Verification receipt

Right Aid Med. Supply Corp. v Travelers Ins. Co.. 2019 NY Slip Op 51184(U)(App. Term 2d Dept. 2019)


“The witness, a 27-year employee of defendant, testified regarding defendant’s policies and procedures for the receipt of mail, both at the Buffalo office, where certain items were sent, and the Melville office, where the claims at issue were processed.”

Implicit here, similar to the recent State Farm cases, is the ability of a claims representative, through resort to the computer system, to testify regarding the intake and mailing from any office to prove the defense.

Workers Comp

Metro Psychological Servs., P.C. v Travelers Prop. & Cas. Ins. Co., 2019 NY Slip Op 51150(U)(App. Term 2d Dept. 2019)

“Defendant proffered sufficient evidence to support its contention that there was an issue as to whether plaintiff’s assignor had been acting in the course of his employment at the time of the accident and that, therefore, workers’ compensation benefits might be available (see e.g. Arce Med. & Diagnostic Svce v American Tr. Ins. Co., 39 Misc 3d 134[A], 2013 NY Slip Op 50531[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Jamaica Med. Supply, Inc. v American Tr. Ins. Co., 34 Misc 3d 133[A], 2011 NY Slip Op 52371[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; D.A.V. Chiropractic, P.C. v American Tr. Ins. Co., 29 Misc 3d 128[A], 2010 NY Slip Op 51738[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; cf. Westchester Med. Ctr. v American Tr. Ins. Co., 60 AD3d 848 [2009]). ” ‘Since primary jurisdiction with respect to determinations as to the applicability of the Workers’ Compensation Law has been vested in the Workers’ Compensation Board,’ it is ‘inappropriate for the courts to express views with respect thereto pending determination by the board'”

Jurisdiction defenses need to specific

Masigla v Windhaven Ins. Co., 2019 NY Slip Op 51169(U)(App. Term 2d Dept. 2019)

He wrote the book, but who wrote the answer? I am not quitting my day job anytime soon…

It appears that an innocent error in an answer could produce grave results for the insurance carrier.

“As to defendant’s second argument, there is no need to consider whether defendant’s claimed lack of contacts with New York might raise an issue of personal, rather than subject matter, jurisdiction, since, pursuant to CPLR 3211 (e), an objection to personal jurisdiction is waived unless it is raised in the answer or in a pre-answer motion to dismiss the complaint, whichever comes first (see Hatch v Tu Thi Tran, 170 AD2d 649 [1991]; see also Parasconda v Club Mateem, Inc., 33 Misc 3d 141[A], 2011 NY Slip Op 52201[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). “Absent the pursuit of either course, a defendant’s voluntary participation in litigation in which the point can be raised, in and of itself, constitutes a submission to the jurisdiction of the courts” (Gager v White, 53 NY2d 475, 488 [1981]). Here, defendant first appeared by interposing its answer, in which it raised the affirmative defense that [*2]the summons was not properly served, but was silent on the issue of personal jurisdiction due to a lack of a jurisdictional basis for the service. Thus, it waived all personal jurisdiction defenses other than the actual service of process (see Hatch, 170 AD2d at 649; Osserman v Osserman, 92 AD2d 932 [1983]).”

Personally, I think the Court court have construed that the summons was not properly served as a general personal jurisdiction defense. Not sure I agree with this Court’s holding, but my name is not on the order nor is my name Paul Kenny and my opinion does not really count.

The second basis for the decision is absolutely correct and is a lesson to everyone who tries to play the deemer does not apply to us game.

” Finally, even if, as defendant claims, it is exempt from Insurance Law § 5107, which requires certain insurers to provide no-fault coverage, defendant did not demonstrate that its policy did not provide such coverage, and, therefore, defendant did not demonstrate its entitlement to judgment as a matter of law.”

The reason as many of you coverage geeks know is that many insurance policy contains an out of state deemer provision in the insurance contract. This is separate and apart from Ins. Law 5107. Thus, absent presenting the contract of insurance, the Court properly found denied the motion as all triable issues of fact have not been eliminated.

IME no show

Acupuncture Approach, P.C. v NY Cent. Mut. Fire Ins. Co., 2018 NY Slip Op 51601(U) (App. Term 2d Dept. 2018)

I missed this one originally. And this was a big one.

