Coverage Pointers - Volume VIII, No. 4
Dear Coverage Pointers Subscribers:
It's the last edition in August and the courts will be back in full swing after Labor Day. This issue, therefore, has our typical late summer content, few cases, but interesting ones. We also reprise an introduction to Kohane's No Fault Primer, as easy "How To" guide covering the often tricky questions relating to the recovery of medical and wage loss in automobile accident lawsuits.
Changes in the Court of Appeals
The Court of Appeals finishes its summer holiday and
starts back up on September 4th. Joining the Court, after Senate
confirmation, will be Fourth Department Presiding Justice Eugene F. Pigott.
Justice Pigott is a western New Yorker, having graduated from the
In February 1997, Governor Pataki appointed him to
the New York State Supreme Court, our trial court. He was elected to a full
14-year term effective the following January. Even before he finished his first
year as an elected Supreme Court Justice, he was designated to the Appellate
Division, Fourth Judicial Department in 1998. In February of 2000, the Governor
appointed Justice Pigott to be Presiding Justice and he has held that position
for six years. He will now be serving as an Associate Justice of the Court of
Attention In-House Counsel
2006 FDCC Corporate
Protecting the Corporation in a Hostile Environment-
New Challenges for In-House Counsel
Mark your calendars now, and
plan to attend, the 3rd Annual FDCC Corporate Counsel Symposium on
The programming for the day and a half symposium is geared toward cutting edge topics for in-house litigation corporate counsel. The programming will include governmental investigations such as CPSC investigations and State Attorney General actions, class action and CAFA updates, other legislative developments, erosion of discovery privileges and discovery abuses, cost effective litigation models, and team building within the corporate litigation department and with outside counsel.
For more information, visit the FDCC website, www.thefederation.org
This Week's Issue
We offer you an interesting array of appellate decisions this week, as well as one from the trial level, because of its interesting discussion involving a provider's right to seek payment of medical bills under No Fault, when a financing company has in interest in those bills:
Those Mondi Blues - Serious Injury
Motion Denied Based on Insufficient Affidavit when Defense IME Doc Fails to
Compare Findings to
Employee Was Special Employee of Related
Corporation and thus Barred from Bringing Lawsuit under Workers Compensation Law
Verdict Reduced as Medical Expenses Part of
Basic Economic Loss
In Denying No Fault Benefits, Form is as
Important as Substance
Provider's Failure to Attach a Copy of Bills
Mailed To Insurer to Affidavit Fatal to Claim
· Provider Has Standing To Seek Payment Of Medical Bills Even Though Executed Finance Agreement Whereby Finance Company Retains Ability To Collect On No-Fault Claims
Keep those cards and letters coming in and see you after the kids are back in college.
Dan D. Kohane
Mondi v. Keahon
Appellate Division, Second Department
Those Mondi Blues – Serious Injury Motion Denied Based on Insufficient Affidavit when Defense IME Doc Fails to Compare Findings to Normal
The defendants failed to make a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). The court holds that under Toure even though the defendants relied on the affirmed medical reports of their own examining neurologist and orthopedist and these experts set forth their respective findings in their reports with respect to the plaintiff's range of motion in his cervical and lumbar spine. However, the fatal flaw was the failure to compare those range of motion findings to what is normal.
Gherghinoiu v. ATCO Properties & Management, Inc.
Appellate Division, First Department
Employee Was Special Employee of Related Corporation and thus Barred from Bringing Lawsuit under Workers Compensation Law
Plaintiff worked for Hemmerdinger Corporation and when injured, received Workers Compensation from Hemmerdinger’s WC carrier. He then sued ATCO seeking recovery under Sections 200, 240(1) and 241(6) of the Labor Law. ATCO argued, and convinced the appellate court, that while plaintiff worked for Hemmerdinger, he was also a “special employee” of ATCO. ATCO supervised him and the other employees, directed and controlled their work, had the power to hire and fire, and provided daily direction from defendant concerning the duties, projects and tasks that the maintenance workers were to perform; that the payroll and all other operating expenses of the two entities were paid from a single, joint bank account; and that defendant and Hemmerdinger were issued a single workers' compensation policy and paid a single insurance premium for it..
