No Fault Defender – A Defense Attorney's Perspective on New York No-Fault Law

Reynolds v Ferrante, 2013 NY Slip Op 04154 (4th Dept. 2013)

“Plaintiff Robert A. Reynolds (plaintiff) had an insurance policy with Geico and sustained injuries to his neck, back and left shoulder in a motor vehicle accident. Geico scheduled a no-fault examination for plaintiff with a chiropractor through defendant SCS Support Claim Services, Inc. (SCS), an independent contractor for Geico. During the course of that examination, plaintiff’s left knee was injured allegedly as a result of the chiropractor’s manipulation of the knee.  Plaintiffs commenced this action alleging, inter alia, that Geico was negligent in the selection, instruction and supervision of SCS and the chiropractor.”

“Geico contends that Supreme Court erred in denying its motion because it cannot be held liable for the acts of an independent contractor. We reject that contention. It is well settled that a person who hires an independent contractor may be held liable for negligence in selecting, instructing or supervising that independent contractor”

“We conclude that the amended complaint is sufficient to advise the court and Geico of the transactions and occurrences on which plaintiffs based their claim and plaintiffs have sufficiently pleaded a cause of action against Geico based upon the alleged negligent selection, instruction and supervision of SCS and the chiropractor”

So in order to prevail against Geico, Plaintiff has to prove that they knew or should have known that the IME chiropractor had tendencies to perform inappropriate IMEs?  It is an interesting lawsuit to say the least

Liberty Mut. Ins. Co. v Bayside Pain & Rehabilitation Medicine, P.C., 2013 NY Slip Op 50906(U)(App. Term 2d Dept. 2013)

“Defendant moved to dismiss the complaint for, among other things, failure to state a cause of action, and plaintiff opposed the motion. While the motion was pending, the Supreme Court transferred the action to the District Court of Nassau County pursuant to CPLR 325 (d). By order dated July 12, 2011, the District Court granted defendant’s motion and dismissed the complaint.”

“This action seeks, in essence, a declaratory judgment and not monetary damages. While we cannot review the propriety of the order of the Supreme Court transferring this declaratory judgment action to the District Court pursuant to CPLR 325 (d) (see e.g. Priel v Linarello, 7 Misc 3d 64 [App Term, 2d & 11th Jud Dists 2005], affd 44 AD3d 835 [2007]; Green v Lakeside Manor Home for Adults, Inc., 30 Misc 3d 16 [App Term, 2d, 11th & 13th Jud Dists 2010]), it is, nevertheless, not within the subject matter jurisdiction of the District Court to adjudicate this particular type of declaratory judgment action.”

Brooklyn Chiropractic & Sports Therapy, P.C. v A. Cent. Ins. Co., 2013 NY Slip Op 50904(U)(App. Term 2d Dept. 2013)

(1) “Defendant also submitted an affirmed report of an independent medical examination (IME) with respect to 11 of the 12 claims, and a peer review report with respect to the 12th, each of which set forth a factual basis and medical rationale for the conclusion that the services in question were not medically necessary.”

(2) “In opposition to defendant’s motion, plaintiff submitted an affirmed report of an IME, conducted by a different doctor one day after the IME performed by defendant’s doctor. The IME report submitted by plaintiff contradicted the findings of defendant’s IME report and was sufficient to raise a triable issue of fact as to the medical necessity of the 11 claims which had been denied based upon defendant’s IME report”

(3) “However, plaintiff failed to offer any medical evidence to rebut the conclusions of defendant’s peer review report, which established a lack of medical necessity for the 12th claim”

This is similar to Hillcrest v. State Farm, where an IME report defeated the findings of the peer review report.  Yet, note how the conflicting IME reports had not effect on the claim that was denied, based upon the peer report.

Optimal Well-Being Chiropractic, P.C. v Hertz Co., 2013 NY Slip Op 50902(U)(App. Term 2d Dept. 2013)

“Since defendant did not submit evidence from anyone with personal knowledge of plaintiff’s assignor’s nonappearances, defendant’s cross motion for summary judgment dismissing the complaint was properly denied (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).”

