3d 129[A], 2006 NY Slip Op 51034[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2006]), and we see no reason to deviate from that rule now.”

“In light of the foregoing, we hold that a denial of claim form issued following the expiration of the 150-day period after the issuance of the initial request for verification is a nullity with respect to that defense. Therefore, we find that the untimely denials issued in this case offer no basis to dismiss the complaint with prejudice. Rather, upon searching the record, we conclude that the action should be dismissed as premature, i.e., without prejudice, which is the same position the parties would have been in before 11 NYCRR 65-3.8 (b) (3) was amended to permit a denial on the ground that verification was not provided.”

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