Standing

US Bank N.A. v Blake-Hovanec, 2021 NY Slip Op 00893 (2d Dept. 2021)

“Contrary to the plaintiff’s contention, the defendant did not waive the affirmative defense of lack of standing. RPAPL 1302-a (as added by L 2019, ch 739, § 1; eff Dec. 23, 2019) provides that, notwithstanding the provisions of CPLR 3211(e), “any objection or defense based on the plaintiff’s lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss.”

This has to be one of my favorite statutes

Standing

Allstate Ins. Co. v Kapeleris, 2020 NY Slip Op 02645 (2d Dept. 2020)

The Defendant, Stacey Kapeleris is one of the nicest people you could meet. The first time she met me, she told me I was not what she thought I would be. I guess I did not wear a tie that day and probably was not dressed like a typical lawyer. This is perhaps why I had trouble working in various law firms. I digressed.

But to the point, Stacey was legitimately injured in a serious car accident. For the last four years, I have had the hardest time fathoming why the Plaintiff has taken a scorch the earth approach to her. It is one thing when the adverse party is an MUA provider, a back brace peddler, a useless compound cream distributor (Voltaron gel works just as well) or a surgeon who is operating for the sake of operating. I have no sympathy to these providers and have gone the distance many times with those providers with mixed results. But, I was justified in what I did.

But this is a real life case, and to tell you I am beyond disgusted would be an understatement. Just look at the docket if you want any further insight. While this will be a non-jury trial and I would not inflame any potential jurors by commenting further, my 17 years of practice compels me to say nothing more as I am very sure this will make one more trip to Brooklyn.

The holding from this case is extremely significant as it questions what I have always understood as standing by estoppel. It also tells an injured person how to retake possession of a bill when the provider does not cooperate.

Now did I want to be the one that made this law? Nope. But as an advocate, I end up taking positions I would normally never think I would take.

Also didn’t someone once say bad facts make bad law? Here are snippets from the case.

(1) “An accident victim may assign his or her no-fault claim to a medical provider who has provided a medical service (see 11 NYCRR 65-3.11; Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 764-765). The no-fault regulations provide that assignments must be made on the prescribed statutory forms (see 11 NYCRR 65-3.11[b][2]; John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d 59, 61 [App Term, 2d Dept]). The prescribed language requires the assignee (treatment provider) to certify that “[t]hey have not received any payment from or on behalf of the assignor [patient] and shall not pursue payment directly from the assignor for services provided by said assignee for injuries sustained due to the [subject] motor vehicle accident” (11 NYCRR R Appendix 13 [NYS Forms NF-3, NF-4, NF-5, NF-AOB]; see John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d at 60). In this regard, as set forth in an informal opinion issued by the Office of the General Counsel of the New York State Insurance Department, “a health care provider who has accepted a no-fault assignment of benefits from a no-fault claimant may not pursue the patient directly for health services rendered that have been denied as medically unnecessary, notwithstanding the language of the assignment, which states in the event that the no-fault carrier fails or refuses to pay for the services provided then I, the patient, agree that I will be responsible for the value of services rendered by said Doctor,'”as “[t]he use of such language is prohibited under N.Y. Comp. Codes R. & Regs. tit. 11, § 65-3.11(b)(2) (2005) (Regulation 68-C)” (Ops Gen Counsel NY Ins Dept No. 06-05-07 [May 2006]; see John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d at 60; see also A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 101 AD3d 53, 64 [“informal opinion of the General Counsel, while not binding on the courts, is entitled to deference unless irrational or unreasonable” (citation omitted)]).”

