IME no-show is a policy defense triggering the hourly attorney fee provision

Kamara Supplies v GEICO Gen. Ins. Co., 192 AD3d 588 (1st Dept. 2021)

I find it offensive that a regulation states that an attorney should work for $70 an hour litigating a case, even a PIP case. It is wrong and, intrinsically, I hate to even acknowledge these minimum wage attorney fee disputes. But this case, which I subliminally ignored, raises the issue. Oh in Fla, they award between $500-$750 an hour for these cases. Hi DFS – how about $250 an hour on all cases, subject to a $10,000 cap, absent good cause shown?

(1) “We find that “policy conditions or exclusion” under which the injured person is excluded from coverage in the “policy issue” reason in box 4 of the NYS NF-10 form refers to the conditions and exclusions of the MPIPE (11 NYCRR 65-1.1 [d]), which include, as noted above, that an EIP must submit to IMEs as required by the insurer. We therefore conclude that an IME no-show defense is a box 4 reason for denial. An EIP who does not attend an IME fails to satisfy a condition precedent to coverage under the policy, voiding the policy ab initio (PV Holding Corp. v Hank Ross Med., P.C., 188 AD3d 429, 430 [1st Dept 2020]).”

(2) “Thus, an insurer who denies a claim [*2]for first-party No-Fault benefits on the basis of the injured person’s failure to attend an IME properly does so by checking box 4 on the denial of claim form, and therefore an injured person’s failure to attend an IME is a “policy issue” both according to the denial of claim form and for purposes of awarding attorneys’ fees under 11 NYCRR 65-4.6 (c).”

(3) “Moreover, statutes and regulations must be interpreted in a manner that does not render them meaningless, unreasonable, or absurd (see McKinney’s Cons Laws of NY, Book 1, Statutes § 145; Long v State of New York, 7 NY3d 269, 273 [2006]). For this reason, we also reject the overly restrictive reading of 11 NYCRR 65-4.6 (c) urged by defendant, which would interpret “a policy issue as enumerated on the prescribed denial of claim form” (id.) as referring only to those specific justifications delineated on the form, and only as they are delineated on the form. That interpretation would both render some of the reasons on the denial of claim form meaningless and require the Department of Financial Services effectively to reproduce the MPIPE on the form to capture all the possible reasons for which a No-Fault benefits claim may be denied.”

Congratulations for minimum wage lawyering. At least when I worked at taco bell in the 1990s, I got to eat for free 😉

Contractual deemer

Domny Med. Servs., P.C. v Universal Ins. Co., 2021 NY Slip Op 50301(U)

“Defendant does not deny that it issued the insurance policy pursuant to which plaintiff seeks payment, but argues that, as an out-of-state company with no ties to New York, it is not liable for these services. Contrary to defendant’s contention, it has not demonstrated, as a matter of law, that its policies should not “be deemed to satisfy New York’s financial security requirements and to provide for the payment of first-party benefits” (Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C., 137 AD3d 1270, 1272 [2016]; see Insurance Law § 5107; 11 NYCRR § 65-1.8) or that the policy at issue does not otherwise mandate coverage under the circumstances

The defense that you do not have ties to New York will warrant statutory deemer dismissal.. But does it mean that the policy itself does not provider for the benefits? Read the policy carefully.

It is $200,000 for pedestrians as well as all occupants of cabs

Murzik Taxi, Inc. v Lutheran Med. Ctr., 2021 NY Slip Op 02302 (2d Dept. 2011)

This case is is a an interesting loss for the Medallions and the black cars registered as Ubers. In avoiding a $58,000 hospital bill, it looks like the rules for this segment of the no-fault motoring population have changed.

“In the alternative, the plaintiff asserts that, as a self-insurer, its bond or policy was limited to $50,000 (see 11 NYCRR 65-2.2[a], [c]). Contrary to the plaintiff’s contention, taxicab owners, such as the plaintiff, are required to maintain liability coverage through an insurance policy or bond in an amount not less than $200,000 per person for basic economic losses (see Rules of City of NY Taxi and Limousine Commn [35 RCNY] § 58-13[d][1][i]; see also Mount Sinai Hosp. v Dust Tr., Inc., 104 AD3d 823, 823-824). Further, the plaintiff failed to submit the insurance policy or bond, or any other documentary evidence for that matter, to establish that the insurance coverage was exhausted.”

Look at the underlined portion and tell me what that means. For one, I can tell you American Transit’s verification protocols on larger level claims are probably improper and will create another bad faith and GBL 349 argument. But think about what this could mean for loss transfer… wow..

Alleviation – not much alleviated

Alleviation Med. Servs., P.C. v Allstate Ins. Co., 2021 NY Slip Op 08159 (2d Dept. 2021)

(1) “The defendant appeals, and we affirm, albeit on different grounds than those relied upon by the Civil Court or the Appellate Term.”

(2) However, “[a]n insurer is not required to pay a claim where the policy limits have been exhausted” (see Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534) since, where payments made by an insurer meet or exceed the policy limits, “its duties under the contract of insurance cease” (Presbyterian Hosp. in City of N.Y. v Liberty Mut. Ins. Co., 216 AD2d 448, 448; see 11 NYCRR 65-3.15).

