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Dilemma and dogma June 30, 2018

Hertz Vehicles, LLC v Best Touch PT, P.C.,2018 NY Slip Op 04854 (1st Dept. 2018)

(1) “Plaintiff failed to meet its burden of filing “proof of the facts constituting the claim” for a default declaratory judgment (CPLR 3215[f]) against the medical provider defendants, i.e., proof establishing that the notices of examination under oath (EUO) that it served on those defendants complied with the timeliness requirements of 11 NYCRR 65-3.5(b) (see Kemper Independence Ins. Co. v Adelaida Physical Therapy, P.C., 147 AD3d 437 [1st Dept 2017]; Natl. Liab. & Fire Ins. Co. v Tam Med. Supply Corp., 131 AD3d 851 [1st Dept 2015]). An insurer must request any “additional verification . . . to establish proof of claim” within 15 business days after receiving the “prescribed verification forms” it forwarded to the parties required to complete them (11 NYCRR 65-3.5[a], [b]). As none of the motion papers, including the affidavit by plaintiff’s claims adjuster, annexes or gives the dates of the prescribed verification forms or other proofs of claim submitted by the medical provider defendants, it is not possible to determine whether the EUO notices were sent to them within 15 business days of plaintiff’s receipt of the form”

What was interesting is in the last appeal of a lost DJ, the Court appeared to walk around 65-3.5 and 65-3.6 when the issue involved a default.  The rationale could be found in the dissent of Longevity and sub silentio set forth in the majority opinion in the same.  This case now applies the summary judgment standard to defaults.

(2) “Plaintiff’s argument on appeal that the providers’ bills are “prescribed verification forms” and its attempt to relate the deadlines applicable to one defendant’s EUO requests to another defendant’s submission of claims documentation or appearance for an EUO are unpreserved and, in any event, unsupported.”

Certain defense attorneys have tried to use the bootstrap method to establish timeliness.  I never bought it.

(3)  “The court erred in denying plaintiff’s motion for a default judgment against Bellevue on the ground that the motion did not contain any letter reflecting that Bellevue’s EUO transcript was sent to her for signature. The motion does contain such a letter, dated March 14, 2016, as well as a follow-up letter, dated April 20, 2016, and accompanying affidavits of service. As the [*2]failure to submit to an EUO and “subscribe the same” violates a condition precedent to coverage (see 11 NYCRR 65-2.4[c][2]), plaintiff provided adequate proof of its claims against Bellevue (see DTG Operations, Inc. v Park Radiology, P.C., 2011 NY Slip Op. 32467[U], *5-6 [Sup Ct, NY County 2011]”

This should worry anyone because I highly doubt that DFS (absent a Thrasher showing) ever advocated for a voiding of the policy due to the failure to sign a transcript.  I see a circular letter coming on this issue, similar to when DFS issued a circular letter to overturn Soundshore.

 

Lack of personal jurisdiction for an out of state insurance carrier June 25, 2018

Pavlova v American Ind. Ins. Co., 2018 NY Slip Op 50943(U)(App. Term 2d Dept. 2018)

To me, this is the ultimate fight.  The accident occurred in New York and putting aside whether the deemer applies, you cannot drag the carrier into a NY Court.

“In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to dismiss the complaint, pursuant to CPLR 3211 (a) (8), on the ground that the Civil Court lacked personal jurisdiction over defendant. In several affidavits in support of the motion, defendant’s employees asserted that defendant is a Pennsylvania company, which is not licensed to do business in New York, maintains no offices in New York, has no agents operating out of, or representatives soliciting business in, New York, and does not own, use or possess any real property in New York. Furthermore, defendant argued that it had been held in prior cases that the courts in the State of New York cannot exercise personal jurisdiction over this defendant. Plaintiff opposed the motion with an affirmation by its counsel, who made unsupported assertions that defendant had transacted business in New York by knowingly issuing policies to New York drivers, and that defendant had established an ongoing relationship with defense counsel in New York, thereby subjecting defendant to jurisdiction in New York. Defendant’s attorney asserted in a reply affirmation that the arguments raised by plaintiff had been rejected by this court in Compas Med., P.C. v American Ind. Ins. Co. (47 Misc 3d 134[A], 2015 NY Slip Op 50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Defendant appeals from an order of the Civil Court entered August 11, 2016 denying defendant’s motion to dismiss the complaint.

