Opinion
058092/09
08-16-2014
SKY MEDICAL SUPPLY INC., A/A/O Robert Taylor, Plaintiff, v. ELRAC INC. d/b/a/ Enterprise Rent–A–Car, Defendant.
Gary Tsirelman P.C., Brooklyn, attorneys for plaintiff. Brand, Glick & Brand, P.C., Garden City, attorneys for defendant.
Gary Tsirelman P.C., Brooklyn, attorneys for plaintiff.
Brand, Glick & Brand, P.C., Garden City, attorneys for defendant.
Opinion
KATHERINE A. LEVINE, J.The sole issue presented to the Court at trial is whether a medical service provider or its assignor can provide an insurance company with oral or telephonic notice of accident or whether such notice must be in writing.
The parties stipulated at trial that neither plaintiff Sky Medical Supply Inc. (“plaintiff” or “Sky”), nor its assignor Robert Taylor (“assignor” or “Taylor”), provided defendant ELRAC (“Elrac” or “defendant”) with a “written notice of claim” within 30 days of the alleged accident and that defendant was only provided with an oral or telephonic “notice of claim.” While plaintiff asserts that oral notification is sufficient, defendant asserts that the case law and regulations mandate that a written notice be tendered.
Both sides refer to the notice at issue as a “notice of claim” which must be received within 30 days of the motor vehicle accident. However, this nomenclature has spawned confusion since the No Fault Regulations have different names for each of the notices that must be provided by the provider/assignor to the insurance company, and oftentimes both the parties and decisions generically refer to these different notices as a “notice of claim.”
In N.Y. & Presbyterian Hospital v. Country–Wide Ins. Co., 17 N.Y.3d 586, 934 N.Y.S.2d 54, 958 N.E.2d 88 (2011), the Court of Appeals carefully distinguished between a “notice of accident” and “proof of claim,” both of which were “independent conditions precedents to liability.” Id. at 590, 934 N.Y.S.2d 54, 958 N.E.2d 88. There, the plaintiff medical provider failed to submit a notice of accident to Countrywide within 30 days but timely submitted a proof of claim for health care services 40 days after the accident. The Court first cited to the regulations implementing the No—Fault Law (Ins. Law, Article 51), which contain “circumscribed time frames for claim procedures” in furtherance of the No Fault Law's goal of ensuring “prompt compensation for losses incurred by accident victims ...” Id. at 590, 934 N.Y.S.2d 54, 958 N.E.2d 88 citing Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 9 N.Y.3d 312, 317, 849 N.Y.S.2d 473, 879 N.E.2d 1291 (2007).
The revised Mandatory Personal Injury Protection Endorsement (“Endorsement” or “PIP”) in the revised No–Fault Regulations —11 NYCRR 65—1.1 contain two separate and distinct notice requirements under the subsection entitled Conditions. It provides that as a condition precedent to bringing an action against an insurance company, there must be:
“Notice. In the event of an accident, written notice
setting forth details sufficient to identify the eligible injured person, along with reasonably obtainable information 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 Hospital for Joint Diseases, supra, the Court of Appeals noted that these regulations require an accident victim to submit a written notice of claim as soon as practicable but no later than 30 days an accident; next, the injured party or assignee must submit a “proof of claim for medical treatment no later than 45 days after services are rendered.” 9 N.Y.3d at 317, 849 N.Y.S.2d 473, 879 N.E.2d 1291. See, N.Y. and Presbyterian Hospital, supra, 17 N.Y.3d at 591, 934 N.Y.S.2d 54, 958 N.E.2d 88 (“these regulations 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 ... excuses the insured/assignor's failure to give the threshold notice of accident within 30 days of the accident, or that health care services provides are exempt from the written 30 day notice of accident requirement”). See also, Medical Select, P.C. v. Allstate Ins. Co., 42 Misc.3d 851, 852, 979 N.Y.S.2d 472 (Dist.Ct., Nassau Cty.2013) (the two “notice” requirements are “separate and distinct” and different time limits apply to each requirement.)
The Court of Appeals also referred to the notice of accident as the generic “notice of claim.”
