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.

EUO no-show from the First Department – lucky win by Mapfre?

Mapfre Ins. Co. of N.Y. v Manoo, 2016 NY Slip Op 04446 (1st Dept. 2016

This is an interesting one.  I believe (see below) the dissent was misconstrued.

“Plaintiff made a prima facie showing of its entitlement to summary judgment dismissing Active Care’s claim for first-party no-fault benefits by establishing that it timely and properly mailed the notices for EUOs to Manoo and that Manoo failed to appear at his initial and follow-up EUOs. The record establishes that plaintiff requested Manoo’s initial EUO by letter dated February 3, 2012. Although Active Care’s NF-3 form is dated February 7, 2012, plaintiff was entitled to request the EUO prior to its receipt thereof…..  The notification requirements for verification requests under 11 NYCRR 65-3.5 and 65-3.6 do not apply to EUOs that are scheduled prior to the insurance company’s receipt of a claim form…

Once Active Care presented its claim dated February 7, 2012, plaintiff was required to comply with the follow-up provisions of 11 NYCRR 65-3.6(b)…Plaintiff established that it fulfilled its obligation under § 65-3.6(b) by rescheduling Manoo’s EUOs within 10 days of his failure to appear at each scheduled exam (see Arco Med. NY, P.C. v Lancer Ins. Co., 37 Misc 3d 136(A) [App Term, 2d Dept 2012]). The second EUO scheduling letter was sent on February 23, 2012, which was just seven days after the February 16, 2012 nonappearance. The third EUO scheduling letter was sent on March 16, 2012, which was just seven days after the March 9, 2012 nonappearance.”

What is interesting here is that the Court I believe answered the question I thought was left open in the last EUO appeal from this Plaintiff’s law firm.  That is, remember where there were three EUO attempts (this was found in the record), the first two were appropriately scheduled and third EUO was scheduled more than 10-days after the second EUO?   Encompass Ins. Co. v. Rockaway Family Med. Care, P.C., 137 A.D.3d 582, 26 N.Y.S.3d 697 (N.Y. App. Div. 2016)

The Court now answered that the 10-day requirement applies to all follow-up EUO attempts.  Thus, Encompass (if decided today) would have been a loser.

What is also interesting is the Court again is distinguishing pre-claim and post-claim EUO protocols “after Manoo failed to appear at that EUO, and Active Care submitted its verification, plaintiff twice rescheduled the EUO in conformity with the requirements of 11 NYCRR 65-3.6(b)”  I do not understand the relevance of Active Care’s NF-3 forms as it relates to allowing the Assignor two attempts (and three here) to appear for an EUO.   This would be a red herring.

Finally, I think the majority mischaracterizes Justice Acosta’s dissent.  I read this dissent as saying that counsel for Mapfre failed to include in their moving papers an affidavit as to when Active Care’s NF-3 was received; and therefore, the motion was properly denied without regard to the lack of sufficiency of Plaintiff’s papers.  And I would say at this point, counsel for insurance carriers should know the contours of Unitrin.

It looks like Justice Acosta did not want to reward sloppy papers from an insurance carrier.  Legal papers before a Supreme Court should have more effort expended on them than that found in the value meal at the McDonalds drive-through.

“[p]laintiff failed to tender proof that it received Active Care’s verification. Thus, plaintiff did not demonstrate that it requested Manoo’s EUO subsequent to such receipt within the time prescribed in the Insurance Department Regulations (11 NYCRR) § 65-3.5[b] [“subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms”] [emphasis added]). Plaintiff’s argument that it submitted evidence showing that its request for Manoo’s EUO was made prior to the date of Active Care’s claim is unavailing in the absence of proof of when the claim was received

A lucky win by Mapfre

Motion to dismiss complaint reversed – the interest clock continues

High Definition MRI, P.C. v Travelers Cos., Inc., 2016 NY Slip Op 02027 (1st Dept. 2016)

(1) “Here, the complaint standing alone failed to apprise defendant insurance companies of basic pertinent information to put them on notice of the claims against them, such as the patients treated and the insurance policies issued by defendant, under which plaintiff submitted claims for treatment rendered. However, in opposition to defendant insurance companies’ motion to dismiss, plaintiff submitted an affidavit from its principal with an exhibit attached providing such information. Thus, the complaint and affidavit submitted in opposition sufficiently apprise defendant insurance companies of the “transactions, occurrences, or series of transactions” that form the basis of the complaint (CPLR 3013).”

(2) “Contrary to defendant insurance companies’ further contention, the complaint sufficiently alleges that plaintiff is the assignee of claims under the policies issued by defendant insurance companies. Defendant insurance companies’ further contention that plaintiff failed to appear for [*2]examinations under oath, which is a condition precedent to coverage (Hertz Corp. v Active Care Med. Supply Corp., 124 AD3d 411 [1st Dept 2015]), presents a factual issue not amenable to resolution on a motion to dismiss pursuant to CPLR 3211(a)(7).”

Two points to see in this case.  First, a motion to dismiss for breach of no-fault contract requires that the pleader allege the person on whose behalf the contract is breached.  Second, the propriety of an EUO no-show defense is inappropriate on a motion to dismiss.


Judicial notice of the Supreme Court file

IMA Acupuncture, P.C. v Hertz Co., 2016 NY Slip Op 50258(U)(App. Term 2d Dept. 2016)

This res judicata decision is interesting because it tests the outer of bounds of Judicial Notice.

