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] [7]; [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] [7])”

Standing in a direct first party case is waivable

Kruger v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 09456 (3d Dept. 2010)

This is why I always plead every affirmative defense in every answer I generate.

“After joinder of issue and discovery, defendant moved for dismissal of the complaint, asserting for the first time that plaintiff had assigned her right to payment for no-fault benefits to her chiropractor and did not have standing to bring the present action. Supreme Court agreed that plaintiff lacked the capacity to sue and dismissed the complaint, and plaintiff appeals.

Defendant asserted that plaintiff lacked standing to maintain this action but, as that defense was not raised in a pre-answer motion to dismiss or in defendant’s answer, it was waived and cannot [*2]now be advanced (see CPLR 3211 [a] [3], [e]; McHale v Anthony, 70 AD3d 466, 467 [2010]; Todaro v GEICO Gen. Ins. Co., 46 AD3d 1086, 1087 [2007]). Contrary to defendant’s contention, the standing issue does not implicate the jurisdiction of Supreme Court such as to render it nonwaivable. Supreme Court is empowered to determine whether defendant is liable to pay no-fault benefits (see Marangiello v Kamak, 64 AD2d 624, 625 [1978]), and whether plaintiff is a proper person to pursue that claim “is an issue separate from the subject matter of the action or proceeding, and does not affect the court’s power to entertain the case before it” (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 243 [2007]; see Matter of Renee XX. v John ZZ., 51 AD3d 1090, 1092-1093 [2008]). Accordingly, defendant waived its right to assert lack of standing as an affirmative defense.”

Spell it out in the affidavit

St. Vincent’s Hosp. & Med. Ctr. v American Tr. Ins. Co., 2010 NY Slip Op 52063(U)(App. Term 2d Dept. 2010)

“As defendant was already in possession, prior to its verification requests, of the subject NF-5 forms, which each bore notations that the assignor’s signature was “on file,” defendant’s verification requests, in effect, sought a copy of the document(s) “on file” which had been signed by the assignors. Since SVHMC established that it had, in response to the verification requests, provided defendant with copies of the authorizations to release information and the assignments executed by the assignors, SVHMC established that it had complied with those requests. While defendant’s attorney asserted that defendant had never received the signed assignment of benefits forms, defendant’s attorney’s affirmation was without probative value as defendant’s attorney lacked personal knowledge of same

Do you see what was missing from Appellant’s answering papers?

Motion seeking leave to amend the answer to seek affirmative defense of lack of standing is proper

Aurora Loan Servs., LLC v Thomas, 2010 NY Slip Op 01606 (2d Dept. 2010)

Contrary to the plaintiff’s contention, the defendant Terence Thomas did not waive the defenses of lack of standing and lack of capacity to sue (cf. Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239). Further, the Supreme Court properly granted those branches of Thomas’s motion which were for leave to amend his answer to assert the defenses of lack of standing and lack of capacity to sue. Motions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025[b]; Lucido v Mancuso, 49 AD3d 220, 222). Here, the proposed amendments were not palpably insufficient or patently devoid of merit. Since the documents upon which Thomas relied in making his motion were obtained from the plaintiff in discovery, there was also no showing of prejudice or surprise resulting directly from Thomas’s delay in seeking leave. Accordingly, the Supreme Court properly granted those branches of Thomas’s motion.”

This would not apply in a no-fault action.  This has been discussed previously.  Type in “assignment” in the search box to the right if you want to see a prior discussion of this issue.

But just note how through discovery, information was gleaned that would allow an otherwise untimely motion to have merit.

