Rocket docket at the First Department

Global Liberty v. Coastal Anesthesia

Another attempt is being made to demonstrate that “rocket docket” preclusion is subject to an interest of justice review and that CPLR 2005 applies in the correct situation.

Procedurally, the submissions were 5-days late and a colorable showing of law office failure was presented in the moving papers.  In my eyes, if this case does not call for the tempering of a hard-line standard, you might as well throw the baby out with the bath water.

The lower arbitrator – a rocket docket enthusiast – precluded the submissions.  I have usually kept my views of the rocket docket club of arbitrators off this blog, and I will continue that policy.  Opportunely, the regulation really needs to be amended to incorporate a prejudice or substantial justice standard prior to disallowing a party the opportunity to plead its case.  Parenthetically, Countriwide would not get much sympathy under my proposed rule change since mercy is not granted towards the insolent few.

The case is up for submission on 11/25/16.  If we win, then some sanity will reign.   Should we lose, then we may be looking to DFS to amend the rule, lest DFS looks like they just do not get it.

My prediction.  Assuming the Court follows  Matter of Unitrin Advantage Ins. Co. Kemper A. Unitrin Bus. v Professional Health Radiology, 2016 NY Slip Op 06767 (1st Dept. 2016), which held that consideration of evidence was not proper:”based on the multiple errors committed by Unitrin, it failed to establish inadvertent law office error, or that the cases should be remanded, in the interest of justice, for a new arbitration hearing”, the appeal has a good shot at success.

Just note the one mistake that was made on Heatlhmakers, i.e., the failure to include an explanation for the slightly late evidence, was herein not repeated.  Fool me once…  you know the bit.  We cannot say the same about “the partner affirmation”

IME no show not upheld

Matter of Unitrin Advantage Ins. Co. Kemper A. Unitrin Bus. v Professional Health Radiology, 2016 NY Slip Op 06767 (1st Dept. 2016)

I read through this case.  The carrier left out page two of one of the letters (that contain the reimbursement language) and, after the arbitration, sought to include it in its Petition to set aside the arbitration award.  The Supreme Court was not impressed and neither was the Appellate Division.  But had Unitrin (or counsel) not committed as many errors, the rocket docket rule appeared to be malleable upon a finding of law office failure.  I am looking to see how this concept plays out in future cases.

” The no-fault regulations include mandatory notice requirements governing insurer requests for both IMEs and examinations under oath (11 NYCRR 65-3.5[e]). The regulations expressly provide that the insurer “shall inform the applicant at the time the examination is scheduled that the applicant will be reimbursed for any loss of earnings and reasonable transportation expenses incurred in complying with the request” (id.). Unitrin failed to establish that the requisite regulatory language was contained within its November 30, 2011 letters sent to the assignors, and, based on the multiple errors committed by Unitrin, it failed to establish inadvertent law office error, or that the cases should be remanded, in the interest of justice, for a new arbitration hearing.”

In addition, the Court correctly held that: “In a proceeding for judicial review of an award by a master arbitrator, an attorney’s fee shall be fixed by the court adjudicating the matter” (Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 139 AD3d 947, 948 [2d Dept 2016]; see 11 NYCRR 65-4.10[j][4])”

Unfortunately for the provider, AAMG limits reimbursement to $70 an hour.


Another Article 75 needed to be taken against AAA

Global Liberty Ins. Co. v. Electrophysiological Medical, P.C., Index #: 21167/2016E (Sup. Ct. Bronx Co. 2016)

I think one of the weakest parts of the AAA no-fault dispute resolution services is the lack of depth that exists within the pool of the master arbitration panel.  With the death of Normal Dachs, Esq., I feel we are left with “rubber stamps” who cite Petrofsky and affirm awards that are legally infirm.  This case is a prime example:

AAA case #:41-14-1002-2571.  Standard IME no show case.  Presented were affidavits of no show and affidavits of non-appearance.  Applicant argued the affidavit of mailing was not specific enough.  Lower arbitrator agreed.  I shook my head in disgust and appealed.  I was not surprised when the award was affirmed.   Of course, the affirmance is sent to the lower arbitrator, Larry Fuchsberg and Chris Maloney, which makes me look like a consistent overzealous “appealer” of NFA awards.  I filed an Article 75.  Respondent sought an adjournment and then shrugged her shoulders.  Court granted the Petition and said the following:

“[t]he petitioner established without opposition that the decision of the master arbitrator, affirming the lower arbitrator, was arbitrary (see In re Petrofsky [Allstate Ins. Co.}, 54 N.Y.2d 207 [1981]; Auto One Ins. Co. v. Hillside Chiropractic, P.C., 126 A.D.3d 423 [1st Dept. 2015]).  The affidavit of Karin Bruford adequately demonstrated that IME letters were mailed to the respondent assignor in accordance with the petitioner’s standing and appropriate office mailing practices and procedures (see Preferred Mut. Ins. Co. v. Donnelly, 22 N.Y.3d 1169 [2014]). The master arbitration award dated January 19, 2016 is hereby vacated, and the petitioner is entitled to costs and disbursements, including petitioner’s $325 master arbitration fee.”

