You've Gotcha Mail -- Appellate Term, First Department, Recommends "Time Out" for No-Fault Litigants

NO-FAULT – VERIFICATION – PROOF OF MAILING – PREMATURE ACTION
Lenox Hill Radiology, PC v. Tri-State Consumer Ins. Co.
(App. Term, 1st Dept., decided 12/30/2010)

Plaintiff MRI provider billed.  Defendant no-fault insurer requested verification.  Plaintiff sued.  At the nonjury trial, in support of its defense that plaintiff's action was premature because it had not responded to defendant's verification requests, defendant  produced the claims examiner who had prepared the verification requests and who testified about the defendant's standard office mailing practices, but acknowledged on cross examination that she had no personal knowledge of the mailroom's actual clerical procedures.  Plaintiff offered no evidence that it had ever responded to the verification requests, arguing only that defendant's proof of mailing of the verification requests was insufficient because the claims examiner who testified at trial did not have personal knowledge of the defendant's actual mail handling procedures.  The trial judge agreed and awarded judgment to plaintiff for $4,390.16.  Defendant appealed.

In REVERSING the judgment and dismissing the complaint, the two-justice majority concluded that defendant presented sufficient evidence at trial of its standard office mailing practice:

The witness's credible and consistent account of the mailing procedures generally followed by defendant, including how the mail was systematically picked up during the work day, when it would "go out," and what steps would be taken if a verification letter was returned as undeliverable (an event which, the witness noted, did not occur here), "obviated the necessity of producing a witness with personal knowledge of the actual mailing" of defendant's verification letters (see Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). Nor was it incumbent upon defendant to produce a witness, such as a mail clerk or other clerical employee, whose duty it was to ensure compliance with its mailing procedures or who possessed personal knowledge of such compliance see Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [2007]).

What is most notable about this decision, however, is the majority's excoriation of what has become our New York no-fault litigation system:

Before concluding, we would be remiss in failing to note that the facts and circumstances of this action do much to illustrate the disturbing reality that first-party no-fault benefits litigation has become the antithesis of what was supposed to be an expeditious and simplified process for the payment of medical costs for injuries sustained in motor vehicle accidents (see Walton v Lumbermans Mutual, 88 NY2d 211, 214 [1996]).  Too often, lawsuits with a value akin to a small claims action become bogged down by an insistence by one party or another that mailing of routine forms be established with scientific precision, asking judges, already burdened to the breaking point with the veritable legion of no-fault cases overflowing from our court dockets (while very able arbitrators remain underutilized), to require multiple witnesses to be summoned to the courthouse, merely to establish a presumption of mailing, even in the absence of an express denial of receipt of the disputed correspondence. Unfortunately, this class of cases has spawned a body of "gotcha" jurisprudence, marked by a near manic preoccupation with form over substance.

How we have reached this sorry state is of little moment. Perhaps all branches of government need to call a "time out" and, working together, endeavor to construct a workable process to achieve what the framers of the No-Fault statute had in mind when they sought to establish a simplified and expeditious process to reimburse those of our citizenry injured in automobile accidents. For sure, the system now in place is not achieving that laudable aim.

Amen and pass the salt.  Enough already.

Albany, your courts are calling.  Again.  Shall I take a message or will you answer the call this time?