Custom Orthotics of NY, Inc. v State Farm Mut. Auto Ins. Co., 2007 NY Slip Op 27549 (Dist Ct Suffolk County, Fourth Dist)

Defendant in its answers to plaintiff’s Notice to Admit admitted that it received the “claims for no-fault benefits” and “bills that are the subject of this action”. . .”to the extent that same were attached to the Summons and Complaint,” but specifically “reserve[d] the right to object to the validity of same at trial.” Defendant further admitted that it did not pay the claims or bills, but “only to the extent that no payment is due and owing.” In addition, as to plaintiff’s [*2]request for an admission that defendant received an Assignment of Benefits Form for the claims underlying this action, defendant admitted, “only that Plaintiff submitted a form that is purported to be an assignment of benefits” but “reserve[d] the right to object to [the] validity [thereof]” at trial.

Also introduced by plaintiff was defendant’s “Arbitration Submission.” Among other things, the Arbitration “packet,” as counsel referred to it, contained defendant’s denial of plaintiff’s claims which was based solely upon a lack of medical necessity.

Among other things, defendant argued that the admissions sought to be used were “at the heart of the matter,” i.e. absolutely essential to plaintiff’s right to recovery, and that the facts underlying the admissions were “hotly contested,” thus precluding the use of the Notice and its contents at trial. Defendant argued further that permitting plaintiff to proceed in this fashion improperly dispensed with the requirement that plaintiff’s witness establish a proper foundation for introduction of the documents necessary to establish its prima facie case.

The court is aware of persuasive authority supporting plaintiff’s position (see, Seaside Medical, PC v General Assurance Co, 16 Misc 3d 758, 842 NYS2d 234 [District Ct, Suffolk Co 2007][unanswered Notice to Admit sufficient to establish prima facie case]; see also, Fair Price Medical Supply, Inc. v St. Paul Travelers Ins Co [16 Misc 2d 8, 838 NYS2d 848 [AppTerm, 1st Dept 2007][holding that defendant's verified answers to interrogatories were formal judicial admissions and therefore sufficient to establish plaintiff's entitlement to judgment in its favor]).

The case at bar is distinguishable, however, in that defendant answered the Notice to Admit, admitting the receipt of certain materials, but pointedly reserving its right to challenge the validity of plaintiff’s documentary evidence at trial. Under the circumstances presented, it cannot be said that plaintiff’s ability to establish a prima facie case is not “hotly contested,” as defendant argues. Significantly, no bills or claim forms were attached to the summons and complaint in the court’s file. Rather, what was appended was a computer printout generated by plaintiff.

In addition, recent caselaw suggests that the formalities surrounding the introduction of business records into evidence must be observed, and that a decision in favor of plaintiff herein would not survive on appeal (see, Westchester County Medical Ctr v NY Central Mutual Fire Ins Co, 262 AD2d 553, 692 NYS2d 665 [2d Dept 1999]; Fortune Medical, PC v Allstate Ins Co, 14 Misc 3d136, 836 NYS2d 492 [AppTerm, 9th & 10th Jud Dists 2007]).

Re: No-Fault Documentation and Social Security Numbers

The insurance dept concluded that a no-fault insurer may require a social security number from an applicant in order to pay or deny a claim. The dep’t also declined to opine whether or not a provider must continue treatment when the insurer will not pay or deny claims due to the applicant’s failure to provide requested verification

For the complete letter, click the above link.

LICENSEE ADDRESS PENALTY

$13,700 fine
Respondent violated Section 5106 of the Insurance Law and various provisions of
Department Regulation 68 (11 NYCRR Part 65) in connection with payment of overdueclaims and denial of claims. Respondent also failed to comply with various provisions of Department Regulation 64 (11 NYCRR Part 216) by failing to a make a timely good faith offer of settlement, failing to send a written explanation for the delay in handling claims settlements of automobile losses, and in failing to timely report to the NICB when property damage claims exceeding $25,000. [Stipulation approved December 5, 2007.]

Is this signifcant? Maybe.

You might recall an earlier post of mine where I referred to a recent draft regulation that included these principles:

(1) A licensee shall lawfully conduct its business with integrity, due skill, and diligence.

(4) A licensee shall observe proper standards of market conduct.

(5) A licensee shall pay due regard to the interests of its clients and treat them fairly.

(6) A licensee shall pay due regard to the information needs of its clients, and communicate information to them in a way that is clear, fair and not misleading.

