Declaratory judgment action and Special proceeding are identical – dismissal denied

Mordini Estates, Inc. v Punto Zero, Inc., 2014 NY Slip Op 51661(U)

“In support of the branch of tenant’s motion seeking to dismiss the petition pursuant to CPLR 3211 (a) (4), tenant failed to demonstrate that the relief sought in tenant’s pending declaratory judgment action was the same or substantially the same as that sought by landlord in this holdover proceeding to recover possession. ” Dismissal on the ground of prior proceeding pending is not appropriate where substantially the same relief is not being sought in the two proceedings’ ”

The quick and dirty of this case is that where a declaratory action and the plenary action or special proceeding seek similar or the same relief, a dismissal motion may be appropriate.  I would note that the Court is Solorzano did not find the no-fault action (seeking recovery on overdue bills) and the declaratory judgment action (seeking a broad coverage based determination) are similar for purposes of this rule.

The conclusory statement of non receipt will not non-suit a 45-day case

Easy Care Acupuncture PC v MVAIC, 2014 NY Slip Op 51645(U)(App. Term 1st Dept. 2014)

“The action, seeking recovery of assigned first-party no-fault benefits, is not ripe for summary dismissal. The vague and conclusory assertion by defendant MVAIC’s claim representative that defendant “was not aware of plaintiff’s bills” prior to the commencement of the action was insufficient, on this record, to make a prima facie showing that plaintiff’s claims were untimely submitted beyond the applicable 45-day time limit (see 11 NYCRR 65-1.1[d]; cf. NY Arthroscopy & Sports Medicine PLLC v Motor Veh. Acc. Indem. Corp., 15 Misc 3d 89 [2007]). Conspicuously absent from the claim’s representative’s moving affidavit was any indication that she or a colleague searched the assignor’s file — said to be under the affiant’s “custody and control” — to ascertain whether plaintiff’s bills and claims had been logged in by defendant as received.”

Like any other defense that germinates from a “non-receipt” of a item, the Courts have uniformly held that some type of search was made prior coming to the conclusion that an item was not received.  The search does not need to be exhaustive (a prior case from the second department dispelled this notion), but the search must be somewhat detailed.  Here, all that was presented was a boilerplate I did not receive the billing.  That is not enough to win in this Court.

New Jersey fee schedule is proper as a matter of law

Surgicare Surgical v National Interstate Ins. Co., 2014 NY Slip Op 24362 (Civ. Ct. Bronx Co. 2014)

The quick synopsis of this case is that were the services are performed in a state where there is a fee schedule for these types of service, the state’s fee schedule will control.  It makes sense, and the Court goes on to note that not applying this rule will turn every “simple” no-fault matter into a battle of coding and billing experts.  This is antithetical to the realm of no-fault.  I personally like how the Court uses 68.5(b) to create a rule that a reasonable and customary amount will only be permissible upon there being no way to harmonize the fee schedule with the service provided.

“In a claim brought under New York’s Comprehensive Motor Vehicle Insurance Reparations Act, otherwise referred to as the “No-Fault Law” (see New York Insurance Law § 5101, et seq.), a provider’s reimbursement for eligible health services performed in New York “shall not exceed the charges permissible under [the fee schedule established by the New York State Workers' Compensation Board]” (see Insurance Law § 5108[a]). Under subdivision (b), “no provider of health services may demand or request any payment in addition to the charges authorized [under the fee schedule]” (Insurance Law § 5108).

Responsibility for administering the Insurance Law rests with the Superintendent of Insurance who has “broad power to interpret, clarify, and implement the legislative policy” (see Insurance Law § 301; A.M. Med. Services, P.C. v Progressive Cas. Ins. Co., 101 AD3d 53, 64 [2d Dept 2012] [internal quotations omitted]). In the no-fault context, Section 5108 (b) of the Insurance Law empowers the Superintendent to “promulgate rules and regulations implementing and coordinating the provisions of [the No—Fault Law] . . .” These rules, found in Part 68 of the New York Insurance Department Regulations, “govern the charges for professional health services” (see Great Wall Acupuncture v Geico General Ins. Co., 16 Misc 3d 23 [App Term, 2d Dept 2007]).

