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

Archive for the ‘Prima Facie case’ Category

Meridan Health Acupuncture, P.C. v Auto One Ins. Co., 2010 NY Slip Op 51263(U)(Dis. Ct. Suffolk 2010)

In this case, the District Court allowed a Notice to Admit to satisfy a plaintiff’s prima facie burden.  It also found that a Defendant’s really cute, but completely inappropriate response, to the notice to admit to be deemed a nullity.  The net effect, in the eyes of the District Court, was to deem the allegations set forth in the notice to admit to be deemed admitted.

I would have no problem with the court’s findings of facts and conclusions of law, provided the District Court transplanted itself to the Grand Concourse from 1850 New York Avenue.  Thus, if the District Court, Third District, Huntington Part, sat in the hypothetical District Court, Third District, Bronx Part, then one should probably applaud this opinion.  Furthermore, if the Appellate Division, Second Department overturns, in effect, Art of Healing, which many of us think is probably going to happen, then this decision would probably be correct.  But, District Suffolk sits on Long Island, and cannot disregard the law as the Appellate Term in this Department has said it to be, viz, a prima facie case requires, among other things, a business record foundation for the entry of the bills into evidence.

But if you read this decision, note how the Court avoids citing Second Department precedent (when convenient), and even cites the one and only Appellate Division, First Department case that commented on what constitutes a prima facie case.

This was a comment from Jerry Maline, of Richard Lau’s office, State Farm’s in-house counsel.  This is a really astute comment, and got me thinking for a second.  Now, just follow me on this to see if my logic makes sense.

According to the Appellate Term, Second Department, Notices to Admit and Interrogatories cannot be used to establish a prima facie case.  This is because a party cannot admit the genuineness of another party’s documents, as well as use these devices to establish a complete prima facie case.  In practice, this translates to disallowing an insurance carrier to lay a business record foundation for a provider’s bills or an injured person’s bills.

The corollary to this rule is that a medical provider cannot lay a business record foundation for an insurance carrier’s denials.

In contrast to the above, we now have learned that at the Appellate Term, First Department, interrogatories and notices to admit may be used to satisfy a prima facie case, since the genuineness of the bills is not part of a provider’s prima facie case.

Now, in light of the Second Department’s  holding in Urban, viz, that a denial does not have to be “in evidence” in order to preserve the defense set forth on the denial, the only factual issue a denial presents is its timeliness.  We all know that denials, generally, are mailed on the date set forth on the denial or the next business day.  There are some variations out there, but that is the general industry standard.  In light of Central Nassau, it would seem that a provider could be charged with having sufficient knowledge to either admit or deny: 1) whether; and/or 2) when the provider received a denial.  Like anything else, this tactic will only work if the statements set forth on the Notice to Admit are properly drafted.

Since the only issue relating to an NF-10 at the Appellate Term, Second Department, involves the timeliness of the denial, it would seem to follow that a Notice to Admit can satisfy the underlying procedural issues, and allow the insurance carrier to go forward on its substantive defense.  Moreover, since an insurance carrier’s entire prima facie defense does not rest on the timeliness of a denial, it cannot be said that the Notice to Admit would go to the ultimate or heart of the disputed issue.  So, an insurance carrier can successfully use this device to demonstrate timely handling, in my opinion.

As for the Appellate Term, First Department, this is an open question.  Notwithstanding that Court’s holding that a Notice to Admit may itself satisfy a provider’s prima facie case, that court has never opined as to whether a denial must be in evidence, in order to preserve the defenses that are set forth on it.  I would imagine that the Appellate Term, First Department, would probably follow the Presbyterian v. Elrac rule and require that the denial be placed into evidence, before allowing a carrier to go forward on its substantive defenses.

In any event, the Appellate Term, First Department, at worst would only leave unresolved for trial the business record foundation issue involving the denial, besides the substantive defenses.  Admittedly, laying a business record foundation is a far easier burden than showing a document was timely mailed.

