Monday, December 27, 2010

Lack of Standing Defense Waived If Not Raised in Pre-Answer Motion or Answer

Kruger v. State Farm Mut. Auto. Ins. Co.

(3rd Dept., decided 12/23/2010)

State Farm denied no-fault coverage benefits to plaintiff for further chiropractic treatment after an IME found no further treatment to be necessary.  The claimant sued and after conducting discovery, State Farm moved to dismiss the complaint, asserting for the first time that plaintiff had assigned her right to payment for no-fault benefits to her chiropractor and did not have standing to bring this action.  Ulster County Supreme Court (O'Connor, J.) granted State Farm's motion and plaintiff appealed.

In REVERSING the order appealed from and reinstating the complaint, the Appellate Division, Third Department, held that lack of standing is a waivable affirmative defense that must be raised either in a pre-answer motion or the insurer's answer
Defendant asserted that plaintiff lacked standing to maintain this action but, as that defense was not raised in a pre-answer motion to dismiss or in defendant's answer, it was waived and cannot now be advanced (see CPLR 3211 [a] [3], [e]; McHale v Anthony, 70 AD3d 466, 467 [2010]; Todaro v GEICO Gen. Ins. Co., 46 AD3d 1086, 1087 [2007]). Contrary to defendant's contention, the standing issue does not implicate the jurisdiction of Supreme Court such as to render it nonwaivable. Supreme Court is empowered to determine whether defendant is liable to pay no-fault benefits (see Marangiello v Kamak, 64 AD2d 624, 625 [1978]), and whether plaintiff is a proper person to pursue that claim "is an issue separate from the subject matter of the action or proceeding, and does not affect the court's power to entertain the case before it" (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 243 [2007]; see Matter of Renee XX. v John ZZ., 51 AD3d 1090, 1092-1093 [2008]). Accordingly, defendant waived its right to assert lack of standing as an affirmative defense.

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