Since Judgment was granted, AAA will never know that their system failed again.  Why do I post this?  The system is broken.  Do I have more of these in the Courts? Yes,  too many.  But, I will admit the petitions and appeals are entertaining and the vindication proves that I have not lost my mind totally.

I will condition the above statement on the fact that I have cases that are not as clear cut as this and a few others, and I cannot predict what the Appellate Division will do.

Trial de novos and exhausting administrative remedies

AutoOne Ins. Co. v Eastern Is. Med. Care, P.C., 2016 NY Slip Op 05354 (2d Dept. 2016)

This case is interesting on a few levels since it addresses what could be categorized as unresolved issues involving provisions of the no-fault law that have not had much exercise in recent years.  Ironically, since the nature of the practice is more arbitration based, I am now more involved with appeals of trial de novo rulings and Article 75 rulings at the Supreme Court and the Appellate Division.  The nice part about this trend is that the carrier gets to chose the venue and I am not stuck in Civil Court.  This means the papers are read, “the briefing schedule” does not exist and real orders are generated.  Civility in practice.

This case it upon the issue of what happens when you file a master arbitration brief and chose not submit one.  Why would this happen?  Simply put, the award is in excess of $5,000 and there is no way to vacate the award through the arbitration system.  The question asked is why bother submitting a brief.  After this case, I have taken the position to put in a pro forma brief, whatever that is.  The Supreme Court did not rule on this issue but it was a large part of Defendant’s argument for dismissing the declaratory judgment action/trial de novo and seeking confirmation of the master arbitral award.

(1) The Court correctly held that: “the insurance regulations specifically provide that a master arbitration will proceed even if a party fails to appear or submit materials and that the master arbitrator must make a determination on the merits, not in favor of an appearing party solely on the default of the other party (see 11 NYCRR 65-4.10[d][8]). Thus, the plaintiff’s failure to file a brief with the master arbitrator was not determinative of whether it satisfied a condition precedent or exhausted its administrative remedies”

Secondly, how much time does an insurance carrier have to commence a trial de novo following a master arbitration award?  Supreme Court said that one only has 35-days to commence a trial de novo, relying on the uniform court rule.  The Court in applying 65-4.10(h)(2) said that the 90-day period to vacate an arbitration award would apply to this situation.

(2) “As this arbitration dispute was originally submitted to the American Arbitration Association (hereinafter AAA) and was not court-ordered, the 35-day timetable applied by the court pursuant to 28 NYCRR 28.12 was not applicable (see 22 NYCRR 28.2). Instead, the plaintiff had 90 days from the date the master arbitrator’s award was mailed to it to commence this action (seeInsurance Law § 5106[c]; CPLR 7511; 11 NYCRR 65-4.10[h][2]; see also Matter of Slater v Eagle Ins. Co., 294 AD2d at 369), and the plaintiff did so. Thus, the court erred in granting the defendant’s cross motion to confirm the award of the master arbitrator on the ground that this action was not timely commenced and in denying that branch of the plaintiff’s motion which was pursuant to CPLR 3211(b) to dismiss the third affirmative defense, which alleged that the action was not timely commenced.”

Now the case is remanded for a determination in the merits of Plaintiff’s motion for summary judgment.

Unitrin has been back-doored into the Second Department

Matter of Global Liberty Ins. Co. v Professional Chiropractic Care, P.C., 2016 NY Slip Op 04156 (1st Dept. 2016)

Order, Supreme Court, Bronx County (Kenneth L. Thompson, Jr., J.), entered July 10, 2015, which denied the petition to vacate a master arbitrator’s award, unanimously reversed, on the law, without costs, the petition granted, and the award vacated. The Clerk is directed to enter judgment accordingly.

The Master Arbitrator’s award was arbitrary because it irrationally ignored the law, which petitioner insurer had presented to the Master Arbitrator, that the no-fault policy issued by petitioner was void ab initio due to respondent’s assignor’s failure to attend duly scheduled independent medical exams (see American Tr. Ins. Co. v Lucas, 111 AD3d 423, 424 [1st Dept 2013]). The alleged error in petitioner’s denial of claim form is of “no moment” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [1st Dept 2011], lv denied 17 NY3d 705 [2011]), and was not a sufficient or rational basis for the award (see Auto One Ins. Co. v Hillside Chiropractic, P.C., 126 AD3d 423, 424 [1st Dept 2015], citing Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]).