A claim form may not be corrected nunc pro tunc following its submission

Bedford Park Neurology, P.C. v New York Cent. Mut. Fire Ins. Co., 2009 NY Slip Op 52634(U)(App. Term 2d Dept. 2009)

“The claim form at issue sought to recover payment on behalf of the physician who rendered the services and not on behalf of plaintiff. Indeed, while the handwritten notation on the claim form refers parenthetically to “Bedford Park Neurology,” this is not the name of plaintiff professional corporation. Consequently, plaintiff’s belated attempt to establish that the claimant physician was either an employee or principal of plaintiff, and that the claim form contains misinformation, is unavailing (A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 22 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2008]). Plaintiff failed to submit a claim form which entitled it to payment, and may not correct the allegedly erroneous claim form once [*2]litigation has commenced (id.; cf. Davydov v Progressive Ins. Co., 25 Misc 3d 19 [App Term, 2d, 11th & 13th Jud Dists 2009]). Accordingly, the branch of defendant’s motion seeking to dismiss so much of plaintiff’s complaint as sought to recover upon a claim form seeking the sum of $2,992 should have been granted (A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 22 Misc 3d 70).”

The problem here is that the attorney made a typographical error when it commenced the litigation.  They meant to say (provider) as opposed to (provider, P.C.).  Since the incorrect entity commenced suit, the case was dismissed.  I am not sure why plaintiff didn’t attempt to move for leave to amend the summons and complaint in opposition to the motion for summary judgment and, upon amendment, substitute the name of the owner of the p.c. for the “p.c.” and after the name of the owner of the pc, state the name of the entity as set forth on the bill as a dba.

I found it interesting how the Appellate Term cited with a “cf” the Davydov case.  In Davydov, the bills and the lawsuit were the same, however, the assignment  of benefits (AOB) was made to a different entity.  The Appellate Term found that this was of no moment since it was not objected to during the claims stage.  It thus seems difficult to reason why a similar typographical error, but on a different portion of the claim form, would result in a different outcome.  Yes, I said claim form.  An AOB is a prescribed form, and thus qualifies as a part of the claim form.

By the way, the Appellate Term, Second Department and the Appellate Division, Second Department denied Progressive’s application for leave to appeal Davydov to the Appellate Division, Second Department.

Proving standing without an assignment?

Since proof of standing is generally not an affirmative part of a no-fault claimant’s prima facie case, this case from the First Department might be of minimal importance to the no-fault bar.  For those of us who are called to help friends, loved ones and members of the armed services avoid foreclosures, the “assignment” defense has scored major victories at the Appellate Division, Second Department.

The matter of IRB-Brasil Resseguros S.A. v Eldorado Trading Corp. Ltd., 2009 NY Slip Op 09395 (1st Dept. 2009), takes away some steam from this defense as set forth herein:

“Plaintiff’s original motion for summary judgment was denied because of the court’s concern that the Euroclear statement and other documents suggested that BB Securities, rather than plaintiff, may have been the true holder under the terms of the note. Plaintiff moved to renew, submitting an affidavit by BB’s managing director, clearly averring that it held the note solely as custodian for plaintiff, as well as an assignment agreement between BB and plaintiff, establishing the latter’s exclusive entitlement to sue under the note. Under these circumstances, the court providently exercised its discretion in granting renewal in the interest of justice (see Garner v Latimer, 306 AD2d 209 [2003]). The additional affidavit by an officer familiar with the corporate records, accompanying a true copy of the assignment agreement, was admissible (see DeLeon v Port Auth. of N.Y. & N.J., 306 AD2d 146 [2003]), and established plaintiff’s entitlement to summary judgment.

In view of our finding that summary judgment was correctly granted upon renewal, we dismiss plaintiff’s appeal of the denial of its original motion for summary judgment as academic. However, had we not done so, we would hold that plaintiff met its prima facie burden on the initial motion for summary judgment by submitting evidence of defendant Eldorado Trading’s promise to pay under the note, the guarantee by defendants Eldorado S.A. and Verpar, and nonpayment (see Eastbank v Phoenix Garden Rest., 216 AD2d 152 [1995], lv denied 86 NY2d 711 [1995]). Plaintiff also submitted evidence demonstrating it had purchased the note, which was held by BB Securities on its behalf in a secure account at Euroclear. Contrary to defendants’ contention, the affidavit of a corporate officer with personal knowledge, together with [*2]authenticated business records, is admissible in support of a motion for summary judgment (see First Interstate Credit Alliance v Sokol, 179 AD2d 583, 584 [1992]).”

