My AIG bail out money at work

Legal Update: The May 24, 2011 opinion was recalled and vacated on reargument. The November 1, 2011 replacement is the operative opinion. It retained the result but changed the reasoning, including removal of the earlier verification-deadline sentence.

Last reviewed: September 2026.

The opinion that prompted this post was later recalled. On November 1, 2011, the Second Department issued a replacement decision in New York University Hospital for Joint Diseases v AIG. The hospital still prevailed on the claim at issue, but the court changed its explanation. The replacement, not the vacated May opinion, should be cited for the ruling.

From the original appeal to the replacement opinion

The original decision was issued on May 24, 2011 and reported at 84 AD3d 1192. It prompted Jason’s criticism of AIG’s decision to litigate and cross-appeal.

On reargument, the court recalled and vacated that opinion and substituted a decision reported at 89 AD3d 702. The November decision left the relevant result intact while revising the discussion. This is not simply an additional opinion agreeing with the first; it replaces the first as the court’s account of the appeal.

The change matters because the May text included a verification-deadline sentence that the replacement omitted. A historical summary that quotes that sentence without identifying the recall can present superseded reasoning as the court’s operative statement.

Which hospital claim was before the court?

Although New York University Hospital for Joint Diseases appears first in the caption, the third cause of action at issue concerned Westchester Medical Center. The appellate disposition should not be described as deciding every hospital bill or every cause of action in the suit.

The hospital established its entitlement to summary judgment on that claim. The insurer relied on correspondence stating that the claim was pending an adjuster’s review or investigation. The replacement opinion held that this did not constitute a verification request that tolled the applicable period.

Without a valid toll, the insurer’s denial was untimely on the record addressed. The court rejected its effort to rely on intoxication as a contributing cause of the accident in defending that claim. That is the case-specific preclusion result, not a statement that every intoxication defense is unavailable in every no-fault action.

An investigation label is not the requested information

The letters’ contents matter. A letter may tell a hospital that a claim is being investigated without identifying additional information the hospital must supply. Describing a claim as pending does not by itself establish that the insurer made and maintained the verification request needed to suspend payment time.

That does not make every investigation improper. It means the insurer must establish the legal effect it claims for the actual correspondence. The request, follow-up and response record—not the label assigned in an internal file—determines whether verification remains outstanding.

Mount Sinai v Dust Transit involves an effective request that lacked a subsequent follow-up. This AIG decision addresses the earlier question of whether the asserted correspondence qualified as the necessary request at all.

Do not carry forward the recalled timing sentence

The current section 65-3.5 distinguishes forwarding prescribed verification forms after a completed application from requesting additional verification after completed forms are received. Those are different procedural steps.

The May opinion’s deleted sentence should not be used to compress those steps into one universal deadline. A present-day calculation needs the applicable subsection, the relevant submission and receipt date, and the remaining claim-processing history.

The St. Barnabas hospital note also discusses intoxication-related verification, but under a different record and the later emergency-services framework. The cases should not be blended into a claim that all hospital services have the same coverage or timing treatment.

Why the replacement belongs in the archive

The comment below remains part of this May 2011 archive entry. His reference to taxpayer standing was rhetorical criticism, not a holding that a taxpayer could intervene in the hospital’s insurance action.

Preserving the comment while identifying the replacement decision lets readers see both the contemporary reaction and the subsequent procedural history. The post’s original date has not been changed to make the opinion appear newly issued.

Jason’s original commentary

The original comments below are retained as historical commentary. The case-specific corrections and later developments are explained above.

Okay – why didn’t AIG just pay this before it ended up at the appellate level? One better – what the heck was AIG cross-appealing? As a taxpayer, I should have standing to protest decisions like these.

Connect to the Encyclopedia

Start with the no-fault verification hub and 2026 Chapa update for the governing framework and case directory. Related case notes:

• Mount Sinai v Dust Transit: the NF-5 and the missing follow-up.
• South Nassau Orthopedic: the clock after a completed EUO.
• Triangle R: provider requests and misaddressed assignor copies.
• St. Barnabas: an insufficient emergency-treatment response.
• Healing Health Products: detailed incoming-mail evidence.

For review of a particular no-fault verification dispute, request a Free Case Review. Keep the requests, responses and relevant claim dates available for that review.