No-Fault Case Law

A provider sued MVAIC for no-fault benefits as assignee of ten assignors whose claims arose from separate accidents, and MVAIC moved under CPLR 603 to sever the remaining four causes of action into two separate actions. The Civil Court denied the motion. The Appellate Term reversed for the reasons stated in its companion decision in Metro Medical Diagnostics, PC v Motor Vehicle Accident Indemnification Corp. (No. 2004-1019 Q C), which found that the facts of each claim raised few common issues. The motion to sever was granted.

The main issues in this case were whether the diagnostic testing performed by Dr. Nir on the patient, Josapphat Etienne, was medically necessary and if the insurer, Allstate, properly denied payment for these services. The court considered the evidence presented by both parties, including testimony from medical professionals from both sides. The defendant's expert testified that the tests were not medically necessary as they were performed too soon after the accident, while the plaintiff's expert testified that the tests were necessary based on the patient's symptoms and consistent with medical standards. The court found that the burden of proof fell on the insurer to prove that the diagnostic testing was medically unnecessary, and held that the tests were indeed medically necessary and ordered Allstate to pay the remaining balance of the claim to Dr. Nir.

A diagnostic center sued GEICO for $2,666.17 in first-party no-fault benefits for MRIs of the brain, cervical spine and lumbar spine performed on referral from the treating physician. GEICO timely denied the claim and, at trial, asserted lack of medical necessity through an expert who testified that the referring physician's examination did not justify the MRIs. On cross-examination the expert acknowledged that diagnostic centers do not ordinarily decide whether a test is necessary, since that decision is made by the examining physician. The court held that a diagnostic center that merely performs tests on referral and makes no independent medical evaluation cannot be denied benefits on a lack of medical necessity defense, absent a nexus imputing the physician's knowledge to it. Judgment was awarded to the plaintiff with interest and attorney's fees.

The New York Supreme Court, Appellate Division, Second Department reversed an order denying a motion to vacate a judgment in a case brought by New York University Hospital Tisch Institute to recover unpaid no-fault benefits from Merchants Mutual Insurance Co. The court ruled that the denial of the motion was an unwise exercise of discretion. The defendant's default was found to be reasonable due to an inexperienced claims adjuster's belief that advising opposing counsel that no-fault benefits had been exhausted would be sufficient. The court also found that the defendant demonstrated a reasonable excuse for the default and a meritorious defense, and that there was a lack of prejudice to the plaintiff. Therefore, the judgment entered upon the defendant's default was vacated, and the case was remitted for further proceedings.

The court considered whether the plaintiffs were entitled to recover no-fault insurance medical payments. Mount Sinai Hospital demonstrated that it submitted the required documents to recover payment for medical services, but Zurich American Insurance Company neither paid nor denied the claims. However, an insurer is not required to pay a claim where the policy limits have been exhausted. In opposition to Mount Sinai's motion, Zurich demonstrated that there were issues of fact as to whether it exhausted the coverage limits of the policy by other "no-fault" payments and whether such payments were in compliance with 11 NYCRR 65.15. The main issue decided was whether Mount Sinai and Wyckoff Heights Medical Center, as assignee of Juan Picardo, were entitled to judgment as a matter of law on their first and third cause of actions. The holding of the case was that Mount Sinai's motion for summary judgment on the first cause of action was denied, while Wyckoff Heights Medical Center was granted summary judgment on the third cause of action.

A supplier sued to recover assigned first-party no-fault benefits, the insurer moved to dismiss for willful failure to comply with discovery, and the plaintiff cross-moved for summary judgment. The court found the plaintiff made a prima facie showing by submitting claim forms and proof that payment was overdue. It rejected the defense of accord and satisfaction because the checks the insurer issued and the accompanying denials did not clearly state that they were offered in settlement of the claim. The insurer's challenge to the claim forms was waived by failure to object within 10 days, and the regulations do not require authentication of the assignor's signature on the assignment. Summary judgment of $2,918.97 plus interest and fees was granted and the discovery motion was denied as moot.

The court considered whether a defendant was required to attempt to conduct a deposition before moving for preclusion in a no-fault first party benefits case. The plaintiff did not dispute that it did not attend the deposition session as ordered, but argued that the defendant should have made a specific statement on the record of an attempted examination before trial in order to secure preclusion. The court held that the defendant was not required to undergo the expense and trouble of arranging for a deposition before moving for preclusion. Therefore, the defendant's motion was granted, and full preclusion was accorded against the plaintiff, resulting in the dismissal of the complaint.

A provider sued to recover first-party no-fault benefits and served the summons and complaint at a Suffolk County office, although it had sent its claim forms to the insurer's claims office in Onondaga County. The provider moved for leave to enter a default judgment, and the insurer cross-moved for leave to serve a late answer, stating that the Suffolk office was not affiliated with it. The Appellate Term found no showing that the entity at that office was the same legal entity as the defendant, so service failed to obtain jurisdiction. The Civil Court therefore properly denied the default judgment, and because the insurer sought only leave to answer late rather than dismissal, it properly granted the cross motion. The order was affirmed.

The relevant facts in this case were that the plaintiff, Amaze Medical Supply Inc., sought to recover first-party no-fault benefits for medical supplies furnished to its assignor. The plaintiff established a prima facie entitlement to summary judgment by showing that it submitted a claim, setting forth the fact and amount of the loss sustained, and that payment of no-fault benefits was overdue. The defendant, GEICO Insurance, timely denied the claims but failed to submit proof in admissible form in opposition to the plaintiff's motion to rebut the prima facie showing. The defendant's submission, an unsworn peer review report, was deemed insufficient to warrant the denial of the plaintiff's motion for summary judgment. Therefore, the appellate court reversed the order denying the plaintiff's motion for summary judgment, granted the motion, and remanded the matter for the calculation of statutory interest and an assessment of attorney's fees pursuant to Insurance Law § 5106(a) and the regulations promulgated thereunder.

The court considered the fact that the plaintiff had submitted a claim for first-party no-fault benefits for medical services and that payment was overdue. The main issue decided was whether the defendant's defense of insurance fraud could be raised, despite the untimely denial of the claim. The court held that the defendant was precluded from raising most defenses due to the untimely denial of the claim, but was not precluded from asserting the defense of insurance fraud. The court found that the affidavit submitted by the defendant's special investigator was sufficient to demonstrate the existence of a triable issue of fact, and therefore the plaintiff's motion for summary judgment was properly denied.