Independent contractor defense proven
Lumbermens Mut. Cas. Co. v A B Med. Servs., PLLC, 2020 NY Slip Op 07280 (1st Dept. 2020)
“As an initial issue, 11 NYCRR 65-3.11 (a) limits no-fault medical billing to employees of the provider that submits claims for no-fault benefits. It is submitted that Supreme Court properly granted judgment in favor of plaintiffs, because the treating providers were independent contractors, as opposed to employees. The record supports a finding that the “degree of control exercised by the purported employer” (Bynog v Cipriani Group, 1 NY3d 193, 198 ), “not only over the results produced but also over the means used to produce the results” (Matter of O’Brien v Spitzer, 7 NY3d 239, 242 ), was insufficient to give rise to an employer-employee relationship.
“Factors relevant to assessing control include whether the worker (1) worked at his [or her] convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer’s payroll and (5) was on a fixed schedule” (Bynog, 1 NY3d at 198). The factors that militate against defendant’s position that the treating providers were employees include the trial testimony that: defendant could not monitor the quality of the work billed because its principal was not qualified in these fields of medicine, defendant used staffing services to find professionals, defendant’s principal could not recall giving the professionals health insurance and required them to provide their own malpractice insurance, he could not recall providing the professionals with certain nerve conduction equipment, the professionals were all part-time and free to take on other jobs, and although the principal provided the professionals with W-2 forms, he did so only because he thought he was required to do so by insurers“
Ubder D-Duber fail
Uy v Hussein, 2020 NY Slip Op 05080 (2d Dept. 2020)
“In any event, even considering Hussein’s affidavit, as well as an affidavit submitted in reply by Uber representative Chad Dobbs, which contained essentially the same averments as Hussein’s affidavit, Uber failed to meet its burden. An action may be considered to be within the scope of employment, thus rendering an employer vicariously liable for the conduct, when “the employee is engaged generally in the business of the employer, or if the act may be reasonably said to be necessary or incidental to such employment” (Pinto v Tenenbaum, 105 AD3d 930, 931). Whether an employee was acting within the scope of his or her employment is generally a question of fact for the jury (see Camisa v Rosen, 150 AD3d 809, 810-811).
Here, contrary to Uber’s contention, the averments of Hussein and Dobbs that Hussein had logged off of the Uber app 40 minutes before the accident were simply insufficient, without more, to eliminate all questions of fact as to whether Hussein was acting within the scope of his alleged employment with Uber at the time of the incident”
Add this to the Postmates case from March 2020 and the California Court’s examination of the Uber issue and it looks like Uber et. al. cannot escape liability. Why is this important? In most states, Uber et. al. writes $1m in third-party coverage when an MVA occurs when someone is on the app. In New York City, the coverage is limited to $100k since the vehicles are considered liveries. So now, Uber vehicles have brought back a dangerous analogue of the pre-Graves cases for rentals. Also, in Long Island and upstate, the Court has actually expanded liability beyond the on and off the App through citing my name sake, Tenenbaum,
Matter of Vega (Postmates Inc.–Commissioner of Labor), 2020 NY Slip Op 02094 (2020)
Your Uber driver is an employee. Watershed moment I think.
“Here, there is substantial evidence in the record to support the Board’s determination that Postmates exercised control over its couriers sufficient to render them employees rather than independent contractors operating their own businesses. The company is operated through Postmates’ digital platform, accessed via smartphone app, which connects customers to Postmates couriers, without whom the company could not operate. While couriers decide when to log into the Postmates’ app and accept delivery jobs, the company controls the assignment of deliveries by determining which couriers have access to possible delivery jobs. Postmates informs couriers where requested goods are to be delivered only after a courier has accepted the assignment. Customers cannot request that the job be performed by a particular worker. In the event a courier becomes unavailable after accepting a job, Postmates—not the courier—finds a replacement. Although Postmates does not dictate the exact routes couriers must take between the pick-up and delivery locations, the company tracks courier location during deliveries in real time on the omnipresent app, providing customers an estimated time of arrival for their deliveries. The couriers’ compensation, which the company unilaterally fixes and the couriers have no ability to negotiate, are paid to the couriers by Postmates. Postmates, not its couriers, bears the loss when customers do not pay. Because the total fee charged by Postmates is based solely on the distance of the delivery and couriers are not given that information in advance, they are unable to determine their share until after accepting a job. Further, Postmates unilaterally sets the delivery fees, for which it bills the customers directly through the app. Couriers receive a company sponsored “PEX” card which they may use to purchase the customers’ requested items, when necessary. Postmates handles all customer complaints and, in some circumstances, retains liability to the customer for incorrect or damaged deliveries.
Postmates exercises more than “incidental control” over its couriers—low-paid workers performing unskilled labor who possess limited discretion over how to do their jobs. That the couriers retain some independence to choose their work schedule and delivery route does not mean that they have actual control over their work or the service Postmates provides its customers; indeed, there is substantial evidence for the Board’s conclusion that Postmates dominates the significant aspects of its couriers’ work by dictating to which customers they can deliver, where to deliver the requested items, effectively limiting the time frame for delivery and controlling all aspects of pricing and payment.