And you may also recall an even earlier post about a referendum in Washington that would allow for a bad bad faith cause of action against insurance companies that fail to pay a legitimate claim, allowing for treble damages. (it was eventually passed)

Is this fine an indication that the insurance dept supports a bad faith cause of action?

not weird weird, weird facts weird

Pinnacle Open MRI, P.C. v Republic W. Ins. Co., 2008 NY Slip Op 25000 (Nassau Dist Ct)

Republic Western alleges that it and U-Haul are wholly owned subsidiaries of a Nevada corporation known as AMERCO. According to Republic Western, it “provides U-Haul with loss adjusting and claims handling through regional [sic] across North America[,]” (Puckett Affidavit 8/20/07, ¶ 7) and further alleges that it “does not issue a policy of insurance to the driver but rather covers U-haul for all claims against the self-insured.” (Puckett Affidavit 8/20/07, ¶ 9) Republic Western explains that “[w]hen a customer rents a U-Haul vehicle in New York State, Republic Western will insure the vehicle.” (Puckett Affidavit 8/20/07, ¶ 9) Based thereon, Republic Western declares that it is “the self-insurer for U-Haul” (Puckett Affidavit 8/20/07, ¶ 7) and that its obligations to pay no-fault first party benefits is imposed by statute or regulation. In this respect, Republic Western suggest that it is in the same position as the Motor Vehicle Accident Indemnification Corporation (hereinafter referred to as “MVAIC”), and is entitled to the application of the three (3) year statute of limitations provided in CPLR § 214(2).

[C]ontradicting its earlier statements, Republic Western alleges that “U-Haul provides the funding for losses regarding its vehicles – including the no fault benefits in question.” (Federici Affirmation 11/26/07, ¶ 4) Re-emphasizing its relationship with U-Haul and AMERCO, Republic Western notes that no insurance is sought from outside companies and that the three (3) corporations should collectively be viewed as a single self-insured entity. Republic Western posits that the question before the court is “whether the liability [to pay first party benefits] would not exist but for a statute.”[emphasis in original] (Federici Affirmation 11/26/07, ¶ 6) Republic Western answers this question by arguing that unlike “[t]raditional [*3]automobile insurance companies” (Federici Affirmation 11/26/07, ¶ 6) which issue policies of insurance, Republic Western is self-insured and “do[es] not issue policies containing the no-fault endorsement, and would not owe no-fault benefits but for Regualtion 68.”(Federici Affirmation 11/26/07, ¶ 6) This court does not agree.

Although claiming to be self-insured, Republic Western has failed to offer any competent proof supporting this claim. In fact, Republic Western’s proof appears to be to the contrary. At the outset, it is noted that Republic Western’s Answer fails to deny, and therefor admits, the allegation contained in paragraph “1″ of the Plaintiff’s Complaint, which alleges: “Defendant is an insurance company licensed to do business in the State of New York.” The court also agrees with the Plaintiff that there is neither legal authority for, nor any logic to, Republic Western’s claim that it is actually the “self-insurer” of a separate legal entity.

Similarly, the business relationship among the corporate entities, Republic Western, U-Haul and AMERCO, does not establish Republic Western as a self-insured. In fact, the affidavit of Sharon Puckett, Republic Western’s claims representative and the AMERCO 10Q report upon which Republic Western relies, do more to establish Republic Western as an insurer than a self-insurer. As previously noted, Ms. Puckett advises this court that “[w]hen a customer rents a U-Haul vehicle in New York State, Republic Western will insure the vehicle.” (Puckett Affidavit 8/20/07, ¶ 9) She similarly advises that Republic Western “covers U-Haul.” (Puckett Affidavit 8/20/07, ¶ 9) Verifying that Ms. Puckett’s use of the words “insure” and “covers” were not used in error, the AMERCO 10Q report submitted by Republic Western advises that “Rep West is focused on providing and administering property and casualty insurance to U-Haul, its customers, its independent dealers and affiliate.”(Amerco 10Q Report, p. 51); “Rep West also underwrites components of the Safemove, Safetow and Safestor protection packages to U-Haul customers. We continue to focus on increasing the penetration of these products. The business plan for Rep West includes offering property and casualty products in other U-Haul related programs.” (Amerco 10Q Report, p. 53); “Premiums at Rep West increased $0.6 million due to increases in U-Haul related business.”(Amerco 10Q Report, p. 59); and, “Premium revenues [for Republic Western] were $5.4 million and $4.8 million for the quarters ended March 31, 2006 and 2005, respectively. U-Haul related premiums were $4.5 million and $3.9 million for the quarters ended March 31, 2005 and 2004, respectively.”(Amerco 10Q Report, p. 67)\