Thus, a properly drafted notice to admit should resolve the timeliness issue.  In the Second Department, this would resolve all issues involving the denial of claim form and allow the carrier to go forward on its substantive defense.  In the First Department, this would at a bare minimum eliminate the mailing issue, and possibly leave the business record issue open, as well as the underlying defense to the no-fault claim.

I think the blog post of Respondent’s counsel in Central Nassau, Kurt Lundgren, shows the practical side of Central Nassau and the business side of our industry.  You should definitely read it.

Central Nassau Diagnostic Imaging, P.C. v GEICO, 2010 NY Slip Op 20244 (App.Term 1st Dept. 2010)

I am going to annotate this opinion -

Here is the synopsis of the argument:

“On appeal, defendant argues that plaintiff could not rely upon defendant’s admissions resulting from its failure to respond to the notice to admit to establish plaintiff’s prima facie case. Defendant maintains that, notwithstanding the factual admissions resulting from its failure to respond to the notice to admit, plaintiff was required to call witnesses at trial to lay a foundation for the admission into evidence of the bills. Because plaintiff did not call any trial witnesses, defendant asserts that the complaint should have been dismissed, as plaintiff failed to establish entitlement to recover the assigned no-fault benefits. We disagree, and affirm.”

Here is the holding:

“[p]laintiff’s requests for admissions were appropriate and defendant, by failing to respond to the notice to admit or seek other appropriate relief, is deemed to have admitted the facts on which plaintiff sought admissions. Because defendant admitted that the two bills attached to the notice were “true and accurate” copies of the bills received by defendant and that defendant has not paid those bills, plaintiff established its entitlement to recover the overdue assigned first-party no-fault benefits (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]).”

The final nail in the coffin from this court:

“Our conclusion that a plaintiff-provider can use admissions obtained through a notice to admit to establish its entitlement to recover overdue assigned first-party no-fault benefits is consonant with the purposes underlying the No-Fault Law, which “were to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists” (Medical Socy. of State v Serio, 100 NY2d 854, 860 [2003]), as well as case law [*3]allowing a plaintiff-provider to establish its entitlement to such benefits based on admissions obtained from a defendant-insurer on interrogatories (see Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8 [2007]).”

The Appellate Term, Second Department gets slighted:

“To the extent Bajaj v Gen. Assur. (18 Misc 3d 25 [2007]) can be read to support a contrary result, we decline to follow it.”

My thoughts:

Why would a plaintiff stipulate to anything if an unanswered notice to admit or Interrogatory #18 of a famous law firm’s discovery package is completely answered?

Admittedly, I suppose this decision makes sense and is correct on the law as Appellate Division authority exists right now.  As a practitioner, it just seems crazy that a provider can mail a piece of paper – it probably can even be a boulder that Fred Flintstone chizzled into – wave a wand and make its case through the statutorily mandated duties of an insurance carrier.  Blame the Appellate Division for this result.

But, I have to laugh at how allowing a medical provider to meet its prima facie case without calling a witness or relying on an insurance carrier’s admissions: “[r]educe[s] the burden on the courts and to provide substantial premium savings to New York motorists”.  It looks like the author of this per curiam opinion decided to hurl some of the left over salt from the stockpiles that New York City has at the conclusion of the winter season at Geico’s counsel’s open wounds.

ONE MORE THING

I was informed last night that I was actually referencing “interrogatory #8″, see supra.  I said “18″.  And yes, I have received many motions over the years explaining how my response to this famous interrogatory was deficient.

Quality Health Prods., Inc. v NY Cent. Mut. Fire Ins. Co., 2010 NY Slip Op 50990(U)(App. Term 2d Dept. 2010)

“Plaintiff argues, among other things, that defendant’s motion should have been denied because defendant failed to establish that its denial of claim forms constituted evidence in admissible form pursuant to the business records exception to the rule against hearsay as set forth in CPLR 4518. This argument is unavailing. Defendant did not offer the denial of claim forms to establish the truth of the matters asserted therein, such as the lack of medical necessity of the services rendered, but rather to show that such denials were sent, and that, therefore, the claims were denied. As the denial of claim forms were not offered for a hearsay purpose, they did not need to qualify as business records (see e.g. Dawson v Raimon Realty Corp., 303 AD2d 708 [2003]; Splawn v Lextaj Corp., 197 AD2d 479 [1993]).

