Geico v. Avanguard – coming to the Appellate Division.
How many times have you waited at 167 Willis Avenue, 1205 Franklin Avenue or at a host of other locations for the Avanguard sideshow? You know the attorneys, you have seen the court reporter there to transcribe “oral argument” and you know those who have had to sit through these, or wait while the circus is in town.
Finally, this case will be heard on March 24, 2014. I hope a decision comes out relatively quickly, and a new issue can take up our time
I really hope this is the one that breaks Westchester/Lincoln and expands the Clennon holding to encompass all of Unitrin. This was argued at the Appellate Division on March 4, 2014. The Court seems to be leaning in that direction. If they were not thinking true condition precedent, then they would not have mentioned this in Westchester/Geico and to some extent, would have found prejudice to Defendant in American Tr. Ins. Co. v. Roberson, when allowing the IME no show action to be discontinued without prejudice to be filed in Manhattan, a pure Unitrin jurisdiction.
We will know the answer probably on March 26, 2014, April 2, 2014 or April 9, 2014. Having not seen the papers, I cannot guess how this was argued or what occurred; but I have confidence that the Court will reach the conclusion it started in early January.
At first, the Appellate Term said it was a fatal defect. Then, they said it was a waivable defect. After that it was held to be a defect that literally could cured nunc pro tunc through filing a new affidavit with the Civil Court clerk. Now, it is deemed irrelevant. Such is the sordid history of this provision of the CPLR. What is noteworthy is that Second Department in 2014 for the first time I can remember held this to defect to be fatal.
Flatlands Med., P.C. v AAA Ins., 2014 NY Slip Op 24048 (App.. Term 2d Dept. 2014)
“At the outset, we note that, despite defendant’s failure to submit a proper certificate of conformity together with the out-of-state affidavit of its corporate officer, as required by CPLR 2309 (c), this omission was not a fatal error (see CPLR 2001;Gonzalez v Perkan Concrete Corp., 110 AD3d 955 ; Mack-Cali Realty, L.P. v Everfoam Insulation Sys., Inc., 110 AD3d 680 ; Fredette v Town of Southampton, 95 AD3d 940 ; Bay Med. P.C. v GEICO Ins. Co., ___ Misc 3d ___, 2013 NY Slip Op 52084[U] [App Term, 2d, 11th & 13th Jud Dists 2013]) and, therefore, the affidavit has been reviewed on this appeal. In view of the foregoing, we find that the Civil Court properly granted defendant leave to renew and reargue its motion for summary judgment.
See: Freedom Mtge. Corp. v Toro, 113 AD3d 815 (2d Dept. 2014)
“It appears from this record that the plaintiff was the holder of the mortgage and note. In any event, by failing to appear in the action, the debtor waived the defense of lack of standing (see HSBC Bank USA, N.A. v Taher, 104 AD3d 815, 817 ). However, the affidavit attesting to the debtor’s default in repaying the mortgage loan did not comply with CPLR 2309 (c). Under the circumstances of this case, the Supreme Court did not improvidently exercise its discretion in denying relief to the movant without prejudice.”
Justice Solomon (who wrote the underlying Supreme court deicison) was in the App. Term panel)
As to the merits, the court held as follows:
“defendant demonstrated, prima facie, through documentary evidence, that it was not authorized to conduct an insurance business in New York and, as a result, jurisdiction could not be obtained over it pursuant to Insurance Law § 1212. Furthermore, defendant established, prima facie, through the affidavit of its corporate officer, that neither it nor its reciprocal insurers, affiliates, or subsidiaries provide, write, or sell insurance in the State of New York or to its residents. They do not provide goods or services within New York nor do they transact business in New York and they do not have any offices or agents in this state. Thus, defendant did not perform any of the acts specified in Insurance Law § 1213 (b) (1) in New York and, as a result, jurisdiction could not be obtained over it pursuant to Insurance Law § 1213 (see Farm Family Mut. Ins. Co. v Nass, 121 AD2d 498 ).”
On this type of motion, this is what the affidavit has to state in order to shift the burden back to the medical provider/injured party.