That Republic Western’s claim to be a self-insurer is erroneous at best, and less than forthright at worst, is evidenced by the representations made by Republic Western in other litigation involving its status as an insurer. In Republic Western Insurance Company v. State, 985 S.W.2d 698, (Tex.App.-Austin1999) Republic Western and U-Haul brought an action seeking a declaration that they were not engaging in the unauthorized business of insurance. The State of Texas sought injunctive relief, restraining such insurance activities. In finding against Republic Western and U-Haul the Texas Court of Appeals noted, “U-Haul offers its rental customers three “Safe Protection” insurance packages” and “solicit[s] rental customers to purchase insurance and collect[s] premiums for Republic Western[.]” Regarding Republic Western’s activities, the court observed, “Republic Western … assist[s] U-Haul in the solicitation and effectuation of insurance, in the dissemination of coverage and rate information, and in the delivery of insurance contracts.”

Accepting for the sake of argument that Republic Western has adequately demonstrated its status as a self-insurer, Republic Western relies upon two (2) lower court decisions, one reported, Alleviation Supplies Inc. v. Enterprise Rent A Car, 12 Misc 3d 787, 819 NYS2d 404 (Civ. Ct. Richmond Co. 2006) and one unreported, AL Medical & Surgical Supplies, Inc. v. Republic Western Insurance Company, Index No. 48145/06, (Civ. Ct. Bronx Co. 2007), to support its statute of limitations argument. Recognizing the application of a six (6) year statute of limitations in actions seeking to recover no-fault first party benefits owed under a policy of insurance, the court in Alleviation Supplies Inc. v. Enterprise Rent A Car, supra . held, “there is not logical reason to view an action against a self-insurer as a breach of contract action, in that the self-insurer’s liability derives solely from statute and regulations promulgated pursuant to statute.” The court in AL Medical & Surgical Supplies, Inc. v. Republic Western Insurance Company, supra . reached the same conclusion. This court respectfully disagrees. This court is not bound by either of the decisions relied upon by Republic Western; and, for the reasons set [*5]forth at length below, respectfully declines to follow them.

As is apparent from the foregoing, to suggest that motor vehicle owners/lessors, who choose to operate as self-insurers, should benefit from the shorter statute of limitations provided by CPLR § 214(2), for “liability … created or imposed by statute except as provided in sections 213 and 215″, because they do not physically issue a policy of insurance or a no-fault endorsement, overlooks the fact that the very same obligations are imposed upon insurance companies by mandating that their policies contain such endorsements. Insurance Law § 5103(a); 11 N.Y.C.R.R. § 65-1.1(a) Moreover, Insurance Law § 5103(h) provides that “Any policy of insurance obtained to satisfy the financial security requirements of article six or eight of the vehicle and traffic law which does not contain provisions complying with the requirements of this article [Article 51], shall be construed as if such provisions were embodied therein.”

As recently recognized in Mandarino v. Travelers Property Casualty Ins. Co., 37 AD3d 775, [*8]831 NYS2d 452 (2nd Dept. 2007), “the inclusion of terms in an insurance contract, which might be mandated by various statutes or regulations, does not necessarily alter the fundamentally contractual nature of the dispute between the insured (or is or her assignee), on the one hand, and his or her no fault’ insurer on the other hand.” In such circumstance, this liability is no less created or imposed upon one issuing a policy of insurance than it is upon a self-insurer who contracts for the leasing of its vehicle, which carries with it the assurance of its financial ability to satisfy the Motor Vehicle Financial Security Act and to pay judgments and claims. See: Guercio v. Hertz Corporation, supra .; ELRAC, Inc. v. Ward, supra .; Nassau Insurance Company v. Guarascio, supra . The court can see no logical reason why an insurer who contracts for the mandated coverage should be subjected to a six (6) year statute of limitations, while a self-insured owner/lessor who contracts for the lease of its vehicle, may limit its liability to those actions commenced within three (3) years of their accrual. The logical extension of such a holding would be to encourage insurance companies to refrain from issuing policies of insurance or excluding no-fault endorsements therefrom, allowing them to argue that their obligations are imposed by statute alone, reducing their exposure, in contravention of the statutory and regulatory scheme.

This, in fact, was the same position recently taken by the Appellate Division, Second Department in ELRAC, Inc. v. Suero, 38 AD3d 544, 831 NYS2d 475 (2nd Dept. 2007). While that case involved a proceeding to recover “uninsured motorist” benefits from the self-insured rental company, rather than no-fault first party benefits, the statutory and regulatory schemes enacting and implementing the two (2) endorsements are the same; and, the court’s reasoning for applying a six (6) year statute of limitations, as opposed to a three (3) year statute of limitations, to a self-insurer is indistinguishable.

