And then the Appellate Division, Second Department spoke

Appellate Division Ruling Reshapes No-Fault Insurance Litigation in New York

The legal landscape for no-fault insurance claims in New York and New Jersey shifted significantly when the Appellate Division, Second Department issued its decision in Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co. This ruling has profound implications for medical providers, insurance companies, and practitioners throughout the New York metropolitan area, particularly in Nassau, Suffolk, Queens, and Brooklyn counties.

The Critical Decision That Changed Everything

Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co.2008 NY Slip Op 07846 (2d Dept. 2008)

The Appellate Division Second Department has now, in pertinent part, decided to follow Dan Medical as it relates to the necessity for the records to be entered into evidence for the truth of the matter asserted.

To quote the court: “The plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law. The plaintiffs’ medical service providers failed to demonstrate the admissibility of their billing records under the business records exception to the hearsay rule (see CPLR 4518”

So there goes the literal interpretation of Mary Immaculate (discussed in the prior post) that the Plaintiffs’ bar has relied upon to meet a prima facie case. Indeed, the Appellate Term, First Department has been adamant that the billing forms do not need to be placed into evidence to make a prima facie case.

Yet, let us not forget that the Appellate Division, First Department, adopted the Mary Immaculate rule in Countrywide Ins. Co. v. 563 Grand Medical, P.C., 50 AD3d 313 (1st Dept. 2008), when they held as to prima facie in a trial denovo setting that:

“Defendant medical provider established prima facie its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by plaintiff insurer and that payment of the no-fault benefits was overdue”

I therefore do not think this case will represent much of a shift in the law, as it stands today. What this case opens up the door to, at some point, is a Court of Appeals ruling should the Appellate Division, First Department continue to follow Mary Immaculate. This would render a split in the Appellate Divisions, which would allow the prima facie issue to make it all the way to the top of the appellate food chain.

Understanding the Implications for New York Practitioners

This decision represents a significant development in no-fault insurance litigation across New York State. For attorneys practicing in the Second Department’s jurisdiction—which includes Brooklyn, Queens, Staten Island, Nassau, Suffolk, Dutchess, Orange, Putnam, Rockland, and Westchester counties—the ruling demands a fundamental reassessment of litigation strategy.

The Business Records Foundation Requirement

The court’s emphasis on CPLR 4518(a) compliance means that medical providers throughout Long Island and New York City can no longer rely on the simplified approach that Mary Immaculate appeared to authorize. Instead, they must ensure their billing records satisfy the strict requirements of New York’s business records exception:

• Personal Knowledge: The person making the record must have personal knowledge of the facts recorded
• Regular Course of Business: Records must be made as part of routine business operations
• Contemporaneous Creation: Records should be made at or near the time of the events they document
• Proper Foundation: Adequate testimony or affidavit must establish admissibility

Strategic Implications for Long Island Medical Providers

Medical practices throughout Nassau and Suffolk counties, many of which rely on sophisticated billing systems and third-party administrators, must now carefully evaluate their record-keeping practices. The days of assuming that mailing proof and overdue payment alone constitute prima facie evidence are numbered—at least in the Second Department.

The Departmental Split: A Litigation Landscape Divided

The ruling creates a peculiar situation where identical cases might be decided differently depending on which appellate department hears them. This geographic lottery effect has significant practical consequences:

First Department (Manhattan, Bronx)

Continues to follow the Mary Immaculate standard, where proof of mailing and overdue payment may be sufficient for prima facie showing.

Second Department (Brooklyn, Queens, Staten Island, Nassau, Suffolk, and surrounding counties)

Now requires strict compliance with business records foundation requirements, making prima facie cases significantly more challenging to establish.

