The spreadsheet was not in admissible form?

Total Family Chiropractic v Mercury Cas. Co., 2010 NY Slip Op 51470(U)(App. Term 2d Dept. 2010)

This was another one that did not necessarily go my way.  By way of explanation, this was a complicated case, where the defense was whether plaintiff assignors made or conspired to make material misrepresentations in the procurement of the insurance policy.

The bills were delayed pending EUO’s of the assignors.  The assignors were coy about admitting that Karoy Brown resided with his soon to be bride, Crystal Franklin Brown.  There were four vehicles that were registered and owned by Crystal Franklin.  Evidence was adduced that a trailer was parked in front of the Franklin residence, which contained lawn mowers and other equipment.  Karoy alleged that he commuted from New Jersey to Patchogue to perform landscaping for a man whose name and number he could not remember.  He worked between 3-5 days per week, for 12 hours per day.  He would always go back home to New Jersey at the end of the day.  Both assignors denied using the vehicles for any commercial purposes.  Karoy had a suspended driver’s license during the relevant time period.  Also, Karoy made a pass at the court reporter after the EUO.  Thank goodness Crystal did not see that.

Evidence was also adduced that Crystal kept logs of  the jobs that were performed.  Both Assignors had cellphones.  Crystal had a lease for her place, and had a landlord.  Other material information was in existence.

The bills were delayed following the EUO in order to obtain this information.  Once obtained, a further investigation would be done, which would shed more light on this case.

Nobody ever complied with the verification requests.

Had the supplied information demonstrated that the vehicles were used for commercial purposes or that Karoy was a resident and used the vehicle, then the claims would have most likely been denied due to the making of material misrepresentations in the procurment of the insurance policy.

Dueling motions for summary judgment were made following commencement of this action.  A spreadsheet was used to log all of the pertinent dates for each bill.  This case was pre-LMK so there were tons of bills for $33.70 and $67.40 flying around out there.

The Court said the following: “In an attempt to establish that the time period in which it had to pay or deny the claims was tolled due to outstanding verification requests, defendant relied upon spreadsheets annexed to the affidavit of its claim representative. However, because the claim representative did not establish that the spreadsheets constituted evidence in admissible form (see CPLR 4518 [a]; People v Kennedy, 68 NY2d 569, 579-580 [1986]; Palisades Collection, LLC v Kedik, 67 AD3d 1329, 1330-1331 [2009]; Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531 [1997]), defendant has not shown that it made timely verification requests.”

The information annexed to the spreadsheets were the dates the bills were received, verifications sent, etc.  All of this information was annexed to the motion itself.  In fact, the motion was about 1000 pages.  The spreadsheet was more or less illustrative.  I mean, I usually put a chart in my motion and put the information in the said chart.  Since there was so much information for each bill, I used a spreadsheet instead of one of my charts in this case.

The affidavit of the claims representative had the standard language that this court previously found to be sufficient to allow the entry of all of the documents into evidence.  The information in the spreadsheet was incorporated by reference.  The case the court cites, Pallisades Collection, involved an assigned credit card debt that Pallisades purchased from Discover.  Pallisades had to establish a business record foundation involving Discover’s business practices, in order to allow the entry of Discover’s data into evidence.

Here, the information was always stored and processed by Mercury.  The affidavit, after laying a foundation for the dates and form of the documents,  said that the spreadhseets annexed to the affidavit memorialized the information pertinent to the claim.  I have to disagree with the court on this one.

Anyway, the moral of the story is this.  If you have information that requires a spreadsheet, make sure you somehow incorporate the actual spreadsheet as part of the affidavit.

E.g.

“3. The following represents the claims handling in this matter:

[INSERT SPREADSHEET]

4. blah blah.

5. Facsimiles shall be deemed originals.”

On the bright side, the notice of trial was stricken so that Mercury can now search this state to find the Brown family and invite them to come in for an EBT.

Identity fraud in the procument of the insurance policy

Alexander Alperovich, M.D., P.C. v Auto One Ins. Co., 2009 NY Slip Op 51721(U)(App. Term 2d Dept. 2009)

They say many times that the devil is in the details. In this case, the defense to the payment of no-fault claims was that there was some type of misrepresentation or “fraud” in the procurement of the insurance policy. We learned last week that the Appellate Term, First Department in the misrepresentation context stated that the misrepresentations must be intentional. We also saw that settled Appellate Division case law holds that a material misrepresentation may be unintentional.

Except for the Kaplan case that was discussed awhile back, the appellate courts have not discussed the extent of third-party liability in relation to “misrepresentations” or other “fraud” in the procurement of an insurance policy.

While Plaintiff prevailed in this case, I would call this a victory for the insurance carriers. The Appellate Term has now framed the issue as to whether “plaintiff’s assignor participated in or was aware of such a fraudulent scheme.”

The defense is now proved if the carrier can show participation or awareness in the so-called scheme. Prior to this case, the standard for third-party liability appeared to be “intentional” involvement in the scheme or involvement in a “conspiracy” in relation to the scheme.