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The Rogak Report: 12 Mar 2007 ** No Fault - 45 Day Rule - Denials **

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  • Lawrence Rogak
    COURT CRITICIZES OFFICIAL NO-FAULT DENIAL FORM BUT PUNISHES INSURER FOR RELYING ON IT Radiology Today a/a/o Andrey Radkevitch v. Citiwide Auto Leasing Inc.,
    Message 1 of 1 , Mar 12, 2007
      COURT CRITICIZES OFFICIAL NO-FAULT DENIAL FORM BUT PUNISHES INSURER
      FOR RELYING ON IT

      Radiology Today a/a/o Andrey Radkevitch v. Citiwide Auto Leasing
      Inc., Index no. 86044/03, 2005-00157KC (App. Term, 2d Dept 2007)

      Plaintiff appealed from an order of the Civil Court, Kings County,
      which denied plaintiff's motion for summary judgment and granted
      defendant's motion for summary judgment as to one bill which was
      submitted late. The Appellate Term reversed.

      One of the bills was submitted 48 days after the date of service.
      Defendant issued a timely denial based on the 45 day rule (11 NYCRR
      65-2.4[c]). But the Appellate Term cited the amended regulation 68
      which went into effect on 4/05/02: "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 advise the applicant that late notice will be excused where the
      applicant can provide reasonable justification of the failure to give
      timely notice." (11 NYCRR 65-3.3[e]).

      "This regulation," held the Court, "ameliorates the impact of the
      severely shortened time periods in which a claimant must submit its
      notice of claim or proof of claim, from 90 days to 30 days in the
      former case, and from 180 to 45 days in the latter... In the instant
      case, we must construe the regulation to bar a defense based on an
      untimely proof of claim when there is a lack of proof of compliance
      with the notice requirement of 11 NYCRR 65-3.3[e]."

      "We note that the NF-10 denial form prepared by the Insurance
      Department, which specifically provides that only a claimant's
      failure to provide reasonable justification for a late notice of
      claim is a ground to deny a claim, fails to fulfill the regulatory
      mandate that a claimant be notified of its right to justify an
      untimely submission both of a late notice of claim and a late proof
      of claim and, in effect, to resubmit a claim if such justification
      can be asserted. Absent such advisements, the NF-10 form, as
      presently configured, lulls a claimant, unaware of its rights, into
      concluding that an opportunity to recover no-fault benefits is
      exhausted and misleads insurers, or the herein self-insurer, that
      reliance on the form satisfies their obligation to advise claimants
      of their right to justify late submissions. Thus, as the herein NF-
      10 form failed to advise plaintiff of its right to cure its untimely
      proof of claim, the denial on the ground of an untimely proof of
      claim must be deemed ineffective, and absent any other basis for the
      claim's denial, defendant is precluded from interposing defenses to
      the claim, save for certain defenses not herein relevant."

      Summary judgment was granted to plaintiff.

      Justice Golia dissented. "...Indeed, the plaintiff does not even
      submit a reasonable justification of the failure to give timely
      notice... The majority chooses to discount the untimely filing and
      does not address the unavailing irrelevant excuse. It chooses
      instead to punish the defendant for attempting to comply with the
      rules and regulations of the Insurance Department by using the forms
      created and produced by the very same Insurance Department. Indeed,
      the majority acknowledges that the 'official' forms mislead insurers
      into believing that reliance on those forms satisfies their
      obligation."

      "It seems incredibly unfair that the defendant should be penalized
      for utilizing the forms promulgated by the Insurance Department to
      which deference should be granted. More importantly, it is
      inappropriate for me to then reward a claimant who has admittedly
      violated the rules of timely filing without requiring that at the
      very minimum, it proffer a reasonable excuse for such late filing."

      Larry Rogak

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