Practical Guidance for No-Fault Practitioners

This appellate split creates both challenges and opportunities for attorneys handling no-fault insurance disputes in the New York area:

For Medical Provider Attorneys

• Enhanced Record Preparation: Ensure all billing records come with proper foundation affidavits that address personal knowledge and business records requirements
• Venue Strategy: Where possible, consider jurisdictional factors that might influence which appellate department will ultimately review your case
• Client Education: Advise medical provider clients to strengthen their record-keeping practices and billing documentation procedures
• Settlement Considerations: Evaluate whether the higher proof burden in the Second Department affects case valuation for settlement purposes

For Insurance Defense Counsel

• Challenges to Foundation: Be more aggressive in challenging the admissibility of billing records under CPLR 4518(a)
• Motion Practice: Consider summary judgment motions based on inadequate foundation for business records
• Discovery Strategy: Focus discovery on how billing records are created and maintained

The Path to the Court of Appeals

As the analysis predicted, this departmental split virtually guarantees eventual Court of Appeals review. The high court will ultimately need to resolve whether New York’s no-fault system requires strict business records foundation or permits the more relaxed Mary Immaculate standard.

What This Means for Current Cases

Practitioners should prepare for continued uncertainty until the Court of Appeals provides definitive guidance. This means:

• Preparing cases to meet both potential standards
• Carefully preserving appellate issues
• Monitoring developments in both departments
• Considering the long-term strategic implications of precedent-setting cases

Technical Requirements Under CPLR 4518(a)

For practitioners who need to navigate the stricter Second Department standard, understanding the technical requirements of CPLR 4518(a) is crucial:

Foundation Elements

A proper business records foundation must establish:

1. Systematic Recording: The records were made in the regular course of business
2. Contemporaneous Creation: The entry was made at or near the time of the event
3. Personal Knowledge: The person making the entry had knowledge of the facts recorded
4. Reliability: The source of information and method and time of preparation indicate trustworthiness

Frequently Asked Questions

Does this ruling affect all no-fault cases in New York?

No, the ruling directly affects only cases within the Second Department’s jurisdiction. However, it creates a split with the First Department that may influence practice statewide pending Court of Appeals resolution.

Can medical providers still win no-fault cases in the Second Department?

Absolutely, but they must ensure their billing records meet strict business records foundation requirements under CPLR 4518(a). The bar is higher, but not insurmountable with proper preparation.

How should Long Island medical practices adapt their billing procedures?

Medical practices in Nassau and Suffolk counties should review their record-keeping procedures with legal counsel to ensure compliance with business records requirements. This may involve updating affidavit forms and training billing staff.

Will this ruling be appealed to the Court of Appeals?

While this specific case may not be appealed, the departmental split virtually guarantees that similar cases will eventually reach the Court of Appeals for definitive resolution.

How does this affect insurance companies’ defense strategies?

Insurance companies in the Second Department now have stronger grounds to challenge the admissibility of billing records, potentially leading to more successful defenses of no-fault claims.

Looking Ahead: Preparing for Continued Evolution

The no-fault insurance landscape in New York continues to evolve through judicial interpretation. This decision highlights the importance of staying current with legal developments and adapting practice accordingly.

Best Practices Going Forward

• Maintain meticulous billing records with proper foundation documentation
• Stay informed about developments in both appellate departments
• Prepare cases to meet the highest evidentiary standards
• Consider appellate strategy from the outset of litigation
• Monitor Court of Appeals developments for ultimate resolution

Professional Legal Guidance for Complex No-Fault Cases

Navigating the evolving landscape of New York no-fault insurance law requires experienced legal counsel who understands both established precedents and emerging trends. Whether you’re a medical provider seeking to recover legitimate charges or an insurance company defending against questionable claims, professional legal guidance is essential.

The departmental split in no-fault jurisprudence creates both opportunities and pitfalls that require careful navigation. Don’t let procedural missteps or inadequate preparation jeopardize your case.

Call 516-750-0595 to discuss your no-fault insurance matter with an experienced attorney who stays current with the latest developments in New York appellate law and can help you adapt your strategy to meet evolving legal requirements.

Related Articles

• Fourth Department’s decade-defining discussion on prima facie case requirements
• Carothers v. Geico no-fault business records showdown
• Court guidance on the business records exception
• Pine Hollow decision restoring business records rule
• New York No-Fault Insurance Law

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Legal Update (February 2026): Since this 2008 decision discussing CPLR 4518 and the business records exception in no-fault litigation, New York courts have continued to refine the evidentiary standards for establishing prima facie cases in medical provider insurance disputes. Practitioners should verify current judicial interpretations of business records admissibility requirements and any subsequent appellate decisions that may have further clarified or modified these evidentiary standards.