Coincidence or Conflict of Interest? -- A Political Pictograph

March 12, 2007

March 3, 2010

April 16, 2010

"Thompson is a member of the Senate insurance committee but over the past year and a half he has rarely introduced bills pertaining to insurance or tort matters. The overwhelming majority of bills he proposed deal with strictly local matters or environmental concerns (he is chairman of the Environmental Conservation Committee). He has introduced 22 bills so far this year."  Buffalo News, Sunday, May 9, 2010

Coincidence or conflict of interest?  You decide.

Bill Introduced to New York State Legislature to Expand "Serious Injury" Categories and Preclude Defensive Summary Judgment

A bill has been introduced to both houses of the New York state legislature that, if passed, will dramatically expand the number and kind of personal injury lawsuits that can be brought and tried in New York State. 

On April 16, 2010, New York State Assembly Bill No. A10739 and Senate Bill No. S07518 were introduced and immediately referred to each body's Insurance Committee.  The jointly introduced bill

"[a]dds to the definition of serious injury and relates to determining the sufficiency of the evidence related to the serious injury; question of fact determined by the trier."

New York Insurance Law ­­ § 5104 requires the existence of "serious injury" before a person injured in an automobile accident can sue and recover non-economic loss (emotional distress/pain and suffering) in a negligence action against another motorist or vehicle owner.  New York Insurance Law ­­ § 5102 currently sets forth nine categories or types of qualifying serious injuries:

1. death
2. dismemberment
3. significant disfigurement
4. a fracture
5. loss of a fetus
6. permanent loss of use of a body organ, member, function or system
7. permanent consequential limitation of use of a body organ or member
8. significant limitation of use of a body function or system
9. a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.

The joint bill proposes to add four categories or types of qualifying serious injuries to Insurance Law § 5102's definition of "serious injury":

1. a partial or complete tear or impingement of a nerve, tendon, ligament, muscle or cartilage
2. injury to any part of the spinal column that results in injury to an intervertebral disc
3. impingement of the spinal cord, spinal canal, nerve, tendon or muscle
4. a surgical procedure to any injured part of the body

What's an impingement of a muscle, and why is it added twice?  Will strains and sprains qualify?  Contusions?  Non-herniated but bulging discs?  Will sutures qualify as a "surgical procedure"?  The imprecision and ambiguity of these proposed additional "serious injury" categories should be embarrassing to the sponsors of this bill. 

The "Justification" section of the sponsors' memorandum for the Assembly's proposed bill makes the following argument in support of the bill:

When the legislature originally passed N.Y.S. Ins. Law § 5102, it never intended that New York's citizens would be deprived of their constitutional right to a trial by jury where they actually sustained a serious injury. The judicial transformation and interpretation of this statute has produced overwhelming obstacles never intended by the legislature and has clogged the courts with boilerplate "threshold motions" which monopolize judicial resources.

Over the past twenty years developments in technology have enabled medical practitioners to identify injuries to ligaments, tendons, tissue, nerves and other non-bony structures through the use of CT Scans, MRIs, EMGs and other methods. Prior to these advances in technology significant injuries would not have been revealed or adequately appreciated but they are now readily identifiable, and the seriousness of their effects are understood far better than ever before.

Unfortunately, current law has not kept pace with modern medicine.  As a result numerous cases where a serious injury was clearly present have been dismissed because the existing law does not clearly and specifically list and identify such injuries as actionable, regardless of how the injury affected the accident victims' lives.

The proposed amendments would curtail summary dismissal of legitimate cases involving significant injuries not objectively verifiable when the law was originally enacted in 1977. The Courts have been flooded with countless motions and extensive appellate practice on the issue of whether a serious injury was sustained, resulting in unfair and contradictory decisions and the dismissal of meritorious claims.  Injured parties in one Judicial Department may have their case dismissed as "non-serious" while in another Judicial Department a case with similar facts is permitted to proceed.

Don't like the courts meddling with the personal injury plaintiffs' lawyers' livelihood?  There's a legislative app for that.  In addition to seeing to it that nearly every minor, soft-tissue injury that results from a car accident will be actionable, cut the damnable courts out of the picture by outlawing summary judgment on the "serious injury" issue.  The jointly introduced bills would add a new section 5102-a to New York's Insurance Law, entitled "Issues of fact and sufficiency of the evidence":

Whether an injury qualifies as a serious injury pursuant to subsection (d) of section five thousand one hundred two of this article shall be a question of fact.  Where evidence is offered as to (a) whether an injury qualifies as a serious injury pursuant to subsection (d) of section five thousand one hundred two of this article, or (b) the causation of such injury, the sufficiency of such evidence shall be determined by the trier of fact.  Sufficiency and weight of evidence offered, including but not limited to that pertaining to qualitative and/or quantitative assessment of injury, shall be reserved for the trier of fact. 