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While 11 NYCRR § 65–1.1 mandates that both the notice of accident and proof of claim of health services be in writing, 11 NYCRR § 65–3.4 states that “whenever the insurer receives notice of claim by telephone, the party receiving such notice on behalf of the insurer shall be identified to the called by name and title ...” It further requires the insurer's representative to take down the name, address and phone number of the applicant and policy holder along with information regarding the time, place and circumstances of the accident “which will enable the insurer to begin processing the claim.” Additionally, 11 NYCRR § 65–3.2, which spells out the claim procedures to be followed by insurers,” provides in subd.(d) that the insurer should “hasten the processing of claim through the use of a telephone whenever it is possible to do.”
While the courts recognize that these provisions permit an injured party to give an oral “notice of claim” to the insurer, they have not clarified whether the term “notice of claim” applies to proof of claim or notice of accident or both. See, Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc.3d 18, 20, 793 N.Y.S.2d 661 (App.Term, 2d Dept.2004) (an insurer has a right to an IME following an oral or written “notice of claim and prior to its receipt of the statutory claim forms” (pre claim IME)); Medical Select, P.C., supra, 42 Misc.3d at 853, 979 N.Y.S.2d 472 (provision permitting insurer to receive “notice of claim” by telephone is part of the regulations goal “to facilitate the insurer's receipt of timely written notice”). But see, Sound Shore Medical Center v. N.Y. Central Mutual Fire Ins. Co., 106 A.D.3d 157, 162, 963 N.Y.S.2d 282 (pursuant to 11 NYCRR § 65–2.4, the injured party or his assignee must submit a written notice of claim to an insurer no later than 45 days after services are rendered).
The two reported decisions where an oral notice of accident was tendered reach opposite results and neither court directly discussed the applicability of 11 NYCRR § 65–3.4. See, Meehan v. City of N.Y., 295 A.D.2d 581, 744 N.Y.S.2d 484 (2d Dept.2002) (plaintiff's “telephone report of accident, claim and no fault,” completed shortly after the accident, did not provide the Transit Authority with “actual notice of essential facts constituting the claim” since they failed to suggest any connection between the accident and alleged negligence in operation of control of bus). In Mtr. of Nationwide Mutual Ins. Co. v. Acevedo–De La Cruz, 2013 N.Y. Slip Op. 31452(U), 2013 N.Y. Misc. LEXIS 2840, 2013 WL 3591551 (Sup.Ct., N.Y.2013), the court did not directly rule on the issue before this court but rather refused to vacate a master arbitration award. The original arbitrator had dismissed a no fault claim because he found that the insured's telephonic notification of the accident violated a condition precedent of the contract which required, pursuant to 11 NYCRR 65.1–1, that notice of an accident be in writing. The court affirmed the master arbitrator's award permitting the claim to go forward because he had rationally found that 11 NYCRR § 65–3.2(d) and (3) required that the carrier “hasten the processing of a claim through the use of telephone whenever possible to do so,” and “clearly inform the applicant of the insurer's position regarding any disputed matter.” The master arbitrator thus rationally determined that the insurer had violated the no fault law by failing to inform the insured of its position regarding her oral notification by phone. Furthermore, the court found that 11 NYCRR § 65–3.4 supported the master arbitrator's finding that oral notification was sufficient.