Although the operative technology has changed in the interim decades, this case is indistinguishable from Matter of Rivera, where we held that substantial evidence supported the Board’s conclusion that a similar delivery person was an employee of the delivery company—even though he set his own delivery routes and did not have a set work schedule but called the company’s dispatcher whenever he wished to engage in work, accepting only the jobs he desired (see Matter of Rivera [State Line Delivery Serv. — Roberts], 69 NY2d 679 , cert denied 481 US 1049 ; see also Matter of Di Martino [Buffalo Courier Express Co. — Ross], 59 NY2d 638 ).”
So remember this. All of your ATIC non yellow taxi cases? Sue the “base”. At the least app cases are toast. When they say the policy is $100,000, smile and say, my client had a scope and we are in the Bronx – no deal.
The first application of the new precludable independent contractor rule
W & Z Acupuncture, P.C. v Unitrin Auto & Home Ins. Co., 2012 NY Slip Op 52400(U)(2d Dept. 2012)
Insurance carrier sought an EBT of the medical provider based upon the “independent contractor” defense. Until three months ago, this defense escaped preservation. Not so anymore. The Court was therefore constrained to reverse the Civil Court:
“In an affirmation in support of defendant’s motion to compel, defendant’s attorney argued that the treating acupuncturists were not plaintiff’s employees; rather, they were independent [*2]contractors and, therefore, plaintiff was ineligible to recover the assigned no-fault benefits at issue. However, defendant’s denial of claim forms did not deny plaintiff’s claims on the ground that the treatment at issue had been rendered by independent contractors. Therefore, defendant is precluded from asserting that ground for denial of coverage as a defense in this litigation (A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., ___ AD3d ___, 2012 NY Slip Op 06902 [2d Dept, Oct 17, 2012]). Consequently, the branch of defendant’s motion seeking to compel plaintiff to appear for an EBT in support of this defense should have been denied, as this discovery demand is palpably improper.”
The independent contractor "defense" is sufficient to non-suit a plaintiff under CPLR 3211(a)(7)
Health & Endurance Med., P.C. v Travelers Prop. Cas. Ins. Co., 2011 NY Slip Op 51120(U)(App. Term 2d Dept. 2011)
Contrary to plaintiff’s contention, defendant was permitted to move to dismiss on the ground that the complaint fails to state a cause of action notwithstanding defendant’s service of an answer (CPLR 3211 [a] ; [e]). Plaintiff’s claim forms state that the services at issue were rendered by an independent contractor. Where services are rendered by an independent contractor, the independent contractor is the provider entitled to the payment of the assigned first-party no-fault benefits (see Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2005]). This court has held that a statement in a claim form, that the services were provided by an independent contractor, may not be corrected once litigation has commenced, even if the statement was erroneous (A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 22 Misc 3d 70 [App Term, 2d, 11th & 13th Jud Dists 2009]). Thus, defendant has conclusively demonstrated that plaintiff is not the provider entitled to payment of the assigned first-party no-fault benefits (A.M. Med. Servs., P.C., 22 Misc 3d 70; Rockaway [*2]
Blvd. Med. P.C., 9 Misc 3d 52), and defendant’s motion to dismiss for failure to state a cause of action should have been granted (see CPLR 3211 [a] )”
Estoppel through Box #16
Some practioners called Box #16 the trap box. Hit independent contractor and you are dead. I always said wait a second. Just resubmit the bill, give a justification and you should get around the 45-day rule. However, do not make the mistake too often or the 45-day rule may become absolute. I also have said that on certain fee code issues, i.e., the “BR” codes, the same rule applies. Resubmit with the pertinent documentation and you should be alright.
Yet, there was always a displeasure I has towards Box #16 issues when the Claimant decided to fight the independent contractor issue through affidavit. The reason, as the Appellate Term said, was that all other defenses would be waived.
A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co.
2008 NYSlipOp 28528 (App. Term 2d Dept. 2008)
“In the case at bar, the claim forms at issue state that the treating professionals were independent contractors. Contrary to plaintiff’s contention, the allegation that said treating professionals were actually employees, and that the claim forms contain misinformation, is irrelevant. Plaintiff did not submit bills that entitled it to payment, and correction of the defect involved herein should not be permitted once litigation has been commenced”
The Court then said something which I found fasciniating and I think can be used in a litany of situations:
“An insurer should be able to rely on the assertions in the claim form, and, in keeping with the aim of “provid[ing] substantial premium savings to New York motorists” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 ), should be able to handle a claim for services rendered by an independent contractor accordingly without engaging in further consideration of the claim. An insurer is not obliged to issue a denial in order to assert the non-precludable, independent contractor defense. Consequently, if a provider were to be permitted to demonstrate during litigation that the claim form was incorrect and services were, in fact, rendered by an employee, not only would the insurer, which exercised its option not to expend further efforts to defend a facially meritless claim, have lost its opportunity to conduct meaningful claims verification, but also its decision not to issue a denial would result in its preclusion from introducing most defenses”