Remarkable.  In no other other area of the law is a defendant denied his or her right to make a dispositive motion.  The very idea is patently ridiculous as antithetical to the rule of law and function of the judiciary.  What about a defendant's constitutional right to not face trial of a frivolous or unmeritorious lawsuit?  I suspect § 5102-a may be just a throwaway component inserted into these bills as a bargaining chip the sponsors may be willing to give up in order to obtain passage of the expanded definition of "serious injury".  But without a prohibition of summary judgment, the hopelessly vague and imprecise four additional types of serious injuries will likely spawn more, not less, motion and appellate practice.

If passed, the bill would apply immediately to all future actions and retroactively to any actions commenced prior to the act's effective (signing) date and pending on the effective date, where as of such date a trial has not yet commenced and a dispositive motion has not yet been filed.  If these bills ever make it out of the insurance committees to the legislature's floor for a vote, expect a deluge of serious injury motions to be filed.

I have an idea.  Let's get rid of no-fault altogether in New York.  No serious injury threshold.  But no pool of $50,000 in basic PIP per person to run up medical bills for unnecessary treatment either.  Remove the incentive to bilk no-fault insurers and medically manufacture qualifying serious injuries.  Everything gets to trial, but who's going to spot the cost of all those back surgeries of dubious medical necessity and efficacy just to pump up the personal injury settlements or verdicts?  Not auto insurers.  Maybe the lawsuit funding companies will.  And we'll solve the no-fault insurance fraud crisis (see my April 22, 2010 post) in one swell foop.  All in favor, say aye.

Update (April 27, 2010, 6:20 a.m.) ~~  For a thoughtful plaintiff's attorney's perspective on this bill, head over to Eric Turkewitz's New York Personal Injury Law Blog.  Eric and I appear to agree that the no-fault system is broken, but we differ on whether and, if so, how it can be fixed.  No one can legitimately argue with the laudable goal of eliminating inconsistencies in appellate decisions and recognizing that a causally related surgical shoulder or knee is more deserving of admission to court than a broken pinky finger or toe.  The proposed additional four categories of serious injuries, however, would make court a general admission event in New York, especially with a repeal of CPLR Rule 3212 only with respect to the "serious injury" threshold issue.

Update (May 11, 2010, 8:12 a.m.) ~~   This past Sunday's Buffalo News featured a front-page article entitled "Thompson legislation stirs new controversy".  It seems that the sponsor of the Senate version of this bill, Sen. Antoine Thompson of Buffalo, himself filed a personal injury action on March 3, 2010 for a 25% torn rotator cuff -- an injury that might not qualify as a "serious injury" unless Thompson's bill, which would apply retroactively to any previously commenced lawsuit that has not yet reached trial or for which a summary judgment motion has not yet been filed, is passed.  Coincidence or conflict of interest? 

Uninsured Motorist Arbitrator Did Not Exceed His Authority by Placing Monetary Value on Claimant's Injuries in Excess of Policy Limit

UM – SERIOUS INJURY – CPLR 7511 PROCEEDING TO VACATE ARBITRATION AWARD – GROUNDS TO VACATE AWARD
Safeco Prop. & Cas. Ins. Cos. v. Dye
(Sup. Ct., Queens Co., decided 11/18/2009)

On August 27, 2006, a vehicle owned and operated by Safeco's insured, Roshaun Dye, was struck by a hit-and-run motor vehicle. By demand dated December 3, 2007, Dye sought arbitration of his claim for uninsured motorist (UM) benefits from Safeco on the basis that the accident involved a hit-and-run vehicle.

The arbitration was held on April 20, 2009. Upon completion of the arbitration of this matter, the arbitrator, in his award dated May 15, 2009 determined that "the compensatory value of the injuries sustained by the Claimant RD to be $100,000.00. However, I also find that the Claimant RD was 75% comparatively negligent in causing this accident and therefore his award is reduced and he is entitled to $25,000.00".

Safeco commenced this special proceeding pursuant to CPLR § 7511 to vacate the arbitration award, contending that: (1) the arbitrator exceeded his authority by awarding benefits in excess of applicable policy limits; (2) there was no evidence in the record to support that the claimant sustained a serious injury; and (3) the arbitrator's exclusion of pertinent evidence constituted misconduct.

