Post Jamaica Wellness Appellate Division victories

Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 2020 NY Slip Op 00971 (4th Dept. 2020)

I still think that the Fourth Department should have followed the First Department as modified by Longevity. That said, a change or clarification in the law should allow a successive summary judgment motion.

“The Nationwide plaintiffs subsequently filed a second motion for summary judgment on the complaint and submitted, inter alia, a detailed affidavit of the claims specialist, the subject denial of claim forms, and affidavits of the operations manager of their third-party claims processor. Defendant cross-moved pursuant to CPLR 3124 to compel discovery. Supreme Court denied the motion on the ground that it was an improper successive motion for summary judgment and granted in part the cross motion. The Nationwide plaintiffs now appeal.

We agree with the Nationwide plaintiffs that the court erred in refusing to entertain their second summary judgment motion. “Although successive summary judgment motions generally are disfavored absent newly discovered evidence or other sufficient cause . . . , neither Supreme Court nor this Court is precluded from addressing the merits of such a motion” (Giardina v Lippes, 77 AD3d 1290, 1291 [4th Dept 2010], lv denied 16 NY3d 702 [2011]; see Putrelo Constr. Co. v Town of Marcy, 137 AD3d 1591, 1593 [4th Dept 2016]). Here, our intervening decision in the prior appeal, which clarified that the defense based on nonappearance at an EUO is subject to the preclusion remedy and that the Nationwide plaintiffs were therefore required to establish that they issued timely denials on that ground, constitutes sufficient cause to entertain the motion (see Pludeman v Northern Leasing Sys., Inc., 106 AD3d 612, 616 [1st Dept 2013]).

We further agree with the Nationwide plaintiffs that they are entitled to summary judgment. Contrary to defendant’s contentions, we conclude upon our review of the record that the Nationwide plaintiffs met their burden as movant and that defendant failed to raise a triable issue of fact (see Nationwide Affinity Ins. Co. of Am. v Beacon Acupuncture, P.C., 175 AD3d 1836, 1837 [4th Dept 2019]). In addition, defendant’s ” mere hope or speculation’ that further discovery will lead to evidence sufficient to defeat [the Nationwide plaintiffs’] motion is insufficient to warrant denial thereof” (Kaufmann’s Carousel, Inc. v Carousel Ctr. Co. LP, 87 AD3d 1343, 1345 [4th Dept 2011], lv dismissed 18 NY3d 975 [2012], rearg denied 19 NY3d 938 [2012]; see Austin v CDGA Natl. Bank Trust & Canandaigua Natl. Corp., 114 AD3d 1298, 1301 [4th Dept 2014]; see generally CPLR 3212 [f]). In light of our determination, defendant’s cross motion to compel discovery is dismissed as moot (see Clark C.B. v Fuller, 59 AD3d 1030, 1031 [4th Dept 2009]). We therefore reverse the order by granting the motion, dismissing the cross motion, and granting judgment in favor of the Nationwide plaintiffs declaring that they are under no obligation to pay or reimburse any of the subject claims.”

Nationwide Affinity Ins. Co. of Am. v PFJ Med. Care, P.C., 2020 NY Slip Op 00972 (4th Dept. 2020)

” Here, to establish their entitlement to summary judgment by making the requisite showing with respect to their defense to payment of the subject claims based upon defendants’ nonappearance at the EUOs, the Nationwide plaintiffs submitted facts that were known to them but not offered on the prior motions for summary judgment (see CPLR 2221 [e] [2]). The Nationwide plaintiffs also established a reasonable justification for failing to present such facts on the prior motions inasmuch as this Court, in our intervening decision in Jamaica Wellness, held for the first time and in contrast to established precedent in another department that the defense based on nonappearance at an EUO is subject to the preclusion remedy and, therefore, that an insurance carrier seeking a declaration that it is not obligated to pay claims due to such nonappearance must establish, inter alia, that it issued timely and proper denials (167 AD3d at 197-198; see generally Foxworth v Jenkins, 60 AD3d 1306, 1307 [4th Dept 2009]).”

