More on Florida

Craigg v Infinity Select Ins. Co., 2013 NY Slip Op 23014 (App. Term 2d Dept. 2013)

Who would have thought that some of the most interesting choice of law cases would come from no-fault litigation at the Appellate Term?   This is a wild one, not so much as to how the grouping of factor test came about but because of the outcome that the court reached when the grouping of factors was applied:


“defendant, a Florida insurer, had issued letters rescinding plaintiff’s assignor’s insurance policy ab initio on the ground that material misrepresentations had been made during the application process; and that defendant had refunded the assignor’s premiums. The parties’ attorneys further stipulated to the admission into evidence of plaintiff’s claim form, defendant’s rescission letter, the policy application, and the insurance policy. Finally, the parties agreed that the sole issue for the Civil Court to decide was “whether or not Defendant has to establish the reason for rescinding its policy.” After trial, the Civil Court found for plaintiff, holding that New York law applied and that defendant was required, but failed, to present evidence in support of the underlying basis for its rescission of the policy. A judgment was subsequently entered, from which the appeal is deemed to have been take”

Conclusion of Law #1:

“Florida law applied since Florida had the most significant contacts with the contracting party and the contract”

Conclusion of Law #2:

Where, as here, an insurer is not seeking a judicial decree of rescission in the action, but, rather, is seeking to establish that the policy had, in fact, been retroactively rescinded to a time prior to the commencement of the action, the insurer must simply demonstrate that it complied with the [*2]Florida statute by giving the requisite notice of the rescission to the insured and that it returned or tendered all premiums paid within a reasonable time after the discovery of the grounds for avoiding the policy

[Defendant wins]





A primer on Florida Law

W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 2012 NY Slip Op 22142 (App. Term 2d Dept. 2012)

It was interesting to see a discussion on the nuances of Florida PIP law.  It has been under such lately, especially as they seek to crack down on perceived abuses of the law.  Putting aside the radical shift in Florida no-fault, an interesting discussion arose from the Appellate Term regarding retroactive cancellation of insurance policies.

(1) “Lawrence Sherman and Bird Waldon were involved in a motor vehicle accident in New York. Sherman, the driver, and Waldon, his passenger, were in a vehicle insured by defendant under a Florida automobile insurance policy issued to Sherman.”

(2) “Florida Statutes Annotated, title 37, § 627.409 permits the retroactive rescission of an insurance policy if there has been a material misrepresentation in an application for insurance, whereas New York prohibits such a retroactive rescission (see Vehicle and Traffic Law § 313; Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56, 58 [2000]; Matter of Insurance Co. of N. Am. v Kaplun, 274 AD2d 293, 297-298 [2000]) but permits an insurer to deny benefits to a claimant who was a participant in the fraud”

(3) “In the instant case, defendant insurer seeks judgment as a matter of law, under Florida law, based upon its having validly rescinded the policy pursuant to Florida law, and not under the laws of New York, where it would have had the burden of establishing that the insured, Sherman, had fraudulently procured the policy.”

(4) “An insurer’s failure to rescind a motor vehicle policy in accordance with the statutory notice of cancellation procedures of Florida Statutes Annotated, title 37, § 627.728 does not preclude or abrogate the insurer’s ability to void the policy ab initio pursuant to Florida Statutes Annotated, title 37, § 627.409 (see United Auto. Ins. Co. v Salgado, 22 So 3d 594, 600-601 [Fla 2009]). The insurer must, however, demonstrate that it gave notice of the rescission to the insured and that it returned or tendered all premiums paid within a reasonable time after the discovery of the grounds for avoiding the policy.”

The Assignee medical provider who takes an assignment from an assignor-insured who makes a material misrepresentation in the procurement under NY law may still have no-fault benefits disclaimed.  My reading of this case is that under Florida law, all of the assignors will lose coverage, whether or not they are innocent.  Contrariwise, under New York law, the insure must prove that the other assignors conspired or aided and abetted the insured in material the misrepresentations.

From a choice of law standpoint, FL law applies because that is where the policy was issued from.

New Jersey law bars most of Plaintiff's recovery in this PIP subrogation action

Utica Mut. Ins. Co. v Bleeker, 2011 NY Slip Op 51076(U)(App. Term 1st Dept. 2011)

There is perhaps nothing worse than leaving a job and (1) having either written complication motions papers that formed the basis of a successful appeal and became the opinion of the appellate court, or (2) having written an appeal but then having your name deleted from the brief.

