Biting the Same Apple, Again -- Court Declines to Review Issues Previously Decided or Not Pursued on Appeal

NO-FAULT – INSURANCE LAW § 5106(C) – TRIAL DE NOVO REVIEW – NURSE'S PEER REVIEW
Country-Wide Ins. Co. v. 563 Grand Medical, PC a/a/o Robert Alford
(Sup. Ct., New York Co., decided 12/2/2008)

Follow the epic journey of 563 Grand Medical's $12,600 in PT, acupuncture and EMG/NCV billings from 2001, as they wind they way through arbitration, master arbitration, de novo review, summary judgment, the First Department, and back to New York Supreme. At 2% per month compound interest (pre-revised Regulation 68's effective date), the serpent may soon swallow its own tail.

There's more procedural than substantive in this latest chapter of this epic struggle. 563 Grand Medical was awarded approximately $9,000 of its billings in arbitration (PT and EMG/NCV but not acu). Country-Wide appealed to a master arbitrator and lost. Country-Wide then commenced this action for a trial de novo pursuant to Insurance Law § 5106(c), and 563 Grand Medical moved for summary judgment. Country-Wide opposed the motion on the grounds that: (1) Grand Medical had not made out a prima facie case; (2) the supporting affidavit of Dr. Leonid Slutsky was without probative value as he was no longer licensed to practice medicine in New York and did not state that he had personal knowledge of the subject bills; and (3) the medical review report of a nurse examiner was sufficient to establish the lack of medical necessity of the treatment services provided.

By decision and order in May 2005, New York Supreme (Helen E. Freedman, J.) found that that the nurse who had conducted the peer review was not competent to give a medical opinion and granted Grand Medical's summary judgment motion. Because this was a de novo review, the court awarded Grand Medical the full $12,600 in billings, plus $4,000 in attorney's fees and interest from August 15, 2001. Country-Wide unsuccessfully moved to reargue that motion and then appealed that decision/order to the First Department.

In an April 3, 2008 decision, the First Department unanimously reversed Justice Freedman's decision, holding that: (1) Country-Wide had raised a triable issue of fact as to whether the claimed benefits were properly denied for lack of medical justification;(2) Country-Wide was not required to set forth the medical rationale in its denial of claim form; and (3) a nurse's review denying no-fault claims for lack of medical necessity is not per se invalid, citing its own 2007 decision in Channel Chiropractic, P.C. v Country-Wide Ins. Co., 38 AD3d 294, 295 [2007]).

Back in New York Supreme, Grand Medical renewed its motion for summary judgment, arguing that Country-Wide's nurse's peer review was legally insufficient because it did not set forth the reviewer's "training, observations and actual experience", as required by the First Department in its Channel Chiropractic decision. In rejecting that argument and denying Grand Medical's renewed summary judgment motion, Justice William Sherwood held:

In making this argument, defendant fails to mention that the Appellate Division in its decision and order on the appeal in this case cited the Channel Chiropractic case, thereby indicating that the court was aware of the decision and had considered it in reaching its determination in this case. Generally, a change in the decisional law will be applied retroactively to all cases still in the normal litigation process (citations omitted). However, the case cited by defendant does not represent a change in the decisional law as it was decided prior to the appellate decision in this case and relied upon other decisions of both the Appellate Division and the Appellate Term of the 9th and 10th Judicial Districts standing for the same proposition (see, People v Lewis, 16 3d 173 [1 Dept. 2005]; Patil v Country-Wide Ins. Co., 11 Misc3d 130[A] [App. Term, 9th & 10th Jud. Dists., 2006]). Consequently, since there has been no change in the decisional law the proper procedural vehicle would have been for Grand Medical to have moved before the Appellate Division for leave to reargue based upon its opinion that the Channel Chiropractic case is dispositive of the issue of the validity of the nurse’s peer review as a basis for denial of no-fault benefits. Essentially, by again moving for summary judgment, defendant is asking this Court to address an issue which could have properly been raised before the Appellate Division. This Court has no authority to overturn a determination of the Appellate Division. In any event, the qualifications of the nurse reviewer may be addressed at trial.

The court also rejected Country-Wide's attempt "to argue anew that defendant failed to establish its prima facie case. The foregoing reasoning is equally applicable to plaintiffs arguments which were presented on its appeal and found to be lacking. Plaintiff will not be permitted another bite of the same apple. The same holds true of Country-Wide’s arguments in support of its cross motion for a stay. Its arguments concerning the credibility of Dr. Slutsky and the probative value of Dr. Slutsky’s affidavit in view of the Consent Agreement were presented to Justice Freedman on the prior motion for summary judgment and also reviewed by the Appellate Division on appeal. Country-Wide, like Grand Medical, may be deemed to be improperly seeking reargument of an appellate decision."

On the issue of interest, Justice Sherwood ruled that "[i]f Country-Wide believed this determination [of the accrual date for interest] was in error, it was incumbent upon Country-Wide to have challenged it on the appeal from the judgment." Lastly, the court held that "defendant’s application for an attorney’s fee award in excess of the 20% of the amount of first-party benefits awarded by the court allowed under Insurance Regulation 11 NYCRR § 65-4.6(f) should be determined at the trial of the action."