Case Title: New York and Presbyterian Hospital v. Country Wide Ins. Co.

Citation: 2011 NY Slip Op 07149

Docket Number: 

State: new-york

Court: New York Appellate Court

Date: 2011-10-13T00:00:00Z

Document:
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 216  
New York and Presbyterian 
Hospital, &c.,
            Respondent,
        v.
Country Wide Insurance Company,
            Appellant.
Thomas A. Torto, for appellant.
Joseph Henig, for respondent.
JONES, J.:
The question before the Court is whether a health care
services provider, as assignee of a person injured in a motor
vehicle accident, can recover no-fault benefits by timely
submitting the required proof of claim after the 30-day period
for providing written notice of the accident has expired.  We
hold it cannot.  
On July 19, 2008, Joaquin Benitez was injured in a
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No. 216
traffic accident which took place in Manhattan, and treated at
New York and Presbyterian Hospital (Presbyterian) from that date
through July 26, 2008.  On the date of Benitez's discharge, he
and Presbyterian executed an Assignment of No-Fault Benefits form
under which he assigned to Presbyterian "all rights, privileges
and remedies to payment for health care services provided by
[Presbyterian] to which [Benitez is] entitled under Article 51
(the No-Fault statute) of the Insurance Law."  Benitez and
Presbyterian also executed a completed NYS Form NF-5 (i.e., a
hospital facility form).  Neither Benitez nor Presbyterian
provided the required written notice of accident to his no-fault
insurer, Country Wide Insurance Company (Country Wide), within 30
days of the accident as required by the New York insurance
regulations (11 NYCRR 65-1.1).
On August 25, 2008, Presbyterian, as assignee of
Benitez, billed Country Wide (i.e., sought no-fault benefits) for
the sum of $48,697.63.  In billing Country Wide, Presbyterian
submitted a number of documents, including the required proof of
claim (the NF-5 form).  Country Wide received the bill and other
documents on August 28, 2008, 40 days after the accident. 
Country Wide denied Presbyterian's claim on the ground it had not
received timely notice of the accident under 11 NYCRR 65-1.1,
which requires an "eligible insured person" to give written
notice to the insurer "in no event more than 30 days after the
date of the accident."  
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Presbyterian brought this action against Country Wide
to compel payment of no-fault benefits in the amount of its bill,
plus statutory interest and attorney's fees, alleging it had
provided timely notice and proof of claim under 11 NYCRR 65-1.1,
which requires an insured person's assignee to submit written
proof of claim no later than 45 days after the date health care
services are rendered.  Presbyterian and Country Wide each moved
for summary judgment. 
Supreme Court granted Presbyterian summary judgment,
ruling that the hospital satisfied its notice obligation by
timely submitting the proof of claim.  Citing 11 NYCRR 65-3.3
(d), the Appellate Division affirmed (71 AD3d 1009 [2d Dept
2010]), stating "[c]ontrary to the insurer's contention, the
hospital's submission of a completed hospital facility form . . .
within 45 days after services were rendered satisfied the written
notice requirement set forth in 11 NYCRR 65-1.1."  This Court
granted Country Wide leave to appeal and we now reverse.
Country Wide argues that the Appellate Division
decision eviscerates the 30-day written notice of accident
requirement and that the aforementioned regulations do not
contain any language which provides that submission of a proof of
claim for health care services within 45 days excuses the failure
to give the threshold notice of accident within 30 days of the
accident.  In response, Presbyterian construes the stated no-
fault regulations as exempting health care providers from the 30-
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No. 216
day notice of accident requirement.  In Presbyterian's view, its
filing of the hospital facility form within 45 days of the date
services were rendered constitutes both "proof of claim" and
timely "notice of accident".  For the reasons that follow, we
agree with Country Wide's position.
The primary goals of New York's no-fault automobile
insurance system are "to ensure prompt compensation for losses
incurred by accident victims without regard to fault or
negligence, to reduce the burden on the courts and to provide
substantial premium savings to New York motorists" (Matter of
Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860
[2003]).  In furtherance of these objectives, "the Superintendent
of Insurance has adopted regulations implementing the No-Fault
Law (Insurance Law art 51), including circumscribed time frames
for claim procedures" (Hospital for Joint Diseases v Travelers
Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007] [emphasis added]).
11 NYCRR 65-1.1, the mandatory personal injury
protection endorsement for motor vehicle liability insurance
policies, provides:
"Conditions
"Action Against [Insurance] Company. No
action shall lie against the Company unless,
as a condition precedent thereto, there shall
have been full compliance with the terms of
this coverage.
"Notice. In the event of an accident, written
notice setting forth details sufficient to
identify the eligible injured person, along
with reasonably obtainable information
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regarding the time, place and circumstances
of the accident, shall be given by, or on
behalf of, each eligible injured person, to
the Company, or any of the Company's
authorized agents, as soon as reasonably
practicable, but in no event more than 30
days after the date of the accident . . .
"Proof of Claim; Medical, Work Loss, and
Other Necessary Expenses. In the case of a
claim for health service expenses, the
eligible injured person or that person's
assignee or representative [e.g., a health
care services provider] shall submit written
proof of claim to the Company, including full
particulars of the nature and extent of the
injuries and treatment received and
contemplated, as soon as reasonably
practicable but, in no event later than 45
days after the date services are rendered.  