“In any event, this court may take judicial notice of undisputed court records and files, including the judgment in the Supreme Court declaratory judgment action (see Renelique v State-Wide Ins. Co., ___ Misc 3d ___, 2016 NY Slip Op 50096[U] App Term, 2d Dept, 2d, 11th & [*2]13th Jud Dists 2016]; see also Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2009]; Matter of Khatibi v Weill, 8 AD3d 485 [2004]; Matter of Allen v Strough, 301 AD2d 11 [2002]). In light of the Supreme Court’s declaratory judgment, defendant’s cross motion to dismiss should have been granted under the doctrine of res judicata”

The Court uses the word “may”.  May requires a request in your papers?

Unpreserved argument

Natural Therapy Acupuncture, P.C. v Unitrin Auto & Home Ins. Co., 2016 NY Slip Op 50133(U)(App. Term 2d Dept. 2016)

This is really a good argument.  But, it fell outside the Rybak boilerplate as to why a declaratory judgment order is not preclusive as to his client.  On appeal, unnamed appellate counsel tried to resuscitate an omitted meritorious argument.   Court said this:

“Plaintiff’s contention on appeal, in essence, that defendant was not in privity with Kemper, is unpreserved for appellate review, because plaintiff failed to raise the issue in the Civil Court (see Volunteer Fire Assn. of Tappan, Inc. v County of Rockland, 114 AD3d 935 [2014]; Peerless Ins. Co. v Casey, 194 AD2d 411 [1993]; Martin v Triborough Bridge & Tunnel Auth., 180 AD2d 596 [1992]).”

Irony here.  I have an appeal where a meritorious argument was omitted from Rybak’s boilerplate and unnamed appellate counsel is not raising it on appeal.  I think we know the answer.

Unsettled order fails to dismiss Civil Court action

Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co., 2015 NY Slip Op 51886(U)(App. Term 2d Dept. 2015)

“Upon a review of the record, we find that since the March 2010 Supreme Court order in the declaratory judgment action merely granted the entry of a declaratory judgment, but failed to make a statement declaring the rights of the parties involved (see Hirsch v Lindor Realty Corp., 63 NY2d 878, 881 [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, 11th & 13th Jud Dists 2015]), the Supreme Court order cannot be considered a conclusive final determination and, thus, can have no preclusive effect in the instant no-fault action”

You know the order stated: motion granted, settled judgment.  Nothing else was decreed.  Defendant failed to settle a judgment and this is the result.

Unitrin citing that hits upon the Longevity factors

Easy Care Acupuncture P.C. v Praetorian Ins. Co., 2015 NY Slip Op 51524(U)(App. Term 1st Dept. 2015)

“Contrary to plaintiff’s specific contention, defendant was entitled to request the IMEs prior to its receipt of plaintiff’s claim forms (see 11 NYCRR 65-1.1 [an insurer has a right to request IMEs “when, and as often as [it] may reasonably require”]; Steven Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006] [an insurer is entitled to request IMEs “before . . . or after the claim form is submitted” (emphasis supplied)]; see also Inwood Hill Med., P.C. v General Assur. Co., 10 Misc 3d 18, 19-20 [2005]).”

In American Transit v. Longevity, we learned for the first time that 65-3.5(d) plays into the calculus of whether an IME letter is timely relative to the claim.  It would seem to me that scheduling IME’s prior to receipt of the claim forms would be the best way of complying with this regulation and avoiding a Longevity issue.  This regulation and 65-1.1 come into disharmony when the IME is scheduled more than 30-days after receipt of the billing,  The timing element of 3.5(d) takes second fiddle to the notion that “an insurer has a right to request IMEs “when, and as often as [it] may reasonably require”

So be it.  Disharmony is what keeps the law fluid and most of us employed.

Staged accident not proven – very sloppy papers

This just goes to show the attention to detail that is necessary in order to prevail on summary judgment on a staged accident.

Nationwide Gen. Ins. Co. v Linwood Bates III, 2015 NY Slip Op 06122 (2d Dept. 2015)

(1) The plaintiff asserted that several defendants failed to attend their scheduled depositions, which was purportedly a breach of Bates’s insurance contract with the plaintiff. The plaintiff, however, failed to submit evidence from someone with personal knowledge of the mailings of the deposition requests

(2) ” In addition, the uncertified police accident reports submitted by the plaintiff were not admissible”

(3) “Further, the unsigned and unsworn deposition transcript of the defendant Miguel Ortiz was inadmissible”

(4) ” The plaintiff submitted an affidavit of its investigator, but the investigator relied, mostly, on inadmissible evidence, and lacked personal knowledge of the facts surrounding the three collisions.”

It just does not get worse than this.  The Court pretty much stated that some people have no business filing staged accident DJ actions.  I almost imagine that if counsel had immaculate papers, a different result would arise.

Trial De Novo not tenable

Avenue C Med., P.C. v Encompass Ins. of MA, 2015 NY Slip Op 06101 (2d Dept. 2015)

“The statute permits an insurer or a claimant to institute a court action to adjudicate the dispute de novo where the master arbitrator’s award is $5,000 or greater” (Green v Liberty Mut. Ins. Co. Trust, 16 AD3d 457, 457). Here, the master arbitrator, by vacating the arbitrator’s award in its entirety, effectively made no monetary award, and, because the master arbitrator’s award was less than $5,000, neither party is entitled to maintain a court action to adjudicate the dispute de novo”

The common rule is that the last layer of review prior to filing a trial de novo must be more than $5,000.00  Thus, if a master arbitrator reduces or awards less than $5,000, then there is no right to file litigation.