Non contact case

This one is from my friend Allan Hollander. Good job. I apologize for my delay in posting. I got caught up for three weeks on a preliminary injunction motion on a case that consumed me. Anyhow, that is not relevant to the readers. Here is Beacon:

Nationwide Affinity Ins. Co. of Am. v Beacon Acupuncture, P.C., 2019 NY Slip Op 06942 (4th Dept. 2019)

(1) “Plaintiff commenced this action seeking a declaration that it was not obligated to pay certain insurance claims related to a motor vehicle accident in which, as relevant here, defendant Quentin Walker was allegedly injured. Plaintiff moved for summary judgment on the complaint against defendants-respondents (defendants), which provided healthcare services or medical equipment to Walker, and defendant Nu Age Medical Solutions, Inc. After noting that the “issue [was] limited to the bills relating to” Walker, Supreme Court denied the motion with respect to defendants. In its order, the court determined that, although plaintiff had met its initial burden and defendants had failed to raise a triable issue of fact in opposition, the motion was premature with respect to defendants. Plaintiff now appeals from the order insofar as it denied the motion in part.”

(2) We agree with plaintiff that its motion was not premature inasmuch as defendants failed to demonstrate that ” discovery might lead to relevant evidence or that the facts essential to justify opposition to the motion were exclusively within the knowledge and control of’ ” plaintiff (Gannon v Sadeghian, 151 AD3d 1586, 1588 [4th Dept 2017]). ” Mere hope that somehow the [nonmovant] will uncover evidence that will [help its] case provides no basis . . . for postponing a determination of a summary judgment motion’ ” (Mackey v Sangani, 238 AD2d 919, 920 [4th Dept 1997]). Further, we agree with the court that plaintiff met its burden as movant and that defendants failed to raise a triable issue of fact

After the DJ

Valdan Acupuncture, P.C. v Nationwide Mut. Fire Ins. Co., 2019 NY Slip Op 51098(U)(App. Term 2d Dept. 2019)

This case answers a question some have properly asked. At what point do the Assignee medical providers not have to be named in the underlying declaratory judgment in order for a declaration of non-coverage to be binding on the that party.

The general rule is the Magic rule, which states that res judicata will not attach to an declaratory judgment when a medical provider is not named in a DJ action. The corollary to this rule is the Astoria v. State Farm rule which says that a fully contested jury trial in a third-party negligence action involving the assignor will be collateral estoppel on the issue of non contact in an assigned first-party action despite the medical provider not having the opportunity to participate in the third-party action.

Now we have the Valdan Acupuncture rule.

” Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v JP Morgan Chase Bank, N.A., [*2]140 AD3d 912, 913-914 [2016]; see Matter of Hunter, 4 NY3d 260, 269 [2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). In the case at bar, as the injured party’s assignment to plaintiff was made on September 21, 2011, after the commencement in August 2011 of the declaratory judgment action, plaintiff is deemed to be in privity with the assignor and “charged with notice that [its] rights to the assignment are subject to the competing claim” (Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 487 [1979]). “

And I am unsure if it is irony or serendipity but my good friend Gary T was involved in all three of these cases. I guess he owns all aspects of this issue. Oleg Rybak cannot own every IME/EUO/DJ issue.

Negligent employment

Walden Bailey Chiropractic, P.C. v Geico Cas. Co., 2019 NY Slip Op 05267 (4th Dept. 2009)

I feel as though Mr. Walden Bailey was unhappy with the gecko and went after him with all guns blazing. I just read a story about a guy who died after eating a gecko – apparently salmonella poisoning. Luckily, Mr. Walden did not suffer the same fate and still has his breach of contract action against the gecko

” We agree with defendant, however, that plaintiff failed to allege facts constituting negligent hiring, supervision, or retention sufficient to survive defendant’s motion to dismiss. “An employer may be liable for a claim of negligent hiring or supervision if an employee commits an independent act of negligence outside the scope of employment and the employer was aware of, or reasonably should have foreseen, the employee’s propensity to commit such an act” (Lamb v Stephen M. Baker, O.D., P.C., 152 AD3d 1230, 1231 [4th Dept 2017] [internal quotation marks omitted]). Here, plaintiff’s cause of action for negligent hiring, supervision or retention is based on the factual allegations that defendant’s employees denied or delayed the payment of claims to plaintiff and sent repetitive verification demands, and that defendant was aware of what its employees were doing and continued to employ them. Plaintiff, however, [*2]failed to allege that those acts were committed outside the scope of the employees’ employment. Plaintiff also failed to allege how the employees’ alleged acts of denying claims and sending verification demands constituted acts of negligence. Thus, we conclude that the court erred in denying that part of defendant’s motion seeking to dismiss the 13th cause of action, and we therefore modify the order accordingly. “