The second happened to me in Stepehen Fogel v. Progressive.  The first just happened to me today in Utica v. Bleeker.

To even begin to understand Bleeker, you need to free up a few hours of time and many brain cells.  I can tell you that I probably spent in excess of 30 hours on this file.  My recollection is there was a Motor vehicle accident on the New York side of the GW Bridge. The MVA was the fault of Defendant as she rear-ended the Utica vehicle.

The injured person was working, and Utica had a comp and a no-fault endorsement on this policy.

Injured person files in New Jersey for comp benefits which New Jersey law defines as PIP subtitute benefits.  There is a limited right to subrogation for these payments, which did not apply in this case.  The same holds true for compensation lost wage benefits.  I also think the same similarly holds true for scheduled loss compensation benefits, although the Appellate Term did not want to touch this one with a ten foot pole.

In any event, a $15,000 case is probably not worth maybe $1,000?  I am not sure of the dollar value, as it has been awhile.  Here is the case itself:

Order (Manuel J. Mendez, J.), dated June 7, 2010, insofar as appealed from, modified to the extent of granting defendant-appellant partial summary judgment dismissing plaintiff’s cause of action for medical expenses it paid on behalf of its subrogor and so much of the complaint as sought recovery of the initial $5,200 in workers’ compensation payments made to the subrogor; as modified, order affirmed, without costs.

In this subrogation action, plaintiff insurer seeks reimbursement for, inter alia, medical expenses and workers’ compensation benefits paid in lieu of first-party no-fault benefits to its subrogor for injuries he sustained as a result of an automobile accident with defendant, which occurred in New York during the course of subrogor’s employment. Since plaintiff provided a workers’ compensation insurance policy to subrogor’s employer, Knorr Brake Corporation, a Maryland-based company, subrogor initially received temporary benefits processed by Maryland’s Workers’ Compensation Commission. Ultimately, however, subrogor, as a New Jersey resident, successfully pursued his additional and final workers’ compensation benefits with the New Jersey Division of Workers’ Compensation.

Following discovery, defendant Rhondi Bleeker moved for summary judgment dismissing plaintiff’s complaint on the grounds that choice of law principles dictate this action to be governed, and consequently barred, by New Jersey and New York laws. Plaintiff cross-moved for partial summary judgment, countering, inter alia, that Maryland law governed. In the order appealed from, Civil Court denied defendant’s motion and plaintiff’s cross motion for [*2]summary judgment, while agreeing with plaintiff that Maryland law applied, thus permitting the continuation of this action. We modify.

While Civil Court properly determined that the law and forum where workers’ compensation benefits were paid will govern an action for reimbursement of those benefits (see New Jersey Mfrs. Ins. Co. v Steckert, 264 AD2d 314, 315 [1999], citing Matter of O’Connor, 21 AD2d 333, 335 [1964]; see Carminucci v Pepsico, Inc., 236 AD2d 499, 501 [1997]; Canfield v Child World, 209 AD2d 569, 569-570 [1994]), and that under Maryland’s Workers’ Compensation Act, an insurer is entitled to assert a subrogation claim for reimbursement of benefits paid (see Podgurski v OneBeacon Ins. Co., 374 Md 133, 140 [Md Ct of Appeals 2003]), Civil Court erred in concluding that this action is governed by the law of Maryland.

To the contrary, the record indicates and it is undisputed that plaintiff’s subrogor ultimately pursued his claim with the New Jersey Division of Workers’ Compensation, which culminated in an award approving the parties’ “settlement” of the claim based upon a “finding” that “the terms of the settlement are fair and just,” and awarding him permanent disability benefits and deeming the temporary disability awarded in Maryland and medical bills “adequate as p[ai]d.” Since subrogor invoked New Jersey’s Workers’ Compensation provisions for an adjudication of his claim and received a final award thereunder, this action is governed by the law of the State of New Jersey (see Williams v A & L Packing and Storage, 314 NJ Super 460, 465-466 [NJ App Div 1998]; Phillips v Oneida Motor Freight, Inc., 163 NJ Super 297, 305 [NJ App Div 1978]; see also Cramer v State Concrete Corp.,39 NJ 507, 511 [NJ 1963]).