Within this regulatory framework, the Insurance Department has promulgated Section 68.6 which provides that:

“If a professional health service is performed outside New York State, the permissible charge for such service shall be the prevailing fee in the geographic location of the provider” (11 NYCRR § 68.6).

The question of exactly what constitutes the “prevailing fee” in this context appears to be one of first impression since neither of the parties nor this Court have located authority interpreting Section 68.6 in relation to a state which utilizes a no-fault fee schedule. However, the Superintendent of Insurance has issued a formal Opinion interpreting Section 68.6 in the context of a foreign jurisdiction that apparently did not have a fee schedule. The Opinion, which involved a question of licensure for physical therapists providing health services in Guatemala, specifically cites the Section at issue and states:

As to the amount of the reimbursement, where the health services are provided outside of New York State . . . [t]he dollar amount of the reimbursement for physical therapy services (or other professional health services) performed on an eligible injured person under a New York No-Fault insurance policy in Guatemala is determined by the permissible cost for such services in Guatemala (General Counsel Opinion 4-1-2003 (No.3), 2003 WL 24312368 (US), 2 [emphasis added]).

The Superintendent’s use of the word “permissible” is significant as it strongly suggests that reimbursement for health services performed in a foreign jurisdiction may be regulated by that jurisdiction’s laws, including a governing no-fault regime. Indeed, the principle of limiting reimbursements to “permissible” amounts is mirrored in the section of the Insurance Law that codifies the No-Fault Law’s salient feature of explicitly restricting reimbursement for health services performed in New York to the amounts allowable by this State’s fee schedule (see Ins. Law Section 5108[a]); therefore, it is only logical that the same principle should apply to foreign jurisdictions. Consistent with the use of “permissible ” in the core provision of the No-Fault Law, the Superintendent has reasonably interpreted the language of Section 68.6 to require that an insurer pay for any health service performed in a locale outside of New York at the permissible cost for that location. As such, the Superintendent’s interpretation of its own regulations is entitled to deference (LMK Psychological Services, P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009] ["the Insurance Superintendent's interpretation of its own regulations if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision'").

In addition, the language of the preceding subsection within Section 68.6 also utilizes the term "prevailing fee." That subsection, Section 68.5 (b), states that:

"If a professional health service is performed which is [eligible for no-fault benefits], but is not set forth in fee schedules adopted or established by the superintendent, and if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR § 68.5[b] [emphasis added).

Section 68.5 (b) requires that the insurer pay the "prevailing fee in the geographic location of the provider" only if this State's fee schedule has not established a permissible charge for the health service or has not adopted the type of provider who seeks reimbursement for no-fault benefits. In other words, for any claimed health service, the insurer must look first to the fee schedule in determining the proper reimbursement amount. It is only after the insurer concludes that the fee schedule does not apply that it may look to the "prevailing fee" in the provider's location. The provider's likelihood of receiving the "prevailing fee" is further conditioned upon the insurer's prerogative to re-categorize the particular health service to fit under existing fee schedules. By looking first to the application of a fee schedule, Section 68.5 employs a logical approach in which [*3]the insurer pays a “prevailing fee,” as plaintiff defines that term, only after all possible fee schedule applications have been exhausted.

