A DJ to nowhere

Kemper Independence Ins. Co. v Adelaida Physical Therapy, P.C., 2017 NY Slip Op 00916 (1st Dept. 2016)

“Although the failure of a person eligible for no-fault benefits to appear for a properly noticed EUO constitutes a breach of a condition precedent, vitiating coverage (see 11 NYCRR 65-1.1; see also Hertz Corp. v Active Care Med. Supply Corp., 124 AD3d 411 [1st Dept 2015]; Allstate Ins. Co. v Pierre, 123 AD3d 618 [1st Dept 2014]), plaintiff failed to supply sufficient evidence to enable the court to determine whether the notices it had served on the injury claimants for EUOs were subject to the timeliness requirements of 11 NYCRR 65-3.5(b) and 11 NYCRR 65-3.6(b) (see Mapfre Ins. Co. of N.Y. v Manoo, 140 AD3d 468, 470 [1st Dept 2016]) and, if so, whether the notices had been served in conformity with those requirements (see National Liab. & Fire Ins. Co. v Tam Med. Supply Corp., 131 AD3d 851 [1st Dept 2015]). Specifically, plaintiff failed to provide copies of any completed verification forms it may have received from any of the health service provider defendants or any other evidence reflective of the dates on which plaintiff had received any such verification forms, or otherwise assert that it never received such forms.

The Court has delimited the proof necessary to demonstrate that a no show is timely, relative to the receipt of billing.  Manoo involved verification of treatment forms that were dated after the EUO letters, showing timeliness on its fact.  An affidavit from a claims representative expressing when billing per provider or per claim was received would be the “other evidence reflective of the dates on which plaintiff had received any such verification forms”.  The Court held in this manner in AT v. Vance and AT v. Longevity.

In light of the caselaw that has been established since 2015, this perfection of this appeal seemed strange as the result was preordained, and there does not appear anything in the face of this opinion that would cause a shift in the law.  Plus with Manoo at the Court of Appeals, the vitality of Unitrin may or may not be dead by years end.


Punted satisfaction case

J.K.M. Med. Care, P.C. v Interboro Ins. Co., 2016 NY Slip Op 26348 (App. Term 2d Dept. 2016)

(1) In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that the action was barred by virtue of a November 21, 2011 judgment which had been entered against plaintiff in a declaratory judgment action in the Supreme Court, Nassau County. Plaintiff cross-moved for summary judgment. By order dated April 23, 2014, the Civil Court (Robin S. Garson, J.) denied defendant’s motion and granted plaintiff’s cross motion, directing plaintiff to enter judgment in the principal sum of $556.78, plus statutory interest and attorney’s fees. In July 2014, plaintiff submitted a proposed judgment in the total sum of $988.34. A judgment was ultimately entered on September 19, 2014 in the sum of $993.34.

(2) In August 2014, prior to the entry of judgment in this action, defendant moved for summary judgment dismissing the complaint, as the amount which was due and owing had been satisfied, or, in the alternative, in the event that a judgment had been entered while defendant’s motion was pending, for an order granting it a satisfaction of such entered judgment, pursuant to CPLR “5020 (c),”[FN1] and plaintiff opposed the motion. By order entered April 23, 2015, the Civil Court (Robin Kelly Sheares, J.) denied defendant’s motion in its entirety on the ground that it was an improper successive motion for summary judgment.

(3) Although defendant’s second motion sought summary judgment dismissing the complaint, [*2]defendant sought such relief only in the event that no judgment had been entered while its motion was pending. Since a judgment had been entered on September 19, 2014, defendant’s request for primary relief in the form of summary judgment became academic, and, thus, the branch of defendant’s motion seeking the alternative relief requested, i.e., for an order, pursuant to CPLR 5021 (a) (2), directing the entry of a satisfaction of judgment, became operative. However, in denying defendant’s motion in its entirety, the Civil Court did not consider the merits of the branch of defendant’s motion seeking the alternative relief of the entry of a satisfaction of judgment. Consequently, the matter is remitted to the Civil Court for a determination thereof.

My review of the file shows there was an issue with the granted declaratory judgment action.  The DJ action, however, was granted and a cost/disbursement judgment in the sum of $1200 was entered.  Since the amount due and owing in no-fault benefits was less than that sum, the idea was issue to an offsetting partial satisfaction against the Supreme Court judgment.   The Appellate Term punted.  I suppose we will be back up next decade.

Judgment in declaratory judgment action does not need to rendered against Assignor to be effective

Infinity Chiropractic Health, P.C. v Republic W. Ins. Co., 2016 NY Slip Op 51564(U)(App. Term 2d Dept. 2016)

The eventual order and/or judgment does not need to be entered against assignor directly.

(1)  “However, insofar as is relevant to this appeal, the Civil Court denied the branches of defendant’s unopposed motion seeking summary judgment dismissing the fifth through eighth causes of action, which causes of action related to services that plaintiff had rendered to assignor Lawrence Jones, on the ground that the order in the declaratory judgment action had not been granted as against Lawrence Jones, individually. Defendant appeals from so much of the order as denied the branches of its motion seeking summary judgment dismissing the fifth through eighth causes of action.”