My only misgiving here is absent discovery, how can a plaintiff really make an allegation of negligent hiring? Perhaps, the cause of action should have survived pending discovery? The Plaintiff has no way of knowing or finding a way to know why all of these claims were denied or verified. I would compare this to the situation where the EIP or the provider no-shows. Here, the provider attorney has access through subpoena power of the EIP and personal knowledge of what his or her client did or did not do.

Watch out for text degradation

Global Liberty Ins. Co. v Tyrell, 2019 NY Slip Op 03691 (1st Dept. 2019)

This case was the result of the system crunching large pdf’s into smaller files to free up more space on my hard drive. I am not even kidding. We were not even aware of the text degradation until it was raised in opposition. The natural reaction is to put in better copies; but apparently, you need an affidavit explaining that the better copies were the ones sent to the Defendant. New rule here and I will remember. Not even sure that specific argument was raised but practice tip out there – if you wish to clarify you submission in Reply, get an affidavit briefly explaining what happened. Perhaps shame on me here.

Supreme Court accepted the clear letters in reply but found a mailing issue. It is a fair guess that the Appellate Division accepted the mailing and non-appearance issue, but relied on a hyper-technical issue to affirm the lower court’s order. I can live with this.

What was really good though (and I am quite thankful) is the Court found the wrong caption/ no caption argument to lack merit. This argument has picked up steam in Civil Kings, and it is nice to see it has finally died. Well it will not die but it has been judicially found to lack merit. Thus, the App Term and Article 75 courts will likely not find merit in this argument.

Appellate Division hold that Civil Court lacks subject matter over DJ actions

State Farm Fire & Cas. Co. v Jewsbury, 2019 NY Slip Op 01247 (2d Dept. 2019)

This involves the unsuccessful argument that Civil Court actions block Supreme Court declaratory judgment actions. The Appellate Divisions have never ruled in favor of the providers under a CPLR 3211(a)(4) dismissal theory. If that was the holding, I would not really care much about this.

But – we finally have clarity regarding the ability of an insurance carrier to seek declaratory judgment relief in Civil Court. The answer was what we all knew it was after Fresh Acupuncture, but later confused due to Countrywide. A well reasoned decision.

“After State Farm received and failed to pay first-party beneficiary claims submitted by Parisien, Parisien commenced two actions in the Civil Court of the City of New York for payment (see Insurance Law § 5106). While those actions were pending, State Farm commenced this action in the Supreme Court, Kings County. State Farm seeks a judgment declaring that it is not required to pay any claims related to the accident on the policy it issued.”

” The Supreme Court improvidently exercised its discretion in granting that branch of Parisien’s motion which was pursuant to CPLR 3211(a)(4) to dismiss the complaint insofar as asserted against him. A declaratory judgment resolving the issue of State Farm’s obligation to pay any claims on the policy with respect to the accident, and naming all providers who may seek reimbursement under the policy, would further the interest of judicial economy. Indeed, the Civil Court may not issue the declaratory relief State Farm seeks in this action (see Fresh Acupuncture, P.C. v Interboro Ins. Co., 56 Misc 3d 98, 100 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]; cf. CPLR 3001; Insurance Law § 3420[a][6]; Mazzei v Kyriacou, 139 AD3d 823, 824), and the other providers who may seek no-fault reimbursements relating to that collision are not parties to the two actions pending in the Civil Court. “

Appellate Term, first department gives expansive reading to CCA 212-a

Country-Wide Ins. Co. v Yao Jian Ping, 2019 NY Slip Op 50160(U)(App. Term 1st Dept. 2019)

“This action, seeking a de novo adjudication of a no-fault insurance claim following a master arbitrator’s award in excess of $5,000 (see Insurance Law § 5106[c]), was properly commenced in Civil Court, since the amount in dispute did not exceed $25,000 (see CCA 212-a; Imperium Ins. Co. v Innovative Chiropractic Servs., P.C., 43 Misc 3d 137[A], 2014 NY Slip Op 50697[U] [App Term, 1st Dept 2014]; Brooks v Rivera, 40 Misc 3d 133[A], 2013 NY Slip Op 51191[U] [App Term, 1st Dept 2013]).”