Stracar Med. Servs. v New York Cent. Mut. Ins. Co., 2014 NY Slip Op 50263(U)(App. Term 1st Dept. 2014) (sorry – this was a first department case – perhaps it was wishful thinking that the judges at 141 Livingston Street would follow this)
Not only were the ATIC declaratory judgment actions that were filed en masse from 2011-2013 potent, but they created great case law. Now, I am proud to say that the case law I created has now found its way into Appellate Term orders in Civil Court cases, where most non-arbitrated no-fault matters call home.
“Defendant-insurer demonstrated its entitlement to summary judgment dismissing this action for first-party no-fault benefits by submitting the affidavit of its no-fault litigation examiner demonstrating that the notices scheduling the assignor’s independent medical examinations (IMEs) were timely and properly mailed, as well as the sworn affidavits of the scheduled examining physician and her employee that the assignor failed to appear at the scheduled IMEs (see American Tr. Ins. Co. v Lucas, 111 AD3d 423 ; American Tr. Ins. Co. v Solorzano, 108 AD3d 449 ). In opposition, plaintiff did not specifically deny the assignor’s nonappearance or otherwise raise a triable issue with respect thereto, or as to the mailing or reasonableness of the underlying notices (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 , lv denied 17 NY3d 705 ). “Accordingly, when [plaintiff's] assignor failed to appear for the requested medical exams, [defendant] had the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued” (American Tr. Ins. Co. v Lucas, 111 AD3d at 424 ; see Unitrin at 560).”
Ingram v Miller, 2014 NY Slip Op 01296 (2d Dept. 2014)
“Except where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just” (CPLR 2201; see Morreale v Morreale, 84 AD3d 1187, 1188). Here, the Supreme Court did not improvidently exercise its discretion in denying the appellant’s motion to stay all proceedings in the subject actions pending resolution of an action commenced by a codefendant’s insurer seeking, among other things, a declaratory judgment regarding insurance coverage for the codefendant. The parties in the declaratory judgment action were not sufficiently identical to, or overlapping with, the parties in these actions to warrant a stay”
“Here, in light of the limited basis of the plaintiff’s motion for summary judgment on the complaint, which was premised solely on the defendant’s alleged failure to timely pay or deny the no-fault claim within 30 days of receipt of proof of the claim (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a], [c]), “the defendant’s only burden in opposition . . . was to raise a triable issue of fact regarding its timely . . . denial of the [plaintiff's] claim” (Lenox Hill Hosp. v Government Empls. Ins. Co., 89 AD3d 905, 905; see Viviane Etienne Med. Care, P.C., v Country-Wide Ins. Co., _____ AD3d _____, 2013 NY Slip Op 08430 [2d Dept 2013]; Westchester Med. Ctr. v Progressive Cas. Ins. Co., 89 AD3d 1081, 1082-1083). In opposition to the plaintiff’s prima facie showing of entitlement to judgment as a matter of law, the defendant satisfied its burden by raising a triable issue of fact as to whether it did in fact mail a proper NF-10 denial of claim form to the plaintiff only 22 days after its receipt of the claim verification that it had previously requested”
This shift has been years in the making, based upon the Westchester-Liberty case that came out a few years ago. To reach the merits of the defense, the plaintiff needs to show the defense lacks merit. Thus on medical necessity case, plaintiff must affirmatively show that the service is medially appropriate; On a DWI case (which this case was), Plaintiff must show that Defendant was not drunk or that the intoxication was not a proximate cause of the loss. It is an interesting standard and, in practice, the only reason a plaintiff moves for summary judgment is to establish its prima facie case. CPLR 3212(g). I wonder when the Appellate Division will (if ever) reach this discrete issue.
Gumbs v Flushing Town Ctr. III, L.P., 2014 NY Slip Op 01267 (2d Dept. 2014)
“Discovery determinations rest with the sound discretion of the motion court (Andon v 302-304 Mott St. Assoc., 94 NY2d 740, 745 ). This Court is nonetheless vested with a corresponding power to substitute its own discretion for that of the motion court (id.). Notwithstanding our own discretion, “deference is afforded to the trial court’s discretionary determinations regarding disclosure” (Don Buchwald & Assoc. v Marber-Rich, 305 AD2d 338, 338 [1st Dept 2003][internal quotation marks omitted]). Unlike the dissent, we find no abuse of the court’s discretion given the paucity of support for the motion in the first instance. Specifically, defendants’ argument regarding the relevance of Gumbs’s medical history as set forth in his deposition was improperly made for the first time in their reply papers (see e.g. [*2]Ambac Assur. Corp. v DLJ Mtge. Capital, Inc., 92 AD3d 451, 452 [1st Dept 2012]). The purpose of reply papers “is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of the motion” (id. [internal quotation marks omitted]). This impropriety deprived plaintiffs of an opportunity to respond to the argument. Accordingly, the denial of defendants’ motion was reasonable and supported by law.