“Here, in support of her cross motion, Kapeleris submitted evidence establishing that although she had assigned her right to no-fault benefits to two medical providers, Winthrop and Nancy E. Epstein, she was billed directly by Winthrop and LI Neurosurgical for their services after the claims of those providers were denied by Allstate for lack of medical necessity (cf. Abruscato v Allstate Prop. & Cas. Ins. Co., 165 AD3d 1209, 1211). Further, Kapeleris’s evidentiary submissions showed that she remitted payment to those providers for their services in connection with the subject accident. Thus, Kapeleris’s evidentiary submissions showed that neither Winthrop nor LI Neurosurgical could certify that “[t]hey have not received any payment from or on behalf of the assignor [Kapeleris],” and that they would “not pursue payment directly from the assignor for services provided by said assignee for injuries sustained due to the [subject] motor vehicle accident.” This evidence was sufficient to demonstrate, prima facie, that the assignment to Winthrop and LI Neurosurgical, though valid when made, had been rendered ineffectual, and therefore, Kapeleris had standing to pursue her claims for no-fault benefits against Allstate for services rendered by Winthrop and LI Neurosurgical.”

“Furthermore, Kapeleris demonstrated that she did not execute an assignment of her rights to collect no-fault benefits to Nassau Anesthesia (see 11 NYCRR 65-3.11[b][1], [2]; Lopes v Liberty Mut. Ins. Co., 24 Misc 3d 127[A], 2009 NY Slip Op 51279[U] [App. Term, 2d Dept]). Thus, Kapeleris also demonstrated, prima facie, that she had standing to pursue her claim for no-fault benefits against Allstate for the payment she made to Nassau Anesthesia.”

The issue was whether a written revocation of assignment of benefits is necessary when an injured person pays assigned non-coverage denied billings. The answer is not found in the regulations but is a function of common law and common sense.

And the developed case law led to the conclusion found in the Respondent’s brief and within the Court’s holding: the assignment was revoked through conduct.

Affirmed with costs.

EIP’s payment of assigned billings confers standing back to EIP

Abruscato v Allstate Prop., 2018 NY Slip Op 07279 (2d Dept. 2018)

However, the Supreme Court should have denied that branch of the defendant’s motion which was to dismiss so much of the first cause of action as sought to recover no-fault insurance benefits for medical expenses. The defendant contends, inter alia, that the plaintiff lacked standing because he had assigned his right to no-fault insurance benefits for medical expenses to his medical providers. Although the defendant submitted evidence that the plaintiff assigned his right to no-fault benefits to two medical providers (hereinafter the assignees), the plaintiff’s evidentiary submissions showed that other medical providers had also billed him for their services.

Moreover, upon the defendant’s determination that the injury was not causally related to the motor vehicle accident, the assignees were no longer precluded from seeking payment from the plaintiff (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199; Rotwein v Stancil, 15 Misc 3d 19, 21). Since there was a failure of insurance coverage rendering the plaintiff personally responsible for the medical bills (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199; Rotwein v Stancil, 15 Misc 3d at 21), the plaintiff has a cause of action to recover no-fault insurance benefits for medical expenses from the defendant (see Guggenheimer v Ginzburg, 43 NY2d at 275).

__________

Two things can happen to revive the EIP’s right to have standing.  First, the EIP pays the billings that were sent to it.  Or – Second, the insurance carrier determines the injuries are not related to the motor vehicle accident.  Allstate’s counsel’s position on these cases (same counsel always) is plainly obnoxious.  I am glad to see the Appellate Division bring some common sense to the plight of the EIP who is left defenseless, i.e, getting sued from the assignee medical providers and told from the insurance carrier that there is nothing they can do.  Alas, there is a legal remedy.

Standing

McCormack v Maloney, 2018 NY Slip Op 02385 (3d Dept. 2018)

This is a commercial paper case, but I blog about standing because it is an issue we deal with at various times.  Here are relevemt snippets from an upstate case involving holder of notes that are not indorsed in blank.

“Defendant argues, and we agree, that the complaint should have been dismissed for lack of standing. Because defendant raised the issue of standing as an affirmative defense in his answer, plaintiff had to prove his standing to maintain this foreclosure action in order to be entitled to relief….”

