American Transit v. Cano (2012): When an Out-of-State Provider Can Be Sued in New York No-Fault DJ Actions

Citation: American Transit Ins. Co. v. Cano, 2012 NY Slip Op 31608(U), Index No. 100765/2012 (Sup. Ct. NY Co., June 21, 2012, Tingling, J.) — official PDF

Posture: No-fault declaratory judgment action by NY insurer; out-of-state hospital provider moved to dismiss for lack of personal jurisdiction.

Holding: Motion to dismiss denied. A New Jersey hospital that voluntarily submits bills to a New York no-fault insurer under an assignment from a New York-insured eligible injured person has transacted business in New York within the meaning of CPLR 302(a)(1) and is subject to long-arm jurisdiction in a related declaratory judgment action.

The Question Behind Cano

Every No-Fault practitioner in New York eventually sees the same defense move. The carrier files a declaratory judgment (“DJ”) action in New York Supreme Court naming the eligible injured person (“EIP”) along with every medical provider who treated that EIP. One of the providers — an out-of-state clinic, hospital, or imaging center — appears not to defend the merits, but to move for dismissal on jurisdictional grounds. The provider’s theory: it is a foreign corporation, it has no offices in New York, it employs no one in New York, and so a New York court cannot drag it in to litigate coverage. Sometimes the motion is decorated with affidavits about square footage and tax filings in the provider’s home state.

The Cano motion was that kind of motion. The provider was a New Jersey hospital. The EIP — “Cano” — had been treated at the hospital after an accident covered (or arguably covered) by an American Transit no-fault policy. The hospital had taken an assignment of benefits from Cano, submitted NF-3 billing forms to American Transit at its New York office, and waited to be paid. When American Transit instead filed a DJ action in New York County Supreme Court — alleging that Cano had failed a condition precedent to coverage — the hospital answered by saying that New York had no power over it at all.

Justice Tingling denied the motion. The hospital had transacted business in New York the moment it accepted a New York-insured assignment and tried to collect a New York-regulated no-fault payment. The court was unimpressed by the jurisdictional argument as offered; in the original 2012 commentary on this blog, I called it “the disingenuous argument that there is no jurisdiction.” A New Jersey provider that voluntarily participates in New York’s no-fault payment system has, by that participation, consented to defend its right-to-payment in a New York court.

The point of this post — fourteen years after the fact, and updated for the way this issue is litigated in 2026 — is to explain why the Cano result is correct as a matter of long-arm doctrine, why it matters far beyond the single hospital that lost the motion, and how the same reasoning maps onto every out-of-state-provider DJ defense that gets filed in New York County, Kings County, and Suffolk County Supreme Courts every month.

What Condition Precedent Was at Issue

The reported Tingling decision discloses limited substantive detail because the motion was procedural. The complaint in the DJ action — and the typical fact pattern for an American Transit DJ filed in this posture — alleges that the EIP failed one of the conditions precedent to coverage under New York’s no-fault regulation, 11 NYCRR Part 65-1.1. The condition precedent breaches that most commonly trigger a DJ action of this shape are:

• The EIP failed to appear for one or more scheduled examinations under oath (“EUO”) at the carrier’s offices.
• The EIP failed to appear for two scheduled independent medical examinations (“IME”) — the classic two-strike no-show paradigm.
• The EIP failed to submit an NF-2 notice of claim within 30 days, or failed to respond to verification requests within the statutory 120-day window.

Under the New York Court of Appeals decisions in Presbyterian Hosp. v. Maryland Cas. Co., 90 NY2d 274 (1997), and Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007), an EIP’s failure to satisfy a Reg 68 condition precedent can — depending on which condition — defeat coverage altogether and extinguish the right of any assignee provider to collect on bills submitted under that assignment. The carrier’s DJ action is the procedural device for obtaining a court declaration that the policy provides no coverage and that none of the assignee providers can collect.

The jurisdictional motion in Cano was the New Jersey hospital’s attempt to escape the DJ action entirely — not by attacking the substantive condition-precedent claim, but by saying the court could not reach the hospital at all.

Why the Hospital Lost: CPLR 302(a)(1) and “Transacting Business” in New York No-Fault

CPLR 302, New York’s long-arm statute, provides four independent bases for specific personal jurisdiction over a non-resident defendant. The provision Cano turned on was CPLR 302(a)(1), which reaches a non-resident who “in person or through an agent… transacts any business within the state or contracts anywhere to supply goods or services in the state.”

