Key Takeaway
Court rules that billing for one undelivered item doesn't void entire no-fault policy, allowing recovery for other legitimately provided medical supplies.
Jian Kang, Inc. v New York Cent. Mut. Fire Ins. Co., 2013 NY Slip Op 50851(U)(App. Term 2d Dept. 2013)
(1) In this action by a provider to recover assigned first-party no-fault benefits, defendant denied plaintiff’s claims on the ground of “material misrepresentation” because plaintiff had billed for a heating pad which defendant had determined had not been provided to plaintiff’s assignor.
(2) The Civil Court, by order entered April 20, 2011, granted defendant’s motion to the extent of dismissing so much of the[*2]complaint as sought to recover for the heating pad, on the ground that it had not been delivered to plaintiff’s assignor, but denied the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover for the remaining supplies billed for, which amounted to $3,988.58.
(3) Defendant failed to establish as a matter of law that the claim forms which are the subject of this appeal sought payment of assigned first-party no-fault benefits for medical supplies that had not actually been provided by plaintiff to its assignor. Defendant also failed to establish that the provider’s billing for a heating pad which had never been delivered to plaintiff’s assignor voided the automobile insurance policy underlying this action from the policy’s inception and that, therefore, defendant need not pay for any of the other medical supplies which may have been furnished to plaintiff’s assignor under this policy.
That is okay – you can bill for supplies that were never provided. If you get caught, well you will be penalized solely for the supply that was not delivered. How about the other supplies? No problem – payment is forthcoming.
Insurance Law 403(c): “(c) In addition to any criminal liability arising under the provisions of this section, the superintendent shall be empowered to levy a civil penalty not exceeding five thousand dollars and the amount of the claim for each violation upon any person, including those persons and their employees licensed pursuant to this chapter, who is found to have: (i) committed a fraudulent insurance act, fraudulent life settlement act or otherwise violates the provisions of this section; or (ii) knowingly and with intent to defraud files, makes, or assists, solicits or conspires with another to file or make an application for a premium reduction, pursuant to subsection (a) of section two thousand three hundred thirty-six of this chapter, containing any materially false information or which, for the purpose of misleading, conceals information concerning any fact material thereto.”
Financial Services Law 408(a)(1)(A): ‘In addition to any civil or criminal liability provided by law, the superintendent may, after notice and hearing, levy a civil penalty: not to exceed five thousand dollars per offense, for:any intentional fraud or intentional misrepresentation of a material fact with respect to a financial product or service or involving any person offering to provide or providing financial products or services”
Does anybody have any shame anymore?
Related Articles
- Understanding no-fault insurance fraud and the 30-day payment rule
- How fraudulent procurement defenses can be precluded in no-fault cases
- When counterclaims based on precludable fraud are rejected
- Material misrepresentation in fraudulent procurement cases
Legal Update (February 2026): Since this 2013 decision, New York’s no-fault fraud provisions under Insurance Law § 403 have been subject to regulatory amendments and updated enforcement guidelines that may affect how material misrepresentation claims are evaluated and the scope of policy voidance remedies. Practitioners should verify current provisions regarding partial fraud defenses and their impact on otherwise valid claims for medical supplies and services.
