Court of Appeals
Jun 11, 2019
2019 NY Slip Op 04643
Insurer prevailed
An insurer need not prove common-law fraud to deny reimbursement to a medical corporation improperly controlled by nonphysicians. The Court of Appeals affirmed the order sustaining dismissal after a jury found that unlicensed persons controlled the provider. Under Mallela and 11 NYCRR 65-3.16 (a) (12), willful and material violations of licensing requirements suffice; fraudulent intent or conduct tantamount to fraud need not be separately found. Inflated leases and transfers of profits supported the control finding under Business Corporation Law §§ 1507 and 1508, rather than mere fee splitting. Any error in admitting nonparties' repeated Fifth Amendment invocations and charging an adverse inference was harmless under CPLR 2002; the court left open whether such an inference is permissible.
Appellate Division, Second Department
Jun 12, 2019
2019 NY Slip Op 04707
The loss-transfer award was irrational because it disregarded a jury finding that the claimant had not proved accident-related injury. The no-fault insurer sought reimbursement from the tractor's insurer under Insurance Law § 5105 after paying benefits. Despite receiving the federal jury's verdict sheet, the arbitrator found the tractor's insured entirely at fault and awarded reimbursement. The Appellate Division, Second Department, affirmed vacatur under CPLR 7511 (b) and denial of confirmation, favoring the tractor's insurer. The verdict precluded recovery under Insurance Law § 5105 (a); the no-fault insurer, as subrogee, was in privity with the claimant and bound despite not being a party. Its objection that no judgment copy was submitted was raised for the first time on appeal and was unpreserved.
Appellate Term, Second Department
Jun 28, 2019
2019 NY Slip Op 51098(U)
Insurer prevailed
The provider's claim was barred by res judicata because its assignment followed commencement of the insurer's declaratory judgment action. The insurer obtained a Supreme Court declaration that it owed no no-fault benefits arising from the accident to the assignor and certain other providers. Although this provider was not a party to that action, its later assignment placed it in privity with the assignor and charged it with notice that its rights were subject to the competing claim. A judgment for the provider would impair rights established by the declaration. The Appellate Term, Second Department, affirmed the order granting the insurer summary judgment dismissing the complaint with prejudice.
Appellate Term, Second Department
Jun 28, 2019
2019 NY Slip Op 51102(U)
Insurer prevailed
An insurer need not explain its reasons for requesting EUOs in scheduling letters or in response to a provider's objection. The provider sought assigned no-fault benefits but responded to EUO requests by stating that it would not appear unless the insurer supplied its reasons. The Civil Court denied the insurer's summary judgment motion based on a perceived factual issue concerning good faith and objective standards. Deferring to the Department of Financial Services' interpretation of the no-fault regulations, the Appellate Term, Second Department, reversed the order, insofar as appealed from, and granted the insurer summary judgment dismissing the complaint.
Appellate Term, Second Department
Jun 28, 2019
2019 NY Slip Op 51100(U)
Insurer prevailed
The insurer rebutted the presumption of medical necessity, and the provider failed to prove the services were medically necessary. At a nonjury trial limited to medical necessity, the claim and denial forms were admitted, and the parties stipulated to the peer review doctor's expertise as a board certified internist. The doctor testified that the services lacked medical necessity; the provider called no witnesses. The provider then failed to meet its ultimate burden of proving medical necessity by a preponderance of the evidence. The Appellate Term, Second Department, affirmed the judgment, insofar as appealed from, dismissing the second, third, fourth, sixth and eighth causes of action.
Appellate Term, First Department
Jun 19, 2019
2019 NY Slip Op 51003(U)
Insurer prevailed
The provider's action was premature because requested verification remained outstanding, despite its asserted submission of some documents. The insurer's additional verification requests were properly mailed to the provider's attorney as authorized by counsel's earlier correspondence. Even accepting the provider's assertion that it submitted certain documents, the record showed that it had not fully responded. Because verification remained outstanding, the then-applicable 30-day period to pay or deny had not begun, and the claims were not overdue. The Appellate Term, First Department, reversed the order denying the insurer's summary judgment motion, granted the motion and dismissed the complaint.
Appellate Term, Second Department
Jun 14, 2019
2019 NY Slip Op 50987(U)
Split result
The provider's second and third causes of action were premature because requested wholesale invoices remained outstanding. The insurer submitted the provider's letters acknowledging the verification requests and expressly declining to supply the invoices, and the provider raised no triable issue. The Appellate Term, Second Department, affirmed dismissal of those claims but modified the order by vacating dismissal of the first and fourth causes of action. The insurer sought dismissal of those two claims for lack of medical necessity and neither asserted nor established prematurity as to them. The court remitted those branches of the insurer's summary judgment motion to the Civil Court, Kings County, for a new determination.