We, otherwise, find no occasion to substitute our own discretion for that of the motion court. Gumbs’s waiver of his physician-patient privilege is limited in scope to “those conditions affirmatively placed in controversy” (Felix v Lawrence Hosp. Ctr., 100 AD3d 470, 471 [1st Dept 2012]). Gumbs did not place his entire medical condition in controversy by suing to recover damages for orthopedic injuries (see e.g. Schiavone v Keyspan Energy Delivery NYC, 89 AD3d 916, 916-917 [2d Dept 2011]).
The dissent found noteworthy. This was the rule I always learned as Justice Gische stated it:
“Defendants’ motion squarely put before the court plaintiff’s verified complaint and supplemental bills of particulars which expressly specified that plaintiff’s demand for monetary damages included loss of future earnings and loss of enjoyment of life based upon the permanency of his injuries. These sworn statements were sufficient to show that plaintiff had put his overall physical condition at issue in this action. The absence of the deposition transcript detailing plaintiff’s general physical condition until defendants’ reply papers did not warrant denial of defendants’ motion.”
This was a 3-2 and I am sure someone will grant Defendant leave to appeal to the Court of Appeals. The case looks like a 7 figure dispute.
American Tr. Ins. Co. v Roberson, 2014 NY Slip Op 01144 (2d Dept. 2014)
“In general, absent a showing of special circumstances, including prejudice to a substantial right of the defendant or other improper consequences, a motion for a voluntary discontinuance should be granted without prejudice (see Tucker v Tucker, 55 NY2d 378, 383-384;Wells Fargo Bank, N.A. v Fisch, 103 AD3d 622; Parraguirre v 27th St. Holding, LLC, 37 AD3d 793, 793-794; Valladares v Valladares, 80 AD2d 244, 258, affd on other grounds 55 NY2d 388). Contrary to the defendants’ contention, the plaintiff was not required to demonstrate any basis for seeking a voluntary discontinuance (see Larchmont Fed. Sav. & Loan Assn. v Ebner, 89 AD2d 1009). Furthermore, there was no showing that the rights of the defendants or others would be prejudiced if the plaintiff were permitted to commence a second action for the same relief in another venue”
This is an interesting case, but you would not know it from reading the decision. Procedurally, this case was commenced in Supreme, Nassau County. Defendant answered, and while this is hard for many to believe (and I can share this now), most Nassau Supreme judges follow(ed) Unitrin. One or two judges were wishy washy on this point. So a decision was made to file the same action in Supreme Court, Manhattan. It is my right to chose were I want a case heard and to engage in forum shopping. We moved to discontinue and a magical cross-motion containing an affidavit of service saying it was served on me never made its way to my office. By the way, this is why e-filing is great – you cannot fall victim to these non-existent motions and oppositions. I learned the cross-motion sought discontinuance with prejudice, costs, attorneys fees, etc., but this was when we learned that we lost our motion.
Figuring the motion would be unconditionally granted, the Manhattan action was filed and we obtained summary judgment and a non-coverage declaration.
As you now know, the Nassau County action was discontinued with prejudice, with costs. Defendant, having prevailed, moved to void the declaration of non-coverage in the Manhattan action. I filed an appeal in the Nassau County action, and cross-moved to stay the Manhattan application to void our declaration in Manhattan. Supreme Court in Manhattan granted the stay and the Nassau order was modified so that the discontinuance is without prejudice.
As to filing Nassau County, it might not be a bad idea. (1) Inasmuch as the most recent precedent, Clennon, cites favorably to Unitrin; (2) Lucas in the First Department cites to NYP v. Cwide; and (3) the Second Department in one of the most recent Geico cases (see prior post on blog) held open a reconsideration of Lincoln General upon an appropriate record, it appears that Unitrin may be followed in both Departments.