This was one of my appeals.  The case began as three no-fault arbitrations on Franklin Avenue.  The carrier prevailed.  The lower arbitrator noted that there were errors in the denial (the dates of the no-shows) were wrong, but held in favor or the carrier.  The provider appealed and the master arbitrator REVERSED all three arbitration awards based upon the errors in the denials.

We filed a Petition (consolidated all three awards) in  Bronx Supreme Court and sought to vacate the award of the master arbitrator.  Supreme Court in a published decision denied the Petition, applied the extremely deferential Second Department “no-fault does not belong in the courts” standard.  I appealed, the Petition was granted and the claims were denied.

You want to know the lesson of this case is?  Know where you are filing these Petitions and have confidence in your position.  Admittedly, the Second Department would have probably affirmed saying that mistakes of law are not sufficient to vacate an arbitration award.  Moreover, the First Department believes that Unitrin is the correct statement of law.

Also, after Hillside came out, I realized that the First Department would follow the law without the Second Department’s anti-no-fault impediments.  And this decision and Hillside prove my theory right.  While I might be guilty of forum shopping, I am also guilty of trying to maximize my successes on an eventual appeal that I knew I would have to file.



Supreme Court held that Medicaid fee schedule applies to CPM rental

In the matter of Accelerated DME Recovery, INC. a/a/o Ana Pleitz v. State Farm Mutual Auto. Ins Co.. Index # 706132/15 (Sup. Ct. Queens  Co. 2015)(Modica, AJSC)

While the denial of an Article 75 challenge to a master arbitrator’s decision is not generally newsworthy, this Decision from Supreme Court appears to have gone a step further and on its face would have probably granted State Farm’s challenge to an arbitration award.

What you will discern through a reading of this opinion is the Court has found as a matter of law that the Medicaid formula for determining the proper amount of reimbursement for CPM, i.e. (1/6th * invoice /30) is proper.  I would parenthetically note that the DOH opinion that State Farm obtained on this issue appears to be 1) dispositive; and 2) the potential death knell to the argument that CPM providers can charge reasonable and customary.

I sense this may be a game changer.

Good job to counsel for State Farm on this discreet issue.  At fee schedule, will surgery providers deem CPM to be absolutely necessary for the recovery of surgery causally related to a motor vehicle accident?  I know where my vote is on that question.



Trial De Novo granted and declaration of non-coverage granted

Allstate Ins. Co. v. Phelps Memorial Hospital, 2013 NY Slip Op 33590(U)(Sup. Ct. Nassau Co. 2013)

“This Court conducted a non-jury trial on matter on November 7, 2013, and
reserved decision. The plaintiffs expert credibly testified the treatment rendered to Jorge  Caniero was neither caused by the November 18, 2010 motor vehicle accident nor was  there any exacerbation of a pre-existing condition caused by that same accident. The  Court finds Jorge Caniero was admitted to Phelps Memorial Hospital on suspicion he  experienced a stroke which was not related to the November 18, 20 I 0 motor vehicle  accident. The Court also finds the treatment rendered by the defendant was related to the  diagnosis of acute CVA hypertension, diabetes, mellitus, coronary artery disease and  hyperlipidemia. These conditions were not causally related to the November 18, 2010  motor vehicle accident.

“The plaintiff proffered medical facts by its expert which were sufficient to show the medical condition  for which Jorge Caniero was treated was not related to the November 18, 2010 motor vehicle accident nor was there any exacerbation of a pre-existing condition caused by that same accident”

This is an interesting order as it is one of the few times a lack of causation defense has actually been successful.  It seems to help that Defendant did not put on a case?  If you look at the history of this matter, Defendant made a motion to dismiss the action as time barred, presumably because the Trial de-novo/declaratory judgment action was not commenced within the 90-day period set forth in Article 75 of the CPLR.  This motion was denied.

I suspect Defendant’s motion should have probably been granted.  The simple reason is that assuming the demand for trial de-novo occurs more than 6-years after the claim became overdue, while the original arbitration was commenced timely, then the trial de novo would be time barred.  I am not sure that makes sense and is in accord with the meaning of Ins. Law 5106(c).