In denying Safeco's petition and confirming the award, Queens County Supreme Court Justice Jaime Rios noted that judicial review of compulsory arbitration, such as UM arbitration, is more limited than for voluntary arbitration, and that to be upheld, the arbitrator's award must only have evidentiary support and not be arbitrary and capricious.  Justice Rios then held:

An arbitrator is not required to justify his award, it must merely be evident that there exists a rational basis for it upon a reading of the record (see Block v St. Paul Fire & Marine Ins. Co., 137 AD2d 475 [1988]; Dahn v Luchs, 92 AD2d 537 [1983]).

Here, the arbitrator's decision was based upon Dye's testimony, police report, photos of the accident scene and Dye's vehicle, MRI reports of Dr. Shapiro and Dr. Rothpearl; hospital and medical records submitted by Dye and Safeco; a copy of Safeco's insurance policy, and examination under oath of Dye. The MRI report of the right knee by Dr. Shapiro revealed "abnormal signal in the posterior horn of the medial meniscus without articular extension" and "joint effusion"; the MRI of the right knee by Dr. Rothpearl revealed "medial, supra patellar plicai", "thickening and increased signal associated with the medial collateral ligament, consistent with a low-grade partial tear", "lateral patellar tilt", "suboptimal visualization of the anterior cruciate ligament. A tear of this ligament cannot be excluded and clinical correlation is recommended", and the MRI report of the lumbar spine revealed "right foraminal herniation at L5-S1. According to the records of Lutheran Medical Center, on November 29, 2007, Dye underwent arthroscopic surgery to the right knee, which revealed "medial meniscal tear of the medial and lateral side", "synovitis of the medial compartment" and "cartilage abrasion on the medial femoral condyle".

Judicial review of an arbitrator's award is very limited (see Pearlman v Pearlman, 169 AD2d 825 [1990]) and the fact findings of the arbitrator may not be second guessed by a reviewing court (see Liberty Mut. Ins. Co. v Sedgewick of New York, 2007 NY Slip Op 6882). The question of whether a claimant has sustained a serious injury is a matter within the province of the arbitrator not the courts (see Aetna Cas. & Sur. Co. v Cochrane, 64 NY2d 796 [1985]). Based upon the present record, the arbitrator's award has ample evidentiary support and is thus, rationally based. Additionally, even if the arbitrator failed to consider certain evidence, vacatur of the award would not be warranted (see American Express Prop. & Cas. Co. v Vinci, 63 AD3d 1055 [20009]).

Moreover, while an arbitration award may be vacated upon the ground that the arbitrator exceeded his authority by making an award in excess of the policy limits, here, the arbitrator made an award within the policy limits. 

The decision does not reveal what the UM policy limit was, but presumably it was at least $25,000.  As reduced by the claimant's percentage of comparative negligence or culpable conduct, the arbitration award did not exceed the policy's UM coverage limit.

Miscarriage of One-Week Pregnancy Found to Be a "Loss of a Fetus" and Constitute a "Serious Injury" Under New York Insurance Law § 5102

AUTO – SERIOUS INJURY – LOSS OF A FETUS
McKendry v. Thornberry
(Sup. Ct., Rensselaer Co., decided 1/26/2009)

New York's No-Fault Law was enacted in 1973 to assure prompt and full compensation for economic loss and to provide for non-economic loss in the case of serious injury.  As originally enacted, it contained two categories of “serious injury”:  first, claims for death, dismemberment, significant disfigurement, certain types of fractures and permanent loss of use of a body organ, member, function or system; and second, claims for medical charges as a result of an injury that exceeded $500.

In 1977, the definition of "serious injury" was enlarged to mean:

a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.  (Insurance Law § 5102[d])

Merriam-Webster Online Dictionary defines "fetus" as "an unborn or unhatched vertebrate especially after attaining the basic structural plan of its kind; specifically: a developing human from usually two months after conception to birth[.]"

Plaintiff sued defendant for the "loss of [her] unborn child" allegedly due to an auto accident.  Defendant moved for summary judgment on the basis that plaintiff failed to sustain a serious injury as defined by Insurance Law § 5102(d).  Defendant submitted an affirmed report from a doctor who opined that plaintiff was "no more than 1 week pregnant" at the time of the accident and that "from conception to 6 weeks gestation, the pregnancy is in the embryonic stage and the product of conception is an embryo and not a fetus."  In opposition to defendant's motion, plaintiff argued that a pregnancy of any duration constituted a "fetus" as the term is used in Insurance Law § 5102(d).  Plaintiff also argued that the rules of statutory construction require that the intent of the Legislature be given priority over medical definitions and dictionary definitions because the term "fetus" is a word of technical or special meaning.

