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The “Application” of Law in No-Fault Cases: Part I - The Plaintiff’s Burden of Proof
By: Allison L. Goldstein, Esq.

FOR THE DEFENSE


The “Application” of Law in No-Fault Cases: Part I
The Plaintiff’s Burden of Proof
By: Allison L. Goldstein, Esq.
Bruno, Gerbino & Soriano, LLP
Melville, New York

It’s been a little over a year since I stepped into a courtroom in Civil Court, Kings County to defend my first no-fault trial. With my basic knowledge of law and the rules of evidence, I thought the burden the plaintiff would need to overcome to prove the basic elements of the case would be nearly impossible. Now a year later, after witnessing day after day the explosion of no-fault cases clogging the courts’ trial calendars, the basic elements of a plaintiff’s case have all but disappeared and the defendant has been the one required to overcome an almost insurmountable burden.

In any other trial, a plaintiff is first required to prove the basic elements of its case before the defendant is required to put forth a defense. When analyzing the basic elements of a no-fault matter, it seemed logical that issues such as standing, entitlement to benefits and damages would always be essential elements of a plaintiff’s case. However, this is not the reality of the system we currently work in. According to the standard currently applied in the Second Department, all a plaintiff needs to do to establish its prima facie case is prove that it submitted its proof of claim to the defendant. See Dermatossian v. New York City Transit Authority, 67 N.Y.2d 219, 224, 492 N.E.2d 1200, 501 N.Y.S.2d 784 (1986); Ocean Diagnostic Imaging, P.C., v. Nationwide Mut. Ins. Co., 2004 N.Y. Slip. Op. 51041U, 4 Misc. 3d 142A (N.Y. App. Term, 2nd Dept. 2004); Damadian MRI in Elmhurst, P.C., v. Liberty Mut. Ins. Co., 2003 N.Y. Slip. Op. 51700U, 2 Misc. 3d 128A, 784 N.Y.S2d 919 (N.Y. App. Term 2nd Dept. 2003); Amaze Medical Supply, Inc. V. Eagle Ins. Co., 2003 N.Y. Slip Op. 51700U, 2 Misc. 3d 128A, 784 N.Y.S2d 918 (N.Y. App. Term 2nd Dept. 2003); A.B. Medical Services, PLLC v. Eagle Ins. Co., 3 Misc. 3d 8, 776 N.Y.S. 2d 434 (N.Y. App. Term 2nd Dept. 2003; Choicenet Chiropractic, P.C. v. Allstate Ins. Co., 2003 N.Y. Slip Op. 50672U, 2003 N.Y. Misc. Lexis 314 (N.Y. App. Term, 2nd Dept. 2003).

In creating this standard for plaintiffs, the “courts have declined to distinguish proper proof of claim under the insurance regulations from the quantum of proof necessary to prevail on a motion for summary judgment in an ensuing action on the claim...” Damadian MRI in Elmhurst, Supra. The courts have followed the same standard at trial, and deem the plaintiff’s burden fulfilled after only having shown that proof of claim was submitted. Even though this standard is just “how it is,” what about “how it should be?”


In applying the aforementioned standard, the courts are allowing plaintiffs to recover for benefits that they have not even shown that they have standing to sue for in the first place. As per Insurance Regulation 65-3.11 Direct Payments, (a) an insurer shall pay benefits for any element of the loss . . . directly to the applicant or . . . upon assignment by the applicant . . . shall pay benefits directly to the providers of health care services as covered under section 2102 (a)(1) of the Insurance Law. Any First Year Contracts student could tell you that without an assignment of benefits, there is no privity of contract between the medical provider and the insurance company. In failing to require plaintiffs to present a valid, or in some cases any, assignment of benefits in admissible form, this standard clearly ignores both the No-Fault regulation and basic premises of contract law.