This case also has a rare appearance of the “interest of justice” exception to the general rule that renewal is not allowed unless new facts are presented.  It also has a standard business records discussion.  I will cross-link this on the evidence blog.

It is Standing Again

Countrywide Home Loans, Inc. v Gress, 2009 NY Slip Op 08989 (2d Dept. 2009)

“Contrary to the plaintiff’s contention, the Supreme Court properly granted that branch of the motion of the defendant Anthony Gress which was to dismiss the complaint insofar as asserted against him pursuant to CPLR 3211(a)(3) on the ground that the plaintiff lacked standing to bring this action. In order to commence a foreclosure action, the plaintiff must have a legal or equitable interest in the subject mortgage (see Wells Fargo Bank, N.A. v Marchione,AD3d, 2009 NY Slip Op 07624 [2d Dept 2009]; Katz v East-Ville Realty Co., 249 AD2d 243; Kluge v Fugazy, 145 AD2d 537, 538). “Where the plaintiff is the assignee of the mortgage and the underlying note at the time the foreclosure action was commenced, the plaintiff has standing to maintain the action” (Federal Natl. Mtge. Assn. v Youkelsone, 303 AD2d 546, 546-547; see Wells Fargo Bank, N.A. v Marchione,AD3d, 2009 NY Slip Op 07624 [2d Dept 2009]; First Trust Natl. Assn. v Meisels, 234 AD2d 414). Here, it is undisputed that the subject mortgage was not assigned to the plaintiff until July 5, 2007, more than five months after the commencement of this action on January 22, 2007. Furthermore, although the July 5, 2007, assignment recited that it was effective retroactive to August 1, 2006, “a retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of the assignment”

Would we have the same result in a no-fault case?  Compare, Davydov v. Progressive Ins. Co., 25 Misc.3d 19 (App. Term 2d Dept. 2009).

“signature on file”

While not earth shattering, the matter of Richmond Hospital a/a/o Claudio v. State Farm (Sup. Ct. Nassau Co. Index # 22143/08 [Lally, J. 2009]) that I prevailed on is proof that the courts are heeding the Court of Appeals decision in holding that an Assignment of Benefits form bearing the legend “signature on file” may be challenged through timely and proper additional verification requests.  There are two things to observe in this decision.  First, the Court found that “signature on file” satisfied the “claimant’s notice burden where the carrier does not take timely action to verify the existence of an assignment of benefits.”  Second, the Court found Plaintiff’s argument that the Claimant was unable to sign the Assignment of Benefits because he was too severely injured to be without merit.

But here is what intrigues me I suppose.   What would happen if the AOB failed to state signature on file or contain any other indicia that it was signed?  We all know that it would not matter, since standing is not part of a medical provider’s prima facie case.  Yet, Justice Lally intimates otherwise.

Finally, as I have said numerous times – if the law were being written on a clean slate, I would tend to agree with the approach the majority of no-fault jurisdictions (everyone except for New York) take and  require a medical provider to prima facie prove: (a) Standing; (b) Performance of a medically necessary service; (c) Causal relation between the service and the loss; (d) Proper billing of the service; and (e) The bill being overdue when the action was commenced.  But, we are not writing on a clean slate.  We must therefore work within the framework that has been built in the last 15 years, lest we want to live in the late Mr. Rogers’ “Land of Make Believe.”

