Thursday, August 7, 2008

NYC Civil Holds That No-Fault Insurer Not Required to Introduce the Policy to Assert/Rely on 45-Day Proof of Claim Requirement

Dana Woolfson LMT, a/a/o Tania Rega v. Government Employees Ins. Co.

(NYC Civil, New York Co., decided 8/6/2008)

July 31, 2006 accident. Policy covering the accident was issued after April 5, 2002, the effective date of revised-revised Regulation 68 (the one reducing the proof of claim requirement from 180 to 45 days). Plaintiff conceded that she submitted bills to GEICO for payment more than 45 days after their dates of service. GEICO denied payment and plaintiff sued.

At trial, although the parties stipulated that the policy in question had been issued after April 5, 2002, GEICO did not produce and introduce a copy of the policy that was in effect on the accident date. Plaintiff argued that GEICO could not rely on the lessened 45-day proof of claim requirement without introducing the policy. GEICO countered that because the revised PIP endorsement is mandatory under the new regulations, it applies whether or not the policy actually contains it, and so it is not necessary to produce the policy.

New York County NYC Civil Court Judge Arlene Bluth agreed with GEICO, finding the introduction of the policy at trial to be not necessary to prove that it contained the mandatory endorsement:
In support of its position, the defendant relies upon the very recent Appellate Term, Second Department case Eagle Chiropractic, P.C. v Chubb Indem. Ins. Co., 19 Misc 3d 129(A) , 859 NYS2d 902 (2008), which holds that because the policy was issued after April 5, 2002, the Endorsement was mandatory and the defendant need not prove that the policy contained the Endorsement. Plaintiff did not distinguish Eagle on its facts, and indeed, on page 4 of her post-trial memorandum acknowledges that if this Court were bound to follow Eagle, then defendant would win. Instead, plaintiff claims that the law is different in this department. Plaintiff maintains that this Court must follow SZ Medical P.C. v State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A), 2005 NY Slip Op 51842(U) (App Term 1st Dept 2005), which requires a finding for plaintiff.

Plaintiff asserts that SZ Medical requires that a defendant always produce the policy in order to support its position that the new regulations apply. By taking language out of context, plaintiff misreads the holding of SZ Medical. Indeed, there is no split between the appellate terms because SZ Medical and Eagle both hold that once it is established that the policy was issued on or after April 5, 2002, then the new regulations must apply.

In SZ Medical, plaintiff moved for summary judgment on its prima facie case for claims submitted between December 2002 and April 2003; defendant opposed, claiming the new regulations applied. The trial court denied summary judgment, finding that because plaintiff submitted the claims after April 5, 2002, the new regulations applied. In reversing, the Appellate Term simply made clear that the date the policy was issued determines if the new regulations are applicable, not the date when plaintiff submits its claims. The defendant in that case did not come forward with proof of when the policy was issued, and there is no indication that this crucial date could have otherwise been determined; the Appellate Term granted plaintiff's motion for summary judgment.

Here the defendant need not produce proof that the policy was issued after April 5, 2002 because the parties stipulated to that fact. Had there been no stipulation, however, the fact remains that the earliest date that the policy covering this July 31, 2006 accident could have been issued was July 31, 2005; this was more than three years after the effective date of the new regulations. Even if the insurance policy lacked the mandatory Endorsement, then the applicable provisions of the Insurance Law or the applicable regulation, which "has the force of law" (Raffellini v State Farm Mut. Auto Inc. Co., 9 NY3d 196, 201, 848 NYS2d 1, 4 [2007]), are deemed to be part of the policy as though written into it. See also McKinney's Insurance Law § 3103 (a) (even if the policy or provision is "in violation of the requirements or prohibitions of this chapter it shall be enforceable as if it conformed with such requirements or prohibitions"); Trizzano v Allstate Ins. Co., 7 AD3d 783, 780 NYS2d147 (2 Dept 2004) (auto policy); Tag 380 LLC v ComMet 380 Inc., 10 NY3d 507, 860 NYS2d 433 (1st Dept 2008) (fire policy).

Where, as here, it is clear that the policy is subject to the new regulations, the mandatory Endorsement is read into the policy and the defendant is not required to produce it. Accordingly, after trial, the Court awards judgment in favor of defendant Government Employees Insurance Company and against plaintiff Dana Woolfson, LMT. The complaint is dismissed with prejudice.

I know, I know. Usually courts will deem policies to include mandatory policy provisions that are no less favorable or more favorable to insureds or policy beneficiaries. Admittedly, there is something a bit odd in a court reading a more restrictive provision into a policy without seeing proof that it was actually in there.

Nevertheless, the takeaway point on this case and issue should be to bring and introduce a representative copy of the policy on a dispositive motion or at trial, and not rest the case's outcome on a court adopting this same position, especially in venues outside of the Second Department.

1 comment:

A Certain Blawg Reader said...

Amazingly, I think I agree with you. Reading a deemer statute to provide a more restrictive provision against the insured is a mistake here. Carrier could always, though unlikely, provide for more time for submission of claims.