This Court finds that the tenets of statutory construction mandate that the right of an insured to orally notify the insurer of the notice of claim applies to both the proof of claim and the notice of accident. In construing administrative rules, the court must utilize the same canons of construction applicable to statutes. Mtr. Of Cortland–Clinton, Inc. v. New York State Dept. of Health, 59 A.D.2d 228, 231, 399 N.Y.S.2d 492 (4th Dept.1977). See, Mtr. of Garzilli v. Mills, 250 A.D.2d 131, 681 N.Y.S.2d 176 (3rd Dept.1998). One of the primary tenets of statutory construction is that “a statute or ordinance must be a construed as a whole and ... its various sections must be considered together and with reference to each other.” People v. Mobil Oil Corp., 48 N.Y.2d 192, 199, 422 N.Y.S.2d 33, 397 N.E.2d 724 (1979). See East Acupuncture, P.C. v. Allstate Ins. Co., 61 A.D.3d 202, 209, 873 N.Y.S.2d 335 (2d Dept.2009). As a corollary, statutes and regulations are to be harmonized, and not interpreted in a way that would leave one section without meaning or force. Statutes, § 98; Mtr. Of Albano v. Kirby, 36 N.Y.2d 526, 530, 369 N.Y.S.2d 655, 330 N.E.2d 615 (1975) ; Mtr. of Kaiser v. Commissioner of Depart. of Health, Nass. Cty Dept. of Social Services, 2006 N.Y. Slip Op. 51786U, 13 Misc.3d 1211(A), 2006 WL 2726813 (Sup.Ct., Nass.Cty.2006). To that end, separate sections of a statute should be construed in connection with each other as if they were in the same section. Statutes, §§ 97, 130. See, Friedman v. Connecticut Gen. Life Ins. Co., 9 N.Y.3d 105, 115, 846 N.Y.S.2d 64, 877 N.E.2d 281 (2007) ; Finally, regulations should be construed to avoid objectionable, unreasonable or absurd results. Long v. State of New York, 7 N.Y.3d 269, 273, 819 N.Y.S.2d 679, 852 N.E.2d 1150 (2006); Mtr. Of ATM One v. Landaverde, 2 N.Y.3d 472, 477, 779 N.Y.S.2d 808, 812 N.E.2d 298 (2004) ; East Acupuncture, P.C., supra, 61 A.D.3d at 207, 873 N.Y.S.2d 335 (2d Dept.2009) ; Pine Hollow Medical P.C. v. Global Liberty Ins. Co., 25 Misc.3d 244, 250, 882 N.Y.S.2d 636 (Civil Ct., Richmond Co.2009) ; Statutes, § 145.
The Superintendent of Insurance determined that the revised Regulation 68 (repealing and replacing the prior 11 NYCRR part 65) was “the most effective means of advancing the legislative intent of providing prompt payment of [no-fault] benefits as the loss is incurred, while reducing rampant abuse.” Mtr. Of Medical Society of State of N.Y. v. Serio, 100 N.Y.2d 854, 867, 768 N.Y.S.2d 423, 800 N.E.2d 728 (2003). It would frustrate the legislative intent of the No Fault Law by reading one particular section of the no fault regulations apart from the rest of the revised no fault program—which sets tight deadlines for the submission and payment of claims and “stresses the justifying of claims.” Nyack Hospital (Zadwydas) v. General Motors Acceptance Corp., 8 N.Y.3d 294, 300, 832 N.Y.S.2d 880, 864 N.E.2d 1279 (2007). The no fault regulations thus must be construed as a whole and its various sections must be considered in reference to each other; “any construction which deprives any part of a statute of effect and meaning when it is susceptible of another interpretation giving effect to every part, is avoided” East Acupuncture P.C. v. Allstate Ins. Co., 15 Misc.3d 104, 107, 832 N.Y.S.2d 737 (App.Term, 2nd Dept.2007) citing to Statutes, § 231.
The term “notice of claim,” as contained in 11 NYCRR § 65–3.4, is not specifically defined in the regulations. The canons of statutory construction require a term of greater comprehension to include a lesser term in line with the axiom that the “whole includes all of its parts.” Mtr. Of DeTroia v. Schweitzer , 87 N.Y.2d 338, 341, 639 N.Y.S.2d 299, 662 N.E.2d 779 (1996). Furthermore, words and phrases should be interpreted with reference to the scheme of the entire section, and the “meaning of an undefined word depends on the meaning of the whole act.” Charlotte's Fancy Restaurant, Inc. v. New York Dept. of Consumer Affairs , 121 A.D.2d 969, 970–71, 505 N.Y.S.2d 615 (1st Dept.1986)rev'd 69 N.Y.2d 865, 514 N.Y.S.2d 714, 507 N.E.2d 307 (1987) ; All Boro Psychological Services, P.C. v. Geico, 38 Misc.3d 268, 272, 953 N.Y.S.2d 479 (Civil Ct., Kings Co.2012) ; Statutes § 97.