“At trial, plaintiff testified that he purchased the note and mortgage from Trustees Capital in September 2006, and a written assignment effectuating the transfer of both such instruments to plaintiff was admitted into evidence. The testimonial and documentary evidence adduced at trial further established, however, that plaintiff subsequently assigned both the note and mortgage to his then-bankruptcy attorney in March 2008 as partial payment for legal services, and there is not a scintilla of proof in the record that the note was reassigned to plaintiff prior to the commencement of this foreclosure action in June 2010. Nor did the trial evidence establish that plaintiff was the holder of the original note at the time that he commenced this action. “Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff” (Wells Fargo Bank, NA v Ostiguy, 127 AD3d 1375, 1376 [2015] [citations omitted]; see UCC 1-201 [b] [21]; 3-202, 3-204; Hartford Acc. & Indem. Co. v American Express Co., 74 NY2d 153, 159 [1989]; U.S. Bank N.A. v Brody, 156 AD3d 839, 840 [2017]). While there was testimony that plaintiff possessed the original note at the time of trial in 2015, there was no proof that he was in possession of the original note when he commenced this foreclosure action five years earlier. Even if he was, the note — which was payable to Trustees Capital — was neither indorsed in blank nor specially indorsed to him. Consequently, plaintiff’s physical possession of the note could not render him the lawful holder thereof for purposes of enforcing it .”

Now, another interesting question here is whether the 6 month period to recommence the action would run upon dismissal since the dismissal is not on the merits?

Familiarity with predecessor business record practice

US Bank N.A. v Ballin, 2018 NY Slip Op 01212 (2d Dept 2018)

“Thrasher averred, in relevant part, that her affidavit was based upon her review of Ocwen’s business records, and that upon review of such records, the note was physically transferred to the plaintiff on December 1, 2006. The plaintiff failed to demonstrate that the records relied upon by Thrasher were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Thrasher, an employee of Ocwen, did not attest that she was personally familiar with the plaintiff’s record-keeping practices and procedures (see Bank of N.Y. v Willis, 150 AD3d 652, 653; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 852; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652). Thus, the plaintiff failed to establish, prima facie, that it had standing to commence the action.”

The question as you could imagine is what is sufficient to prove sufficiency of a prior entities practices.

Why follow the law?

HSBC Bank USA, N.A. v Simmons, 2015 NY Slip Op 01609 (2d Dept. 2015)

“Since Justice Arthur Schack continues to ignore this Court’s precedent, as articulated in Wells Fargo Bank Minn., N.A. v Mastropaolo (42 AD3d 239), holding that the defense of lack of standing is waived if not raised by the defendant in an answer or pre-answer motion to dismiss (see Deutsche Bank Natl. Trust Co. v Islar, 122 AD3d 566; HSBC Bank USA, N.A. v Taher, 104 AD3d at 817; U.S. Bank, N.A. v Emmanuel, 83 AD3d at 1048-1049; cf. Bank of N.Y. v Cepeda, 120 AD3d 451, 452; Bank of N.Y. v Mulligan, 119 AD3d 716, 716; Wells Fargo Bank, N.A. v Gioia, 114 AD3d at 767), we deem it appropriate to remit the matter to the Supreme Court, Kings County, for further proceedings on the complaint before a different Justice.”

Standing not expressly pleaded

Bank of Am., N.A. v Paulsen, 2015 NY Slip Op 01597 (2d Dept. 2015)

“Here, contrary to the conclusion reached by the Supreme Court, the appellant did not waive the issue of standing. Although the appellant’s answer did not raise standing as a separate defense, a fair reading of his answer reveals that it contained language which denied that the plaintiff was the owner and holder of the note and mortgage being foreclosed. Under such circumstances, the appellant was not required to expressly plead lack of standing as a defense”

This is interesting.  The Court held, in essence, that the denial of certain averments in the complaint was sufficient to raise the affirmative defense of lack of standing.  So, the more artfully a complaint is pleaded, the better the chance of a de-facto standing defense being proffered.

