« Back to BG&S in the News

You Must Choose; But Choose Wisely
By: Allison Frischling, Esq.

FOR THE DEFENSE
You Must Choose; But Choose Wisely

By: Allison Frischling, Esq.
Bruno, Gerbino & Soriano, LLP
Melville, New York


Recently there seems to be a new trend with regard to the resolution of no-fault claims. Plaintiffs are now attempting to resolve claims that arise out of the same accident through the use of both arbitration and litigation. A plaintiff can elect to resolve its dispute through arbitration; but should be aware that once a matter is brought in arbitration all other claims that arise from that date of loss must be resolved through an arbitration hearing. Plaintiff must make a choice at the beginning to either resolve a claim through an arbitration hearing or litigate the claim in court for resolution of the claim. Once arbitration is chosen, a plaintiff may not Aswitch@ its method of resolution if it is unhappy with the outcome of the dispute.
According to N.Y. Ins. Law 5106(a) first party benefits and additional first party benefits shall be made as the loss is incurred. The claim must either be paid or denied within 30 days of receipt of the proof of loss. If proof is not supplied as to the entire claim, the claim is not overdue until said proof of claim is received. Under N.Y. Ins Law 5106(b) a claimant is given the opportunity to submit its dispute to arbitration.
Using arbitration as a forum can be an attractive option to claimants who want to expedite the process of claims which are in dispute. In Roggio v. Nationwide Mutual Insurance Co.,the plaintiff had been involved in an automobile accident in a vehicle insured by Nationwide Ins. Co. The plaintiff submitted a claim to Nationwide Ins. Co which in turn was denied. The claim was denied based on an Independent Medical Examination (IME) which determined a lack of medical necessity for services already provided as well as a lack of need to continue treatment based on the injuries sustained. The plaintiff chose to resolve her dispute through an arbitration hearing. Following the hearing, an award was issued which determined that most of the services provided were not medically necessary. The plaintiff appealed the decision to a Master Arbitrator who confirmed that the services were not medically necessary. The plaintiff then commenced an Article 75 proceeding to vacate the arbitration award, which was ultimately denied, appealed to the Appellate Division which was then withdrawn by stipulation.

In the meantime, plaintiff submitted a second no-fault bill that had been denied by Nationwide Insurance Company for litigation in the courts. Nationwide made a motion to either compel no-fault arbitration, or dismiss the action based on res judicata and collateral estoppel. The lower court denied this motion, but on appeal the Appellate Court dismissed the complaint and stated that while the claim was brought after the arbitration award it is not barred by res judicata or collateral estoppel. However, her election to arbitrate precluded litigation. The Court of Appeals affirmed this decision and held that a claimant who is not satisfied with its result through an arbitration hearing, cannot now submit a claim that arises from the same loss, to the courts for resolution of the disputed bills. A The courtroom may not be used as a convenient vestibule to the arbitration hall as to allow a party to create his own unique structure combining arbitration and litigation@. ABy the same token, parties are not permitted to participate in arbitration on the merits and yet maintain a right to litigate the issues.@
The option of resolving disputes through an arbitration hearing can be used for disputes to be resolved quickly and economically rather than bringing a claim to court. With that being said, it would make no sense for a claimant who is unhappy with the arbitration decision to be able to bring a suit in the courts. This would be a further expense that would flood the courts with even more no-fault litigation suits. Clearly this is what the use of arbitration was seeking to avoid.
In Advanced Medical Care, PLLC v. Travelers Insurance, Judge Nadelson held that, Aonce a No-Fault claim is submitted to arbitration, regardless of the result of that submission, that claim and all subsequent No-Fault claims arising out of the same accident are bound by that submission and the parties may not resort to the courts to adjudicate their rights@. This doctrine was further affirmed by the Appellate Division, 2d Department in Cortez v. Country Wide Ins. Co. The Court held, A [b]y electing to arbitrate, the plaintiff waived his right to commence an action to litigate subsequent disputes over no-fault benefits to which he was allegedly entitled to as a result of that accident@.
It is imperative that a plaintiff make an informed choice when choosing how it wants any disputed claims to be resolved. At the same time defendants must be aware of this new trend with regard to resolving no-fault claims.

Editors Note: Allison Frischling is a graduate of Albany Law School and an associate at Bruno, Gerbino & Soriano, LLP, located in Melville, New York.

« Back to BG&S in the News