(2) “Plaintiff was named and served in the declaratory judgment and ultimately defaulted therein. As plaintiff’s right to recover as an assignee of Lawrence Jones was fully litigated in the Supreme Court action, notwithstanding defendant’s admitted failure to serve Lawrence Jones individually in that action, and notwithstanding that the declaratory judgment made no determination as against Lawrence Jones, individually, the order in the declaratory judgment action was a conclusive final determination barring plaintiff from recovering for any services it rendered to Lawrence Jones arising from the July 16, 2010 accident.”

Default granted but summary judgment motion denied

Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 2016 NY Slip Op 06680 (2d Dept. 2016)

(1) “Here, the Supreme Court found that the plaintiff submitted proof of service of the summons and complaint upon Gorum (seeBusiness Corporation Law § 306[b][i]; CPLR 3215[g][4][i]) and that Gorum had not answered or appeared in this action, thereby admitting all traversable allegations (see Rokina Opt. Co. v Camera King, 63 NY2d 728, 730). However, the court erred in denying that branch of the plaintiff’s motion which was for leave to enter a default judgment against Gorum on the basis that its expert’s affirmation, in the form of a peer review, did not have an original signature (see CPLR 2101[e]; Rechler Equity B-1, LLC v AKR Corp., 98 AD3d 496, 497; Billingy v Blagrove, 84 AD3d 848, 849; Campbell v Johnson, 264 AD2d 461, 461). Further, the plaintiff’s expert’s affirmed peer review demonstrated facts constituting the cause of action asserted against Gorum (see Woodson v Mendon Leasing Corp., 100 NY2d at 71). Thus, the court should have granted the plaintiff leave to enter a default judgment against Gorum.”

The “original signature” is a relic of the 1970s and 1980s.  Certain judges fail to appreciate that a copy or a holographic signature (and electronic signature in the 1st Department or electronic signature with authentication in the Second Department) are sufficient to allow the document to be considered.

(2)  “The peer review reports and medical records submitted in support of this motion failed to demonstrate as a matter of law that the surgery performed by Diwan on Souffront was not medically necessary.”

Admittedly, this is the standard type of peer reports that  the insurance carriers utilize to show lack of medical appropriateness.   It is for this reason that surgery peer reviews necessitate expert testimony.  My hope is one day, the industry will compel the orthopedists to fill in the gaps in the peer reviews so that the can stand on their own two feet.

Preliminary injunction denied – the analysis is questionable

Liberty Mut. Ins. Co. v Branch Med., P.C., 2016 NY Slip Op 31706(U)(Sup. Ct. NY Co. 2016)

(1)  In connection with one such claim, at an examination under oath (EUO) held on March 31, 2014, Nicholas testified that he and his brother, Scott, solely owned and controlled Branch, that their compensation was tied to company profits, and that defendant Mark Levitan served as Branch’s “administrative executive,” overseeing company staff, marketing, bookkeeping, and internal HIPAA procedures, with online access to Branch’s bank account. He was not a physician. When questioned further about Levitan, Nicholas was instructed by counsel not to answer questions about Levitan’s compensation relative to his and Scott’s, nor whether Levitan had been involved in any business owned by Nicholas before Branch.

(2) “Nothing in Nicholas’s testimony evidences fraud, nor do the unanswered verification requests. Moreover, the requests were improper. (See Is. Chiropractic Testing, P. C. v Nationwide Ins. Co., 35 Misc 3d 1235[A], 2012 NY Slip Op 51001[U], *2 [Dist Ct, 3d Dist, Suffolk County 2012] [request for documents pertinent to fraudulent incorporation defense inappropriate for verification request]”

(3) “Even if the alleged gaps in Nicholas’s testimony support an inference that Levitan earned more than him and Scott, it is consistent with Levitan, as staff, earning a salary, whereas Nicholas and Scott, as owners/shareholders, earned compensation based on the corporation’s profits. And even if Levitan was affiliated with a prior business owned by Nicholas, it proves nothing absent evidence he owned or controlled it.”

(4) Plaintiffs’ remaining allegations are unsubstantiated and based on speculation, and to the extent that plaintiffs rely on Springer’s EUO, they fail to provide or point to the pertinent portions of his testimony. Plaintiffs thus fail to establish, by clear and convincing evidence, the likelihood of success on the merits of their claim that Branch and Windsor were fraudulently incorporated and ineligible to receive no-fault benefits”

This one is interesting.  I never liked the whole directing not to answer thing.  The questions were relevant regarding compensation of the administrator of the practice.  Ultimately, the amount of his compensation relative to his bona-fide verifiable job duties would lead to legitimate verification requests for financial documents.  The Court got that wrong, simple.

As to the Court applying District Court decisions disallowing verification of financial documentation, the regulations prefer that these document exchanges take place pre-suit.  Remember the case where Supreme Court was reversed when the Court granted discovery in the form of financials during arbitration?  The Court cited 65-3.5 and 65-3.6.

I think the decision is wrong and should be appealed.  Unless, I am missing something?