Plaintiff raises the same argument regarding the notice of cancellation offered by defendant with respect to the insurance policy issued to Manuel Espinal which defendant had canceled. Again, since this document was not being offered for a hearsay purpose, it did not need to qualify as a business record. As plaintiff’s remaining contentions are meritless, the order is affirmed.”

In St. Vincent Medical, P.C. v. Mercury (App. Term 2d Dept. 2009) and NY&P v. Elrac Inc.(2d Dept. 2004), it was held that the denials constituted business records despite the objections of the respective plaintiffs.  Also, Dan Medical holds that a bill has to be placed into evidence to satisfy a provider’s prima facie case.  So, I am confused by this one.

CORRECTION – See,  St. Vincent Medical Care, P.C. v. Mercury Cas. Co. 23 Misc.3d 135(A)(App. Term 2d Dept. 2009)(”The affidavit of defendant’s claim representative set forth the affiant’s personal knowledge of defendant’s business practices and procedures, so as to lay a foundation for the admission of the documents annexed to the affidavit as business records (see CPLR 4518; Dan Med., P.C. v New York Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2007]“).

The second case I cited above should be:  Hospital for Joint Diseases v. Elrac, Inc. 11 A.D.3d 43 (2d Dept. 2004)(”We expressly reject the argument of NY & P Hospital that the affidavit of a claims representative based on records maintained by an insurer in the ordinary course of business did not constitute admissible evidence sufficient to establish a valid defense (see DeLeon v Port Auth. of N.Y. & N.J., 306 AD2d 146 [2003]; First Interstate Credit Alliance v Sokol, 179 AD2d 583, 584 [1992]). Personal knowledge of such documents, their history, or specific content are not necessarily required of a document custodian (see DeLeon v Port Auth. of N.Y. & N.J., supra”)

There is another case: Montefiore Medical Center v. Liberty Mut. Ins. Co. 31 A.D.3d 724 (2d Dept. 2006)(”Contrary to the contention of the plaintiff Montefiore Medical Center, the affidavit of the defendant’s claims representative based on records maintained by the insurer in the ordinary course of business was sufficient to establish the defense (see Hospital for Joint Diseases v. ELRAC, 11 A.D.3d 432, 433, 783 N.Y.S.2d 612). Similarly, the documents submitted on the cross motion demonstrate that the insurer effectively canceled the policy (see Hughson v. National Grange Mut. Ins. Co., 110 A.D.2d 1072, 488 N.Y.S.2d 930″).

Miller v Bah, 2010 NY Slip Op 04753 (2d Dept. 2010)

“After he testified, the plaintiff, who did not identify the defendant in court as the driver of the offending vehicle, rested his case without calling another witness, or offering an accident report into evidence. The defendant, who did not present a case, then moved pursuant to CPLR 4401 for judgment as a matter of law.”

Defendant eventually receives the directed verdict, and a malpractice case may be on its way.

You will have to wait.

Matter of Andrew Carothers, M.D., P.C. v Geico Indemnity Co., 2010 NY Slip Op 72075(U)(2d Dept. 2010)

Application by the appellant pursuant to 22 NYCRR 670.8(d)(2) to enlarge the time to serve and file a reply brief on an appeal, by permission, from an order of the Appellate Term of the Supreme Court, Second, Eleventh, and Thirteenth Judicial Districts, dated July 14, 2009.

ORDERED that the application is granted and the reply brief shall be served and filed on or before June 2, 2010.

