One of many thorny issues in PIP litigation involves the defective denial rule. Specifically, when is a denial defective? The test, as it has been understood, involves the making of numerous mistakes or material mistake(s) in the denial of claim form. The test is fact specific and whenever anyone asks me whether a denial of claim form is defective, it is many times quite difficult to give a definitive answer.
Today’s case only makes the waters murkier – as if the waters weren’t contaminated enough – since the court now holds that a denial is not defective if the mistakes are: inconsequential or do not prejudice the claimant. So, now we have more parameters to litigate within this realm of no-fault practice.
St. Barnabas Hosp. v Penrac, Inc., 2010 NY Slip Op 09122 (2d Dept. 2010):
Plaintiff argued that “[d]efendant’s denial of the claim…was invalid because the denial of claim form mistakenly identified the hospital’s collection agent, rather than the hospital, as the claimant and provider of services.”
“[w]hile the hospital based its own motion for summary judgment, and its opposition to the defendant’s motion, on its assertion that the defendant’s denial of claim form contained errors which rendered it fatally defective and a nullity (see e.g. St. Barnabas Hosp. v Allstate Ins. Co., 66 AD3d 996; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664), the errors complained of were inconsequential and posed no possibility of confusion or prejudice to the hospital under the circumstances [*2]of this case.
