Key Takeaway
Court ruling allows insurers to preserve policy limit defenses even when compelled payments exceed coverage limits, protecting exhaustion claims in no-fault cases.
This article is part of our ongoing policy exhaustion coverage, with 13 published articles analyzing policy exhaustion issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
St. Barnabas Hosp. v Country Wide Ins. Co., 2010 NY Slip Op 09121 (2d Dept. 2010)
Now this is an interesting one, and is quite hypertechnical in practice. Here is the pertinent part of the holding:
“ince the only issues decided in connection with the motion for summary judgment on its cause of action to recover no-fault medical payments were the questions of whether the defendant had failed to pay or deny the relevant claim within the statutory time frame, and whether the defendant had received verification of that claim, the defendant is not collaterally estopped from seeking to modify the amount of the judgment that was in satisfaction of the plaintiff’s claim, based upon the contention that the policy limits have been partially exhausted”
The best way of understanding this issue is to assume the following:
Free Consultation · No Fee Unless We Win
Does this apply to your situation?
Every case is different. Get a free, confidential case review from an experienced attorney who can tell you exactly where you stand.
1. $50,000 policy
2. Bill in the amount of $45,000 denied on lack of medical necessity received 8/1/10
3. Bill in the amount of $30,000 denied on lack medical necessity received 9/1/10
Defendant goes to trial and loses the $30,000 bill on 10/1/10 and loses. Defendant then goes to trial on $45,000 bill and loses on 11/1/10.
According to this case, Defendant may now move for partial summary judgment on the $30,000 bill to the extent of reducing its liability to $5,000 (the policy limits).
Try this hypothetical. Bill #1 is $50,000, and assume same facts. Defendant after losing at trial on the $30,000 bill may now move for summary judgment to dismiss the complaint! Of course, many might be saying that Defendant should have moved at trial or through motion practice to dismiss the $30,000 bill based upon the policy exhaustion defense. Yet, it may happen that a decision on the $50,000 bill was pending when the $45,000 bill went to trial. The carrier thought they could win both. Oops.
Now, I have another hypothetical, but I am not going to share that on here, since I am going to test it out first. I cannot give away all my secrets on this blog.
Related Articles
Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
Keep Reading
More Policy Exhaustion Analysis
Policy exhaustion?
NY court rulings on no-fault insurance policy exhaustion defenses, including when insurers can claim coverage limits reached after denying claims improperly.
Dec 18, 2018
Policy Exhaustion goes to Madison Avenue/Someone from the Insurance Defense side should be putting in Amicu
Ameriprise v Kensington Radiology: Court grants appeal on $50,000 policy exhaustion defense in NY no-fault insurance arbitration award case.
Aug 23, 2018
Just a bad decision
Court rules insurer cannot modify no-fault judgment after losing summary judgment motion - defendant's belated policy limit defense fails procedural requirements.
Mar 30, 2011
Priority of payment, again
Court remands case for hearing on whether policy limits were exhausted before provider claims arose, highlighting critical priority of payment issues in no-fault insurance...
Jan 21, 2018
It was not the partner affirmation this time
NY court rules on policy exhaustion defense failure when insurer cited 11 NYCRR 65-3.15 for out-of-state policy, creating priority payment issues in no-fault case.
Jun 29, 2017
Priority of payment – an extended discussion
In-depth analysis of no-fault insurance policy exhaustion and priority of payment regulations following Alleviation Med.
Apr 1, 2017Was this article helpful?
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a policy exhaustion matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.