(3) “[A]n insurer must pay or deny only a verified claim—that is, a claim that has been verified to the extent compliance with section 65-3.5 dictates in the particular case—within 30 calendar days of receipt; and, conversely, is not obligated to pay any claim until it has been so verified” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299). Once claims have been verified they are subject to the priority of payment regulation, 11 NYCRR 65-3.15 (see Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d at 300).

(4) “While the defendant submitted records indicating that the subject no-fault policy had been exhausted in 2013, the defendant’s submissions failed to establish its prima facie entitlement to judgment as a matter of law. Although the defendant submitted an affidavit from one of its employees that set forth the defendant’s ordinary business practice of receiving, recording, and denying no-fault claims from medical providers, the affidavit is bereft of any specific information regarding this claim. The defendant failed to submit the no-fault application, verification, any request for verification, or any denial associated with the plaintiff’s claim for payment.”

(5) “Accordingly, there are issues of fact remaining as to when the claim was denied, and the basis and efficacy of the denial”

So we know that the policy was exhausted and that this was not enough. Yet, the Court does not want to tell us the significance of any of this. I suppose the record on this case was not clean and the Court got to kick the can down the road.

An Mvaic Notice of Claim

Jean-Philippe, Matter of, v Motor Veh. Acc. Indem. Corp., 2020 NY Slip Op 51511(U)(App. Term 2d Dept. 2020)

” To the extent petitioner contends that her submission of an application for no-fault benefits (NF-2) and a copy of a police report together constituted, in effect, the functional equivalent of a notice of claim and thus that she timely complied with Insurance Law § 5208, we reject this contention. Although “[t]he statutory provisions creating and regulating the MVAIC are to be liberally construed to serve their ends” (Matter of Hernandez, 120 AD3d at 1349) and assuming, without deciding, that the NF-2 may be deemed to be have been sufficiently sworn to under penalty of perjury (see Penal Law § 210.45; People v Sullivan, 56 NY2d 378, 380 [1982]), the police report which accompanied petitioner’s NF-2 was not sworn to or otherwise affirmed under penalty of perjury. Consequently, it may not be deemed to be the functional equivalent of so much of a notice of claim as the NF-2 otherwise did not satisfy. As a result, because petitioner did not make an evidentiary showing that she had satisfied the statutory requirement, petitioner failed to establish her entitlement for relief (see Matter of Hernandez, 120 AD3d 1347).”

An NF-2 might be but a police report is not a sworn to form for MVAIC eligibility purposes

Policy Exhaust?

S.O.V. Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 2020 NY Slip Op 51365(U)(App. Term 2d Dept. 2020)

“In support of its motion, defendant alleged that, after it had partially denied the claims that are the subject of this action, it paid other claims and that those subsequent payments had exhausted the available coverage. However, even if true, this allegation does not warrant summary judgment dismissing the complaint on the basis of an exhaustion of available coverage defense (see 11 NYCRR 65-3.15; Alleviation Med. Servs., P.C. v Allstate Ins. Co., 55 Misc 3d 44 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; see also Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 [2007]).”

This was before the affirmance of Alleviation, which says a lot of nothing.

There was no policy

Gentlecare Ambulatory Anesthesia Servs.; Lyonel F. Paul M.D. v Hereford Ins. Co., 2020 NY Slip Op 51379(U)(App. Term 2d Dept. 2020)

“The papers submitted by defendant in support of its [ ] motion were sufficient to establish that the policy being sued upon was a workers’ compensation insurance policy which did not cover plaintiff’s claim to receive reimbursement of assigned first-party no-fault benefits. As plaintiff failed to demonstrate the existence of an applicable automobile insurance policy issued by defendant or to otherwise raise a triable issue of fact, [defendant’s motion for summary judgment should have been granted]” (Ultimate Health Prods., Inc. v Hereford Ins. Co., 51 Misc 3d 127[A], 2016 NY Slip Op 50367[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Flatbush Chiropractic, P.C. v Hereford Ins. Co., 49 Misc 3d 149[A], 2015 NY Slip Op 51712[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).”

It is probably not a good idea to seek NF benefits under a WC policy.

Policy exhaustion and the business records

JPF Med. Servs., P.C. v Nationwide Ins., 2020 NY Slip Op 51122(U)(App. Term 2d Dept. 2020)

” Here, defendant failed to demonstrate, as a matter of law, that it had made any payments under the policy because, as plaintiff argues, defendant’s claim specialist did not lay a sufficient foundation for the payment log, upon which defendant relied, to be accepted as proof that the payments listed therein had been made (see CPLR 4518 [a]; People v Kennedy, 68 NY2d 569 [1986]; Charles Deng Acupuncture, P.C. v 21st Century Ins. Co., 61 Misc 3d 154[A], 2018 NY Slip Op 51815[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]). Although defendant’s claim specialist referred to an affidavit annexed as exhibit K, which presumably discussed the payment log, an affidavit was not attached to the papers received by the court. Consequently, defendant failed to make a prima facie showing”

The phantom affidavit and the business record foundation. Both can cause problems.

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”.