Defendant made a prima facie showing that personal jurisdiction had not been obtained over it. “In opposing a motion to dismiss pursuant to CPLR 3211 (a) (8) on the ground of lack of personal jurisdiction, ‘a plaintiff need only make a prima facie showing that such jurisdiction exists’ ” (Hopstein v Cohen, 143 AD3d 859, 860 [2016], quoting Lang v Wycoff Hgts. Med. Ctr.[*2]55 AD3d 793, 798 [2008]). In the case at bar, the affirmation of plaintiff’s attorney was insufficient to demonstrate that personal jurisdiction over defendant existed under the Civil Court’s long-arm statute (see CCA 404 [a]), as plaintiff’s counsel failed to establish that he possessed personal knowledge of the facts”

I hate ending a post with a categorical statement that does not complete the story.  Assume Plaintiff filed an arbitration?

“While personal jurisdiction is required for the exercise of the state’s judicial power over a party, arbitration is a form of dispute resolution almost wholly independent of the court system (see Siegel, NY Prac § 586 at 1050 [5th ed 2011]). “Except for a few basic guarantees, such as the right to be heard and to be represented by counsel at the arbitration, the procedural law of the state is also inapplicable to arbitration, including the rules of  [***5] evidence” (id. at 1052). In short, personal jurisdiction is not required for arbitration that is controlled by the parties’ agreement. Therefore, the Supreme Court erred in granting the petition to permanently stay arbitration on the ground that there was no personal jurisdiction over AIIC.”  American Ind. Ins. Co. v Art of Healing Medicine, P.C., 104 A.D.3d 761, 763 (2d Dept. 2014)
And then, the Court held:  “Although this Court has held, HN5 in the context of claims for uninsured or supplemental underinsured motorist benefits, that ” ‘[a] party will not be compelled to arbitrate absent evidence affirmatively establishing that the parties expressly agreed to arbitrate their disputes’ ” (Matter of Progressive Specialty Ins. Co. v Louis, 122 AD3d 637, 638, 996 NYS2d 89 [2014], quoting Matter of State Farm Mut. Auto. Ins. Co. v Juma, 44 AD3d 963, 963, 844 NYS2d 364 [2007]; see Matter of State Farm Mut. Auto. Ins. Co. v Torcivia, 277 AD2d 321, 715 NYS2d 75 [2000]), those cases do not apply to claims for the payment of first-party benefits, ostensibly because Insurance Law § 5106 (b) mandates every insurer to provide a claimant with the option to arbitrate disputes concerning first-party benefits. Indeed, the obligation to arbitrate is not found in the policies but is imposed upon the policies by the No-Fault Law”  Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C., 137 A.D.3d 1270, 1272 (2d Dep,. 2018)
I guess Oleg should put on his Arbitration hat and leave Room 809 in Civil Court, Kings County for this one.

+15 minute decision begs a better question June 25, 2018

Karina K. Acupuncture, P.C. v Phoenix Ins. Co., 2018 NY Slip Op 50913(U)(App. Term 1st Dept. 2018)

“Defendant made a prima facie showing of entitlement to summary judgment dismissing plaintiff’s no-fault claims for acupuncture needle reinsertion services by demonstrating that it timely and properly denied the claims based on the assignor’s sworn statement denying that such services were performed upon him. In opposition, plaintiff’s proof, essentially consisting of an attorney’s affirmation, was insufficient to raise a triable issue as to whether the needle reinsertions were actually performed.”

What happens when the EIP says “sometimes” I get reinserted needles?  Or the proof is inconclusive that the EIP never had the needles reinserted.  Does the provider lose all reinsertion billing or does the carrier lose the defense because it cannot delineate the dates the reinsertion never occurred.

