Key Takeaway
Court awards summary judgment to no-fault provider when preclusion order renders insurance company's defense legally insufficient, establishing prima facie case.
When Preclusion Orders Doom Insurance Defenses
No-fault insurance disputes often turn on whether an insurance company’s denial of benefits was legally sufficient. While insurers typically have broad discretion to challenge claims based on medical necessity or other grounds, procedural failures can completely undermine their defense. This case demonstrates how a preclusion order can render an insurance company’s defense “deficient as a matter of law,” making it impossible for them to contest a no-fault provider’s claim.
The decision illustrates a critical intersection between procedural compliance and substantive legal defenses in no-fault litigation. When courts issue preclusion orders preventing insurers from presenting evidence supporting their denials, those denials become legally meaningless. This creates a powerful precedent for establishing prima facie cases against insurance companies that fail to follow proper procedural requirements.
Jason Tenenbaum’s Analysis:
Lof Med. Supply, Inc. v GEICO Gen. Ins. Co., 2013 NY Slip Op 50595(U)(App. Term 2d Dept. 2013)
This is a rare application of “Avenue T” where the court held the defense was insufficient as a matter of law and awarded summary judgment to the plaintiff.
(1) STATEMENT OF LAW
“A no-fault provider establishes its prima facie case “by proof of the submission to the defendant of a claim form, proof of the fact and the amount of the loss sustained, and proof either that the defendant had failed to pay or deny the claim within the requisite 30-day period, or that the defendant had issued a timely denial of claim that was conclusory, vague or without merit as [*2]a matter of law”
(2 ) APPLICATION
“laintiff demonstrated that defendant’s proffected defense of lack of medical necessity was without merit as a matter of law, in that the Civil Court had issued a prior order precluding defendant from offering any evidence in support of its claimed defense. In opposition to the motion, defendant failed to raise a triable issue of fact”
Key Takeaway
This decision shows how procedural violations can completely destroy an insurance company’s substantive defenses. When a court issues a preclusion order preventing an insurer from presenting evidence to support its denial, that denial becomes legally insufficient, allowing the no-fault provider to establish its prima facie case and obtain summary judgment.