Gherghinoiu's affidavit failed to refute defendant's contentions and was not inconsistent with them. For example, he admitted that defendant's employees controlled the Hemmerdinger employees at the premises where he worked, directing them to perform maintenance and repairs and subsequently ascertaining that such work was satisfactorily done. Hemmerdinger and defendant were issued a single, valid, workers' compensation insurance policy that insured both entities. Inasmuch as plaintiff was defendant's special employee, receiving benefits under said policy, his claims against defendant are barred under Workers' Compensation Law § 11 and § 29(6) which provides an exclusive remedy of Worker Compensation with respect to employers.
Editors note: Generally, issues of special employment are established at the Workers Compensation Board and not in the courthouse. Frequently, courts will argue that if an employer did not raise the issue at the Workers Compensation Board, they are barred from raising it in the lawsuit. Beware.
Aparicio v. Fazio
Appellate Division, Second Department
Verdict Reduced as Medical Expenses Part of Basic Economic Loss
The defense moved to set aside that part of a verdict that awarded medical expenses in an automobile accident case involving two motorists. The jury had awarded amounts for future and past pain and suffering and some $33,000 for past medical expenses. The defense correctly argued that any amount of medical expense or lost wages that fall within the statutory definition of pain and suffering cannot be recovered in a lawsuit by a covered person against another covered person. The plaintiff argued that the parties had stipulated to allow the jury to hear the amount of agreed medical expenses and thus the defense had waived the Insurance Law’s prohibition against recovering basis economic loss in a lawsuit. The court held that the stipulation contemplated (and the Insurance Law permits) the jury to hear about the amount of medical expenses as evidence of the kind of injury and treatment and pain and suffering the plaintiff suffered. However, knowing the amount doesn’t mean that the plaintiff can recover the amount and the verdict was therefore reduced by the $33,000.
Editor’s note: For Kohane’s Primer on No Fault Coverage, click here.
New York University Hospital Rusk Institute, a/a/o Norman Dell v. Hartford
Accident & Indemnity Company
Appellate Division, Second Department
In Denying No Fault Benefits, Form is as important as Substance
Bibi was injured in a car accident and covered by a Hartford auto policy. The hospital sent Harford bills, on a prescribed form, seeking payment of an $18,000+ bill. Hartford received the forms, and following regulatory protocol, within 30 days demanded verification of treatment. Hartford then denied a portion of the claim (about $10,000 worth) claiming that the hospital used an incorrect DRG code and the proper code would have led to a lower reimbursement rate. The denial was sent, not on an NF-10 (the prescribed denial of claim form) but (heaven help us) by letter.
The hospital argued that use of a letter rather than an NF-10 was fatal, and Hartford should be precluded from denying benefits. “Hogwash,” responded the court. “A letter of disclaimer is permissible, provided that it is approved by the New York State Department of Insurance, issued in duplicate, and contains substantially the same information as the prescribed form which is relevant to the claim denied.” It must include the information called for in the prescribed denial of claim and must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated. This letter conveyed the information required by the form and the ground for the denial and thus had all the substantive information required.
“Whew,” thought Hartford. “We’re in the clear.”
“Not so fast,” responded the Court.
The appellate court held that Hartford failed to establish that the letter was issued in duplicate and approved by the Department of Insurance (see 11 NYCRR 65-3.8[c], supra). Accordingly, having failed to pay or properly deny that portion of the hospital's claim within the statutory time frame, Hartford was precluded from interposing a defense
In this feature to the newsletter, we highlight recent no-fault arbitration awards. The compilation and publication of these awards is not at the same level as traditional reported case law. There is no single source to conduct comprehensive research in the area. This feature seeks out notable current awards and judicial determinations and provides them to our subscribers.