Both the Insurance Department’s Opinion and Section 68.5 (b)’s formula for applying the “prevailing fee” comport with the policy goals underlying the Legislature’s adoption of a fee schedule. The purpose of a fee schedule is “to significantly reduce the amount paid by insurers for medical services, and thereby help contain the no-fault premium” (Goldberg v Corcoran, 153 AD2d 113, 118 [2d Dept 1989] [internal quotations omitted] citing Governor’s Program Bill, 1977 McKinney’s Session Laws of NY, at 2449; Governor’s Memorandum in Support of Assembly Bill 7781—A). Moreover, per Insurance Department regulation, the express purpose of the fee schedule was to “contain the cost of no-fault insurance” (see 11 NYCRR 68.0). Like New York, New Jersey passed similar no-fault legislation as a “cost containment initiative” (see Casinelli v Manglapus, 181 NJ 354, 360, 858 A2d 1113, 1116 [2004]). In furtherance of policy goals akin to New York’s, New Jersey’s Department of Insurance has promulgated a medical fee schedule (see 11 NJSA 11:3-2.9). Thus, the “permissible” charge for health services rendered in New Jersey are limited by the maximum amounts permitted under New Jersey’s fee schedule.

Based on the foregoing, this Court holds that, when services are rendered outside of New York but in a jurisdiction which utilizes a fee schedule, the insurer complies with Section 68.6 by paying the “permissible” charge for that particular medical service, that is, the amount permitted by that jurisdiction’s fee schedule. There being no dispute that defendant issued payment on plaintiff’s claim in accordance with New Jersey’s fee schedule, plaintiff is not entitled to more. Since plaintiff’s action is based entirely on its claim of entitlement to reimbursement in excess of New Jersey’s “permissible” charge, the relief sought in the complaint must be denied and the action dismissed.

Contrary to plaintiff’s position, this Court neither exceeds its “jurisdiction” nor subverts the plain language of Section 68.6 by holding that an insurer complies with Section 68.6 when the reimbursement amount is consistent with another state’s fee schedule. Rather, this Court merely adopts a reading of Section 68.6 that comports with both the Insurance Department’s interpretation of its own regulation, as well as the policy goals underlying New York’s (not to mention, New Jersey’s) No-Fault Law.

Aside from the core objective of “provid[ing] a tightly timed process of claim, disputation and payment” (see LMK Psychological Services, P.C., 12 NY3d at 223), another important goal of the no-fault laws was also to “reduce the burden on the courts” (see Hosp. for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007] [internal quotations omitted]). If this Court were to accept plaintiff’s interpretation of Section 68.6, rather than “reduce the burden on the courts,” similar no-fault disputes would routinely call upon trial courts to conduct evidentiary hearings on local billing practices to determine the “prevailing fee” in a neighboring location notwithstanding the fact that such a jurisdiction has already established its own legally permissible fee. Such a situation would undoubtedly subvert the No Fault Law’s core objective of creating a speedy process of claim, dispute resolution, and, ultimately, payment.

Equally important, the goals of consistency and fairness are undermined when injured parties, or their provider-assignees, can be reimbursed for the same health services at different rates [*4]from those permitted under either New York’s or even another state’s fee schedule simply because the services were rendered outside of New York but are to be paid in this State. Plaintiff’s proposed reimbursement scheme would only frustrate the purposes of both jurisdictions’ no fault laws because providers would be incentivized to treat New York patients in other jurisdictions hoping to receive more for performing the same health service outside of New York’s borders.

Certificate of conformity waived

Todd v Green, 2014 NY Slip Op 08004 (2d Dept. 2014)

Law Office of Jason Tenenbaum, P.C, Garden City, N.Y., for appellant. (shameless self promotion)

“The Supreme Court determined that the plaintiff’s affidavit of merit, notarized in Georgia, lacked a proper certificate of conformity as required by CPLR 2309(a), and denied the motion, with leave to renew upon the submission of a proper affidavit. The plaintiff appeals.”