Was this result ordained by Alfrof v. Safeco?  If it is, then the future of “personal knowledge” is just not looking too promising.

Manhattan Telecom. Corp. v H & A Locksmith, Inc., 2013 NY Slip Op 03867 (2013)

“On November 5, 2009, Vanunu moved to vacate the judgment, asserting that his default was excusable and that he had meritorious defenses to the action. Supreme Court denied the motion, finding that Vanunu’s delay in defending himself was not excusable. The Appellate Division reversed without reaching the issue of excusable default, holding that because “plaintiff failed to provide . . . evidence that [Vanunu] was personally liable for the stated claims . . . . the default judgment was a nullity” (Manhattan Telecom. Corp. v H & A Locksmith, Inc., 82 AD3d 674 [1st Dept 2011]). The Appellate Division granted leave to appeal, certifying the question of whether its order was properly made. We answer the question in the negative, and reverse.”

…

“The defect in the default judgment before us is not jurisdictional in this sense. A failure to submit the proof required by CPLR 3215(f) should lead a court to deny an application for a default judgment, but a court that does not comply with this rule has merely committed an error — it has not usurped a power it does not have. The error can be corrected by the means provided by law — i.e., by an application for relief from the judgment pursuant to CPLR 5015. It does not justify treating the judgment as a nullity.”

This will be interesting to watch play out.   Does the failure to comply with CPLR 3215(f) implicate the meritorious defense branch of CPLR 5015(a)(1), provided that a reasonable excuse is established?  This will insulate clerk’s judgments that do not comply 3215(f) where a reasonable excuse is not found on the subsequent 5015(a)(1) motion.

McDonald v Kohanfars, 2013 NY Slip Op 03821 (2d Dept. 2013)

“In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from stated portions of an order of the Supreme Court, Queens County (Lane, J.), dated November 22, 2010, which, inter alia, denied that branch of their motion which was pursuant to CPLR 4404 to set aside a jury verdict on the issue of damages and for judgment as a matter of law on the issue of serious injury, and the plaintiff cross-appeals, as limited by her brief, from so much of the same order as denied her cross motion to set aside, as inadequate, the jury verdict awarding damages for past and future pain and suffering in the sum of $200,000.”

“At a trial on the issue of damages, the plaintiff testified that she had previously injured her neck in a work-related accident in 1992 and had fusion surgery in February 1996, followed by six months of physical therapy; after that surgery, a followup MRI taken in 1996 revealed a bulging disc at level C4-5, but she had no further pain or treatment after May 1997. Following the subject automobile accident on January 20, 2005, the plaintiff experienced pain in her neck but did not seek treatment until her neck became stiff a couple of days later. She underwent physical therapy and took pain medication from 2005 through 2007 to treat her stiff neck, pain in her neck, arms, and hands, and numbness in her hands. She further testified that, on May 7, 2008, she had fusion surgery on her neck, after which she wore a neck collar for a couple of months. At the time of trial, she continued to take painkillers, receive medical treatment, and undergo physical therapy.

The plaintiff’s orthopedic surgeon, Dr. Jonathan Lewin, testified that he started treating the plaintiff in December 2007. Dr. Lewin reviewed the operative report for the plaintiff’s 1996 fusion surgery at the C5-6 disc level of her neck, but did not review any of the plaintiff’s treatment records related to her 1992 work-related accident and 1996 surgery; he opined that the plaintiff had been successfully treated in 1996. Dr. Lewin reviewed a CAT scan taken in February 2005, about a month after the subject automobile accident, which showed degeneration at disc levels C4-5 and C6-7.  Dr. Lewin ordered an MRI, which was taken in January 2008 and revealed a herniated disc in the plaintiff’s neck. More than three years after the subject accident, on May 7, 2008, Dr. Lewin performed a discectomy, removing the herniated disc between C-4 and C-5 to take pressure off the nerve roots, and fused the spine. An MRI taken in July 2009 continued to show a bulging disc at the C6-7 level. Dr. Lewin testified that persons with prior fusion surgery had a 5-15% chance of needing a second surgery even without a subsequent accident, but that the plaintiff would not have needed the second fusion surgery if not for the subject accident. He further testified that the plaintiff had diminished motion in her spine which resulted in a consequential limitation in the use of her neck, and that he had performed range-of-motion testing during his examinations of the plaintiff but could not find any mention of such testing in his records.

