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Motions To Sever And The No-Fault Bar
By: Diane B. Kadlec, Esq.

FOR THE DEFENSE

Motions To Sever And The No-Fault Bar

By: Diane B. Kadlec, Esq.
Bruno, Gerbino and Soriano, LLP
Melville, New York


Bundling the no-fault claims of many different medical providers is a common practice among plaintiff’s counsel when preparing a Summons and Complaint seeking reimbursement of no-fault benefits that were denied by an automobile carrier pursuant to Insurance Law Art. 51 and 11 NYCRR Regulation 68. Very often, the medical providers’ suit involve the claims of different assignors who were allegedly injured in motor vehicle accidents which occurred on different days, who allegedly received different medical services/treatments from their respective plaintiff/assignee, and who in turn seek reimbursement under different insurance policies which were issued by a carrier common to all. Thus, the sole common thread that runs through this type of suit is the identity of the carrier and the collective fact that no-fault benefits were not paid.

In response to this practice, it can be expected that defense counsel will move to have the action severed into individual, independent causes of action. The motion is brought pursuant to CPLR 603:

In furtherance of convenience or to avoid prejudice the court may order a
severance of claims, or may order a separate trial of any claim, or of any
separate issue. The court may order the trial of any claim or issue prior to the
trial of the others.


The application of CPLR 603 presents the court with the responsibility and opportunity to exercise its discretion upon consideration of the facts and circumstances before it. In Mount Sinai Hospital v. Motor Vehicle Indemnification Corporation, 291 A.D.2d 536, 738 N.Y.S.2d 247 (A.D. 2 Dept. 2002) the Appellate Division, Second Department, held that “the Supreme Court had providently exercised its discretion in severing the remaining five causes” since there were five unrelated assignees, five different accidents and no common contract of insurance. However, in Hempstead General Hospital v. Liberty Mutual Insurance Company,134 A.D.2d 569, 521 N.Y.S.2d 469 (A.D. 2 Dept. 1987), the Appellate Division, Second Department held that 29 claims included within one action was proper since the issues involved a common question of law and because the “multiple transactions by multiple plaintiffs ‘do not lose their character as a series of transactions because they occurred at different places and times’” (citing Akely v. Kinnicutt, 238 NY 466, 467, 144 N.E. 682). The Appellate Division found that the Supreme Court did not “abuse its discretion in denying the defendant’s motion to sever.” (It should be noted that in this latter instance, the Court relied upon CPLR 1002, “Permissive Joinder of Parties”, in support of its decision. The facts of this case were not provided within the decision so the particular character of the transactions is unknown.) In a libel action, the Appellate Division, First Department held that to avoid confusion or prejudice to the named defendant, it was a prudent exercise of discretion for the lower court to sever the actions and ordered a separate trial. Schneph v. New York Times Company, 21 A.D.2d 599, 252 N.Y.S.2d 931 (A.D. 1 Dept. 1964). See also, Reid v. Haher, 88 A.D.2d 873, 451 N.Y.S.2d 775 (A.D. 1 Dept. 1982) Severance was ordered “in furtherance of convenience or to avoid prejudice” when it was determined that the different plaintiffs asserted separate malpractice allegations against the same physician. In this instance, counsel who represented all of the plaintiffs bundled their respective claims into one suit.

The Hempstead General Hospital case notwithstanding, the avalanche of no-fault suits that has inundated the lower courts has resulted in a vigorous application of CPLR 603. In an unpublished decision, Justice Kenneth A. Davis, Justice of the Supreme Court sitting in Nassau County ordered that an action be severed, citing Mount Sinai, supra., because the assignors were unrelated, they were involved in separate, unrelated motor vehicle accidents and were treated by different hospitals. “The only common element between the actions is the same insurance carrier and that insurer’s failure to pay no-fault benefits.” The New York Presbyterian Hospital a/a/o Joan Benham v. Allstate Insurance Company (Index No. 1529/2003). Case law is replete with the repetition of the abovementioned criteria: different assignees holding different derivative claims of their respective assignors, the assignors allegedly involved in motor vehicle accidents which occurred on different days, there is no common contract of insurance between them and no overriding similarity except that no-fault benefits were not paid by the same carrier.

In the Civil Courts of the City of New York, Part 40 has been created solely to hear procedural motions (discovery, severance and consolidation motions and motions to strike a case from the calendar) arising from no-fault suits. Currently, the Civil Courts freely grant motions to sever. Usually the Judge will grant the motion on its original return date and direct the parties to enter into a Stipulation severing the matter into separate, individual causes of action. While the first-named plaintiff’s cause of action will retain the original index number, the Court will instruct plaintiff’s attorney to purchase separate index numbers for the other newly-severed actions. Additionally, the Stipulation will address the amendment of the caption, and the service of separate pleadings upon adverse counsel. Any hesitancy expressed at this amicable resolution of the motion to sever will be met with the not-so-veiled threat of the imposition of sanctions against the recalcitrant party.

In Bronx County, a “Notice For All Attorneys” effective March 1, 2004, has been prepared and circulated. Paragraph 5 reads as follows:

Counsel are cautioned with respect to bringing an action involving different
assignors, carriers, plaintiffs or accident dates unless it can be clearly demonstrated that
specific common questions of law and fact which [sic] predominate. Upon a motion to sever, if granted, sanctions and costs may be imposed and the joining of these claims may be deemed frivolous or not made under reasonable inquiries and can result in burdensome
and unnecessary severance applications to the court. See, Rules of the Chief Administrator Sec. 130-1.1 and 130-1.1(a) 22 NYCRR 130-1.1, 130-1.1(a).

Judge C. Stephen Hackeling, Judge of the District Court, Third District, Suffolk County has admonished plaintiff’s counsel for bundling and has threatened the imposition of sanctions should the practice continue. Asian Healing Arts Acupuncture a/a/o Sergey Frasnov et al v. Allstate Insurance Company (Index No. HUC 4683-03)

Unless there are weighty and unusual circumstances, careful consideration should be given to the preparation of the Summons and Complaint on behalf of medical providers whose no-fault bills have not been paid. The bundling of plaintiffs’ claims may appear to be a more cost efficient and effective approach; however, the current judicial climate shows again and again that this practice is specious.

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