Viviane Etienne Med. Care v. Country-Wide Ins. Co., 2015 N.Y. Slip Op 04787 (Ct. of App. 6/10/15)
In a 5 to 2 decision, the Court of Appeals held that “a plaintiff demonstrates prima facie entitlement to summary judgment by submitting evidence that payment of no-fault benefits are overdue, and proof of its claim, using the statutory billing form, was mailed to and received by the defendant insurer. Proof evincing the mailing must be presented in admissible form, including where it is applicable, meeting the business records exception to the hearsay rule.” Notably, the Court held that the plaintiff was not required to submit its claim forms in admissible form. Rather, only the evidence establishing that the claims were mailed to the defendant and were neither paid nor denied in accordance with the No-Fault law was required to be in admissible form. In reaching this conclusion, the Court looked to the legislative intent behind the No-Fault law to provide prompt resolution of No-Fault claims, stating that “[t]he legislative design of the no-fault insurance scheme demonstrates an interest in prompt resolution of reimbursement claims, a desire to avoid litigation, and statutory consequences on an insurer to incentivize it to seek verification of a claim, deny it, or pay.” This interest, according to the majority, outweighs the risk that insurers may be forced to pay fraudulent claims as a result of their failure to issue timely denials. “Plaintiff, therefore, satisfied its burden on summary judgment by demonstrating the mailing of the proof of claim forms, and their receipt by the insurer.”
The dissent argues that the majority holding relieves a moving plaintiff from establishing key elements of its cause of action, thereby constituting a departure from the longstanding precedent requiring the proponent of a summary judgment motion to “establish [a] cause of action . . . ‘sufficiently to warrant the court as a matter of law in directing judgment’ in [the movant's] favor (CPLR 3212 subd [b]), and [the movant] must do so by tender of evidentiary proof in admissible form’… These rules are designed, at least in part, to prevent the perpetration of fraud upon the court. Moreover, an insurer’s duty to pay or deny a claim within 30 days is not triggered until it receives “proof of the fact and amount of loss sustained” (Insurance Law § 5106 [a]; see 11 NYCRR 65-3.8 [a] ). Yet, the majority’s rule arguably eviscerates any avenue for insurers to contest even whether a verification of treatment form contains sufficient information to constitute “proof of the fact and amount of loss sustained” — or in other words, whether the payments were actually overdue — since proof of the mailing of the prescribed form, without any regard to its contents or its completeness, will now carry a plaintiff’s burden on summary judgment.”
The dissent points out that the language of the No-Fault law defines first party benefits as payments for reimbursement of basic economic loss resulting from personal injuries arising from the use or operation of a motor vehicle and identifies covered expenses as those incurred for necessary medical services. “Thus, to establish entitlement to no-fault benefits for medical services, a party must demonstrate that the loss arose from an automobile accident and that the expenses incurred were medically necessary.” In support of its position, the dissent emphasizes that the burden to which it would hold plaintiffs is not onerous, as a No-Fault plaintiff could meet the burden of establishing these facts simply by submission of the prescribed proof of claim form (NF-3) in admissible form, while relieving plaintiffs of this burden, as the majority decision does, exposes a No-Fault system already subject to wide-spread fraud to even greater abuse.
While this decision clearly constitutes a victory for No-Fault plaintiffs, the impact of the decision may prove to be relatively insignificant, as it merely affirms a standard that has already been adopted by most courts.