We encourage the submission of no-fault awards, including Master Arbitration awards that address interesting issues. These can be submitted to Audrey Seeley at [email protected]. With all submissions, we ask that you forward a redacted version of the award omitting the parties’ names and that the document be in PDF format. For copies of these decisions, contact Audrey.
8/21/06 In the Matter of the Arbitration
between the Applicant and Respondent
Arbitrator Veronica K. O’Connor, Esq. (Erie County)
Provider’s Failure to Attach a Copy of Bills Mailed To Insurer to Affidavit Fatal to Claim
Here is the Angle: This claim for medical expenses was commenced directly by the eligible injured person, after she paid the providers in full the sum of $32,721.70 for two back surgeries. The insurer contended it never received from the medical provider the bill for the first surgery. The provider submitted an affidavit in support of the eligible injured person’s claim attesting to mailing procedures of bills. However, the provider failed to attach to its affidavit a copy of the medical bills it mailed to the insurer. Arbitrator O’Connor found this fatal the eligible injured person’s claim.
Also, it is noted that the remainder of the claim was awarded in the applicant’s favor due to the peer review physician apparently not rebutting the treating physician’s “critique” of his report.
The Analysis: The applicant, eligible injured person, was involved in a March 19, 2002, motor vehicle accident. The applicant sought medical treatment for her low back from various physicians. On September 22, 2003, the applicant underwent L5-S1 diskectomy with fusion. On September 22, 2003, the applicant underwent revision surgery with hardware removal.
The insurer requested Dr. Joseph Paul conduct a medical records review with regard to the September 22, 2003, back surgery. Dr. Paul did not recommend payment of the surgical bill. His opinion was based upon his findings that the MRI revealed degenerative changes. The applicant was treated in March 2000 for low back pain. Moreover, Dr. Paul opined that it was clear from reviewing the file that the first surgery was not related to the March 19, 2002, motor vehicle accident.
On November 6, 2003, the insurer issued a denial, based upon Dr. Paul’s review, for all treatment including surgery, diagnostic testing, hospital stay, household help, physical therapy, and disability regarding the low back.
On November 24, 2003, Dr. Paul reviewed additional records related to the September 22, 2003, surgery at the insurer’s request. Dr. Paul was specifically asked to review a letter from Dr. Whalen dated November 13, 2003. While the letter’s contents were not discussed, Dr. Paul indicated his opinion was unchanged. Dr. Paul reasoned that the surgery was not related as the applicant was examined by three physicians before Dr. Whalen who did not indicate surgery. Further the medical records reveal a prior history of low back problems. Moreover, Dr. Paul did not feel that Dr. Whalen’s simple statement as to casual relationship without further basis was sufficient to establish that the surgery was related to the accident.
On December 1, 2003, the insurer issued a denial, based upon Dr. Paul’s aforementioned comments reaffirming its position regarding the surgery.
In the arbitration, the applicant sought payment of the surgical bills from Dr. Whalen. The applicant submitted a February 26, 2004, report from Dr. Whalen which stated that the insurer paid for the first surgery but denied payment for the second surgery. Dr. Whalen reviewed Dr. Paul’s peer review, which was the basis for the denial of the second surgery. Dr. Whalen, in opposing Dr. Paul’s peer review, opined that the MRI of the lumbar spine, while it demonstrated degenerative changes that are unrelated to the accident, also revealed a disc herniation at L5-S1 that is related to the accident. Also, Dr. Whalen treated the applicant for her prior low back problem. He stated that at the time of the problem the applicant was pregnant and no MRI or x-ray was performed. The applicant was prescribed conservative care and that her symptoms resolved. Finally, Dr. Whalen opined that the surgery was warranted as the applicant failed a course of conservative treatment. A discogram also revealed that the applicant’s pain was associated with the L5-S1 disc. Accordingly, surgery was a reasonable option.
Arbitrator O’Connor noted that there was no evidence that Dr. Whalen’s February 2004 correspondence was ever forwarded to Dr. Paul for review and comment.
