Pa retroactive rescission

Monroe v Omni Indem. Co., 2020 NY Slip Op 50731(U)(App. Term 2d Dept. 2020)

“Contrary to plaintiff’s contention, the affidavit of defendant’s litigation representative was sufficient to demonstrate that defendant had mailed the rescission letter and refund check to the insured/assignor. As defendant set forth facts showing that it had rescinded the insurance policy ab initio in accordance with Pennsylvania law, defendant established its prima facie entitlement to summary judgment dismissing the complaint, which showing plaintiff failed to rebut (see Healthway Med. Care, P.C. v Infinity Group, 54 Misc 3d 132[A], 2017 NY Slip Op 50042[U]). Plaintiff’s contention that defendant had to prove that a material false statement had been made by the insured lacks merit. This court has “held that an insurer need not establish the underlying reasons for the retroactive rescission of the policy, but rather has the burden of establishing that it complied with the law of the sister state which permits retroactive rescission

My assumption above is that is the law of the sister state requires the carrier to prove that they had the right to rescind the policy, then that inquiry would be riper for determination by our court?

In fact, I think it is a valid assumption:

Parisien v Omni Indem. Co., 2020 NY Slip Op 50729(U)(App. Term 2d Dept. 2020)

“The Pennsylvania Supreme Court has held, however, that while an automobile insurance policy may be retroactively rescinded as to an insured who has made a material misrepresentation, the policy may not be retroactively rescinded [*2]with respect to third parties “who are innocent of trickery, and injured through no fault of their own”:

No need to file cancellation with DMV?

Matter of Global Liberty Ins. Co. v Ho Suk Shin, 2020 NY Slip Op 02469 (2d Dept. 2020)

The insured removed his vehicle from the policy. A dmv notice was not sent. The insured replaced the vehicle with a commercial vehicle. The carrier changes the policy number to accommodate the new vehicle. Now, the removed vehicle is involved in an accident. Is there coverage? The Appellate Division said no. Not a terribly logical decision, but to make the right the decision, the floodgates of hell would be opened on every removed car case.

“We agree with the Supreme Court’s determination denying that branch of the petition which was to permanently stay arbitration and dismissing the proceeding. Although the cancellation of an insurance policy is not effective as to third parties unless the cancellation is filed with the Commissioner of Motor Vehicles in accordance with Vehicle and Traffic Law § 313(2)(a) (see Vehicle and Traffic Law § 313[3]; Matter of Progressive Northeastern Ins. Co. v Barnes, 30 AD3d 523, 524; Matter of Chubb Group of Ins. Cos. v Williams, 14 AD3d 561, 562), here, the court determined that the insurance policy was not cancelled but rather that the same coverage was transferred to a different vehicle (see Vehicle and Traffic Law § 313[2][a]). Since the only changes to the policy at issue here were administrative—involving the substitution of one vehicle for another under the same policy and changing the number of the policy—State Farm was not required to notify the Department of Motor Vehicles (see 15 NYCRR § 34.1[d][2]; Vehicle and Traffic Law § 313[2][a]) and thus the petitioner’s contentions are without merit.”

“The July 1983 amendments to section 313 of the Vehicle and Traffic Law—changing the requirement for filing a notice of termination to include only policies, “as opposed to any insured vehicle or vehicles under such policy” (Vehicle and Traffic Law § 313[2][a])—govern this action. Thus, this Court’s determination in Matter of Eveready Ins. Co. v Wilson (180 AD2d 796, 797), which addressed the pre-1983 provisions of the statute, is not dispositive here.”

Sorry – I am not convinced. I do not mind losing when I should but if you saw the oral argument, they agreed with our position. As Rivera once told me on another case “Floodgates”.

The hourly attorney fee

Kamara Supplies v GEICO Gen. Ins. Co., 2020 NY Slip Op 50414(U)(App. Term 1st Dept. 2000)

The holding is simple. If the “policy issue” is not specifically enumerated on the form NF-10, there is no basis for an hourly attorney fee. A no-show or intoxication defense fits under box #4 “the injured person is excluded under policy conditions or exclusion”

The Court said it was not since IME and EUO now show are not explicitly set forth in form NF-10. The “rationale” for the restrictive ruling is set forth herein: “Construing the regulation strictly, as we must since it is in derogation of the common law rule that parties to a controversy pay their own counsel fees (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 301[a]; Matter of A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5 [1986]), hourly attorneys’ fees are allowable where one of the specifically enumerated policy issues is involved, not whether one party designates a particular defense as a policy issue.”

I think a few points need to be raised. This Court over the last two years has just been getting the issues wrong. The reason is simply the lack of no-fault appeals this Court sees. This has caused a systemic distortion of the contours of these cases. And, as this case shows, the wrong decisions swing both ways.

First, to narrowly construe box #5 as “policy conditions” is wrong. No-fault law is narrowly construed against the carrier because the purpose is to afford coverage in a swift and generous fashion. Do I agree with this policy goal? Probably not. But, my beliefs are irrelevant. This is the public policy goal. That said, all challenged inferences go to the injured person and their assignor. Assuming this is a close case, the tie goes to the runner or here, the provider.

