A hook to apply Unitrin in the Second Department through Clennon

Prestige Med. P.C. v Travelers Home & Mar. Ins. Co., 2014 NY Slip Op 24317 (Civ. Ct. 2014)

You can read this Civil Court case a bunch of different ways.  There are two statements of law that I think ring true.

Statement number 1

The first is that Unitrin does apply in the Second Department.  Judge Levine noted that Interboro v. Clennon  cited Unitrin for the proposition of law that the failure to cooperate with an EUO allows a disclaimer.  Unitrin of course stands for the proposition that a failure to attend IME’s voids coverage.  Unitrin was supported through American Transit v. Lucas, where that Court cited to NY Presbyterian v. Countrywide for the proposition of law that the failure to attend IMEs is an absolute coverage defense.  In American States v. Huff (an extremely important case in this arena for so many reasons) the Court held that the failure to participate in an EUO is an absolute coverage defense.  This would be attending and saying “I am not going to answer questions” or even prior to a first no show calling the insurance company or their agent and saying “I am not going to appear, get lost.”

Judge Levine drawing in a decision by Judge Hirsh (which he probably will not follow because he is bound by the Appellate Term’s failure to recognize or cite Clennon in favor of Lincoln General from 2009), has held that she will follow Unitrin.  Or course, JHO Spodek told the world he will not let “peer hearsay” into evidnec despite what the Appellate Term says, and we all know where that got his cause.  A trailblazer with an illusory cause?

Statement number 2

The second statement is that a provider EUO must be scheduled within 15 business days of the completed EIP EUO to preserve the toll.  This is nothing new, as the Appellate Term, First Department held this way last year in a NYCM case.  She goes on to say that Untirin will not be followed if the verification, viz, provider EUO demand is mailed more than 15 business days following the EIP EUO, and the day for day deductions in the regulations for timeliness of denials would apply.  This is probably a bit off base, trying to apply a hybrid of Unitrin and Lincoln General.  I think the Appellate term was implicit in holding that if the provider EUO demand is scheduled more than 30-days following the EIP EUO (verification issued more than 30-days following receipt of prior verification would run afoul of Ins Law. 5106 and Westchester v. GMAC [2007]), the toll would be lost and the coverage defense would be lost.

Looking beyond the face of the agreement

South Shore Neurologic Assoc., P.C. v Mobile Health Mgt. Servs., Inc., 2014 NY Slip Op 06963 (2d Dept. 2014)

Self-referrals and fee splitting can garner attention whenever any payor wishes to avoid a contractual or quasi-contractual obligation.  It transcends no-fault.  This one looks interesting:

“South Shore established its prima facie entitlement to judgment as a matter of law declaring that the commercial relationship constituted an unlawful fee-splitting arrangement in violation of Education Law § 6530(19) and 8 NYCRR 29.1(b)(4) by submitting documents and deposition testimony showing that certain contracts were a pretext to justify the appellants’ receipt of one third of the profits of South Shore’s MRI practice ”

The net effect of this fee sharing arrangement was left undecided according to the Appellate Division.

An Application of Langan


Matter of Utica Mut. Ins. Co. v Burrous, 2014 NY Slip Op 06986

“From the eyes of the decedent”

“Contrary to the Supreme Court’s determination, Utica is not entitled to a permanent stay of arbitration, and that branch of its petition should have been denied. In State Farm Mut. Auto. Ins. Co. v Langan (16 NY3d 349), the Court of Appeals held that, for the purposes of an uninsured motorist endorsement, when an occurrence is “unexpected, unusual and unforeseen,” from the insured’s perspective, it qualifies as an “accident” (id. at 355 [internal quotation marks omitted]). Here, from the decedent’s perspective, her collision with Demoliere’s vehicle was unexpected, unusual, and unforeseen. Therefore, the occurrence constituted an “accident” within the meaning of the uninsured motorist endorsement of the decedent’s policy (see State Farm Mut. Auto. Ins. Co. v Langan, 16 NY3d at 355-357; see Matter of Progressive Northeastern Ins. Co. v Vanderpool, 85 AD3d 926, 927)”

It is an inquiry of whether the recipient of PIP benefits or seeking UM benefits was part of the intentional loss.  In a staged loss scenario, this is colloquially stated a “no-brainer.”  When the issue involves the victim of someone on a death wish (who is not Charles Bronson), it is a different story.