” While plaintiff argues that defendant did not mail its IME scheduling letters to the correct address, defendant demonstrated that copies of the IME scheduling letters had been mailed to the attorney who represented plaintiff’s assignor with respect to the accident in question (see Great Wall Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 22 Misc 3d 136[A], 2009 NY Slip Op 50294[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). “

Another hiccup to the briefing schedule rule

Golden Star Acupuncture, P.C. v Erie Ins. Co. of NY, 2019 NY Slip Op 50920(U)(App. Term 2d Dept. 2019)

“We note that the Civil Court did not improvidently exercise its discretion in considering the papers submitted by plaintiff in opposition to defendant’s motion, even though the opposition papers had been untimely served pursuant to the parties’ stipulation, as defendant was able to submit reply papers (see Hsu v Shields, 111 AD3d 674 [2013]; Kavakis v Total Care Sys., 209 AD2d 480 [1994]). “

So what happened in Carothers?

Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 2019 NY Slip Op 04643 (2019)

The facts are as egregious as they come. Carothers made nothing and lay people Sher and Vayman pocketed the money. Medtrex appeared to be the factor. If this were Florida, we would not have this conversation since they allow lay person ownership with a medical director. New York and New Jersey require physician ownership.

We all know how the story played out and the facts are not what should interest anyone. It is the law, or its shift that should interest you.

First, Court of appeals punted on the issue Judge Soloman raised in the initial dissent: negative inference due to Sher and Vayman pleading the fifth amendment. They appeared to want to resolve it in favor of the insurance carriers, but backed away.

Second, “A [*4]corporate practice that shows “willful and material failure to abide by” licensing and incorporation statutes (Mallela, 4 NY3d at 321) may support a finding that the provider is not an eligible recipient of reimbursement under 11 NYCRR 65-3.16 (a) (12) without meeting the traditional elements of common-law fraud.”

Comment: I never thought the carrier had to prove common-law fraud.

Third, “Insurance carriers do not have good cause to delay or deny payments of reimbursement claims on the basis of a provider’s slight divergence from licensing requirements. Here, the jury’s finding that plaintiff was in material breach of the foundational rule for professional corporation licensure — namely that it be controlled by licensed professionals — was enough to render plaintiff ineligible for reimbursement under 11 NYCRR 65-3.16 (a)(2). The trial court committed no error in refusing to issue a charge requiring a “tantamount to fraud” finding by the jury”

Comment: “material breach of the foundational rule for professional corporation licensure”. Interesting.

Fourth, “plaintiff is incorrect to characterize the improper control of plaintiff by unlicensed persons as simply an instance of improper fee splitting of the professional corporation’s profits with a nonphysician in violation of 8 NYCRR 29.1 (b) (4). Although the Appellate Division held in Matter of Allstate Prop. & Cas. Ins. Co. v New Way Massage Therapy P.C. (134 AD3d 495, 495 [1st Dept 2015], lv denied 28 NY3d 909 [2016]) that a “fee-sharing arrangement . . . does not constitute a defense to a no-fault action,” the jury in this case determined that plaintiff was controlled by unlicensed persons, rather than merely splitting fees with them. Control of a professional corporation by nonprofessionals violates foundational New York licensing requirements and rendered plaintiff ineligible for insurer reimbursement, for exactly the same reason the medical service corporation in Mallela was ineligible for reimbursement.”

Comment: Mere violations of the Public Health Law and regulations promulgated thereto will not sufficie as a basis to withhold no-fault benefits.

Of course, this makes me wonder about the viability of the Raia case – where the owner of the clinic is a physician in good standing, cannot read films and the Second Department (Liberty Mut. Ins. Co. v Raia Med. Health, P.C., 140 A.D.3d 1029, 1031 [2d Dept. 2016]) held that sufficient violations of the the education law to withhold compensation. Where does that fit on the radar ? Or, is 65-3.16(a) clearly pure Mallela? I need more guidance.

You know DFS does NOT approve of this disclaimer

Hereford Ins. Co. v Forest Hills Med., P.C., 2019 NY Slip Op 03926 (1st Dept. 2019)

” Moreover, movant defendants failed to demonstrate a meritorious defense. The failure by the occupants of the vehicle to subscribe and return the transcripts of their examinations under oath violated a condition precedent to coverage and warranted denial of the claims (see Hertz Vehs., LLC v Gejo, LLC, 161 AD3d 549[1st Dept 2018]). “

I really find this basis to disclaim coverage disingenuous. The EIP came to the EUO, told his or her story, lied or did not lie. We go from there. I cannot fathom how the failure to return an EUO transcript – which is a sworn to document and which may be used against the deponent or the assignee as a matter of course – warrants the loss of no-fault benefits.