Accordingly, it is the holding of this court that a claim for no fault first party benefits against a self-insured motor vehicle rental company will be subject to the six (6) year statute of limitation provided by CPLR § 213(2); and, the motion of Republic Western to dismiss this action as untimely is denied.

I know this seems like a lot. I actually edited a bunch of stuff out.

Odessa Med. Supply, Inc. v Government Employees Ins. Co., 2007 NY Slip Op 27542 (Civ Ct City NY, Bronx County)

Defendant moves for an Order, pursuant to CPLR §2221(e), granting defendant leave to renew and ordering a new trial based upon a change in law. Defendant’s motion is granted. Written opposition was submitted. Defendant’s motion for leave to renew is granted and upon renewal this Court’s Decision/Order, dated October 31, 2006, is vacated, plaintiff’s motions in limine for preclusion and for a directed verdict are denied.

The1999 amendment of CPLR §2221 codified the rules pertaining to reargument and [*3]renewal motions. CPLR §2221(e)(2) makes clear that a motion to vacate or modify a prior order on the ground that there has been a change in the law that would change the prior determination is a renewal motion. While the 1999 amendment set forth a specific time frame for the making of a motion to reargue (30 days after service of a copy of the order determining the prior motion with notice of entry [CPLR §2221(d)(3)]), a motion to renew contains no statutory time prescription. The issue of the timeliness of a motion to renew under the 1999 statutory amendment was addressed by the Appellate Division, Fourth Department, in Glicksman v. Board of Educ./Cent. Sch. Bd. of Comesewogue Union Free Sch. Dist., 278 AD2d 364, 717 NYS2d 373 (2000). In Glicksman the plaintiff’s complaint was dismissed. No appeal was taken from the order/judgment of dismissal. Subsequently, there was a change in the decisional law and seven months later a renewal motion ensued pursuant to the then recently amended CPLR §2221(e)(2). The motion Court granted the renewal motion and the Appellate Division reversed. The Appellate Division held that there was no indication in the legislative history of any intent to change the long-standing rule regarding finality of judgments and that a motion to renew may not be made after judgment was entered and no appeal was pending. Glicksman reaffirms that the law remains unchanged and that a motion to renew based upon a change in the law must still be made while the case is sub judice, i.e., still pending in the court system. See also Daniels v. Millar Elev. Ind., Inc., 44 AD3d 895, — NYS2d — (2nd Dept. 2007); Eagle Ins. Co. v. Persaud, 1 AD3d 356, 766 NYS2d 571 (2nd Dept. 2003). Plaintiff does not assert that the defendant was untimely in the service or filing of its Notice of Appeal or that defendant’s appeal was dismissed. Consequently, defendant’s motion is timely since no judgment was entered and an appeal was pending and as such the Court retains jurisdiction to determine the instant motion.

Subsequent to the issuance of this Court’s Decision/Order and Judgment, dated October 31, 2006, the Appellate Division, Second Department, decided the case of A.B. Med. Servs., PLLC v. Geico Cas. Ins. Co., 39 AD3d 778, 835 NYS2d 616 (2007).

The Appellate Term, 1st Judicial Dist., concurred in A.I.D. Med. Supplies & Inter-trade, Inc. v. Geico Gen. Ins. Co., 15 Misc 3d 140(A), 841 NYS2d 818 (2007), specifically citing A.B. Med. Servs., PLLC v. Geico Cas. Ins. Co. See also, Andrew Carothers, M.D., P.C., v. NY Mut. Fire Ins. Co., 16 Misc 3d 136(A), NY Slip Op. 51613(U)(App. Term, 2nd and 11th Jud. Dists., 2007); Delta [*4]Diagnostic Radiology, P.C. v. Chubb Group of Ins., 17 Misc 3d 16, — NYS2d —, NY Slip Op. 27345 (App. Term, 2nd and 11th Jud. Dists., 2007).

The decisions of the Appellate Courts, cited above, subsequently ruled that pursuant to applicable Insurance Department Regulations, upon request, an insurer is required to release a copy of the peer review report to the applicant or its attorney; that a denial based upon lack of medical necessity is not insufficient because it fails to set forth the factual basis and medical rationale; and had in been the intent of the Insurance Department to require the factual basis and medical rationale in the denial it would have so provided. Hence, herein, the fact that the denial of claim form does not state a factual basis or a medical rationale does not invalidate the denial that was timely sent as so stipulated at trial by the plaintiff.