IME and EUO issues under Unitrin

Alpha Acupuncture, P.C. v Hertz Claim Mgt. Corp., 2014 NY Slip Op 51515(U)

“The defendant-insurer made a prima facie showing of entitlement to summary judgment dismissing the action for first-party no-fault benefits by establishing that it timely and properly mailed the notices for independent medical examinations (IMEs) to plaintiff’s assignor and his counsel, and that the assignor failed to appear (see American Tr. Ins. Co. v Lucas, 111 AD3d 423 [2013]; American Tr. Ins. Co. v Solorzano, 108 AD3d 449 [2013]). Contrary to plaintiff’s contention, defendant submitted competent evidence of the assignor’s nonappearance in the form of the sworn affidavits of the scheduled examining chiropractor and an employee of defendant’s third-party IME scheduler attesting to the affiants’ personal knowledge of their office practices and policies when an assignor fails to appear for a scheduled IME (see American Tr. Ins. Co. v Lucas, 111 AD3d at 424).”

“Accordingly, when the assignor failed to appear for the requested chiropractic IME, defendant had the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued (see American Tr. Ins. Co. v Lucas, 111 AD3d at 424), and even though defendant initially denied the claims on different grounds (see Unitrin, 82 AD3d at 560).”

Perhaps I am stating the obvious, but there is a theory that mailing the letters in accordance within the verification time periods means mailing the letters within 15-days of receipt of the bills (65-3.5).  This cannot make sense since the failure to attend IMEs can (and many times does) occur after a denial “on different grounds” occurs.  The letters, therefore, are not mailed within the 15-day period.  It is implicit in the decisions that the time periods would be the 10-days between the first no show and the second letter.  Until this is explicit, this argument will persist.



Acupuncture fee schedule defense again

Karina K. Acupuncture P.C. v State-Wide Ins. Co., 2014 NY Slip Op 51518(U)(App. Term 1st Dept. 2014)

“The affidavits and other documentary evidence submitted by defendant established prima facie that defendant timely denied that portion of plaintiff’s first-party no-fault claim seeking payment of $1,182.53 – stemming from acupuncture services rendered by plaintiff during the period October 1, 2009 through October 21, 2009 – on the ground that the fees plaintiff charged exceeded the amount permitted by the applicable workers’ compensation fee schedule (see Akita Med. Acupuncture, P.C. v Clarendon Ins. Co., 41 Misc 3d 134[A], 2013 NY Slip Op 51860[U][App Term, 1st Dept 2013]; Great Wall Acupuncture v Geico Ge. Ins. Co., 16 Misc 3d 23 [2007]). In opposition, plaintiff failed to raise a triable issue as to the efficacy of defendant’s mailing of the denial form issued in connection with this claim or the calculation of the fee.

Note how in less than one year, this Court moved away from the original language in Akita :”Nor did plaintiff establish or raise a triable issue that the acupuncture work sued for did not constitute a similar procedure than the one defendant chose for comparison in arriving at the reimbursement rate” and has now moved towards the following language: “In opposition, plaintiff failed to raise a triable issue as to the efficacy of defendant’s mailing of the denial form issued in connection with this claim or the calculation of the fee.”

(what a difference a year makes)

Mailing and denial issues

Urban Well Acupuncture, P.C. v American Commerce Ins. Co., 2014 NY Slip Op 51520(U)

“The action, seeking recovery of first-party no-fault benefits, is not ripe for summary dismissal since defendant “failed to . . . establish that the denial of claim form was in fact mailed to the plaintiff” (Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 564-565 [2005]; see Mercury Cas. Co. v Encare, Inc., 90 AD3d 475 [2011]). The affidavit submitted by the defendant insurer to establish proof of mailing – identifying the affiant as a “mailroom representative” of a nonparty to this action, State-Wide Insurance Company (“State-Wide”) – neither stated that the affiant actually mailed the claim denial to plaintiff nor, so far as appears, described defendant’s mailing office practice and procedures (see New York and Presbyterian Hospital v Allstate Ins. Co., 29 AD3d 547 [2006]), as opposed to those generally followed by State-Wide. Conspicuously absent from defendant’s moving submission was any allegation or showing that a jural relationship existed between defendant and State-Wide. Given these shortcomings in defendant’s proof, we have no occasion to consider whether defendant’s purported mailing of the claim denial to the individual treating acupuncturist rather than the employing professional corporation was proper (see 11 NYCRR 65-3.8[c])”

Nyack v. Metropolitan is best known as one of the first defective denial cases.  There is a line in this case (nobody paid attention to it) stating that an affidavit of mailing to the plaintiff was not presented.  I guess somebody forgot to link “state wide” and “american commerce” in the mailing affidavit.  It happens, and I am sure this mistake will not happen again.