ENTER:

“It is well established that “ [a] denial of a motion for summary judgment is not necessarily res judicata or the law of the case that there is an issue of fact in the case that will be established at the trial’ ” (Wyoming County Bank v Ackerman, 286 AD2d 884). Nevertheless, “[i]f the facts at [trial] are substantially the same as those presented in the prior appeal, the trial court must adhere to this [C]ourt’s determination of the controverted questions of law” (Bolm v Triumph Corp., 71 AD2d 429, 434, lv dismissed 50 NY2d 801, 928). Because we concluded in the prior appeal that there is a triable issue of fact whether the letter signed by defendant’s [*2]president restarted the statute of limitations (Caleb, 19 AD3d 1090; see General Obligations Law § 17-101), the court was bound by the doctrine of law of the case to submit that issue to the jury.”

If an appellate court makes a finding that a certain fact or issue has been established and not rebutted on appeal, then the Fourth Department is of the view that it is improper for a trial court to a force a trial on that issue.  Six words and an ampersand: (1) prima (2) facie (3) case & (4) timely (5) mailed (6) denial.  I refuse to decipher the Morse code.

Since this is the only Fourth Department from the April series of decisions that I will be posting, I am going to add a thought that is completely unrelated to the post.  Take a look at the cases that the Fourth Department decided on April 30, 2010.  This would be the second section of cases – the first are the appellate motions.  You will see – and I am not kidding you – that about 30% of the cases have dissents.  Of those 30%, at least 40-50% have two Justice dissents, which allows a final judgment to be taken to the Court of Appeals as of right.  This is unprecedented.  I have been opining for months that there are an inordinately large number of dissents up in our Rochester Appellate Court.  But I have never in my life have seen anything from an appellate court in New York, like what I saw in the April 30, 2010 batch of cases.

By the way, the most interesting case that came out on April 30, 2010 was this case entitled Progressive Halcyon Ins. Co. v Giacometti, 2010 NY Slip Op 03544 (4th Dept. 2010).  It involved an issue as to whether the presumption of “permissive use” has been rebutted due to a “backseat driver” sitting in the front passenger seat, who jerks the steering wheel and causes an accident.  Although completely unrelated to no-fault, this is a 4-1 decision you must read.

Reiss v Roadhouse Rest., 2010 NY Slip Op 01632 (2d Dept. 2010)

“At the hearings before the JHO, the intervenors failed to prove that GHI was entitled to reimbursement under its insurance contract with the plaintiff. More particularly, the intervenors failed to prove that any part of the settlement proceeds in this action included a recovery for past medical expenses and, thus, could not demonstrate that GHI was entitled to the reimbursement of medical benefits it paid on the plaintiff’s behalf. The intervenors’ sole witness, the attorney representing Healthcare Recoveries, which itself was only an agent retained by GHI to pursue the reimbursement claim, was not qualified to testify regarding the terms of the health insurance agreement between GHI and the plaintiff (see Franklyn Folding Box Co. v Grinnell Mfg., 234 AD2d 505, 506), and his testimony that the plaintiff’s past medical expenses were considered by the parties in reaching their settlement was mere speculation based upon inadmissible hearsay (see generally Matter of Hausknecht v Comprehensive Med. Care of N.Y., P.C., 24 AD3d 778, 779). The intervenors also improperly sought to prove the amount of GHI’s claim by seeking to admit into evidence, as a business record, the consolidated statement of benefits prepared by Healthcare Recoveries from information it obtained from GHI. Since the intervenors’ sole witness also was not qualified to give testimony regarding GHI’s record-keeping practices, that document should not have been admitted into evidence (see Lodato v Greyhawk N. Am., LLC, 39 AD3d 494, 495).”

Many times – and this is happening more frequently – the injured person seeks to have post no-fault IME medical treatment paid for through his or her major medical carrier.  When a personal injury case settles or even is tried to a verdict, the major medical carrier through their collection agent will usually attempt to recoup the paid-out benefits against the injured person through recovery on the underlying lien.  This will take place in the context of a Civil action.  The injured person, assuming there is no assignment of benefits, will then bring a third-party against the no-fault carrier.

The no-fault carrier is subject to suit in a contractual and contribution role of sorts.  As we can see, the collection agent of the major medical carrier has some hurdles – not insurmountable but significant – to recoup the benefits from the injured person.  Should the major medical carrier fail to make a prima facie case as seen above in Reiss, then the no-fault carrier is not on the hook.

