15 decisions · 4 Appellate Division · 7 Appellate Term · 4 trial courts
Issues this month: Timeliness and preclusion 6 Provider's prima facie case 4 Defaults and vacatur 4 Policy issues 3 Staged accidents, lack of coverage 2 Verification requests 2
The insurer's cross motion for summary judgment on the first cause of action was granted on appeal based on exhausted policy limits. The Appellate Division, Second Department, reversed the order, insofar as appealed from, denied the providers' motion upon reargument, and dismissed that cause. The court stated that the insurer established exhaustion and the providers raised no triable issue, citing New York & Presbyt. Hosp. v Allstate Ins. Co.
The insurer proved exhaustion of policy limits before it became obligated to pay the provider's claim. The Appellate Division, Second Department, reversed the order, denied the provider's summary judgment motion, granted the insurer's cross motion, and dismissed the first cause of action. Claims representatives' affidavits, denial forms sent to the provider and the provider whose claim exhausted coverage, and a payment log listing payments to other providers established exhaustion and compliance with 11 NYCRR 65-3.15. The provider raised no triable issue in opposition. Its own motion also failed to establish entitlement to judgment as a matter of law under CPLR 3212.
The insurer established grounds to vacate its default through an excuse tied to a misspelled insured's name and a meritorious coverage defense. Under CPLR 5015 (a) (1), the insurer needed a reasonable excuse and a meritorious defense. The providers' misspelling in the pleadings impeded locating the relevant policy, which, when found, did not cover the assignor's medical expenses. The delay was brief, the default was not willful, and the providers suffered no prejudice. Those circumstances and the policy favoring resolution on the merits supported discretionary relief. The Appellate Division, Second Department, affirmed the order vacating the default judgment and granting the insurer leave to answer.
The insurer showed a reasonable excuse for its brief answering delay and potentially meritorious defenses, warranting default vacatur. The Appellate Division, Second Department, affirmed the order vacating the providers' default judgment, extending the insurer's time to answer under CPLR 3012 (d), and quashing an information subpoena under CPLR 2304. The default was not willful, and the providers showed no prejudice. Those circumstances, together with the policy favoring resolution on the merits, supported the trial court's exercise of discretion.
The providers failed to establish submission of their claims, and the insurer showed grounds to open its default. The Appellate Term, Second Department, modified the reargument order to grant renewal, vacate the default relief, deny the providers' default-judgment motion and permit the insurer to answer within 30 days. Under CPLR 3215 (f) and Insurance Law § 5106 (a), the providers had to establish claim submission and overdue payment. Their billing manager's affidavit showed neither personal knowledge of mailing nor sufficiently detailed office mailing procedures. The insurer demonstrated a reasonable excuse, particularly the Superintendent of Insurance's initial delay in forwarding process, and a meritorious defense. The appeal from the earlier order was dismissed as superseded.
The providers' billing affidavit failed to identify which of the three providers the affiant represented and did not establish a prima facie case. The Appellate Term, Second Department, affirmed the denial of partial summary judgment. Insurance Law § 5106 (a) required proof of claim submission and overdue payment. The affiant called himself billing manager of the provider companies without specifying which ones. The court would not assume that the affidavit covered all three, because the plural description could refer to only two.
An untimely denial does not preclude a defense that the collision furthered an insurance fraud scheme. The Appellate Term, Second Department, reversed the order granting the provider summary judgment and denied its motion. The insurer's denials cured deficiencies in proof of claim submission, but were untimely under 11 NYCRR 65-3.8 (c). A request to execute and return an EUO transcript did not toll the deadline under the regulations applicable to these claims, which did not require EUOs; the insurer also failed to prove mailing of the request. Fraudulent-billing and excessive-treatment defenses were precluded. Nevertheless, the insurer's submissions established a founded belief that the injuries did not arise from an insured incident, raising a coverage issue sufficient to defeat the motion.
The provider failed to prove mailing of its claims, and the insurer's blanket denial did not establish receipt of those claims. The Appellate Term, Second Department, affirmed the denial of the provider's summary-judgment motion. The insurer disputed receiving the claims. The provider's assertion that each claim was timely submitted in the ordinary course of business did not establish an office practice designed to ensure proper addressing and mailing. Although the insurer's denial form referred to all of the provider's claims, it acknowledged receipt of no specific claim and could not establish receipt of the claims at issue.