I like how the court ducked the main issue here: Can a denial be sent to the treating acupuncturist as opposed to the P.C.  If the court follows Judge Ciaffa’s agency theory case and pertinent precedent regarding the duty to communicate, then the answer to the question should be an unconditional “yes”.

Abandoned (3215[c])

Acupuncture Works, PC v New York City Tr., 2014 NY Slip Op 51513(U)(App. Term 1st Dept. 2014)

“Where a plaintiff fails to move for entry of a default judgment within one year of a defendant’s default in answering, dismissal of the underlying action as abandoned is required in the absence of a proper showing by plaintiff of a viable excuse for the delay and a meritorious cause of action (seeCPLR 3215[c][court "shall" dismiss claims for which default judgments are not sought within the requisite one-year period]; Giglio v NTIMP, Inc., 86 AD3d 301, 308 [2011]; Hoppenfeld v Hoppenfeld, 220 AD2d 302, 303 [1995]).”

The failure to answer, appear or move within one year will usually spell the end of a case since dismissal is mandatory.


Vacatur of the default granted

M&E 73-75 LLC v 57 Fusion LLC, 2014 NY Slip Op 07077 (1st Dept. 2014)

This outlines the difficulties of obtaining a default in the First Department

“The IAS court providently exercised its discretion by denying plaintiff’s motion (see e.g. Nutley v Skydive the Ranch, 65 AD3d 443, 444 [1st Dept 2009]). Defendant made the requisite showing of a reasonable excuse for failing to answer the complaint (see Whittemore v Yeo, 99 AD3d 496, 496-497 [1st Dept 2012]). The factors to be considered in determining the sufficiency of the excuse all weigh in defendant’s favor (see New Media Holdings Co. LLC v Kagalovsky, 97 AD3d 463, 465 [1st Dept 2012]). Defendant did not willfully default, as it claims that it did not receive plaintiff’s summons and complaint. Further, shortly after plaintiff served defendant, defendant filed its own action against plaintiff (index No. 154700-12), which evidenced its intent to defend plaintiff’s action (see Arrington v Bronx Jean Co., Inc., 76 AD3d 461, 463 [1st Dept 2010]). The order dismissing defendant’s action did not collaterally estop defendant from arguing that it had a reasonable excuse for defaulting in this action. Indeed, whether defendant had a reasonable excuse was neither material nor essential to that decision (see Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]). Further, defendant was not required to submit an affidavit of merit in opposition to plaintiff’s motion (Arrington, 76 AD3d at 462). Moreover, the motion court had the power to sua sponte allow defendant to interpose a late answer (see Higgins v Bellet Constr. Co., 287 AD2d 377 [1st Dept 2001])”

As a casual observer, it seems common parlance in the Second Department that an allegation of reasonable excuse based upon “non receipt of a summons and complaint” relates solely to service; the failure to controvert same will be fatal to the defaulter.  Here, the Court found this to be a reasonable excuse (upon an allegation of non-receipt) and then stated that filing its own action evinced a desire to defend on the merits.  I believe the First Department’s view makes sense, as it should be easier (rather than harder) to vacate defaults where a party made a mistake in appearing or opposing, as opposed to plainly deciding not to defend.

A questionable release

Ford v Phillips, 2014 NY Slip Op 07037 (3d Dept. 2014)

This one struck me as odd when I read it 2 weeks ago.

(1) “Defendants met their initial burden of establishing that they had been released from [*2]plaintiff’s claims by submitting the signed release. Contrary to plaintiff’s contention, no affirmation from a party with personal knowledge was required to authenticate the release; plaintiff admits that he signed the document, and its facially valid terms establish that he released all personal injury claims against defendants arising out of the June 2012 accident. Accordingly, the burden shifted to plaintiff to establish the existence of issues of fact as to whether the release bars this action”

(2) “Plaintiff submitted an affidavit asserting that a claims representative for Travelers contacted him shortly after the accident to arrange a meeting at plaintiff’s home. During this meeting, the representative allegedly induced plaintiff to sign the release by assuring him that he had suffered only “soft tissue injuries” that would heal over time and that Travelers would “take care of [plaintiff]” if his injuries turned out to be “something serious.” Plaintiff asserts that the representative stated that Travelers was an “up-and-up company” that “doesn’t play games,” that New York law required the company to take care of “any permanent injury,” and that Travelers had recently paid $20,000 to another injured party who had undergone surgery after signing a release. Finally, plaintiff claims that the representative told him that the $750 payment represented interim reimbursement for time and fuel expenses related to medical appointments, rather than a final settlement. Plaintiff asserts that he read the release but did not understand its significance because he had never been involved in a personal injury automobile accident before, and that he relied upon the representative’s alleged statements in executing the release. He further asserts that he suffered herniated disks as a result of the accident, and is now advised that surgical correction is required.”