” A party’s right to recover upon a defendant’s failure to appear or answer is governed by CPLR 3215′” (U.S. Bank, N.A. v Razon, 115 AD3d 739, 740, quoting Beaton v Transit Facility Corp., 14 AD3d 637, 637). Thus, a plaintiff moving for a default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting defendant’s failure to appear or answer (see CPLR 3215[f]; U.S. Bank N.A. v Poku, 118 AD3d 980U.S. Bank N.A. v Razon, 115 AD3d at 740; Dela Cruz v Keter Residence, LLC, 115 AD3d 700). Here, in support of his motion to enter a default judgment, the plaintiff met all of these requirements (see U.S. Bank N.A. v Poku, 118 AD3d 980). Although the Supreme Court [*2]found that the plaintiff’s affidavit lacked a proper certificate of conformity, it should have considered the affidavit since the absence of a certificate of conformity is not a fatal defect (see Midfirst Bank v Agho, 121 AD3d 349; Gonzalez v Perkan Concrete Corp., 110 AD3d 955, 960; Fredette v Town of Southampton, 95 AD3d 940, 942). Further, even if the subject certificate of conformity was inadequate, the defendant failed to answer or appear in opposition to the motion, and it was inappropriate for the Supreme Court to, sua sponte, raise the issue on the defendant’s behalf (see Midfirst Bank v Agho, 121 AD3d 349).

The moral of the story  is to take a stand when you think the Court is treating you like a no-fault defendant in Civil Kings, Special Term.  The appellate courts sometimes get it right.

Defective notarization

Clarke v Scottsdale Ins. Co., 2014 NY Slip Op 51586(U)(App. Term 2d Dept. 2014)

(1) 2309 defect does not matter anymore.  ”While plaintiff timely objected to the form of defendant’s affidavit, in that it did not comply with the requirements of CPLR 2309 (c), the absence of a certificate of conformity is not a fatal defect”

(2)”Nevertheless, we find that the affidavit of defendant’s claims analyst was not in proper admissible form for a different reason, to wit, that the notary public never stated therein that the claims analyst had personally appeared before her and was personally known to her or had satisfactorily established her identity (see Galetta v Galetta, 21 NY3d 186 [2013]; see also Fryer v Rockefeller, 63 NY 268 [1875]; Gross v Rowley, 147 App Div 529 [1911]; cf. Collins v AA Truck Renting Corp., 209 AD2d 363 [1994]). “

Missing document charge not granted

Knight v M & M Sanitation Corp., 2014 NY Slip Op 07631 (2d Dept. 2014)

This serious injury trial was problem for Plaintiff on may accounts.  But there was discussion on a missing document charge for the failure to obtain photographs:

“Although there was testimony that McCarron took pictures at the accident scene with a disposable camera, the plaintiff failed to establish that any photographs of the accident scene existed, or that he moved to compel their production during discovery (see McGloin v Golbi, 49 AD3d 610Crespo v New York City Hous. Auth., 222 AD2d 300).”

Insurable interest

Matter of Progressive Specialty Ins. Co. v Alexis, 2014 NY Slip Op 07668 (2d Dept. 2014)

The term insurable interest is always interesting.  What is it really?  Well the Appellate Division discusses this a bit:

“As the owner of the vehicle, So Mi Ko had an insurable interest for which New York Central provided coverage (seeInsurance Law § 3401; Scarola v Insurance Co. of N. Am., 31 NY2d 411, 412-414; Azzato v Allstate Ins. Co., 99 AD3d 643, 650-651). Accordingly, New York Central’s cancellation of So Mi Ko’s policy on this ground was improper and, therefore, invalid (see Matter of Lumbermens Mut. Cas. Co. [Brooks], 13 AD3d 198, 199; Nassau Ins. Co. v Hernandez, 65 AD2d 551, 552; cf. Matter of State Farm Mut. Auto. Ins. Co. v Cherian, 202 AD2d 434, 435-436).”

The inability to recall which shoulder was hurt damages the plaintiff’s case

Fludd v Pena, 2014 NY Slip Op 07747 (1st Dept. 2014)

This 5102(d) case is interesting because it stands for the proposition that the failure to make complaints of pain at the IME of the affected body parts will negate the requirement to examine that body part.  I am going to say that is the case even when there is record evidence of pain at that body part.