Second, the fact that we are fighting over a $70 per hour attorney fee is plainly asinine. Have we as attorneys devalued ourselves to the point that we are satisfied working for $70 an hour or $80- an hour? Moreover, if a provider had 10 cases on the calendar that day, the provider ethically would have to split his or her fee. Moreover, the paperwork is done in mass so it is hard to justify more than a few hours of time spend on doing paper work.

While I always appreciate the nuances in the law – and make no mistake – I would have pushed for hourly attorneys fees and appealed this decision if I was the Plaintiff. But on a larger scale front, this decision tells us what is wrong with the current system.

For instance, why should attorneys representing hospitals and surgeons make more money ($1000-$1360) per file than the bottom feeder attorney representing chiropractor clinics who is fighting a $40 fee schedule reduction two treatments denied on medical necessity grounds? There is zero public policy ground for what the system has become.

I understand at one point, you could make the argument that a 20% attorney fee was fair because you could encourage the provider to put all of his or her post IME or no show billings into one case and the attorney fee would be somewhat fair? But in the modern practice, we encourage surgery bills and disincentive other practitioner’s billings? While I disagree that any of this is “constitutional” or rises to a pernicious level that would warrant wholesale judicial action, I am beginning to wonder what policy goal is addressed by this regulation?

Policy exhaustion

Matter of Ameriprise Ins. Co. v Kensington Radiology Group, P.C., 2020 NY Slip Op 00500 (1st Dept. 2020)

“Respondent contends that its claims were complete before the policy issued by petitioner was exhausted. This argument is unavailing. The Court of Appeals has interpreted the word “claims” in 11 NYCRR 65-3.15 to mean “verified claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]), i.e., claims as to which the healthcare provider has submitted additional information requested by the insurer (see id. at 297-298, 300-301). Petitioner requested verification in the form of an examination under oath (EUO). Since respondent never appeared for an EUO, its claims were never verified. The defense that an award exceeds an arbitrator’s power is so important that a party may introduce evidence for the first time when the other party tries to confirm the award (see Brijmohan, 92 NY2d at 822-823).

Respondent may also raise on appeal the purely legal argument that Appellate Term lacked the power to remand to Civil Court for a framed issue hearing (see generally Branham v Loews Orpheum Cinemas, Inc., 31 AD3d 319, 323 n 2 [1st Dept 2006], affd 8 NY3d 931 [2007]). On the merits, however, this argument is unavailing (see Allstate Prop. & Cas. Ins. Co. v Northeast Anesthesia & Pain Mgt., 2016 NY Slip Op 50828[U], 51 Misc 3d 149[A] [Appellate Term, 1st Dept, 2016]; Allstate Ins. Co. v DeMoura, 2011 NY Slip Op 50430[U], 30 Misc 3d [*2]145[A] [Appellate Term, 1st Dept, 2011]).”

So in this case, the question on remand will be whether the EUO’s were properly scheduled. The failure here will mean the claims were complete prior to the EUO defaults when there may have been money remaining on the policy. The basis here is that the EIP attender his EUO but the provider defaulted. Measuring the provider EUO against the bill, it was more than 15-business days from its receipt. Measuring the provider EUO letter from the EIP EUO, it was more than 15-days from this date. So the framed issue will be interesting when it all shakes out.

But the important holding here is that this Court is not advocating the proposition that exhaustion is unconditional. The Court is applying 3.15, which would mean, in essence, that this Court may follow the Appellate Term Alleviation line of cases.

DJ following a default

Actual Chiropractic, P.C. v Global Liberty Ins. Co. of N.Y., 2020 NY Slip Op 50185(U)(App. Term 2d Dept. 2020)

“On the instant appeal, defendant has annexed to its brief an order of the Supreme Court, Bronx County, entered February 9, 2018, which held, among other things, that all civil lawsuits, judgments and other proceedings “that have been brought or may be brought by . . . Actual [*2]Chiropractic, P.C.” seeking no-fault benefits under the same claim number and regarding the same assignor and motor vehicle accident as in the case at bar are permanently stayed. As a court may take judicial notice “on appeal, of reliable documents, the existence and accuracy of which are not disputed” and, generally, “of matters of public record” (Brandes Meat Corp. v Cromer, 146 AD2d 666, 667 [1989]; see Headley v New York City Tr. Auth., 100 AD3d 700 [2012]), this court, in the interest of judicial economy, takes judicial notice of the Supreme Court’s order entered February 9, 2018, which permanently “stays” the parties from proceeding further in the action at bar.

In light of the stay issued by the Supreme Court, this appeal has “been rendered academic as any determination on [this] appeal[ ] would not, under the facts of this case, have a direct effect upon the parties” (Matter of Claudia G. [Ermelio G.], 71 AD3d 894, 895 [2010]).”