The Court of Appeals has been consistent for decades that a “transaction of business” sufficient for 302(a)(1) is satisfied when a non-resident defendant purposefully avails itself of the privilege of conducting activities within New York, and the cause of action arises out of that purposeful availment. See Ehrenfeld v. Bin Mahfouz, 9 NY3d 501 (2007); Fischbarg v. Doucet, 9 NY3d 375 (2007). The two-part inquiry is unforgiving: was there a purposeful contact, and does the claim arise from it.

Applied to an out-of-state hospital that bills New York no-fault carriers, both prongs are easy:

1. Purposeful availment. The hospital chose to accept the EIP’s assignment of benefits. It chose to bill American Transit at the carrier’s New York office, on New York-regulated NF-3 forms, calculated under New York’s fee schedules. It chose to invoke New York’s no-fault regulatory machinery to demand payment. Every one of those choices is a contact with New York that the hospital made deliberately and for its own commercial benefit.

2. Arising from. The DJ action and the assignment-of-benefits payment claim are the same controversy. The hospital cannot accept the New York-regulated payment stream while disclaiming the New York-regulated forum that adjudicates payment disputes. The DJ action arises from precisely the same transactions — the bills submitted to American Transit’s New York office — that the hospital relied on to claim a right to recovery.

That is the framework Justice Tingling applied, and it is the same framework that the Second Department applied seven years later when this firm analyzed the converse fact pattern — an out-of-state insurance carrier (Maryland Auto Insurance Fund) that did not transact business in New York and was dismissed for lack of jurisdiction. The doctrine is symmetrical. A non-resident who chooses to participate in New York’s no-fault system can be sued in New York about that participation. A non-resident who did not participate cannot.

The hospital in Cano fell on the wrong side of that line by its own conduct.

The “Disingenuous” Read

In the 2012 version of this post, I described the hospital’s argument as disingenuous, and that word is worth a moment’s attention. The doctrine is not new, and the precedent supporting it was already two decades deep by 2012. Ehrenfeld was five years old. Fischbarg was five years old. Presbyterian Hospital was fifteen. Every appellate practitioner in this corner of the bar knew — or should have known — that submitting NF-3s to a New York carrier on assignments from New York-insured patients was purposeful availment within the meaning of 302(a)(1).

The motion did not lose because it was wrongly briefed. It lost because the legal proposition the hospital advanced was incompatible with the conduct the hospital had engaged in. You cannot collect New York no-fault payments without consenting to New York’s adjudication of those payments. Counsel who bring this kind of motion are sometimes doing it to buy time, or to test whether the carrier will accept a discount to avoid the motion practice, or because they have a client who genuinely does not understand what it has consented to by submitting the bills. None of those motives turn the motion into a winner.

The practical lesson is that the Cano defense is not a defense — it is, in the great majority of cases, a delay tactic. Plaintiff’s counsel who oppose this motion should lead with the assignment, the bills, the NF-3s, and the documentary record of the provider’s voluntary participation in New York’s no-fault system. The factual record will defeat the motion on the merits before the long-arm doctrine even has to be invoked at length.

Why Cano Still Matters in 2026

The factual pattern in Cano — out-of-state medical facility billing a New York no-fault carrier — has not gone away. If anything, the modern PIP economy has made it more common. Out-of-state surgical centers (often in New Jersey, Florida, and Pennsylvania), out-of-state imaging providers, out-of-state pain-management clinics, and out-of-state telehealth providers all submit no-fault bills to New York carriers under assignments from New York-insured patients. They appear on the same DJ actions that Cano appeared on. They file the same motions. They lose for the same reasons.

The doctrine has gained additional support in the years since Cano was decided:

• First Department, Second Department, and Appellate Term decisions — including the analyses on this blog dating from 2014 onward, collected in our jurisdiction archive — have consistently held that providers who voluntarily submit bills to New York carriers cannot disclaim New York jurisdiction.
• The converse case, EMC Health Prods. (2018) — analyzed in detail in our out-of-state insurance carrier jurisdiction post — confirms that the doctrine is not a blanket “if it’s no-fault, NY has jurisdiction” rule. Specific jurisdiction requires specific contact. The provider in Cano had the contact; the insurer in EMC Health did not.
• The 2019 SS Medical Care decision — analyzed in our Supreme Court vs. Civil Court declaratory judgment jurisdiction post — confirms that the DJ action remains the principal procedural device for resolving these multi-forum, multi-defendant no-fault disputes, with all that implies for personal jurisdiction over each named provider.

The current state of the law is essentially what Justice Tingling articulated in 2012, with refinements about forum selection between Supreme Court and Civil Court, and about the timing and scope of stays. The underlying rule about provider jurisdiction has not moved.

