Not denying in 30-days proves fatal April 18, 2022

Matter of Advanced Orthopaedics, PLLC v Country-Wide Ins. Co., 2022 NY Slip Op 02406 (2d Dept. 2021)

In a Court that on paper is overly deferential to arbitration decsisions on the basis that mistakes of law are allowed, we tend to see decisions that, on paper, seem better suited for the First Department. This case really highlights the tension between the two Departments.

(1) ” “If the master arbitrator vacates the arbitrator’s award based upon an alleged error of ‘a rule of substantive law,’ the determination of the master arbitrator must be upheld unless it is irrational” (id. at 576 [internal quotation marks omitted]; see Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d 1168).”

(2) “The Supreme Court erred in denying the petition, inter alia, to vacate the award of the master arbitrator, as there was no rational basis to support the award. The master arbitrator’s determination that a denial of liability based upon a failure to appear at an examination under oath constitutes a defense of lack of coverage, which is not subject to preclusion, is irrational (see Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d at 1168; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047).”

(3) “Further, the master arbitrator’s application of 11 NYCRR 65-3.5(p) is irrational, as it effectively allows an insurer to avoid the statutory timeliness requirements set forth in 11 NYCRR 65-3.8(a). Where, as here, the initial request for an examination under oath is sent more than 30 days after receipt of the claim, the request is a nullity (see Excel Prods., Inc. v Farmington Cas. Co., 71 Misc 3d 137[A], 2021 NY Slip Op 50441[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]), and the insurer’s failure to timely notice the examination under oath is not excused by 11 NYCRR 65-3.5(p)”

What did we learn here? Plenty! A finding that a disclaimer is not required for what some could call a post loss condition precedent to coverage, a/k/a, condition subsequent. The net effect of this means that the substantive law to be applied is based upon the court that ultimately is called upon to confirm or vacate an arbitration award. Very slippery.

The second issue involves 11 NYCRR 65-3.5(p). This involves extensions of times to perform acts under the regulations. Insofar as a time to pay, deny or take legally cognizable action extends beyond 30-days after a bill is received, it is deemed a nullity. The Court leaves open the failure to timely serve a follow-up verification request.

And the Second Department acknowledges that an action taken between 15 business day and 30 calendar days is valid. A regulatory cornucopia

Conditional order of preclusion absolves a willfulness inquiry March 23, 2022

Langona v Village of Garden City, 2022 NY Slip Op 01995 (2d Dept. 2022)

“As a result of the defendant’s failure to adequately comply with the discovery demands on or before the deadline imposed in the conditional order, the conditional order, which was served upon the defendant with notice of entry, became absolute (see Von Maack v Wyckoff Hgts. Med. Ctr., 195 AD3d 769, 771; Williams v Davita Healthcare Partners, Inc., 172 AD3d 791Williams v Suttle, 168 AD3d 792, 794; State Farm Mut. Auto. Ins. Co. v Anikeyeva, 130 AD3d 1007, 1007-1008). Although the defendant contends that its behavior was neither willful nor contumacious, “‘[w]ith this conditioning, the court relieves itself of the unrewarding inquiry into whether a party’s resistance was wilful'” (Matter of Metro-North Train Acc. of Feb. 3, 2015, 178 AD3d 929, 931, quoting Gibbs v St. Barnabas Hosp., 16 NY3d 74, 82 [internal quotation marks omitted]).

Sufficient for a default March 19, 2022

State Farm Mut. Auto. Ins. Co. v AK Global Supply Corp., 2022 NY Slip Op 01890 (1st Dept. 2022)

In the staged accident paradigm, what is enough to make a prima facie showing of staged accident?

“Plaintiff’s Claim Specialist, Danette Rodriguez submitted an affidavit stating that the policy was procured online to an Albany address 22 days before the collision, that the collision occurred late at night in Queens County, far from Albany, and that the adverse driver, Alister Brown, told the police he did not believe that the claimants were in the insured vehicle at the time of the collision. She stated further that the claimants began undergoing elaborate and mirror treatments the next day, although the police accident report showed no reported injuries at the scene and no damage to either car. Moreover, during an interview with plaintiff, the alleged driver of the insured vehicle, Oneil Pierrisaint, denied ever driving the vehicle, knowing any of the claimants, or knowing Loiseau’s name, which led plaintiff to conclude that Pierrisaint’s identity had been stolen by John Doe, the unknown driver. Finally, Evans Julce, a witness to the collision, stated in an affidavit that the insured vehicle seemed to have collided with Brown’s car intentionally”

I think this is “overkill”. If you were to measure the staged accident proof against this standard, most cases would not pass muster. I think the case Justice Devin Cohen wrote about a few weeks ago is the prime example of what is needed in the circumstantial case.