In denying defendant's motion, Rensselaer County Supreme Court Justice Henry Zwack ruled that pregnancies of any duration fall within the meaning of "loss of a fetus":

This motion also presents a question of statutory construction and the Court notes that its primary consideration must be "to ascertain and give effect to the intention of the Legislature" (Statutes § 92). "The legislative intent is to be ascertained from the words and language used, and the statutory language is generally construed according to its natural and most obvious sense, without resorting to an artificial or forced construction" (Statutes § 94). "A basic consideration in the interpretation of a statute is the general spirit and purpose underlying its enactment, and that construction is to be preferred which furthers the object, spirit and purpose of the statute" (Statutes § 96). "The words and phrases used in a statute should be given the meaning intended by lawmakers" (Statutes § 230). "Dictionary definitions may be useful as guideposts in determining the sense with which a word was used in a statute, but they are not controlling" (Statutes § 234). "Where a word is susceptible of two or more significations, the meaning to be given must be determined from the context of the statute, the purpose and spirit of it, and the intention of the lawmakers" (Statutes § 235).

Regarding the question of whether a one week pregnancy constitutes a "loss of a fetus" within the meaning of the Insurance Law's serious injury definition, this Court finds that it does, pursuant to the rules of statutory construction. In coming to this conclusion, the Court finds that the term "fetus" is a word of technical or special meaning. The rules of statutory construction state as follows: "Words of technical or special meaning are construed according to their technical sense, in the absence of anything to indicate a contrary legislative intent." The Court finds that the legislative intent appears to indicate an intent to include a pregnancy of any duration. The Memorandum in support of the legislation discusses a court opinion which dismissed the case of a woman who was nine months pregnant when she was in a motor vehicle accident and delivered a stillborn baby due to the accident. However, the Legislature does not engage in any discussion of the definition of the term "fetus," and there is also a reference to the phrase "loss of pregnancy". This Court has weighed heavily the fact that the Legislature referred to "loss of pregnancy" and also the fact that the Legislature did not make any clear reference that indicated an intent to limit the statute's application to pregnancies of a certain duration. The Memorandum in support of the legislation states in relevant part as follows:

A major objective of New York's no fault insurance law was to alleviate litigation by limiting recovery for damages for non-economic loss to instances of serious injury. Since the courts have interpreted the loss of a fetus not to be a serious injury, this legislation is necessary to clarify the statute.

A woman who is involved in an automobile accident that results in the termination of her pregnancy has suffered a serious injury and should have the right to recover from a negligent operator for her non-economic loss. She should not be subjected to an inequitable law that is inconsistent with the original intent of the no fault insurance law.

The Court also notes that the term "fetus" does not have a clear common meaning or a clear definition within the medical community. This further supports a finding that the Legislature did not intend to limit the term to a pregnancy of a certain duration.

The fact that plaintiff's doctor did not oppose the motion by setting forth his opinion of the definition of the term "fetus" is of no moment. The Court's inquiry into the statutory construction may take medical definitions into account, but the nature of this inquiry is not one that is determined by medical experts of the parties. The Court is required to determine the legislative intent behind the use of the term "fetus" in the statute and to determine whether a one week pregnancy falls within that definition as a matter of law.

Based upon the foregoing, the Court finds that the intent of the Legislature relating to Insurance Law § 5102(d) was to include pregnancies of any duration within the meaning of the phrase "loss of fetus".

A Serious Rant About the Permanent Consequential and Significant Limitation "Serious Injury" Threshold Categories

AUTO – SERIOUS INJURY THRESHOLD – INSURANCE LAW § 5102
Vidal v. Maldonado
(Sup. Ct., Bronx Co., decided 12/8/2008)

Okay, maybe "rant" is too harsh a term for the court's critical exposition of the state of the common law on the "serious injury" threshold in New York State. But for those who deal with automobile personal injury claims, this decision is a must read. I first spotted this case over at Eric Turkewitz' New York Personal Injury Law Blog.

Bronx County Supreme Court Justice Paul Victor sets the stage for his discussion of seemingly conflicting New York "serious injury" case law with the following commentary:

The defendants' motions and plaintiffs' responses have become almost assembly line, "cookie cutter" prototypes; and attorneys for defendants (and most plaintiffs) have become expert on how to present or attack a serious injury claim.