The insurer failed to establish an EUO-authorizing policy endorsement or proper EUO notices, leaving its denial untimely. The Appellate Term, Second Department, affirmed the judgment granting the provider summary judgment. Although 11 NYCRR 65-1.1 (d) permits reasonably required EUOs, the insurer had to establish that the policy contained the revised endorsement. It also failed to prove mailing or compliance with follow-up requirements under 11 NYCRR 65-3.6 (b); a claim-delay notice did not properly schedule EUOs. The requests therefore did not toll the 30-day deadline under 11 NYCRR 65-3.8 (c). Fee-schedule and medical-necessity defenses were precluded, and assignment objections were waived by failure to seek verification or timely deny on that ground. Another contention was unpreserved and relied on material outside the record.
The insurer's incomplete denial and inadmissible fraud proof failed to defeat the health care providers' summary judgment motion. The denial omitted claim amounts, claim dates and receipt dates required by 11 NYCRR 65-3.4 (c) (11), making it tantamount to no denial even for claims otherwise timely denied. Although staged-accident coverage remained available, unsworn reports and driver statements, allegations without personal knowledge, and conclusory assertions did not establish a founded belief of noncoverage. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the three health care providers summary judgment, and remanded for interest and attorney's fees under Insurance Law § 5106 (a). It dismissed the transportation provider's appeal after that provider conceded it was not entitled to relief and withdrew its claims.
The insurer's motion to vacate the default judgment was granted upon a showing of a reasonable excuse and a meritorious defense. The Appellate Term, Second Department, affirmed the order in the provider's assigned no-fault action, finding no basis in the record to disturb the lower court's determination that the insurer had established both requirements.
Medicare noncompensability alone does not justify denial of a no-fault claim for sensory nerve conduction threshold testing. After a consolidated trial, the Civil Court, New York County, directed judgment for the provider in both actions, with statutory interest and attorney's fees. Insurance Law § 5108 (a) and (c) incorporates workers' compensation fee schedules, not Medicare standards. The insurer's assertion of provider fraud challenged excessive treatment rather than coverage or reimbursement eligibility and therefore remained subject to medical-necessity denial requirements. Its expert failed to address either patient's condition or establish that the testing was inappropriate for the individual claims. The court left unaddressed the unasserted issues of chiropractic authorization, independent-contractor status and experimental testing.
The insurer could not rely on the no-prejudice rule to disclaim coverage for late notice of the liability action on this record. The Supreme Court, New York County, denied the insurer's summary-judgment and default-judgment motions and granted the injured claimant summary judgment dismissing the declaratory complaint against the claimant. Timely accident notice, notice of counsel's retention, the insurer's investigation and IME requests, and notice of suit before default distinguished the cases applying that rule. Alternatively, counsel's letter satisfied the lawsuit-notice requirement. Summary judgment for the insurer was also premature under CPLR 3212 (f), as discovery had not occurred and the policy was not submitted. The claimant's independent notice under Insurance Law § 3420 (a) (3) preserved indemnification despite the insureds' defaults.
⚠ Not followed by Pinnacle Open MRI, P.C. v Republic W. Ins. Co. (2008 NY Slip Op 25000)
A no-fault action against a self-insurer is governed by the three-year limitations period in CPLR 214 (2). The Civil Court, Richmond County, denied the provider's summary judgment motion and granted the self-insurer's cross motion to dismiss as untimely. Unlike an insurer's contractual obligation under a policy, governed by CPLR 213 (2), a self-insurer's liability arises solely from Insurance Law § 5103 (a) and the implementing regulations, including 11 NYCRR 65-2.1. The action therefore sought recovery on a liability created by statute. The self-insurer received the claim on May 25, 2000, and the action accrued no later than 30 days afterward, when benefits became overdue. Commencement on May 23, 2005, fell outside the applicable limitations period.
An insurer may obtain discovery on nonprecluded defenses despite an untimely denial, but demands on precluded defenses are improper. The Civil Court, Richmond County, denied the provider's summary-judgment cross motion as premature under CPLR 3212 (f), without prejudice to renewal after discovery. Following Mallela and A.B. Medical Services PLLC v Utica Mut. Ins. Co., the court required discovery concerning corporate structure, licensing, independent contractors and coverage defenses. Provider eligibility implicated Business Corporation Law § 1507 and 11 NYCRR 65-3.16 (a) (12). The insurer's motion to strike the complaint was granted unless the provider supplied the required discovery within 60 days after service with notice of entry. Demands concerning precluded defenses were stricken; the court did not reach whether the insurer's coverage submissions raised a triable issue.
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