Plaintiffs normally respond to any attack on the validity or admissibility of the assignment of benefits at time of trial, by arguing that in accordance with General Accident Insurance Group v. Celia Cirucci, 46 N.Y. 2d 862, 414 N.Y.S. 2d 612 (1979), the defendant can not raise any arguments in reference to the assignment of benefits unless such deficiencies were raised within the “four corners” of the denial of claim form. Plaintiff’s argument, however, is misguided and misuses the holding in Cirucci, which dealt with a disclaimer of coverage and not a denial of first party benefits. Furthermore, all arguments regarding the assignment are not new affirmative defenses being raised, but rather are failures on the part of the plaintiff to first prove what it should be required to prove as a part of its prima facie case at the time of trial. In A.B. Medical Services v. Progressive Ins., 2003 NY Slip Op. 507690 (U) (App. Term. 2nd & 11th Jud. Dists. March 11, 2003), the Appellate Term, ruled that in a case where the assignment failed to contain the name of the assignee, “ [a]ccordingly, upon the record presented, the plaintiff’s have not demonstrated their right as a matter of law to maintain the instant action.” Id. In this decision, there was no burden placed on the defendant to first show that such defects were raised within the “four corners” of its denial. Rather, the court rules that it is part of the plaintiff’s prima facie burden to show a valid assignment of benefits in order to “demonstrate their right as a matter of law” to maintain a no-fault action. Id.

In addition, in cases to recover for medical supplies, the court lessened the burden of the plaintiff so that now no wholesale invoices or evidence of any kind is required to show that the amount billed by the provider is not more than150% of its wholesale cost. Under the New York No-Fault regulation, “[f]or medical equipment and supplies, (e.g., TENS units, soft cervical collars) provided by a physician or medical equipment supplier, the maximum permissible charge is 150% of the documented cost of the equipment to the provider.” 11 NYCRR 68, Part E, (b) (1).

In King’s Medical Supply, Inc., a/a/o Lilliana Zulunova, et. al., v. Travelers Property Casualty Corporation, 756 N.Y.S.2d 385 (Civil Court, Kings County, 2003), the court, in developing a standard of proof in medical supplies cases found that “[t]he applicable regulation...state[s] that the maximum charge, and therefore the maximum reimbursement, is 150% of the documented costs of the equipment to the provider. The court thereby holds that to prove cost, the provider must prove what the wholesaler or supplier charged the plaintiff.” Id. The same premise has been followed by the Appellate Term, Second Department in Kings Medical Supply Inc., a/a/o B. Guevara Francis, et. al. v. Allstate, 2004 NY Slip. Opp. 50280U (N.Y. App. Term. 2nd Dept. 2004). See also King’s Medical Supply Inc., a/a/o Marino Santos v. Allstate Insurance Company, 2003 NY Slip Op 51681U, 2 Misc. 3d 127A (App. Div. 2nd and 11th Jud. Dists. 2003), (“[t]he regulations explicitly limit a provider’s medical equipment claims to 150 percent of the cost.”) If the court treats the plaintiff’s at time of trial the same way they are treated at the claim stage, then why are the defendant’s not granted the same deference?


Again, going back to first year contracts class, in an action for contract where the amount of damages would be certain, the party is only entitled to recover expectation damages, which are measured by placing the non-breaching party in the same position it would have been had the contract been performed. In claims for no-fault benefits for the provision of medical supplies, the no-fault regulation clearly states that “the maximum permissible charge is 150% of the documented cost of the equipment to the provider.” 11 NYCRR 68, Part E, (b)(1). Furthermore, in Amzae Medical Supply Inc., v. Eagle Ins. Co., 2 Misc. 3d 128a (App. Term. 2d and 11th Jud. Dists, 2003), the Appellate term repeatedly cites to earlier decisions where the Court has found that a plaintiff establishes a prima facie case upon the statutory forms and the amount of the loss. No requirement was made in any case law, making it a prerequisite that questions regarding the price of the supplies be raised in the “four corners” of the denial, and as stated above, the Cirucci case does not support this position as the plaintiff contends. Plaintiffs cannot claim that they are surprised at time of the trial that they have to actually prove the basic elements of their case. In actions to recover for the provision of medical supplies, the plaintiff should be required to show, by admissible evidence, documentation of the costs of the supplies. To allow otherwise would clearly violate the clear language of the No-Fault regulation and goes against basic principles of contract law.

This is the first installment of a two part article. The second part addressing the defendant’s burden of proof will appear in the next issue,

Editor’s Note: Allison L. Goldstein is a graduate of Boston University School of Law and an associate at Bruno, Gerbino & Soriano, LLP, located in Melville, New York

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