This was clearly a set up to see what the Appellate Division First Department would.

The new-new-new regs are not retroactive

Global Liberty Ins. Co. of N.Y. v Spine Consultation NJ, P.C., 2018 NY Slip Op 08748 (1st Dept. 2018)

Had one of those weeks – I felt like the partner whose affirmation could not prove anything.  This case stemmed from what was probably an oversight on DFS’ part.  Historically, DFS always told us when a change on the regulations would take place.  For the first time that I can recall, a regulation did not contain this language,

There was also case law suggesting this type of circumstance, i.e. a regulation or statute can have retroactive application.  You can read my motions papers – they are online.  My brief parroted, in pertinent part, my motion papers.  But the Court was not ready to give us another Unitrin moment.

“The court correctly denied plaintiff’s motion, interpreting Department of Financial Services Regulations (11 NYCRR) § 68.6(b)(1), amended effective January 23, 2018, to apply prospectively. The regulations do not indicate that they apply retroactively, and the law is settled that retroactivity is not imputed where not expressly stated (Bowen v Georgetown Univ. Hosp., 488 US 204, 208 [1988]; Matter of Rudin Mgt. Co. v Commissioner of Dept. of Consumer Affairs of City of N.Y. , 213 AD2d 185, 185 [1st Dept 1995]).”

Default vacated

Government Employees Ins. Co. v Avenue C Med., P.C., 2018 NY Slip Op 08010 (2d Dept. 2018)

(1) “The defendants Salehin Sayeedus, also known as Salehin Sayeedus Suman, Jose Carmen Ma Donna Gloria, also known as Carmen Maria Donna Jose, and Zhi-Yuan Zhong (hereinafter collectively the defaulting defendants) defaulted in appearing and, in April 2014, the plaintiffs filed a motion for leave to enter a default judgment against the defaulting defendants. The motion was unopposed, and was granted on July 23, 2014. In October 2014, the defaulting defendants moved to vacate their default and to compel acceptance of their late answers, asserting that their default was due to law office failure. In support of their motion, the defaulting defendants submitted affidavits from the defendants’ former and present counsel, in which counsel stated that the failure to serve timely answers on behalf of the [*2]defaulting defendants was due to a miscommunication between the defendants’ former and present counsel, upon the transfer of the defendants’ case to their present counsel, regarding the nature of the representation. The Supreme Court denied the motion, and the defaulting defendants appeal.”

(2) “Here, the defaulting defendants demonstrated a reasonable excuse, based upon law office failure arising from a miscommunication between their former counsel and their present counsel, for their default in answering the complaint or otherwise appearing in the action”

(3) “The defaulting defendants submitted affidavits in support of their motion describing their office services and billing practices, in which they stated, among other things, that their patients were required to sign statements acknowledging the treatments that they had received. The defaulting defendants also averred in the affidavits that they did not bill for services that were not rendered”

Now, Avenue C will get its date in Court.

A declaratory judgment to nowhere

Jamaica Wellness Med., P.C. v Mercury Cas. Co., 2018 NY Slip Op 51128(U)(App. Term 2d Dept. 2018)

Upon a review of the record, we find that, as the March 23, 2016 Supreme Court order in the declaratory judgment action merely awarded a default judgment to Mercury against Jamaica’s assignor, but did not declare the rights of Mercury as against Jamaica (see Hirsch v Lindor Realty Corp., 63 NY2d 878 [1984]; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767 [1989]; Metro Health Prods., Inc. v Nationwide Ins., 48 Misc 3d 85[App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]), the Supreme Court order cannot be considered a conclusive final determination of Jamaica’s rights and, thus, can have no preclusive effect on the no-fault action at bar (see Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co., 50 Misc 3d 128[A], 2015 NY Slip Op 51886[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; cf. Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co., 46 Misc 3d 147[A], 2015 NY Slip Op 50222[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Consequently, the Civil Court should not have dismissed the complaint based on the Supreme Court order. In light of the foregoing, we reach no other issue.

This embarrassment speaks for itself.