“Defendants were not required to present medical evidence with respect to plaintiff’s alleged injury to her left shoulder, since plaintiff failed to recall at her deposition which shoulder was injured (see Thomas v City of New York, 99 AD3d 580, 582 [1st Dept 2012], lv denied 22 NY3d 857 [2013]). Moreover, plaintiff made no complaints about any shoulder injury when she was examined by defendants’ expert.


Permanent consequential v. Significant limitaton – the value of early surgery

Sutliff v Qadar, 2014 NY Slip Op 07769 (1st Dept. 2014)

This case really discusses the danger on the personal injury side of the “significant limitation prong” of 5102(d).

Factually, there was an accident in December 2009.  The Claimant presumably had standard PT and other treatments.  He had positive clinical tests and other positive objective tests.  The Plaintiff underwent shoulder surgery February, 2010.

We learn that there was  minor limitation of the shoulder in June, 2010. Presumably. an IME in 2012 or 2013 found normal range of motion and attributed the injury to other forces.

On this record the following happened:

Permanent Consequential

(1) plaintiff failed to raise a triable issue of fact as to the existence of a “permanent consequential” limitation of use of the left shoulder.

(2) On the causation issue (and this is interesting): “To the extent plaintiff argues that the orthopedist found a causally related injury, the orthopedist opined that the causally related injury amounted to only a minor contusion and, based on his review of plaintiff’s medical records, attributed the more serious symptoms to the preexisting injury (see Bravo v Martinez, 105 AD3d 458, 458 [1st Dept 2013]).”

Significant Limitation

“The affirmed reports of plaintiff’s treating physician found substantial limitations and positive clinical tests results in January 2010, a month after the accident, and plaintiff underwent shoulder surgery in February 2010 (see Thomas v NYLL Mgt. Ltd., 110 AD3d 613, 614 [1st Dept 2013]; cf. Vasquez v Almanzar, 107 AD3d 538, 539-540 [1st Dept 2013]). The treating physician also noted that plaintiff’s prior shoulder injury improved with therapy, and opined that the subject accident caused significant injuries to the left shoulder. This evidence, as well as evidence that plaintiff returned to work full time over a year prior to the subject accident, raises a triable issue of fact as to whether this accident caused an aggravation or exacerbation of the prior injury (see Nelson v Tamara Taxi Inc., 112 AD3d 547, 548 [1st Dept 2013]). Further, plaintiff submitted an MRI report performed after the accident, and an operative report of his orthopedic surgeon, which provide objective proof of a preexisting partial tear that may have been aggravated by the subject accident, and of a new symptom following this accident ”

What do I take out of this?

Causation is varies on the prongs of the statute, which is strange.  But it tells us that a positive MRI, clinical results and early surgery will satisfy significant limitation.  Also, a Plaintiff who went back to work from a prior injury but then lost time from work will raise an issue of fact as to causation.

This one hurts the carriers, and I think increases the importance of early surgery in increasing the value of a PI case.  I cannot believe I am saying that exposing people to the risks normally attendant with surgery prematurely will many times shield the Plaintiff from being nonsuited on a significant linitation claim.

No Fault angle

No Fault covers any exacerbation.  We see (at least as to permanent consequential) that this not the case: “the orthopedist opined that the causally related injury amounted to only a minor contusion and, based on his review of plaintiff’s medical records, attributed the more serious symptoms to the preexisting injury”

In no-fault, any causal relationship would be payable by no-fault.  On the PI side, if you can disaggregate the symptoms, causation is not as clear cut and will go to the jury.  I have been looking for a case where the theory that the BI coverage on causation is less expansive as no-fault.


Default granted where answer is 6 months later

Rosenblatt v New York City Tr. Auth., 2014 NY Slip Op 07575  (1st Dept. 2014)

“Defendants demonstrated an excuse of law office failure through the assigned attorney’s detailed affirmation setting forth the series of mistakes that resulted in the granting of plaintiff’s motion for entry of a default judgment, just after defendants had served an answer, which was about six months late

This case is another illustration of the ease that default judgments can be vacated in the First Department, as opposed to the Second Department, where the Courts take a more stern stance towards vacating default judgments.

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