By the way, I do not disagree that a practice manager could or maybe should make more than the principals.  But, the insurance carrier should have been entitled to ask more questions at the EUO and, only if the answers to the questions raise legitimate concerns, should further documentary discovery be required.


What do these cases have in common?

Country-Wide Ins. Co. v Castro, 2016 NY Slip Op 31505(U)(Sup. Ct. NY CO. 2016)

American Tr. Ins. Co. v Tavarez, 2016 NY Slip Op 31601(U)(Sup. Ct. NY CO. 2016)

American Tr. Ins. Co. v Garcia, 2016 NY Slip Op 31602(U)(Sup. Ct. NY CO. 2016)

All of these no-show default motions were struck by 11 NYCRR 65-3.5(d) or 65-3.5(b), 65-3.6(b).   Under the post Longevity and Tam Medical Supply cases, DJs involving IMEs and EUOs that are not scheduled upon receipt of the notice of the loss will rarely achieve the goal that is sought through a DJ, absent perjury.

The Court comments on a copy and paste job

Infinity Ins. Co. v Nazaire, 2016 NY Slip Op 31454(U)(Sup. Ct. Kings Co. 2016)

This is a PA rescission case based upon a garaging issue.  The Court caught on to something interesting.  First, the EUO of the Defendant was not annexed to the moving papers.  Second, the Court found the investigator affidavit to be hearsay.

Third, the footnote said:

“The affidavit of the plaintiffs litigation specialist appears to be, in the antiquated words of one court, a “mere mechanical job of paste pot and shears” (TC. Theatre Corp. v Warner Bros. Pictures, 113 F Supp 265, 271 [SD NY 1953], rearg denied 125 F Supp 233 [SD NY 1953]). The boilerplate text of her affidavit is formatted in regular size font, while the variables are highlighted in bold size font to make it easier for her to make changes depending on the facts of a particular claim.  Her affidavit here does not have all of the correct variables. Notably, para  23 of her affidavit refers to one Nandslie Jean Louis as the policyholder, rather than Jude.”

Interesting read.  My advice to Plaintiff insurance carrier counsel: slow down and proof read.  Being a speed demon does not make friends in the judiciary…

Declaratory judgment – ability to oppose the motion en toto?


(1) “Smith lacks standing to appeal from an order granting a default judgment against Lenox, which failed to appear or answer the complaint and failed to oppose the motion for a default judgment”

(2) “Although Smith, as a named party, could have opposed Hermitage’s position on coverage (see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 471 n [2005]), she elected to seek dismissal on procedural grounds. Thus, having been granted the relief she sought on her own behalf, and having failed to offer any substantive opposition to Heritage’s claim of untimely notice or to oppose Heritage’s request for a default judgment against Lenox, Smith was not aggrieved by that portion of the order that declared that Heritage was not obligated to defend and indemnify Lenox in the underlying action”

I am thinking that this has an effect on a declaratory judgment action when multiple defendants are named.  This stands for the proposition that through an EIP offering opposition to the dec action and showing why a default against non answering provider is wrong, (s)he can kill the dec action.  I get this from the part where it says “Smith could have opposed the position on coverage” and had the opportunity “to offer any substantive opposition to Heritage’s claim of untimely notice or to oppose Heritage’s request for a default judgment against Lenox….”


Unpleaded defense can serve as basis to move for summary judgmemnt

J.K.M. Med. Care, P.C. v Liberty Mut. Fire Ins. Co., 2016 NY Slip Op 51071(u)(App. Term 2d Dept. 2016)

“The rule is that “an unpleaded defense may serve as the basis for granting summary judgment in the absence of surprise or prejudice to the opposing party” (Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]). Here, defendant failed to include res judicata as an affirmative defense in its answer, or to move to dismiss the complaint on that ground pursuant to CPLR 3211 (a) (5) prior to serving its answer. Its remedy then was to move pursuant to CPLR 3025 (b) for leave to amend its answer in order to include that defense. Defendant never explicitly so moved and instead moved for summary judgment based on res judicata and also sought “such other and further relief as [the Civil Court] may deem just and proper.” As plaintiff, in opposition to defendant’s motion, failed to allege any prejudice (see Barrett v Kasco Constr. Co., 84 AD2d 555, 556 [1981], affd 56 NY2d 830 [1982]) or surprise (see CPLR 3018 [b]; Rogoff v San Juan Racing Assn., 54 NY2d 883, 885 [1981]; Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]) resulting from defendant’s seeking summary judgment based on that unpleaded [*2]affirmative defense, under the circumstances, and in the interest of justice, we deem defendant’s answer amended to include the affirmative defense of res judicata”

The more expedient thing would be to plead all potential affirmative defenses in the initial answer.  An argument could be made that it is not proper to allege affirmative defenses that are not applicable.  Yet, the failure to plead anything under the sun leads to these types of cases.  It is better to plead everything that seems relevant and to let the adversary move to dismiss the affirmative defenses as lacking merit.  See e.g.  AutoOne Ins. Co. v Eastern Is. Med. Care, P.C., 2016 NY Slip Op 05354 (2d Dept. 2016)




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.