The applicant paid for all bills therefore there was no standing issue. Arbitrator O’Connor declined to award the applicant payment of the September 22, 2002 surgery bill. Arbitrator O’Connor found that the provider never submitted the bill to the insurer for payment. Interestingly, the applicant produced an affidavit from the provider which attested to the fact that bills are sent first class mail within 45 days of the service date, but never provided copies of the bills that were alleged mailed to the insurer. Further, since the applicant issued full payment of the bill the provider purged the file from its database.
However, with regard to the September 22, 2003 surgery, Arbitrator O’Connor declined to uphold the insurer’s denial. Arbitrator O’Connor stated that the applicant’s medical records established medical necessity for the treatment.
8/17/06 Andrew Carothers, MD, PC v. GEICO Indem. Co., 2006 NY Slip Op 26326 (Kings Cty.)
Provider Has Standing To Seek Payment Of Medical Bills Even Though Executed Finance Agreement Whereby Finance Company Retains Ability To Collect On No-Fault Claims.
Here is the Angle: This decision, while it impacts hundreds of cases for one insurer, is limited to the particular agreement a provider executed with a finance company. However, it does serve as a message to other insurers challenging a provider’s standing where a finance agreement is in place or this particular financing company’s agreement. This case is one to watch as the parties preserved their appellate rights.
The Analysis: The issue in this case was whether the plaintiff had standing to proceed with the lawsuit against GEICO to recover medical expenses. The parties stipulated that this decision was controlling over the parties for any other action and that the doctrine of collateral estoppel applied, yet appellate rights were reserved.
The plaintiff possessed an assignment of benefits from the eligible injured person. The plaintiff allegedly assigned its rights to a third-party financing company, Medtrx Capital, LLC and Medtrx Provider Solutions, LLC (now known as Advanced Healthcare Solutions, LLC) (“Medtrx”). GEICO argued that the plaintiff lacked standing as it was not a real party in interest due to its assignment to Medtrx.
With regard to the relationship between plaintiff and Medtrx, the two entities entered into a loan agreement, a note, and a billing and collection agreement. In those documents, the plaintiff agreed to repay Medtrx for all advances and other credit extensions to the plaintiff. In turn, the plaintiff agreed to assign to Medtrx a security interest in plaintiff’s accounts, which was defined as any right to monetary payment arising from plaintiff rendering medical services covered by an insurance policy. If plaintiff breached that obligation then Medtrx had the ability to specifically collect on no-fault claims for reimbursement or indemnification from all third party payors for medical services the plaintiff provided in plaintiff’s name or on his behalf. In addition, Medtrx only advanced up to 40% of the value of the claim.
Plaintiff entered into this arrangement with Medtrx due to the long delay in payment from no-fault insurers as well as “the current health care situation in this country” causing it the need to obtain loans during cash flow cycles.
The court held that the agreement between plaintiff and Medtrx did not violate any usual custom and practice in the business community. Moreover, “it is not unusual for debtors to agree that the secured parties are entitled to collect and enforce rights against account debtors prior to default.”
The court rejected GEICO’s argument that plaintiff’s assignment of its accounts to Medtrx was “improper” under 11 NYCRR §65-3.11(a) and A.B. Medical Services PLLC v Liberty Mut. Ins. Co. The regulation provides that the insurer must pay benefits directly to the applicant or directly to the provider of health care services upon assignment by the applicant. In A.B. Medical, the Appellate Division held that a healthcare provider was not entitled to direct payment for services performed by an independent contractor. The court held that neither the regulation nor the case is on point to the issue in this case.
Next, the court turned to whether GEICO would be subject to defending itself a second time if the plaintiff were awarded payment of the benefit. GEICO demonstrated that Medtrx would not be entitled to direct payment of the benefit and any action Medtrx commenced in its own name would be dismissed. Rather, as the plaintiff and Medtrx entered into a customary financial transaction and Medtrx is unable to commence any action against GEICO the court reasoned that plaintiff must be able to do so.
Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org ranked among the top five legal research websites in an article published in Litigation News, a publication of the Litigation Section of the American Bar Association. Dan Kohane serves as the FDCC’s Website Editor Emeritus.