. . ."
(emphasis added).  In addition, 11 NYCRR 65-3.3 (d) states:  
"The written notice required by . . . the
mandatory and additional personal injury
protection endorsement(s) shall be deemed to
be satisfied by the insurer's receipt of a
completed prescribed application for motor
vehicle no-fault benefits (NYS Form N-F 2)
forwarded to the applicant pursuant to
subdivision 65-3.4 (b) of this subpart or by
the insurer's receipt of a completed hospital
facility form (NYS Form N-F 5)"
(emphasis added).
The "notice of accident" and "proof of claim" under 11
NYCRR 65-1.1 are independent conditions precedent to a no-fault
insurer's liability (see Hospital for Joint Diseases, 9 NY3d at
317 ["These regulations require an accident victim to submit a
notice of claim to the insurer as soon as practicable and no
later than 30 days after an accident.  Next, the injured party or
the assignee (typically a hospital . . .) must submit proof of
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claim for medical treatment no later than 45 days after services
are rendered" (9 NY3d at 317 [emphasis added] [internal citations
omitted])]).  By ruling that the notice of accident condition was
satisfied based on the plain language of 11 NYCRR 65-3.3 (d), the
Appellate Division disregarded the separate and distinct nature
and purpose of these requirements.  Even more troubling, such a
construction effectively reads the 30-day written notice of
accident requirement out of the no-fault regulations.  But
nothing in 11 NYCRR 65-3.3 (d) explicitly dispenses with the 30-
day notice of accident requirement.  Rather, 11 NYCRR 65-3.3 (d)
merely provides that a NF-5 form may constitute the written
notice required under the notice of accident provision. 
In other words, these regulations (read alone or in
tandem) cannot be interpreted to mean that a hospital/assignee's
timely submission of a proof of claim for health services within
45 days of discharge of the injured person excuses the
insured/assignor's failure to give the threshold notice of
accident within 30 days of the accident, or that health care
service providers are exempt from the written 30-day notice of
accident requirement.  Neither 11 NYCRR 65-1.1 nor 11 NYCRR 65-
3.3 (d) contains such language.  That is, while 11 NYCRR 65-3.3
(d) allows a completed hospital facility form to satisfy the
written notice of accident requirement, the regulation does not
provide (or suggest) that a "proof of claim" in that form filed
within 45 days of treatment satisfies the 30-day notice of
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accident requirement where, as here, the form was submitted to
Country Wide after the 30-day period has expired.
Although the Department of Insurance has not issued any
interpretive statements or opinions regarding the subject
regulations, our case law provides some guidance as to the
importance of the "notice of accident" and "proof of claim"
requirements to the no-fault regulatory scheme.  In Serio, the
Court explained that in 2001, the Superintendent of Insurance, in
response to an alarming increase in insurance fraud over the
preceding nine years, amended these regulations (see 100 NY2d at
861-863).  Specifically, the notice of accident requirement was
reduced from 90 days to 30 days, and the time to provide proof of
claim was reduced from 180 days to 45 days (id. at 860, 862) in
order to, among other things, prevent the fraud and abuse the
Superintendent linked to the lengthy time frames (id. at 862) --
for example, there were numerous cases where individuals were
"exploiting the time lag between the alleged loss and the
deadline for submitting proof of the loss, coupled with the
reality that insurers are given only 30 days to review and
investigate claims before paying them without risk of penalties
for denying or delaying a claim" (id. at 861).  Thus, it is clear
that the Superintendent of Insurance -- the official responsible
for administering the Insurance Law and promulgating the
insurance regulations -- viewed both the "notice of accident" and
"proof of claim" as integral requirements/time periods that
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further the goals of the no-fault system.  Moreover,
Presbyterian's interpretation of 11 NYCRR 65-3.3 (d) would
undercut the anti-fraud purpose of the reduced time periods,
particularly in cases where treatment does not occur until months
or years after the accident.
Based on the foregoing, the proper construction of the
subject regulations is that an NF-5 form (or other form that can
serve as proof of claim) may constitute timely notice of an
accident, as permitted by 11 NYCRR 65-3.3 (d), only if such proof
of claim is given within the 30-day period prescribed by 11 NYCRR
65-1.1.  Any other construction is unwarranted and would
undermine the importance of the 30-day time period to the no-
fault system.
Presbyterian nevertheless argues that interpreting 11
NYCRR 65-3.3 (d) in Country Wide's favor "would severely impact
the hospital's ability to submit a timely bill" in cases where
the insurer is not readily identifiable.  But the Superintendent
has addressed these concerns.  The regulations allow late notices
of accident if there is "written proof providing clear and
reasonable justification for the failure to comply with such time
limitation" (11 NYCRR 65-1.1).*  Indeed, the regulations
* See also 11 NYCRR 65-3.3 (e), which provides:
"When an insurer denies a claim based upon
the failure to provide timely written notice
of claim or timely submission of proof of
claim by the applicant, such denial must
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specifically direct carriers to consider whether the injured
person was a pedestrian or an occupant of a vehicle who may have
difficulty identifying the proper carrier in assessing untimely
notices of accident:
"The insurer shall establish standards for
review of its determinations that applicants
have provided late notice of claim or late
proof of claim.  In the case of notice of
claim, such standards shall include, but not
be limited to, appropriate consideration for
pedestrians and non-related occupants of
motor vehicles who may have difficulty
ascertaining the identity of the insurer"
(11 NYCRR 65-3.5 [l]).
  