"signature on file"

While not earth shattering, the matter of Richmond Hospital a/a/o Claudio v. State Farm (Sup. Ct. Nassau Co. Index # 22143/08 [Lally, J. 2009]) that I prevailed on is proof that the courts are heeding the Court of Appeals decision in holding that an Assignment of Benefits form bearing the legend “signature on file” may be challenged through timely and proper additional verification requests.  There are two things to observe in this decision.  First, the Court found that “signature on file” satisfied the “claimant’s notice burden where the carrier does not take timely action to verify the existence of an assignment of benefits.”  Second, the Court found Plaintiff’s argument that the Claimant was unable to sign the Assignment of Benefits because he was too severely injured to be without merit.

But here is what intrigues me I suppose.   What would happen if the AOB failed to state signature on file or contain any other indicia that it was signed?  We all know that it would not matter, since standing is not part of a medical provider’s prima facie case.  Yet, Justice Lally intimates otherwise.

Finally, as I have said numerous times – if the law were being written on a clean slate, I would tend to agree with the approach the majority of no-fault jurisdictions (everyone except for New York) take and  require a medical provider to prima facie prove: (a) Standing; (b) Performance of a medically necessary service; (c) Causal relation between the service and the loss; (d) Proper billing of the service; and (e) The bill being overdue when the action was commenced.  But, we are not writing on a clean slate.  We must therefore work within the framework that has been built in the last 15 years, lest we want to live in the late Mr. Rogers’ “Land of Make Believe.”

Assignments and business records – a deadly combination

The Fourth Department in Palisades Collection, LLC v Kedik, 2009 NY Slip Op 08259 (4th Dept. 2009) discussed standing and the business record rule, all in one decision.  Interestingly, the failure to get the assignment of benefits into evidence proved fatal to the Plaintiff Assignee’s prima facie case.  I think Judge Billings 5 years ago wrote a similar decision in the no-fault realm, prior to the Appellate Division and Court of Appeals’ decisions, which held that technical standing is not part of a plaintiff’s prima facie case.

For those who venture outside no-fault and deal with assigned actions, here is how the Fourth Division evaluates these issues:

“Plaintiff, as the alleged assignee of Discover Bank (Discover), commenced this action for breach of contract and account stated seeking to recover the balance owed on a credit card issued to defendant. Supreme Court denied in part plaintiff’s motion for partial summary judgment dismissing seven of the affirmative defenses, reserved decision in part, and ordered plaintiff to provide evidence that it had standing. Following plaintiff’s further submissions, the court concluded that plaintiff failed to provide admissible evidence of its standing and sua sponte granted defendant summary judgment dismissing the complaint. We affirm.

To establish standing to sue, plaintiff was required to submit admissible evidence that Discover assigned its interest in defendant’s debt to plaintiff (see generally Rockland Lease Funding Corp. v Waste Mgt. of N.Y., 245 AD2d 779). Here, plaintiff submitted an affidavit from its agent with exhibits, including a printed copy of several pages from an electronic spreadsheet listing defendant’s Discover account as one of the accounts sold to plaintiff. Contrary to the contention of plaintiff, the court properly determined that it failed to establish a proper foundation for the admission of the spreadsheet under the business record exception to the hearsay rule (see generally Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531).

A business record is admissible if “it was made in the regular course of any business and . . . it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter” (CPLR 4518 [a]; see generally People v Kennedy, 68 NY2d 569, 579-580). “A proper foundation for the admission of a [*2]business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” (West Val. Fire Dist. No. 1 v Village of Springville, 294 AD2d 949, 950). Although plaintiff’s agent averred that the spreadsheet was kept in the regular course of business and that the entries therein were made in the regular course of business, the agent did not establish that he was familiar with plaintiff’s business practices or procedures, and he further failed to establish when, how, or by whom the electronic spreadsheet submitted in paper form was made (see CPLR 4518 [a]; West Val. Fire Dist. No. 1, 294 AD2d at 950). Furthermore, although an electronic record “shall be admissible in a tangible exhibit that is a true and accurate representation of such electronic record” (id.), plaintiff’s agent failed to establish that the printed electronic spreadsheet submitted to the court was a true and accurate representation of the electronic record kept by plaintiff.”