Here, viewing the evidence in the light most favorable to the plaintiff, no valid line of reasoning and permissible inferences could possibly lead rational persons to conclude that the plaintiff’s alleged serious injury was causally related to the subject automobile accident (see Pommells v Perez, 4 NY3d 566, 574; Kilakos v Mascera, 53 AD3d 527, 528-529; Ekundayo v GHI Auto Leasing Corp., 273 AD2d 346, 347). Given the evidence of the plaintiff’s previous injuries and degenerative condition at the time of the subject accident in 2005, the opinion of the plaintiff’s expert, who first started treating the plaintiff nearly three years after the subject accident, that the plaintiff’s injuries, as observed in 2008, were causally related to the subject accident in 2005, was speculative. Accordingly, the Supreme Court should have granted that branch of the defendants’ motion which was pursuant to CPLR 4404 to set aside the jury verdict on the issue of damages and for judgment as a matter of law on the issue of serious injury

Here is the summary:

(1) Prior accidents in 1992, 1996

(2) C-5,C-6 fusion in 1996

(3) 2005 motor vehicle accident

(4) CT Scan in 2005 shows degeneration at C-5,C-6 – no traumatic findings

(5) C-5, C-6 spinal fusion again in 2008

(6) Doctor testifies that there is a 10-15% chance that those with a prior spinal fusion will need another fusion even if there is no subsequent MVA.  (Good question on cross)

(7) States within a reasonable degree of medical certainty that C-5, C-6  fusion was causally related to the 2005  motor vehicle accident.

Court holds that causation is speculative and reverses the $200,000 damages award.

Would the result of on a no-fault case where the carrier bears the burden to show that the injuries were not causally related have differed from this personal injury case, where the plaintiff has to show prima facie causation?  I do not know the answer.

Urban Radiology, P.C. v GEICO Gen. Ins. Co., 2013 NY Slip Op 50850(U)(App. Term 2d Dept. 2013)

(1) Law requiring AOB

“The Civil Court dismissed the complaint, finding that plaintiff had not established a prima facie case because it had not offered into evidence an assignment of benefits.

While the claim forms at issue did not contain any language regarding an assignment of benefits, there is nothing in the record to indicate that defendant timely objected to the completeness of the forms or sought verification of the existence of a valid assignment. Accordingly, defendant waived any defense based thereon (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 320 [2007]; Hospital for Joint Diseases v Allstate Ins. [*2]Co., 21 AD3d 348 [2005]).”

(2) What is a prima facie case

“Contrary to defendant’s contention, at a trial, unlike upon a provider’s motion for summary judgment, a provider is not required to “show that there is no defense to the cause of action or that the cause of action or defense has no merit” (CPLR 3212 [b]). Rather, it is defendant’s burden to show that it has a meritorious defense (see generally Seaboard Sur. Co. v Gillette Co., 64 NY2d 304 [1984]; Northrup v Blue Cross & Blue Shield of Utica-Waterdown, 235 AD2d 1022 [1997]; 70 NY Jur 2d, Insurance § 1493) and that such a defense is not precluded (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).”

Considering that the validity of an AOB is a defense, in both no-fault and non-no-fault litigation, this makes sense.  The prima facie rule is weird.  It promotes more trials where traditional Mary Immaculate and Dan Medical would control over Avenue T v. Auto One.  I think the Court is probably stretching 3212(b) if it really believes that submission of a bill is sufficient for purposes of trial but not for summary disposition.