I also like this case because it is clear that the 15 business day time period is measured against receipt of the NF-3. ” Documentary evidence shows that plaintiff sent the EUO scheduling letters to the claimants within 15 business days of receiving the prescribed verification forms (in this case, NF-3 forms), as required (see 11 NYCRR 65-3.5[b]; Hertz Vehicles, LLC v Best Touch PT, P.C.,162 AD3d 617 [1st Dept 2018]). Contrary to the motion court’s calculation of the 15-day period as starting from plaintiff’s receipt of the claimants’ NYS Form NF-2s, the NYS Form NF-2 is not a “prescribed verification form[],” but an application for no-fault benefits (11 NYCRR 65-3.5[b])….”

Again, I am a proponent of well supported declaration judgment actions. This is a great example of one. I earnestly believe that EIP attorneys and provider attorneys who have to forage through American Transit’s nonsense Declaratory judgment actions and get them dismissed – which requires multiple rounds of motion practice – should be entitled to their attorneys fees. Contrariwise, the EIP attorney or provider attorney who is confronted with something like this should just walk away.

Verification? March 19, 2022

State Farm Mut. Auto. Ins. Co. v Burke Physical Therapy, P.C., 2022 NY Slip Op 30580(U)(Sup. Ct. Nassau Co. 2022)

The provider goes to the EUO and gets bombarded with post EUO demands that are the functional equivalent of a proctology examination. Provider objects, 120-days pass and the disclaimer is issued. Is that disclaimer valid?

The Court struggled with this one and said this cannot be answered at the summary judgment stage.

“In this Court’s view, only one conclusion can be drawn-that on the precise question at issue here, the law is unsettled. To the extent that the Court finds one position more persuasive than the other, the Court is of the opinion that for purposes of the determination herein, it is of no import. What matters is the reasonableness of BURKE’s justification{or refusing to provide the documents sought. In the absence of a clear answer as to whether or not STATE FARM was entitled to obtain the numerous documents sought at the verification stage of the claims, the Court cannot find, as a matter of law, that BURKE’s justification was unreasonable. Accordingly, the Court cannot find, as a matter of law, that BURKE failed to satisfy its obligation under 11 NYCRR 65-3.5(0) to offer, within 120 days, “written proof providing reasonable justification for the failure to comply.” The Court thus finds that, on the record presented, STATE FARM has failed to meet its burden to establish a right to disclaim coverage. See TAM Medical Supply Corp. v Tri State Consumers Ins. Co., 57 Misc 3d 133(A) (App Term, 2d Dept., 2d, !Ith & 13th Jud. Dists. 2017).”

Do not ask me for an opinion. I understand what the carrier is trying to do, and it falls within the literal context of the regulations. Yet, are these demands better propounded as discovery demands in the context of litigation or arbitration? At what point is the verification protocol abused or do the equities fall in favor of casting the verification demands as discovery devices better suited during the dispute resolution phase of the claim?

Causation defense fails when ROM diminishment not explained March 19, 2022

Shah v Nowakowski, 2022 NY Slip Op 01952 (4th Dept. 2022)

“Contrary to defendant’s contention, her own submissions in support of the motion raise triable issues of fact whether the motor vehicle accident caused plaintiff’s alleged injuries (see Carter v Patterson, 197 AD3d 857, 858 [4th Dept 2021]; Schaubroeck v Moriarty, 162 AD3d 1608, 1609 [4th Dept 2018]). Defendant submitted the report of her expert physician, who concluded that plaintiff’s injuries were either preexisting or degenerative in nature. The report of defendant’s expert, however, “does not establish that plaintiff’s condition is the result of a preexisting [or] degenerative [condition] inasmuch as it fails to account for evidence that plaintiff had no complaints of pain prior to the accident” (Carter, 197 AD3d at 858 [internal quotation marks omitted]). Further, defendant’s expert failed to address plaintiff’s medical records, which noted that plaintiff’s range of motion had further decreased by 25% after the accident”

I feel like we almost have to look to the Fourth Department for common sense solutions to our auto negligence legal problems…