In Medical Select, supra, the court followed this maxim in finding that the standards for excusing late filings applied to both the notice of accident and proof of claim. Thus, while the revised regulations reduced the time limits in which to submit the forms, the standards for excusing late filings for both forms were “relaxed” so that “bona-fide claims” would be considered if they were delayed due to bureaucratic delay or mishap. Medical Select, supra, 42 Misc.3d at 853, 979 N.Y.S.2d 472. See, Hempstead Pain & Med. Servs. v. General Assurance Co., 13 Misc.3d 980, 821 N.Y.S.2d 841 (Dist.Co.Suff.Co.2006). The court interpreted the regulations' use of the term “timely written notice of claim or timely submission of proof of claim,” as contained in the “safety valve provisions, to apply to both the notice of accident and proof of claim. Id. at 853–54, 979 N.Y.S.2d 472 interpreting both 11 NYCRR 65–3.4(a) and 65–3.3(3) (an insurer that denies a claim based upon failure to provide a timely written notice of claim or proof of claim must advise applicant that such late notice will be excused upon presentation of reasonable justification).
In an analogous situation, the Second Department had to determine which type of claimant the term “applicant” applied to, in light of varying uses of the term in different subsections of the regulations. At issue in East Acupuncture, P.C. v. Allstate Ins. Co., 61 A.D.3d 202, 209, 873 N.Y.S.2d 335 (2d Dept.2009) was whether the toll on the accrual of statutory interest on over due no fault claims, pursuant to 11NYRR 65 –3.9(c), applied solely to claims submitted directly by the injured party (assignor) or also to claims submitted by the medical providers as assignees of the injured parties. The lower court had determined that the interest toll applied only to claims of the injured persons and not to those of the provider assignee. 11 NYCRR § 65–3.9(a) provides in pertinent part that all overdue personal injury protection benefits due “an applicant or assignee ” bears an interest rate of 2% a month. Subdivision (c) however, provides that if the applicant did not request arbitration of institute a lawsuit within 30 days after receipt of a denial of claim form or payment, the accumulation of interest would toll on the disputed claim until such action was taken. Since subdivision (c) only referred to the applicant whereas subdivision (a) used the terms applicant and assignee, East Acupuncture argued that the interest toll could only apply to claims submitted by the assignor injured party. Allstate countered that for tolling purposes, there was no reason to distinguish between claims brought directly by the injured party and those submitted by the provider assignee because the term “applicant” utilized in subdivision (c) referred “generically” to both provider assignees and injured persons. 61 A.D.3d at 208, 873 N.Y.S.2d 335.
After reviewing the canons of statutory construction set forth above, the Second Department found that since the no fault regulations failed to provide a general definition of the term applicant, “the plain meaning of this term [in 11 NYCRR 65–3.9(c) ] would seem to refer to any entity, whether an injured person or a provider/assignee who submits a claim” or applies for no fault benefits. Id. at 210, 873 N.Y.S.2d 335. While noting that the no fault regulations did not consistently and exclusively use the term “applicant” to refer to injured persons, and at times used the term to apply to both entities, the Court found that the no—fault regulations must be construed as a whole and their sections must be construed in reference to each other. Id. at 211, 873 N.Y.S.2d 335. Consistent with the goal of the no fault regulations—to ensure prompt payments of claims—it would be counterintuitive to find that the interest tolling provision applied only to injured persons and then allow a provider's assignee, who delayed commencing legal proceeding, to continue to accrue interest. Id.
The same reasoning applied herein. Since the core objective of the No Fault Regulations is to “provide a tightly time process of claim, disputation and payment,” Hospital for Joint Diseases, supra, 9 N.Y.3d at 319–320, 849 N.Y.S.2d 473, 879 N.E.2d 1291, it begs all reason to adopt respondent's position that a regulation which generically permits the receipt of “notices of claim” by telephone does not apply to the specific forms that an assignor must file in order to be eligible for no—fault benefits—the notice of accident and proof of claim. Furthermore, since all provisions of the regulations must be read in tandem, it would be absurd and irrational to permit an assignor to telephone in a proof of claim but mandate that the notice of accident be in writing.
In light of the above, this Court finds that the claimant properly notified defendant and judgment should be rendered in favor of the plaintiff.