Finally, as an assignee of all the rights, privileges
and remedies to which Benitez was entitled under the No-Fault
law, Presbyterian stood in the shoes of Benitez and acquired no
greater rights than he had (see Matter of International Ribbon
Mills [Arjan Ribbons], 36 NY2d 121, 126 [1975] [Chief Judge
Breitel wrote, "[i]t is elementary ancient law that an assignee
never stands in any better position than his assignor."]).  Here,
because no written notice of accident was given, there was a
failure to fully comply with the terms of the no-fault policy,
which is a condition precedent to insurer liability.  As a
result, the assignment effectively became worthless (i.e.,
Benitez assigned nothing to Presbyterian) -- you cannot assign
advise the applicant that late notice will be
excused where the applicant can provide
reasonable justification of the failure to
give timely notice."
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your right to benefits if your right to those benefits has not
been triggered, or if you had no right to those benefits in the
first place.
For the foregoing reasons, the submission of the proof
of claim within 45 days of the date health care services are
rendered may not serve as timely written notice of accident after
the 30-day period for providing such written notice has expired.
Accordingly, the order of the Appellate Division should
be reversed, with costs, defendant's motion for summary judgment
granted and the complaint dismissed.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order reversed, with costs, defendant's motion for summary
judgment granted and the complaint dismissed.  Opinion by Judge
Jones.  Chief Judge Lippman and Judges Ciparick, Graffeo, Read,
Smith and Pigott concur.
Decided October 13, 2011
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