Key Takeaway
Court ruling explores complex standing issues when major medical providers attempt to pursue no-fault insurance claims through assignment of rights.
This article is part of our ongoing standing coverage, with 30 published articles analyzing standing issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
Understanding Standing in No-Fault Insurance Cases
The relationship between major medical insurance providers and no-fault carriers can create complex legal scenarios, particularly when it comes to who has the right to pursue claims. A recent New York Supreme Court case highlights the intricate issues surrounding standing when major medical carriers attempt to recover benefits they’ve paid on behalf of injured parties.
This case demonstrates how assignment of rights doesn’t always provide the clear pathway to recovery that healthcare providers might expect. The decision also reveals potential errors in arbitration proceedings that could have significant implications for similar disputes between insurance carriers.
Jason Tenenbaum’s Analysis:
AETNA Health Plans v Hanover Ins. Co., 2013 NY Slip Op 33221(U)(Sup. Ct. Bronx Co. 2013)
In this case, Defendant provided no-fault services to Plaintiff’s Assignor. Defendant cut-off Plaintiff’s Assignor, who then sought to have medical benefits paid for by Aetna. When all was said and done, Aetna paid over $42,000 in benefits. Plaintiff asserted a lien on its assignor’s personal injury case and its assignor sought arbitration with AAA. The arbitrator found that since major medical paid for the benefits, the assignor could not maintain an case against no-fault carrier. The master arbitrator affirmed.
Now, Plaintiff assigns whatever rights it has to the Assignee major medical carrier. This does not go anywhere as is discussed in this opinion.
Just note that the lower arbitrator’s and master arbitrator’s decisions were wrong based upon Todaro v. Geico.
Legal Significance
This case exposes fundamental tensions in the relationship between no-fault carriers, major medical insurers, and injured parties when coverage gaps or terminations occur. When no-fault carriers discontinue benefits—whether properly or improperly—injured parties often turn to their major medical coverage for continued treatment. This creates potential double recovery issues and priority of payment questions that courts and arbitrators must navigate.
The arbitrator’s determination that the assignor could not maintain a case against the no-fault carrier once major medical paid benefits reflects one view of priority and payment obligations. Under this view, major medical payment satisfies the injured party’s need for benefits, eliminating the assignor’s ability to pursue the original no-fault claim. However, as Jason notes, this conflicts with established precedent in Todaro v Geico, which addressed similar priority and assignment issues.
The assignment from the injured party to Aetna attempted to transfer whatever rights remained against the no-fault carrier after major medical payment. However, courts are skeptical of such assignments when they appear to transfer rights that may not exist or that have been extinguished by subsequent events. If the arbitrator correctly determined the assignor lacked claims against the no-fault carrier, the assignment conveyed nothing of value to Aetna.
This creates a problematic scenario: Aetna paid over $42,000 in benefits that arguably should have been covered by the no-fault carrier, but cannot pursue recovery either in the assignor’s name (due to the arbitration determination) or in its own name (due to standing issues). The no-fault carrier benefits from its cut-off—even if improper—because the injured party’s needs were met through major medical coverage, eliminating the assignor’s incentive or ability to challenge the termination.
Practical Implications
For major medical carriers, this decision highlights the risks of paying benefits when no-fault coverage disputes exist. Before covering services that may fall within no-fault obligations, major medical carriers should investigate whether no-fault benefits have been improperly terminated. If termination appears improper, major medical carriers might condition coverage on the injured party pursuing arbitration or litigation against the no-fault carrier, or require assignment of rights before the injured party proceeds to arbitration.
For injured parties, the case demonstrates the importance of pursuing no-fault disputes before seeking alternative coverage. Once major medical pays benefits, the leverage and incentive to challenge no-fault terminations diminishes. Injured parties should exhaust no-fault arbitration and litigation options before turning to major medical, preserving their ability to recover from the carrier that should primarily provide coverage.
For no-fault carriers, the decision reveals a potential strategy: when cutting off benefits, carriers may benefit if injured parties obtain alternative coverage rather than immediately challenging the termination. Alternative payment can moot disputes and eliminate the injured party’s standing or incentive to pursue recovery, even when the original cut-off was improper.
The case also illustrates arbitration’s limitations. While arbitration provides streamlined dispute resolution, arbitration determinations that conflict with controlling precedent like Todaro v Geico can create problematic results that courts may struggle to correct, particularly when standing and procedural issues prevent review of the merits.
Key Takeaway
This case illustrates the challenges major medical providers face when attempting to recover benefits through assignment of rights. Even when significant amounts are at stake—over $42,000 in this instance—courts may find that the assignment doesn’t confer proper standing to pursue claims against no-fault carriers, particularly when arbitrators have made determinations that may conflict with established precedent. The decision highlights the importance of injured parties pursuing no-fault disputes before seeking alternative coverage, as subsequent major medical payment can eliminate standing and incentive to challenge potentially improper benefit terminations.
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Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Standing Requirements in New York Litigation
Standing — the legal right to bring a claim — must be established at the outset of any litigation. In no-fault practice, standing issues frequently involve the validity of assignments of benefits, the corporate status of medical providers, and the capacity of parties to sue or be sued. These articles examine how New York courts analyze standing challenges and the documentary proof required to establish or contest a party's right to maintain an action.
30 published articles in Standing
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Frequently Asked Questions
What does "standing" mean in a no-fault insurance case?
Standing refers to a party's legal right to bring a claim. In no-fault litigation, the medical provider must demonstrate a valid assignment of benefits from the patient to have standing to sue the insurer directly. Without a proper assignment, the provider lacks standing and the case may be dismissed.
How do assignment of benefits issues affect standing?
A medical provider typically obtains standing to pursue no-fault benefits through an assignment of benefits signed by the injured person. If the assignment is defective, incomplete, or missing, the insurer can challenge the provider's standing. Courts scrutinize assignment forms carefully, and defects can be fatal to the claim.
Can standing be raised at any point in litigation?
Yes. Standing is a threshold jurisdictional issue that can be raised at any stage. If a party lacks standing, the court must dismiss the action regardless of the merits. In no-fault cases, insurers frequently challenge provider standing through summary judgment motions.
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About the Author
Jason Tenenbaum, Esq.
Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
If you need legal help with a standing matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.