This question asks whether submitting a false bill in the first instance carriers the penalty of losing out on all false billing (even if some of the false billing is not false).  Since the “fraud” provision of the general policy does not apply to the no-fault endorsement (Utica v. Timms), I am hard pressed to say the defense would exist in what I think is the circumstance that occurs more frequently.

Significant limitaiton prong of Ins Law 5102(d) June 18, 2018

Schaubroeck v Moriarty, 2018 NY Slip Op 04453 (4th Dept. 2018)

It is an obsession of mine.  When someone gets into an accident where the threshold applies, has made a complete recovery and can still recover under a non 90-180 basis.  I observed intermittently on here (this is a no fault and not a PI blog) the decoupling years ago of the permanent consequential and significant limitation prong of Ins Law 5102(d).  It is an issue that we do not see too much but it is interesting when we see it.

(1)  The report of defendant’s expert physician “does not establish that plaintiff’s condition is the result of a preexisting degenerative [condition] inasmuch as it fails to account for evidence that plaintiff had no complaints of pain prior to the accident’ ” (id. at 1842; see Thomas v Huh, 115 AD3d 1225, 1226 [4th Dept 2014]). Inasmuch as defendant failed to meet his initial burden on the motion with respect to causation, there is no need to consider the sufficiency of plaintiff’s opposing papers on that issue (see Sobieraj v Summers, 137 AD3d 1738, 1739 [4th Dept 2016]). (First observation on causation)

(2) “Contrary to defendant’s further contention, we conclude that the court properly denied that part of the motion with respect to the significant limitation of use category. Even assuming, arguendo, that defendant made a “prima facie showing that plaintiff’s alleged injuries did not satisfy [the] serious injury threshold” with respect to that category (Pommells v Perez, 4 NY3d 566, 574 [2005]), we conclude that plaintiff’s submissions in opposition to the motion raised an issue of fact. Those submissions included the affirmation of plaintiff’s treating physician, who, after reviewing plaintiff’s medical records and imaging studies, opined within a reasonable degree of medical certainty that plaintiff sustained a folded flap tear at the junction of the mid-body and posterior horn of the meniscus of his right knee, and lateral and medial meniscus tears of both knees that required surgery and were causally related to the accident. He further opined that, consistent with what he observed on the MRI and his observations during plaintiff’s surgery, the meniscus tears limited plaintiff’s ability to walk, sit for long periods, turn, twist, drive for long periods, climb stairs, and walk on uneven surfaces (see Lopez v Senatore, 65 NY2d 1017, 1020 [1985]; LoGrasso v City of Tonawanda, 87 AD3d 1390, 1391 [4th Dept 2011]).”

EUO no-show case/objective reasons not necessary/ what’s next? June 15, 2018

Gentlecare Ambulatory Anesthesia Servs. v GEICO Ins. Co., 2018 NY Slip Op 50864(U)(App. Term 2d Dept. 2018)

“Contrary to plaintiff’s contentions, the proof submitted by defendant in support of its cross motion was sufficient to give rise to a presumption that the EUO scheduling letters and denial of claim form had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) and to demonstrate that plaintiff had failed to appear for the EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [*2][2006]). Furthermore, defendant was not required to set forth objective reasons for requesting EUOs in order to establish its prima facie entitlement to summary judgment, as an insurer need only demonstrate “as a matter of law that it twice duly demanded an [EUO] from the [provider] . . . that the provider failed to appear and that the [insurer] issued a timely denial of the claim[]” (Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2014]; see Parisien v Metlife Auto & Home, 54 Misc 3d 143[A], 2017 NY Slip Op 50208[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Palafox PT, P.C. v State Farm Mut. Auto. Ins. Co., 49 Misc 3d 144[A], 2015 NY Slip Op 51653[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Consequently, plaintiff has not provided any basis to disturb the Civil Court’s order.”

The unanswered question is assuming that the provider sets forth valid reasons for not attending the EUO and a disclaimer is issued, what is the remedy?  Does the insurance carrier always prevail?  Or, is the disclaimer without prejudice to compelling the entity to appear for an EUO?  I think the new Fourth Department case of Progressive v. Elite and the older Second Department case of Park v. Long Island call into question the remedy for this discreet type of breach.  But that is a discussion for another day.