8/15/06 Leonard v. Nationwide Mutual Insurance Company
Southern District Court of Mississippi
Federal Judge in Mississippi Upholds Flood Exclusion after Full Trial on the Merits
The Leonards’ residence was extensively damaged during Hurricane Katrina, and at the time of the damage, their property was insured under a homeowners insurance policy issued by Nationwide; however, the Leonards' home was not covered by a flood policy at the time of the storm. At the time the Leonards were purchasing their homeowners policy, the agent told the Leonards that he did not think they needed to purchase flood insurance. The primary disputes in this case are the cause of the damage, the extent of the damage, and the question whether Nationwide is legally obligated to reimburse the Leonards for any or all of this damage. The Court held that there was no evidence to support a finding that the insurance contract should be reformed. Nationwide provided a copy of the policy to the Leonards, and Paul Leonard read the policy. Having done so, the plaintiffs were bound by the express terms of the policy, even if their interpretation of the policy was incorrect and even if the inferences they drew from the conversations they had with the agent were erroneous.
Submitted by: Stephen Goldman (Robinson & Cole, LLP)
Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York.
Scott C. Billman
Dan D. Kohane, Team Leader
Michael F. Perley
Scott C. Billman
Audrey A. Seeley
Vivian Perry Roché
Fire, First-Party and
Andrea Schillaci, Team Leader
Jody E. Briandi
Philip M. Gulisano
No-Fault/SUM Arbitration Team
Dan D. Kohane, Team Leader
Audrey A. Seeley
Scott C. Billman, Team Leader
Dan D. Kohane
Scott M. Duquin
In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of a judgment of the Supreme Court, Westchester County (LaCava, J.), entered February 17, 2005, as, upon an order of the same court dated January 10, 2005, granting the defendant's motion to set aside so much of a jury verdict as found that the plaintiff sustained damages for past medical expenses in the sum of $33,259.48, failed to award her award her damages for past medical expenses.
ORDERED that the judgment is affirmed insofar as appealed from, with costs.
In this action to recover damages for personal injuries arising out of an automobile accident, a jury returned a verdict in favor of the plaintiff awarding damages in the sums of $40,000 for past pain and suffering, $10,000 for future pain and suffering, and $33,259.48 for past medical expenses. The defendant subsequently moved to set aside so much of the verdict as awarded the sum of $33,259.48 for past medical expenses upon the ground that medical expenses not exceeding the sum of $50,000 constitute basic economic loss and are not recoverable under the no-fault insurance law. The Supreme Court granted the motion and entered judgment only for the jury's damage awards for pain and suffering. We affirm. [*2]
New York's no-fault insurance law expressly provides that basic economic loss incurred as a result of the use or operation of a motor vehicle is not recoverable in a personal injury action (see Insurance Law § 5104[a]). Basic economic loss is defined as including the first $50,000 of medical expenses (see Insurance Law § 5102[a]). Contrary to the defendant's contention, the plaintiff's argument on appeal that the parties' trial stipulation allowing her medical bills into evidence operated as a waiver by the defendant of the no-fault insurance law's prohibition of recovery for basic economic loss is properly before this court. However, the argument is without merit.
A plain reading of the parties' stipulation at issue on this appeal shows that it was evidentiary in nature and in no way worked to waive the Insurance Law's prohibition against recovery for basic economic loss in this lawsuit. The Supreme Court properly granted the defendant's post-verdict motion to set aside the jury's award of $33,259.48 for the plaintiff's past medical expenses and properly entered judgment accordingly (see Tsamasiros v Hughes, 5 AD3d 377; Lloyd v Russo, 273 AD2d 359, 360; Ellis v Johnson Motor Lines, 198 AD2d 258, 259).
In light of our determination,
the defendant's remaining contention has been rendered academic.
SCHMIDT, J.P., RITTER, SANTUCCI and LUNN, JJ., concur.
James Edward Pelzer
Order, Supreme Court, New York County (Judith J. Gische, J.), entered February 23, 2005, which denied defendant's motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.