An interesting MVAIC issue

I usually do not focus or discuss too many MVAIC cases, mainly because they do not terribly interest me and the Second Department has held that every distinctive issue involving MVAIC is either a coverage defense or an additional element of Plaintiff’s prima facie case. The First Department holds that every “condition precedent” is a defense and does not require remedies to be exhausted as a condition precedent. Pardon me for not focusing on MVAIC issues – do not think less of me.

This case interested me due to one sentence:

“The filing of a timely affidavit providing the MVAIC with notice of intention to file a claim is ‘a condition precedent to the right to apply for payment from [MVAIC].’ Compliance with the statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a ‘covered person,’ within the meaning of the statute, entitled to recover no-fault benefits from the MVAIC” (Avicenna Med. Arts, P.L.L.C. v MVAIC, 53 Misc 3d 142[A], 2016 NY Slip Op 51535[U], 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016] [citation omitted]; see Insurance Law §§ 5208 [a] [1], [3]; 5221 [b] [2]). As plaintiff did not establish that such an affidavit had been submitted to MVAIC, plaintiff failed to establish its prima facie case (see Insurance Law §§ 5202 [b]; 5208, 5221 [b] [2]). In light of the foregoing, we reach no other issue.”

Same case in Civil Bronx: Affirmed with $30 costs. By the way, we have seen the bolded comment before in prior cases. But I think the Court is wrong here. What do I know?

The term condition precedent

Lida’s Med. Supply, Inc. v MVAIC, 2019 NY Slip Op 51618(U)(App. Term 2d Dept. 2019)

” Since MVAIC established that there had been no timely filing of a sworn notice to make claim (see Insurance Law § 5208 [a]), plaintiff’s assignor is not a “covered person” (Insurance Law § 5221 [b] [2]). Thus, a condition precedent to plaintiff’s right to apply for payment of no-fault benefits from defendant has not been satisfied”

When is a condition precedent really a condition precedent? Always interesting.

MVAIC is at it again

JJ & R Chiropractic PC v MVAIC, 2019 NY Slip Op 51559(U)(App. Term 1st Dept. 2019)

” [d]efendant MVAIC failed in its burden to establish, prima facie, that plaintiff’s assignor was not a “qualified person” entitled to no-fault coverage (see Socrates Med. Health, P.C. v MVAIC, 29 Misc 3d 129[A], 2010 NY Slip Op 51780[U] [App Term, 1st Dept 2010]). Nor has defendant established that plaintiff was required to “exhaust its remedies” against the vehicle’s owner prior to commencing this action”

For some reason, I do not find MVAIC issues blog worthy. Perhaps it is because I do not deal with them frequently. But the exhaustion of remedies has caused a department split in the Appellate Terms. I take MVAIC will leave this alone since the majority of their cases take place in the Second Department, which has historically been more receptive to MVAIC’s “coverage” issue analysis.

Workers Comp

Metro Psychological Servs., P.C. v Travelers Prop. & Cas. Ins. Co., 2019 NY Slip Op 51150(U)(App. Term 2d Dept. 2019)

“Defendant proffered sufficient evidence to support its contention that there was an issue as to whether plaintiff’s assignor had been acting in the course of his employment at the time of the accident and that, therefore, workers’ compensation benefits might be available (see e.g. Arce Med. & Diagnostic Svce v American Tr. Ins. Co., 39 Misc 3d 134[A], 2013 NY Slip Op 50531[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Jamaica Med. Supply, Inc. v American Tr. Ins. Co., 34 Misc 3d 133[A], 2011 NY Slip Op 52371[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; D.A.V. Chiropractic, P.C. v American Tr. Ins. Co., 29 Misc 3d 128[A], 2010 NY Slip Op 51738[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; cf. Westchester Med. Ctr. v American Tr. Ins. Co., 60 AD3d 848 [2009]). ” ‘Since primary jurisdiction with respect to determinations as to the applicability of the Workers’ Compensation Law has been vested in the Workers’ Compensation Board,’ it is ‘inappropriate for the courts to express views with respect thereto pending determination by the board'”

PPO based discovery

North Val. Med., P.C. v Allstate Ins. Co., 2019 NY Slip Op 50904(U)(2d Dept. 2019)

This one was interesting.

(1) “A review of the record indicates that the Civil Court properly denied the branch of defendant’s motion seeking, pursuant to CPLR 3211, to dismiss the complaint. The affidavits and documents annexed to defendant’s moving papers failed to establish that the corporate plaintiff was a party to the PPO contract, dated October 1998, which states that it is between Emerth L. Coburn, M.D., as an “individual practitioner,” and MultiPlan.”

(2) ” Here, according to defendant, Dr. Coburn explicitly requested Multiplan to include within the scope of his individual PPO contract with Multiplan all bills submitted to [*2]Multiplan bearing plaintiff’s name and taxpayer identification number. Consequently, the Civil Court improvidently exercised its discretion in denying defendant’s alternate relief of compelling an EBT of Dr. Coburn, since defendant is seeking material and necessary evidence to support its defense, as defendant paid plaintiff’s claims in accordance with the provisions of the PPO contract. “

The other issue in the PPO chain is between the carrier and the third-party intermediary. Was that contract presented? We just have multiplan and the doctor individually.