I am quite sure that DFS did not put the “and subscribe the same” (11 NYCRR 65-1.1[b]) language in the regulations to authorize the voiding of coverage due to the failure to sign the transcript. I also suspect this case will spur either an emergency amendment from DFS or an opinion letter. Thankfully, this appeared in the context of a motion to vacate a default, which means the Court of Appeals will not touch this matter, i.e., the failure to establish a reasonable excuse is reviewed under an abuse of discretion standard that will not be upset on appeal.

I think this basis for a disclaimer is the colloquial playing with fire.

App Term EUO cases (ad nauseam)

LMS Acupuncture, P.C. v State Farm Mut. Automotive Ins. Co., 2019 NY Slip Op 50696(U)(App. Term 2d Dept. 2019)

” Furthermore, defendant was not required to set forth objective reasons for requesting the EUOs in order to establish its prima facie entitlement to summary judgment….”

Bronx Chiropractic Care, P.C. v State Farm Ins., 2019 NY Slip Op 50700(U)(App. Term 2d Dept. 2019)

“Contrary to plaintiff’s contention, defendant was not required to set forth objective reasons for requesting EUOs in order to establish its prima facie entitlement to summary judgment”

K.O. Med., P.C. v IDS Prop. Cas. Ins. Co., 2019 NY Slip Op 50687(U)(App. Term 2d Dept. 2019)

“Plaintiff correctly argues that the initial EUO scheduling letter sent to plaintiff had been sent more than 30 days after defendant had received the claims seeking $348.80, $204.41, $148.69, and $91.42. As a result, the request was a nullity as to those claims”

BC Chiropractic, P.C. v Farmers New Century Ins. Co.,2019 NY Slip Op 50680(U)(App. Term 2d Dept. 2019)

” While the Civil Court correctly noted that defendant’s January 13, 2012 letter was a delay letter, which did not toll defendant’s time to pay or deny the claim, defendant established that initial and follow-up letters scheduling an EUO had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]); that plaintiff’s assignor had failed to appear on either date (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. [*2]Co., 35 AD3d 720 [2006]); and that the claim had been timely denied on that ground”

The common refrain here is that the objective basis for the EUO is not part of the an insurance carrier’s prima facie case.

Happy Mother’s Day

I am beginning to publish some articles here today, but I wanted to take a moment to wish all of the mothers out there a happy Mothers Day. Without the support and love of our mothers, much of the good that we see in society would not exist. Many moms have made sacrifices for their children and this blogger – who avoids issues outside the law- is not blind to that fact. A simple reminder on here is in order.

Move quickly or do not move at all

Cashbamba v 1056 Bedford LLC, 2019 NY Slip Op 03456 (1st Dept. 2019)

(1)”Defendants failed to comply with the requirement of 22 NYCRR 202.7 to submit an affirmation of good faith in support of their disclosure-related motion. Contrary to their contention, their counsel’s affirmations are insufficient, because they do not include the time, place, and nature of the consultations that counsel had with plaintiff’s counsel to try to resolve the issues raised by the motion (22 NYCRR 202.7[c]; see 241 Fifth Ave. Hotel, LLC v GSY Corp., 110 AD3d 470, 471-472 [1st Dept 2013]; see also Loeb v Assara N.Y. I, L.P., 118 AD3d 457, 457-458 [1st Dept 2014]). To the extent defendants rely on letters exchanged between their counsel and plaintiff’s counsel, the letters are insufficient, because they relate to only one of the items sought by defendants and do not reference any discussions between counsel. Moreover, the record does not support defendants’ contention that the parties have historically been unable to resolve discovery disputes without court intervention.”

(2) “Furthermore, defendants failed to provide an adequate explanation for their delay in seeking to compel the examination after plaintiff failed to appear. They also failed to explain why they did not move to reargue and/or appeal the court’s decision of June 15, 2017, wherein it denied defendants’ motion to vacate the note of issue. In its decision, the court stated that the motion was denied as moot as “[a]ll discovery sought in the motion has now been provided.” Instead, defendants waited until August 27, 2018, to move to strike the complaint or to preclude plaintiff from providing evidence of his neurological injuries or for an order compelling plaintiff to appear for an independent neurological examination and to provide authorizations.”

The lesson here is once that Note of Issue is thrown down, you need to act expeditiously, whether to reargue or to appeal. Defendant fell asleep here and got severely punished.