Plaintiff Gherghinoiu seeks to recover against defendant for personal injuries sustained while working at a premises owned by his employer, Hemmerdinger Corporation. Hemmerdinger employees allegedly performed, inter alia, construction, alteration, demolition and repair work at the premises under the supervision of defendant, which alleges that it is the managing agent of the property, an alter ego of Hemmerdinger, and this plaintiff's special employer. Having previously recovered from Hemmerdinger for these injuries pursuant to the Workers' Compensation Law, he now seeks recovery from defendant under Labor Law § 200, § 240(1) and § 241(6).
Defendant was entitled to summary judgment since it made the requisite prima facie showing that Gherghinoiu was its special employee, who was unable to demonstrate the existence of any triable issue of material fact. The affidavit of Leonard Bernacke, treasurer of both defendant and Hemmerdinger Corporation, established, among other things, that Gherghinoiu and the other maintenance workers, though listed as employees of Hemmerdinger, were directed and controlled on a daily basis by defendant's employees and executives, who had the exclusive right to hire and fire them at this job site; that the highest position within Hemmerdinger, other than the directors and officers, was foreman, whose duties entailed supervising plaintiff and the other maintenance workers and who received daily direction from defendant concerning the duties, projects and tasks that the maintenance workers were to perform; that the payroll and all other operating expenses of the two entities were paid from a single, joint bank account; and that defendant and Hemmerdinger were issued a single workers' compensation policy and paid a single insurance premium for it.
Such affidavit, based on personal knowledge, was competent to satisfy defendant's burden as the proponent of summary judgment (Karczewicz v 473 Owners Corp., 272 AD2d 137 ) as well as factually sufficient here to establish that defendant was Gherghinoiu's special [*2]employer (see Thompson v Grumman Aerospace Corp., 78 NY2d 553, 557-558  [control and direction of the manner, details and ultimate result of employee's work is "significant and weighty" in determining existence of a special employment relationship]; Ramnarine v Memorial Ctr. for Cancer & Allied Diseases, 281 AD2d 218, 219 ; Karczewicz, supra, 272 AD2d 137). Gherghinoiu's affidavit failed to refute defendant's contentions and was not inconsistent with them. For example, he admitted that defendant's employees controlled the Hemmerdinger employees at the premises where he worked, directing them to perform maintenance and repairs and subsequently ascertaining that such work was satisfactorily done. Moreover, the assertions that Gherghinoiu, who was in no position to have personal knowledge of the entities' corporate relationship, was unaware of the nature of defendant's connection with Hemmerdinger and never considered himself an employee of defendant or consented to a special employment relationship, are essentially irrelevant here (see Black v Loomis, 236 AD2d 338 ).
Hemmerdinger and defendant were issued a single, valid, workers' compensation insurance policy that insured both entities. Inasmuch as plaintiff was defendant's special employee, receiving benefits under said policy, his claims against defendant are barred under Workers' Compensation Law § 11 and § 29(6) (see Thompson, 78 NY2d at 560).
In view of the foregoing, defendant's remaining contentions are academic.
THIS CONSTITUTES THE DECISION
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: AUGUST 17, 2006
In an action to recover no-fault insurance medical payments, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (Martin, J.), dated September 27, 2005, as denied their motion for summary judgment on the second cause of action.
ORDERED that the appeal by the plaintiff New York University Hospital Rusk Institute, a/a/o Norman Dell, is dismissed as that plaintiff is not aggrieved by the order appealed from (see CPLR 5511); and it is further,
ORDERED that the order is reversed insofar as appealed from by the plaintiff Mary Immaculate Hospital, a/a/o Bibi Leitzsey, on the law, the motion is granted, and the first cause of action asserted by the plaintiff New York University Hospital Rusk Institute, a/a/o Norman Dell, is severed; and it is further,
ORDERED that one bill of costs is awarded to the plaintiff Mary Immaculate Hospital, a/a/o Bibi Leitzsey.