Finally, and somewhat related is that the collection agent cannot get around the business record foundation necessary to put the documentation and interpretation of the major medical carrier’s records into evidence.

This case is interesting to say the least.

Dugo v Allstate Ins. Co., 2010 NY Slip Op 50102(U)(Civ. Ct. Richmond Co. 2010)

Lately, various defense counsel have been challenging the precepts behind the Domotor case, which holds that a disclaimer of future benefits excuses compliance with all conditions precedent to coverage, including the timely submission of claims to the insurance carrier.  Since Domotor is an Appellate Division, Second Department opinion that has not been overturned, it would seem incongruous to believe that an insurance carrier can successfully rely on the 45-day non submission defense in this scenario.  Indeed, every published lower court case has found that a global denial excuses compliance with all conditions precedent to coverage including, among other things, the responsibility to timely submit a claim.

This case is interesting because, as seen below, the Civil Court held that the failure to timely submit a claim following a global denial is excused, but the plaintiff may not rely on the supposed presumption of medical necessity that attaches to a statutory claim form.  Therefore, plaintiff must make a prima facie showing that the contested service was medically appropriate in the first instance.  As seen below:

“Plaintiff contends that once defendant issues a general denial which predates any services provided by plaintiff, it is no longer under an obligation to submit claims within 45 days of the date of service. Defendant contends that its general denial does not obviate plaintiff’s obligation, under the No – Fault Law, to submit a claim within 45 days.

Defendant’s attempt to distinguish the current factual situation from the governing case of Mtr. Of State Ins Co. V. Domotor, 266 AD3d 219 (2d Dept. 1999) is unavailing….

Allstate’s “ability to resolve the claims at issue if warranted” is not prejudiced. Plaintiff had the option of continuing to submit claims, despite Allstate’s general denial, and chose not to. Since plaintiff has failed to file its claim, no presumption of medical necessity attaches to the services rendered by plaintiff.The burden therefore has not shifted to defendant to demonstrate the lack of medical necessity. See, , e.g. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U, 17 Misc 3d 1135A( Dist. Ct., Nassau Co. 12/3/2007);A.B. Medical Services, PLLC v. NY Central Mutual Fire Ins. Co., 2005 NY Slip. Op. 50662(U), 7 Misc 3d 1018(A) (Civil Ct. Kings. Co. 2005); Citywide Social Work & Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings [*3]Co. 2004). At trial, plaintiff must establish the medical necessity of the services rendered and negate the general denial issued by Allstate that pursuant to an IME, no further medical services were warranted.”

It is an interesting theory that Judge Levine has posited in relation to forcing a provider to make a prima facie showing that the disputed services were medically appropriate in this factual situation.   As we all know, medical necessity is not part of a provider’s or injured person’s prima facie case.  This is a defense that only becomes relevant following the submission of a timely denied overdue statutory claim form, or in this case, proof that a global denial was issued, received and that the services were rendered after the issuance of said global denial.

Similarly, the causal relation between the loss and the injury is also a defense and is not part of a provider’s prima facie case.  In essence, what independent significance does the claim form really have?  It would appear that in the paradigm the courts have created, the only thing the claim form does is tell us how much is in dispute and, in effect, shifts the burden of production to the insurance carrier.

Thus, is there really a presumption of medical necessity that attaches to a claim form, or is the notion of medical necessity (similar to causation) presumed in the more global sense?  See, Kingsbrook Jewish Medical Center v. Allstate Ins. Co. 61 A.D.3d 13 (2d Dept. 2009); Bronx Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 17 Misc.3d 97 (App. Term 1st Dept. 2007).  I think it is the latter.

For the record, I think that the medical necessity of a service and the causal relation between the loss and the service should be a burden that falls on the provider.  It is like that in every other state.  Why should we be different?  But as this fits within the settled law in this State, it would appear that the insurance carrier in the Domotor scenario would have to prove the lack of medical necessity of a service in the first instance, similar to any other insurance carrier.