Key Takeaway
Exploring whether defendants can use Notices to Admit to establish prima facie cases in New York no-fault insurance litigation and departmental differences.
This was a comment from Jerry Maline, of Richard Lau’s office, State Farm’s in-house counsel. This is a really astute comment, and got me thinking for a second. Now, just follow me on this to see if my logic makes sense.
According to the Appellate Term, Second Department, Notices to Admit and Interrogatories cannot be used to establish a prima facie case. This is because a party cannot admit the genuineness of another party’s documents, as well as use these devices to establish a complete prima facie case. In practice, this translates to disallowing an insurance carrier to lay a business record foundation for a provider’s bills or an injured person’s bills.
The corollary to this rule is that a medical provider cannot lay a business record foundation for an insurance carrier’s denials.
In contrast to the above, we now have learned that at the Appellate Term, First Department, interrogatories and notices to admit may be used to satisfy a prima facie case, since the genuineness of the bills is not part of a provider’s prima facie case.
Now, in light of the Second Department’s holding in Urban, viz, that a denial does not have to be “in evidence” in order to preserve the defense set forth on the denial, the only factual issue a denial presents is its timeliness. We all know that denials, generally, are mailed on the date set forth on the denial or the next business day. There are some variations out there, but that is the general industry standard. In light of Central Nassau, it would seem that a provider could be charged with having sufficient knowledge to either admit or deny: 1) whether; and/or 2) when the provider received a denial. Like anything else, this tactic will only work if the statements set forth on the Notice to Admit are properly drafted.
Since the only issue relating to an NF-10 at the Appellate Term, Second Department, involves the timeliness of the denial, it would seem to follow that a Notice to Admit can satisfy the underlying procedural issues, and allow the insurance carrier to go forward on its substantive defense. Moreover, since an insurance carrier’s entire prima facie defense does not rest on the timeliness of a denial, it cannot be said that the Notice to Admit would go to the ultimate or heart of the disputed issue. So, an insurance carrier can successfully use this device to demonstrate timely handling, in my opinion.
As for the Appellate Term, First Department, this is an open question. Notwithstanding that Court’s holding that a Notice to Admit may itself satisfy a provider’s prima facie case, that court has never opined as to whether a denial must be in evidence, in order to preserve the defenses that are set forth on it. I would imagine that the Appellate Term, First Department, would probably follow the Presbyterian v. Elrac rule and require that the denial be placed into evidence, before allowing a carrier to go forward on its substantive defenses.
In any event, the Appellate Term, First Department, at worst would only leave unresolved for trial the business record foundation issue involving the denial, besides the substantive defenses. Admittedly, laying a business record foundation is a far easier burden than showing a document was timely mailed.
Thus, a properly drafted notice to admit should resolve the timeliness issue. In the Second Department, this would resolve all issues involving the denial of claim form and allow the carrier to go forward on its substantive defense. In the First Department, this would at a bare minimum eliminate the mailing issue, and possibly leave the business record issue open, as well as the underlying defense to the no-fault claim.
