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 August 13, 2009
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 August 13, 2009
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 July 31, 2009
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 July 24, 2009
AA Acupuncture Serv., P.C. v Safeco Ins. Co. of Am.,
2009 NY Slip Op 29311 (App. Term 1st 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?