Applying New Jersey law to the instant matter, most of plaintiff’s subrogation claims fail. Although New Jersey law authorizes an employer to institute an action against a responsible tortfeasor if the injured person does not do so, “the third party shall be liable only to the same extent as he would have been liable had the employee himself instituted suit within a year of the accident” (Patterson v Adventure Trails, 364 NJ Super 444, 447 [NJ Super 2003], quoting Continental Ins. Co. v McClelland, 288 NJ Super 185, 189-190 [NJ App Div 1996]). As such, plaintiff’s subrogation claim for medical expenses in the principal sum of $7,884.97, and workers’ compensation payments up to the sum of $5,200, that would otherwise have been collectible under a standard personal injury protection endorsement covering the subject loss (see NJSA 39:6A-4; see also Rutgers Cas. Ins. Co. v Ohio Cas. Ins. Co., 153 NJ 205, 210 [NJ 1998]), cannot be recovered against defendant (see Patterson v Adventure Trails, 364 NJ Super at 447). Accordingly, defendant’s motion for summary judgment dismissing these claims should have been granted only to the extent provided.

However, the record is inconclusive as to plaintiff’s entitlement to reimbursement for disability payments, if any, in excess of the above stated sum of $5,200 (see e.g. NJSA 39:6A-10), and resolution of this issue must await a more fully developed record.

Choice of law in SUM context – interesting

Matter of Erie Ins. Co. v Boss, 2011 NY Slip Op 03758 (4th Dept. 2011)

(1) New York policy, (2) Massachusetts accident, (3) Massachusetts tort-feasor, and (4) New York victim.

What is the result? Massachusetts law.

“We thus conclude that an individual insured under a New York automobile policy who is injured in an accident in another jurisdiction should not be placed in either a better or worse position [*2]when filing a SUM benefits claim than he or she would have been if the tortfeasor had been fully insured. To apply New York law to the measure of damages in this case would not be consistent with the purpose served by SUM coverage, which is to take the place of a tortfeasor’s insufficient insurance coverage.”

Compare with recent New York no-fault choice of law cases.

Choice of law – and the deemer statute – it is just the beginning

Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 2009 NYSlipOp 29109 (App. Term 2d Dept. 2009)

I think someone out there knew it would be a matter of time before a “Trans-Hudson” (a term involving a New Jersey policy and New York loss) no-fault case would find its way into the court system. It just did. Not surprisingly, the court ruled New Jersey law would apply.

Factually, the case involved a New Jersey policy, New Jersey insured and a New York accident. There is a legion of case law out there that made this result preordained. There are, however, broader issues that this case represents. Arguably, a case predicated upon New Jersey law must be brought within two years of the last payment or two years fromthe date of loss, which ever is greater (New Jersey PIP Law). Stranger pedestrians, consistent with NJ Pip law, are exempted from coverage, upon the presentation of a proper policy endorsement. Furthermore, a provider must make a prima face case of medical necessity and causation to be entitled to no-fault benefits under New Jersey law.

But under New Jersey law, there are pre-certification requirements and sizable deductibles. While the standard New Jersey policy offers $250,000 in first-party benefits, the New Jersey fee schedule rules, in accordance with New Jersey’s 1998 Automobile Insurance Cost Reduction Act (AICRA), do not allow certain services to be compensable. Case and point: CPT services and video fluoroscopy services are per se not compensable under New Jersey law. We all know this is not the case in New York. I will leave the policy determination as to whether these tests should be compensable to somebody else.

But, the deemer statute (Ins Law 5107) adds some wrinkles to this paradigm.

In fact, wouldn’t the deemer statute mandate that the injured person (or his assignee) receive the benefit of the vast array of services, without the co-pays and pre-certs, that the New York fee schedule offers? Otherwise, the deemer statute is without force.

Consider the hypothetical no-fault statute that allows unlimited benefits, yet charges a 90% co-pay up to some indeterminate sum. Clearly, the deemer statute would mandate New York style benefits up until the first $50,000 that is paid out under the policy.

Therefore, it follows that in these “Trans-Hudson” cases, benefits up until the first $50,000 should be paid in accordance with the greater of the New Jersey or New York fee schedule. Should the sister-state’s policy allow for first-party no-fault benefits in excess of $50,000 (this includes only New Jersey and Michigan), then that state’s fee schedule rules would be in effect from dollar $50,0001 up until the policy limit. But, if the sister state’s fee schedule rules are more beneficial to the Claimant that New York’s fee schedule rules, then it would follow that the sister state’s fee schedule rules would need to be followed.

But you can see that we have just touched the surface with these Trans Hudson cases… The details will need to be filled in at a later time.