Great Wall is binding precedent on American Arbitration Association

Allstate Ins. Co. v Natural Healing Acupuncture, P.C., 2013 NY Slip Op 50645(U)(Civ. Ct. Kings Co. 2013)

“The arbitrator failed to mention, much less follow the Appellate Term’s decision in Great Wall Acupuncture v. GEICO Gen. Ins. Co., 16 Misc 3d 23 (App. Term, 2nd Dept. 2007), which addressed the issue and applied the fee schedule for licensed chiropractors to acupuncture services provided by licensed acupuncturists.  In Great Wall, the Appellate Term analogized licensed chiropractors to licensed acupuncturists based on the similar training they underwent for licensure in order to perform acupuncture services, while contrasting them to physicians, who only had to obtain certification in order to perform acupuncture. The Appellate Term further noted the Department of Insurance’s lack of “specific guidance as to which particular fee schedule should be applied to a licensed acupuncturist performing acupuncture,” and urged it to do so. Great Wall, supra at 24.

“Although acknowledging Great Wall, supra, and the fact that the proposed legislation to increase the reimbursement rates for both chiropractors and acupuncturists was still pending, the master arbitrator confirmed the award. The master arbitrator found that Allstate impermissible sought to have him conduct a de novo review, and that the lower arbitrator’s award had “a plausible basis in the evidence presented” and thus conformed to applicable law.”

“This Court does not understand the reasoning behind the master arbitrator’s award. Allstate did not seek a de novo or a factual review, as prohibited by Petrofsky, supra. Rather, petitioner argued that the decision was arbitrary and capricious and contrary to well settled law. This Court cannot countenance an award which finds that proposed or pending legislation trumps well established precedent, i.e. Great Wall, supra. Therefore, the award is vacated and the Court directs that the arbitrator calculate the fees owed to respondent in accordance with the fee schedule for licensed chiropractors who perform acupuncture.”

Ins Law 5105 – loss transfer regarding a livery vehilce and a standard passenger vehicle

Matter of Matter of Philadelphia Ins. Co. (Utica Natl. Ins. Group), 2012 NY Slip Op 05470 (4th Dept. 2012)

This is a coverage case with a vigorous, and I think an accurate dissent.  There is never a shortage of dissenting opinions out of this Rochester based Court, and I am starting to believe the dissents out of this Court make more sense than the majority opinions.  You will see that if you regularly read this blog.  Regarding the case, I will break it down.

(1) Two car collision – it appears the possible livery vehicle is at fault.  Philadelphia insures this vehicle;

(2) Utica is insurer for vehicle that the Injured victim was present inside, and Utica paid Assignor and/or assignee medical providers no-fault benefits;

(3) Utica files for 5105 intercompany arbitration;

(4) Philadelphia did not move for a permanent stay of arbitration;

(5) Philadelphia raised defense during arbitration: (a) Lack of Jurisdiction; (b) Claim not subject to Arbitration;

(6) Arb Forums rules in favor of Utica finding Philadelphia’s vehicle was a livery vehicle;

(7) Philadelphia files an Article 75 to vacate the award on the basis that Arb Forums was wrong on the law; and Utica cross-moves to confirm the award;

(8) Supreme Court grants the petition and vacates the award, awarding judgment in favor of Philadelphia;

(9) Utica Appeals and the Fourth Department reverses and dismisses the Petition;

(10) Fourth Department holds that Philadelphia should have moved to stay arbitration and waived its right to dispute the result of the arbitration because it raised jurisdictional defenses at Arb Forums;

(11) On the merits, the Fourth Department holds that Arb Forums’ finding that the vehicle was used as a livery vehicle has record support;

(12) Dissent dispels the jurisdictional argument; looks at this case from a less deferential viewpoint; and finds that Philadelphia’s vehicle was not being used as a livery vehicle, and would have affirmed Supreme Court’s granting of the petition.

If you read the opinion and are familiar with the wild west of arb forums, it seems that the dissents argument is more persuasive.  Using what looked to be the inartful claims representative’s use of a legal term in a less than formal setting to preclude Article 75 relief seems to be over the top.  On the merits, the dissent hit the nail on the head.

This one should go to the Court of Appeals and looks interesting.

Non-compulsory arbitration award vacated

Siegel v Landy, 2012 NY Slip Op 03625 (2d Dept. 2012)

There is a right to be able to present evidence at an arbitration…

“However, as the plaintiff correctly contends, the arbitration award, as modified, *3 should have been vacated on the ground that the arbitrator failed to follow the procedures set forth in CPLR article 75 (see CPLR 7511 [b][1][iv]). The plaintiff was effectively denied her right to notice, the opportunity to be heard, and the opportunity to present evidence (see CPLR 7506). Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was to confirm the award, as modified, and granted the plaintiff’s cross motion to vacate the award, as modified”