Key Takeaway
Insurance companies must properly authenticate payment records with foundation evidence. A missing affidavit undermines policy exhaustion defense in no-fault cases.
Proving Policy Payments: The Foundation Problem in No-Fault Insurance Cases
Insurance companies defending no-fault insurance claims often assert that policy limits have been exhausted through prior payments to other providers. However, simply producing payment logs isn’t enough — these business records must be properly authenticated under New York’s evidence rules. The Appellate Term’s decision in JPF Medical Services demonstrates how seemingly minor procedural oversights can derail an insurer’s defense and leave them exposed to significant liability.
The case highlights two critical issues that frequently arise in no-fault litigation: the phantom affidavit problem and insufficient business record foundation. When insurance companies fail to properly authenticate their payment records, they cannot establish their policy exhaustion defense as a matter of law, potentially exposing them to claims they believed were covered by prior payments to other medical providers.
Jason Tenenbaum’s Analysis:
JPF Med. Servs., P.C. v Nationwide Ins., 2020 NY Slip Op 51122(U)(App. Term 2d Dept. 2020)
” Here, defendant failed to demonstrate, as a matter of law, that it had made any payments under the policy because, as plaintiff argues, defendant’s claim specialist did not lay a sufficient foundation for the payment log, upon which defendant relied, to be accepted as proof that the payments listed therein had been made (see CPLR 4518 ; People v Kennedy, 68 NY2d 569 ; Charles Deng Acupuncture, P.C. v 21st Century Ins. Co., 61 Misc 3d 154, 2018 NY Slip Op 51815 ). Although defendant’s claim specialist referred to an affidavit annexed as exhibit K, which presumably discussed the payment log, an affidavit was not attached to the papers received by the court. Consequently, defendant failed to make a prima facie showing”
The phantom affidavit and the business record foundation. Both can cause problems.
Key Takeaway
Insurance companies must establish proper foundation for business records when claiming policy exhaustion. Missing or inadequately authenticated documentation — including phantom affidavits referenced but not submitted — can prevent insurers from proving their defense. This procedural failure can expose them to liability for claims they believed were already covered by policy limit exhaustion.