(3) “In reply, defendants submitted an affidavit from the claims representative, denying that he represented to plaintiff that the $750 payment represented anything other than a full settlement of his claims, or that the settlement could be altered after the release was signed. The representative described two telephone conversations and one face-to-face meeting with plaintiff in which the only injuries that plaintiff reported were “soreness in his arms” and “muscle pain in his forearms,” for which he was being treated by his primary care physician. The representative further averred that when plaintiff met with him to sign the release, he stated “that his arms were feeling better” and that he had returned to work. The affidavit includes no claim that plaintiff mentioned that he had suffered injury to his neck or back, nor does it state that the parties intended the release to cover other injuries.”

(4) “In the context of mistakes pertaining to personal injuries, a sharp distinction is drawn between unknown injuries and mistakes as to the consequences of known injuries; a release may be invalidated if the parties mistakenly believed that an injury did not exist when the release was executed, but will not be set aside for a mistake pertaining to the “future course[] or sequelae of a known injury” (Mangini v McClurg, 24 NY2d at 564; see Hayes v Lipinski, 239 AD2d 835, 835 [1997]; Carola v NKO Contr. Corp., 205 AD2d 931, 932 [1994]). Treating plaintiff’s claims as true and allowing him the benefit of every favorable inference, this record does not establish as a matter of law that either party knew of plaintiff’s cervical injury or alleged herniated disks when he signed the release. It is quite unclear whether there was a mutual mistake as to the true nature of plaintiff’s injuries at the time of the execution of the release, and what injuries the release was to cover; resolution of this issue as a matter of law and dismissal of the complaint was thus premature”

Motion denied.

PF-NCS – a thought

One of the “tests” that we see a lot of are on the run of the mill CPT, V-SNCT, PF-NCT.  Of course, if you ask a Claimant “Have you ever had a CPT, V-SNCT, PF-NCT test?”, they will look at you with googly eyes.  But when you show them a pen and say “you know, the test where this pen like device [hold the pen] is connected to a computer and areas of your body are touched”, then they say, “oh I remember that.”  Then you ask them, did anyone tell you the results?  Nope.

This testing has three defenses.  The first is the “fraud” defense.  I lost that one 10 years ago, but had fun trying (Tahir v. Progressive).  Nothing more will be said as the testing (even to its most vocal critics) has some valid purposes when dealing with diabetic neuropathy.

The second defense I am now seeing en vogue is the “coding” defense.  Should the test be billed at 95903, 95999 or a T-3 code?  Different people have different answers.  My vote is for a T-3 code.  This has had success at arbitrations.  I would be interested to see what the Appellate Term says (when a proper foundation is adduced at either trial or on motion practice).  The 95903 code appears to be from an  instruction manual that the end user gets when they purchase the Axion-II machine (or its predecessors).

The new PF-NCT purports not  to be entirely subjective as  there is a potentiameter.  Still, the patient is in control as (s) he is told to explain when they feel pain during the performance of the test, hence the subjective component.  Thus, the potentiometer is supposed to objectify the subjective component of the test.

The third defense is based upon the EMG/NCV test occurring within weeks or a few months of the PF-NCT test during the patient’s treatment path.  The theory, and I think it is quite valid, is pick your test.  Either perform the EMG/NCV test (the so-called “gold-standard”) or the PF-NCT test, but not both.  The detractors of this argument will say the the PF-NCT is more sensitive to A- fibers and C-Fibers (pain receptors) that the EMG/NCV does not address.  But isn’t an EMG/NCV when appropriately performed with an examination sufficient to obtain all of the objective data?  Many time, the EMG/NCV may also be overkill.

Also, if you take a pin and prick various parts of the body (waiting to elicit a response from the patient), shouldn’t this be sufficient to determine the extent of the pain fibers and to allow the clinician to accurately determine where there is sensitivity.

Contact Jason Tenenbaum
(516)750-0595 (T) (516)414-2869 (F) Jason@jtnylaw.com
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