The securitization of debt does not divest party from having standing to prosecute action

American Express Bank FSB v Najieb, 2015 NY Slip Op 01177 (1st Dept. 2015)

“The securitization of plaintiff credit card issuer’s receivables did not divest it of its ownership interest in the account, and therefore did not deprive it of standing to sue to recover defendant’s overdue credit card payments”

This is interesting to say the least.

Unpreserved and without merit

Boris Kleyman Physician, P.C. v IDS Prop. Cas. Ins. Co., 2014 NY Slip Op 51810(U)(App. Term 2d Dept. 2014)

“Defendant’s contention that plaintiff did not establish that it has standing to receive reimbursement of the first-party no-fault benefits to which its assignor is entitled because plaintiff failed to annex a copy of the assignment of benefits form executed by its assignor is not properly before this court, as this argument is being raised for the first time on appeal (see Joe v Upper Room Ministries, Inc., 88 AD3d 963 [2011]). In any event, since the claim forms received by defendant stated that plaintiff’s assignor had executed an assignment and, as in Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co. (9 NY3d 312, 319-320 [2007]), defendant was advised that the signature on the assignment was “on file,” defendant’s contention is devoid of merit (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 319-320 [2007]).

Defendant’s remaining argument is likewise not properly before this court, as this argument is also being raised for the first time on appeal (see Joe, 88 AD3d 963) and, in any event, this argument lacks merit (cf. Radiology Today, P.C. v Mercury Ins. Co., 34 Misc 3d 145[A], 2012 NY Slip Op 50148[U] [App Term, 2d, 11th & 13th Jud Dists 2012]).”

Putting aside the ridiculousness of this appeal, an interesting question is raised.  Does Plaintiff have to show some indicia of standing in order to prevail on its summary judgment motion?  What happens if there was no “on-file” statement on the claim forms or AOB?  I suspect it would not matter, but this case makes that proposition interesting.

So you sued the TPA and not the insurance carrier – now what?

B&R Consol., LLC v Zurich Am. Ins. Co., 2014 NY Slip Op 06287 (2d Dept. 2014)

“The defendants’ contention that Zurich is not a proper party to this action under Insurance Law § 3420(b) because it did not issue the subject policy to Powell is without merit. Although the defendants made a prima facie showing that Zurich did not issue the subject policy by submitting a copy of the policy’s declaration page, which stated that the issuing company was American Guarantee, B & R established in opposition to the defendants’ motion and in support of its cross motion that an apparent agency relationship existed between Zurich and American Guarantee which extended potential vicarious liability to Zurich (see generally Hallock v State of New York, 64 NY2d 224, 231). In addition to the presence of Zurich’s logo on documents created and distributed by American Guarantee, B & R demonstrated that Zurich’s claims counsel was assigned to handle Powell’s case, that the assigned counsel was required to follow Zurich’s guidelines and to submit bills to Zurich, and that Powell was contacted by Zurich’s Customer Care Center regarding the claim and was directed to file his claim on Zurich’s website (see Fletcher v Atex, Inc., 68 F3d 1451, 1461-1462 [2d Cir]). This evidence of Zurich’s direct participation in the administration of Powell’s claim is sufficient to establish, prima facie, that an agency relationship existed between Zurich and American Guarantee such that Zurich may be held liable to B & R (see In re Parmalat Sec. Litig., 375 F Supp 2d 278, 295 [SD NY]). In opposition to B & R’s cross motion, the defendants failed to raise a triable issue of fact.”

Admittedly, this is an issue that never really concerned me personally.  I used to like watching a certain plaintiff attorney who has cluttered the Appellate Term with senseless appeals lose cases where he sued the TPA.  But the joy turned to anger when an insurance carrier called me on one of my Article 75 UM Petitions, demanded I discontinue against him because I sought to join a TPA as a proposed additional respondent and then demanded “costs” because I would not withdraw that branch of my Petition.

Alas, I will now have the last laugh 🙂