Radiology Today, P.C. v Travelers Ins. Co.,  2013 NY Slip Op 50849(U)(App. Term 2d Dept. 2013)

“Since defendant’s expert’s testimony did not include a factual basis or medical rationale for her opinion, it was insufficient to establish that there was a lack of medical necessity for the services rendered (see A-Quality Med. Supply v GEICO Gen. Ins. Co., Misc 3d , 2013 NY Slip Op 23088 [App Term, 2d, 11th & 13th Jud Dists 2013]; PSW Chiropractic Care, P.C. [*2]v Maryland Cas. Co., 32 Misc 3d 144[A], 2011 NY Slip Op 51719[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Additionally, a peer review report, unlike a witness, is not subject to cross-examination and is not admissible by defendant to prove lack of medical necessity (see A-Quality Med. Supply, Misc 3d , 2013 NY Slip Op 23088). Thus, the Civil Court’s determination that defendant had not established that the services at issue were not medically necessary, could have been reached under a fair interpretation of the evidence”

So why bring the treating doctor to court?

Jian Kang, Inc. v New York Cent. Mut. Fire Ins. Co., 2013 NY Slip Op 50851(U)(App. Term 2d Dept. 2013)

(1) In this action by a provider to recover assigned first-party no-fault benefits, defendant denied plaintiff’s claims on the ground of “material misrepresentation” because plaintiff had billed for a heating pad which defendant had determined had not been provided to plaintiff’s assignor.

(2)  The Civil Court, by order entered April 20, 2011, granted defendant’s motion to the extent of dismissing so much of the[*2]complaint as sought to recover for the heating pad, on the ground that it had not been delivered to plaintiff’s assignor, but denied the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover for the remaining supplies billed for, which amounted to $3,988.58.

(3) Defendant failed to establish as a matter of law that the claim forms which are the subject of this appeal sought payment of assigned first-party no-fault benefits for medical supplies that had not actually been provided by plaintiff to its assignor. Defendant also failed to establish that the provider’s billing for a heating pad which had never been delivered to plaintiff’s assignor voided the automobile insurance policy underlying this action from the policy’s inception and that, therefore, defendant need not pay for any of the other medical supplies which may have been furnished to plaintiff’s assignor under this policy.

That is okay – you can bill for supplies that were never provided.  If you get caught, well you will be penalized solely for the supply that was not delivered.  How about the other supplies?  No problem – payment is forthcoming.

Insurance Law 403(c): “(c) In addition to any criminal liability arising under the provisions of this section, the superintendent shall be empowered to levy a civil penalty not exceeding five thousand dollars and the amount of the claim for each violation upon any person, including those persons and their employees licensed pursuant to this chapter, who is found to have: (i) committed a fraudulent insurance act, fraudulent life settlement act or otherwise violates the provisions of this section; or (ii) knowingly and with intent to defraud files, makes, or assists, solicits or conspires with another to file or make an application for a premium reduction, pursuant to subsection (a) of section two thousand three hundred thirty-six of this chapter, containing any materially false information or which, for the purpose of misleading, conceals information concerning any fact material thereto.”

Financial Services Law 408(a)(1)(A): ‘In addition to any civil or criminal liability provided by law, the superintendent may, after notice and hearing, levy a civil penalty: not to exceed five thousand dollars per offense, for:any intentional fraud or intentional misrepresentation of a material fact with respect to a financial product or service or involving any person offering to provide or providing financial products or services”

Does anybody have any shame anymore?

American Transit Ins. Co. v. Bacchus, Index #: 310450/11 (Sup Ct. Bx Co. 2013)

A Supreme Court finds on renewal that City Care Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co.,  2013 NY Slip Op 50430(U)(App. Term 1st Dept, 2013), was a change in law, sufficient to compel the Court to vacate its prior order (denying the relief I requested) and  to grant my motion for (1) Leave to enter a default judgment against the non-answering Defendants, and (2) Summary judgment against the answering Defendants.

An interesting read, if only because a Supreme Court has held Appellate Term precedent (a coordinate court)  is sufficient to constitute a “change in law” to trigger the procedural mechanism for a motion seeking renewal.  The case is also noteworthy in that is goes to show that the practitioner who diligently follows the law can sometimes pull out a victory when one does not seem possible.