Appellate Term, Second Department
Jun 14, 2019
2019 NY Slip Op 50989(U)
Insurer prevailed
The scheduled IME doctor's affirmation established the assignor's nonappearance, resolving the sole issue reserved for trial. The insurer sought summary judgment dismissing the provider's assigned no-fault claims based on failure to attend duly scheduled IMEs. The Civil Court denied the motion but limited trial, in effect under CPLR 3212 (g), to nonappearance. The doctor's affirmation sufficiently proved that fact, and the provider did not challenge the finding that the insurer was otherwise entitled to judgment. The Appellate Term, Second Department, reversed the order, insofar as appealed from, and granted the insurer's motion dismissing the complaint.
Appellate Term, Second Department
Jun 7, 2019
2019 NY Slip Op 50918(U)
Provider prevailed
The insurer failed to justify tolling no-fault interest because it did not show that the provider prevented settlement payment. After an open-court settlement remained unpaid, judgment was entered under CPLR 5003-a. The Civil Court stayed no-fault statutory interest from settlement until the provider moved to recalculate interest, and the provider appealed on inadequacy grounds. Once the action settled, the insurer was obligated to pay; under CPLR 5003-a (e), the prevailing provider did not have to demand payment. The Appellate Term, Second Department, reversed the judgment, vacated the portion of the order staying interest, denied that branch of the insurer's cross motion and remitted for entry of a new judgment.
Appellate Term, Second Department
Jun 7, 2019
2019 NY Slip Op 50923(U)
Insurer prevailed
The provider failed to acquire personal jurisdiction through mailed service without a returned acknowledgment or another method of service. The provider obtained a default judgment for assigned no-fault benefits, but its papers lacked an acknowledgment of receipt under CPLR 312-a. Proper service is prerequisite to default judgment under CPLR 3215 (f); mailed service requires filing the acknowledgment under CPLR 312-a (b) (1) and 306 (d). The record did not show a subscribed, affirmed acknowledgment returned under CPLR 312-a (c), and no alternative service was attempted under CPLR 312-a (e). The Appellate Term, Second Department, reversed the judgment, vacated the order, denied default judgment and granted the insurer dismissal under CCA 411, remitting for entry of judgment dismissing without prejudice.
Appellate Term, Second Department
Jun 7, 2019
2019 NY Slip Op 50919(U)
Provider prevailed
The insurer's request to stay no-fault statutory interest between settlement and judgment was denied on appeal. Judgment followed an unpaid settlement under CPLR 5003-a. The Appellate Term, Second Department, reversed the order, insofar as appealed from, for the reasons stated in Seaside Rehabilitation v Allstate Ins. Co., the companion appeal decided the same day, No. 2017-1666 Q C.
Appellate Term, Second Department
Jun 7, 2019
2019 NY Slip Op 50920(U)
Split result
The insurer failed to prove EUO nonappearance, and the provider failed to establish entitlement to summary judgment on the appealed claims. Although EUO letters were properly mailed to one assignor, defense counsel's legal assistant did not establish personal knowledge of nonappearance. The provider's owner's affidavit did not establish untimely denials or timely denials that were conclusory, vague or legally meritless under Insurance Law § 5106 (a). Considering the provider's untimely opposition was within the Civil Court's discretion because the insurer could reply. The Appellate Term, Second Department, modified the order, insofar as appealed from, to deny the provider's cross motion on that assignor's claims and otherwise affirmed, leaving denial of the insurer's motion intact.
Appellate Term, Second Department
Jun 7, 2019
2019 NY Slip Op 50938(U)
Split result
The insurer failed to establish through admissible evidence that Florida law applied or that the policy limits were exhausted. Its affidavits did not establish the payment log's admissibility under CPLR 4518. The Appellate Term, Second Department, modified the order to deny the insurer summary judgment on the third, fifth and seventh causes of action. The provider also lacked proof that those claims were untimely denied or that timely denials were conclusory, vague or legally meritless. Dismissal of the first, second, fourth and sixth causes of action was affirmed because the insurer established that the workers' compensation fee schedule precluded payment for those services and the provider raised no factual issue. New appellate arguments were unpreserved; denial of the provider's motion was affirmed.
Trial court, Second Department
Jun 3, 2019
2019 NY Slip Op 50862(U)
Insurer prevailed
The master arbitrator's affirmance of a policy-exhaustion denial was rational despite conflicting appellate authority. The provider argued that exhaustion could not defeat its claim because the policy remained unexhausted when the insurer earlier denied the claim in good faith. Both arbitrators considered the split between the First and Second Departments concerning exhaustion and payment priority, and followed Harmonic Physical Therapy, P.C. v Praetorian Ins. Co. The District Court, Nassau County, found that choice rational and denied the provider's vacatur application under CPLR 7511 (b) (1) (iii). Judicial review did not permit vacatur for an asserted substantive legal error unless the award was so irrational as to require it. The court confirmed the master arbitration award under CPLR 7511 (e).