What This Means for Practice

For plaintiff carriers (the side filing the DJ): name every out-of-state provider that received an assignment and submitted bills. Plead the assignment, the date of the NF-3, the amount billed, and the New York office to which it was submitted. Those allegations defeat the Cano motion on the face of the complaint. Even when the motion is filed anyway, the carrier should be prepared to attach the NF-3s and any payment correspondence as exhibits on the opposition.

For defense counsel representing out-of-state providers: the Cano motion is rarely a winner. Counsel should evaluate whether the substantive coverage defense is real (e.g., does the EIP actually have a documented EUO/IME no-show?) and, if so, focus the resources on the merits rather than on personal jurisdiction. If the substantive defense is weak, the realistic path is settlement, not a 302(a)(1) motion.

For medical providers themselves, including the bookkeeping and intake staff who actually process assignments: understand that accepting an assignment of New York no-fault benefits is a deliberate business decision with legal consequences. The provider is electing to be a participant in New York’s no-fault payment system. The provider’s billing department is, in effect, the corporate contact point for that election.

Connect to the Encyclopedia

This post is one node in a connected analysis of New York jurisdiction and declaratory-judgment doctrine. For the broader framework, see:

• The Legal Encyclopedia — our master organization of 1,900+ articles on New York no-fault, personal injury, civil procedure, and employment law, including a dedicated Declaratory Judgments & Arbitration topic hub.
• Personal Jurisdiction in New York Insurance Cases: No-Fault Defense Guide — the comprehensive 2019 analysis of CPLR 301/302 in no-fault context, with the EMC Health Products mirror case.
• New York Declaratory Judgment Actions: Supreme Court vs. Civil Court Jurisdiction — the SS Medical Care analysis on multi-forum coordination.
• Lack of Personal Jurisdiction for an Out-of-State Insurance Carrier — the converse fact pattern: insurer, not provider.
• Jurisdictional Defect (It Really Isn’t) — what counts as a true jurisdictional defect under CPLR 5015(a)(4).
• EUO Requirements in New York No-Fault Insurance Cases — the substantive condition-precedent doctrine that drives most DJ actions of this shape.
• IME No-Shows in New York No-Fault Insurance Cases — the other principal condition-precedent breach.
• Verification 120-Day Rule — Chapa (2026) — the most recent Appellate Division pronouncement on Reg 68 verification.

Original 2012 Note (Preserved)

The original commentary on this case, written in June 2012, read in full:

A New Jersey Hospital who renders treatment upon an EIP submits bills to the insurance carrier. The bills are overdue. EIP fails to comply with a condition precedent to coverage. Insurance carrier brings a dreaded DJ action against the EIP and all providers who have the right to collect no-fault benefits.

Hospital moves to dismiss based upon the disingenuous argument that there is no jurisdiction. The motion is denied in a nice decision by Justice Tingling.

Plf Attorney: Law Office of James F. Sullivan Def Attorney: Unknown

The shorthand still captures the result. The analysis above is the longer-form version, written to explain to a practitioner — or to a litigator who has not encountered this exact motion before — why Justice Tingling’s ruling is correct and how it fits the larger jurisdictional doctrine that now governs every no-fault DJ action in New York.

Key Takeaway

An out-of-state medical provider that submits bills to a New York no-fault carrier under an assignment of benefits from a New York-insured eligible injured person has transacted business in New York within the meaning of CPLR 302(a)(1) and is subject to long-arm jurisdiction in any related declaratory judgment action filed by the carrier. The “disingenuous” motion to dismiss for lack of jurisdiction — the motion the hospital filed in Cano — was wrong in 2012 and remains wrong in 2026. The doctrine is settled. The factual record on assignments and NF-3 billings defeats the motion on its own.

If you are an out-of-state provider considering whether to bill New York no-fault carriers, understand the jurisdictional consequence of that decision before you start. If you are a New York carrier filing a DJ action against an out-of-state provider, plead the assignment and the bills with specificity. The doctrine will do the rest.

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This post was first published on June 23, 2012, when the trial-level decision in American Transit Ins. Co. v. Cano was new. The 2026 update expands the original three-paragraph note into a full practitioner analysis, explains the CPLR 302(a)(1) framework that justified Justice Tingling’s ruling, and connects the decision to fourteen years of subsequent doctrine on the same issue. The original 2012 commentary is preserved above. Last reviewed: May 16, 2026.

If you are a medical provider or insurance carrier dealing with a no-fault declaratory judgment action and need to evaluate jurisdictional defenses, call our Long Island office at (516) 750-0595 for a free consultation. The Law Office of Jason Tenenbaum, P.C. has handled more than 100,000 no-fault matters and analyzed every major appellate decision in this area since 2008.