Defendants are very adept at providing prima facie proof demonstrating that plaintiff has not suffered a serious injury; proof at the very least sufficient to meet their "initial burden" to present competent evidence that plaintiff has no cause of action. Plaintiffs, too, have become quite conversant with the requirements to defeat defendant's motion.

* * * * *

The enabling legislation for the No-Fault Law itself provides little or no guidance to the bench and bar as to the scope of the terms used. For example, one should reasonably assume that the legislature sought to distinguish "significant limitations of a body function or system" from a "consequential limitation of a body organ or member". However, there appears to be no practical difference. Some courts have held that "consequential" means "significant" (See, e.g. Altman v. Gassman, 202 AD2d 265 [1st Dept. 1994]); and there are abundant cases in which all of the above terms (including body function, system, organ or member) are used interchangeably. The guidelines, conditions and examples provided by the Court of Appeals in a series of decisions, including Toure (cited and discussed, infra ) although very helpful, have not entirely unburdened the trial courts; and these serious injury claims continue to be the cause of incessant motion practice, and an abundant use of judicial resources at both the trial and appellate levels.

You can read the decision itself for Justice Victor's discussion and analysis of the Toure, Brown and Parreno decisions. After again noting that "[t]his legislatively imposed task has caused more than a season of judicial discontent and frustration, [and] has resulted in an extremely difficult and flawed process which results too often in an inconsistent and unfair application of the law", the court denied defendant's motion for summary judgment, even though plaintiff's treating internist had not set forth numeric percentages of any decreased range of motion in plaintiff's cervical and lumbar spine regions. The court found that a "less than normal" qualification of the ROM test findings was sufficient to create a question of fact when coupled with a positive MRI and the treating internist's finding of back spasms.

Presuming the defendant appeals this decision, we'll see what the First Department has to say. There are no bills currently pending in Albany that I found to amend the "serious injury" categories or proof requirements of Insurance Law § 5102(d).

UM Arbitration Award of No Serious Injury Upheld

UM – SERIOUS INJURY THRESHOLD – REVIEW OF ARBITRATION AWARD
Matter of the Arbitration Between Reyes v. Liberty Mut. Ins. Co.
(App. Term, 2nd Dept., decided 7/10/2008)

Petitioners were involved in a motor vehicle accident with an uninsured vehicle owned and operated by Anthony Manuele. They commenced a personal injury action against Mr. Manuele and, upon his default, an inquest was conducted and default judgments were entered in their favor against Mr. Manuele. Petitioners then served Liberty Mutual with a demand for arbitration of their claims for uninsured motorist (UM) coverage. An arbitration hearing was held, and petitioners argued that the arbitrator was bound by the amount of the default judgments rendered in the personal injury action, and was obligated to render an award in the same amount of the judgments therein. Liberty argued that the arbitrator was not so bound, and offered a copy of the insurance policy which stated that any judgment for damages arising out of a lawsuit brought without its written consent was not binding upon the insurer. It was conceded that Liberty had not been aware of the default judgments rendered in the personal injury action until the date of the arbitration hearing. The arbitrator found that Liberty was not bound by the default judgments, and rendered an award in favor of Liberty, dismissing petitioners' claims based upon their failure to demonstrate that they sustained a serious injury within the meaning of Insurance Law § 5102 (d).

Petitioners then commenced this special proceeding to vacate the arbitrator's award pursuant to CPLR § 7511(b), arguing that it was irrational and that the arbitrator "exceeded his power". Although petitioners were unable to produce the UM or SUM endorsements under which they sought coverage, they claimed that their policy did not contain the language contained in the policy produced by Liberty. Petitioners argued that that it was irrational for the arbitrator to include such language as a provision in their policy. Moreover, even if such language was included in the applicable endorsement, the arbitrator exceeded his authority by determining an issue involving policy coverage rather than limiting himself solely to the issues of liability and damages. In opposition, Liberty argued that there were no grounds for vacatur of the award, since said provision was included in the policy. The arbitrator's award was neither irrational, nor did the arbitrator exceed his authority in determining petitioners' entitlement to benefits.

In AFFIRMING Queens Civil Court's denial of the petition to vacate the arbitrator's award, the Appellate Term held that the arbitrator did not exceed his authority in determining whether petitioners were entitled to benefits under their policy with Liberty, and that petitioners had failed to meet their burden of showing that the arbitrator's award was irrational or that it had no evidentiary support or was arbitrary and capricious.