Incidentally, the Court found there was no prejudice if we were allowed to file this action in the First Department. Not sure what if anything you can read into that line, since Defendant made it clear that Plaintiff could not obtain the same declaration in Nassau that it could (and did) in Manhattan. Therefore, Defendant argued that it was prejudiced. Assuming Lincoln General was still good law, then Defendant was correct that it was prejudiced. However, if Unitrin is now the guiding precedent, then Defendant could not be prejudiced.
Willer v Kleinman, 2014 NY Slip Op 01164 (2d Dept. 2014)
You agree to arbitrate or are a forced participant in an arbitration. Assuming there is no other way to wiggle out of being subjected to AAA jurisdiction, you proceed to file a complaint. Your adversary answers your complaint and pleads counterclaims that bear on the merits of the arbitration. Are you out of the woods? Precedent suggests that you are.
“However, the defendants, by their conduct in this lawsuit, waived arbitration. As this Court explained in Reynolds & Reynolds Co., Automotive Sys. Div. v Goldsmith Motor Corp. (251 AD2d 312, 313),”[t]here is no inflexible or mechanical rule as to what constitutes a waiver of the right to arbitrate. Rather, determination of the issue depends on the facts and circumstances of each particular case . . . Among the factors to be considered are the extent of the party’s participation in litigation and conduct inconsistent with the assertion of a right to arbitrate, the delay in seeking arbitration, and whether the other party has been prejudiced” (citations omitted).
While a party who commences an action waives arbitration, the same cannot be said for a defendant (see De Sapio v Kohlmeyer, 35 NY2d 402, 405). A defendant who submits an answer, or submits a pre-answer motion to dismiss the action, does not waive arbitration, especially if the arbitrability of the controversy is asserted as a ground to dismiss the action (see Flynn v Labor Ready, 6 AD3d 492; Spatz v Ridge Lea Assoc., 309 AD2d 1248; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 AD2d 614). However, in the instant case, the defendants asserted counterclaims related to issues in the main action, against both plaintiffs, including Nadia Willer, who is united in interest with Justin Willer, but is not a party to any arbitration agreement (see Dembitzer v Chera, 305 AD2d 531, 532). Further, the defendants sought and obtained discovery (see De Sapio v Kohlmeyer, 35 NY2d 402, 405).
Allstate Ins. Co. v. Phelps Memorial Hospital, 2013 NY Slip Op 33590(U)(Sup. Ct. Nassau Co. 2013)
“This Court conducted a non-jury trial on matter on November 7, 2013, and
reserved decision. The plaintiffs expert credibly testified the treatment rendered to Jorge Caniero was neither caused by the November 18, 2010 motor vehicle accident nor was there any exacerbation of a pre-existing condition caused by that same accident. The Court finds Jorge Caniero was admitted to Phelps Memorial Hospital on suspicion he experienced a stroke which was not related to the November 18, 20 I 0 motor vehicle accident. The Court also finds the treatment rendered by the defendant was related to the diagnosis of acute CVA hypertension, diabetes, mellitus, coronary artery disease and hyperlipidemia. These conditions were not causally related to the November 18, 2010 motor vehicle accident.”
“The plaintiff proffered medical facts by its expert which were sufficient to show the medical condition for which Jorge Caniero was treated was not related to the November 18, 2010 motor vehicle accident nor was there any exacerbation of a pre-existing condition caused by that same accident”
This is an interesting order as it is one of the few times a lack of causation defense has actually been successful. It seems to help that Defendant did not put on a case? If you look at the history of this matter, Defendant made a motion to dismiss the action as time barred, presumably because the Trial de-novo/declaratory judgment action was not commenced within the 90-day period set forth in Article 75 of the CPLR. This motion was denied.
I suspect Defendant’s motion should have probably been granted. The simple reason is that assuming the demand for trial de-novo occurs more than 6-years after the claim became overdue, while the original arbitration was commenced timely, then the trial de novo would be time barred. I am not sure that makes sense and is in accord with the meaning of Ins. Law 5106(c).