On July 3, 2004, Bibi Leitzsey was injured in an automobile accident. At the time of the accident, Leitzsey was covered by a no-fault insurance policy issued by the defendants Hartford Accident & Indemnity Company, Hartford Casualty Insurance Company, and Property and Casualty Insurance Company of Hartford (hereinafter collectively the defendants). On August 20, 2004, the plaintiff Mary Immaculate Hospital, a/a/o Bibi Leitzsey (hereinafter the hospital), sent to [*2]the defendants, by certified mail, return receipt requested, a hospital facility form (N-F5) and a UB-92 form, demanding payment of its $18,145.76 bill.
The defendants received the forms on August 23, 2004, and extended their time in which to pay or deny the claim on September 7, 2004, by demanding verification of Leitzsey's treatment (see 11 NYCRR 65-3.8[a]). On September 28, 2004, or within 30 days of their receipt of the requested verification, the defendants timely denied a portion (i.e., $10,385.08) of the claim, asserting that the hospital utilized an incorrect DRG code, and that the correct DRG code corresponded to a lower reimbursement amount. In lieu of the prescribed denial of claim form (N-F10), the defendants issued their September 28, 2004, partial denial by letter.
Contrary to the hospital's contention, "[a] letter of disclaimer is permissible, provided that it is approved by the New York State Department of Insurance, issued in duplicate, and contains substantially the same information as the prescribed form which is relevant to the claim denied'" (Presbyterian Hospital in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210, quoting 11 NYCRR 65-3.8[c]). "A proper denial of claim must include the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4[c]) and must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated'" (Nyack Hosp. v State Farm Mut. Auto Ins. Co., 11 AD3d 664, quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864). "[A] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law" (Nyack Hosp. v State Farm Mut. Auto Ins. Co., supra at 565, quoting Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44).
Here, the defendants' September
28, 2004, letter adequately conveyed the information mandated by the prescribed
form including, but not limited to, the precise ground on which the partial
denial was predicated. However, the defendants failed to establish that the
letter had been issued in duplicate and approved by the Department of Insurance
(see 11 NYCRR 65-3.8[c], supra). Accordingly, having failed to pay or
properly deny that portion of the hospital's claim within the statutory time
frame, the defendants were precluded from interposing a defense (Presbyterian
Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 286; Nyack
Hospital v State Farm Mut. Auto Ins. Co., supra), and the Supreme
Court should have granted the plaintiff's motion for summary judgment on the
second cause of action.
ADAMS, J.P., MASTRO, FISHER and COVELLO, JJ., concur.
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Suffolk County (Pitts, J.), dated November 4, 2005, as granted that branch of the plaintiff's motion which was for leave to reargue their prior motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), which had been granted in an order dated May 18, 2005, and, upon reargument, denied their motion for summary judgment and reinstated the complaint.
ORDERED that the order dated November 4, 2005, is affirmed insofar as appealed from, with costs.
While we affirm the order dated
November 4, 2005, insofar as appealed from, we do so on grounds other than those
relied upon by the Supreme Court. Contrary to the Supreme Court's determination,
the defendants failed to make a prima facie showing that the plaintiff did not
sustain a serious injury within the meaning of Insurance Law § 5102(d) (see
Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d
955). The defendants relied on the affirmed medical reports of their own
examining neurologist and orthopedist. While these experts set forth their
respective findings in their reports with respect to the plaintiff's range of
motion in his cervical and lumbar [*2]spine, they
failed to compare those range of motion findings to what is normal (see
Browdame v Candura, 25 AD3d 747; Kennedy v Brown, 23 AD3d 625;
Aronov v Leybovich, 3 AD3d 511). Since the defendants failed to establish
their prima facie entitlement to judgment as a matter of law, it was unnecessary
to consider whether the plaintiff's papers submitted in opposition were
sufficient to establish a triable issue of fact (see Coscia v 938 Trading
Corp., 283 AD2d 538).
MILLER, J.P., RITTER, LUCIANO, SPOLZINO and DILLON, JJ., concur.
James Edward Pelzer
Clerk of the Court