Dash & Berger, Jericho, for plaintiff.
Carman, Callahan & Ingham, L. L. P., Farmingdale, for defendant.
OPINION OF THE COURT
KENNETH L. GARTNER, J. The instant motion presents a novel legal issue of potential significance to the no-fault insurance system. This issue arises requesting verification, using the prescribed forms, within 10 days after receipt of the hospital's completed application, it failed to comply with its obligation to timely deny or disclaim," and thus would "be precluded from interposing a statutory exclusion defense," i.e., that the insured's intoxication excluded the injuries sustained from coverage. (Presbyterian Hosp. v Maryland Cas. Co., supra, 90 NY2d, at 281-282.) Subsequently, in Central Gen. Hosp. v Chubb Group (90 NY2d 195 [1997]), the Court of Appeals held that while an insurer could not be precluded from asserting that the allegedly causative event of an injury was not covered by insurance at all, an insurer "might" suffer a preclusion remedy for late notification under Presbyterian Hosp. (supra), and that this preclusion remedy "might" prevent it from asserting that the medical treatment for which payments were sought was "medically excessive." (Central Gen. Hosp. v Chubb Group, supra, 90 NY2d, at 199, 202.) While Presbyterian Hosp. and Central Gen. Hosp. (supra), respectively, by their literal terms merely precluded an insurer from asserting an "exclusion" defense, and observed that an insurer "might" be precluded from asserting a defense that the services rendered were "medically excessive," the Appellate Division, Second Department, has taken a more expansive view of the import of these holdings. In Bonetti v Integon Natl. Ins. Co. (269 AD2d 413, 414 [2d Dept 2000]), the Appellate Division definitively held that an insurer's claim that the treatment for which payment is sought is "medically excessive" is a defense subject to preclusion under Central Gen. Hosp. And in Mt. Sinai Hosp. v Triboro Coach (263 AD2d 11, 17 [2d Dept 1999]), the Appellate Division held that:
"[U]nless [the insurer] can establish that it qualifies for the narrow exception carved out by the Court of Appeals in [
Central Gen. Hosp.], it must be precluded from raising
any defense to [the claimant's] action because of its failure to deny the hospital's claim within the statutorily prescribed 30 days" (emphasis added).
The Second Department's broad reading of
Presbyterian Hosp. and
Central Gen. Hosp. (
supra) is in accord with that of the dissent in
Presbyterian Hosp., which expressly acknowledged "that the majority would preclude the insurer from raising
any defense except lack of coverage." (90 NY2d,
supra, at 289 [emphasis added].) The instant defendant, in support of its cross motion, has nevertheless submitted copies of two unpublished nisi prius
Hosp., the Appellate Division, First Department, had determined broadly that what was precluded was "`the insurance company's ability to
deny the claim.'" (226 AD2d 260 [internal quotations omitted; emphasis added].) This, too, would appear to bar the defendant here. (
Accord, Presbyterian Hosp. v Atlanta Cas. Co., 210 AD2d 210 [2d Dept 1994].) Semantics aside, the
raison d'etre of the
Presbyterian Hosp.' Central Gen. Hosp. line of cases is a "focus on avoiding prejudice to insureds by providing for prompt payment or disclaimers of claims." (
Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274, 284,
supra.) As the Court in
Presbyterian Hosp. explained (
90 NY2d, at 286):
"To string out belated and extra bites at the apple is, on the present state of the law, inherently contradictory and unfounded under the statutes, regulations and policies that pertain to and govern this dispute, and we should not countenance such practices on the state of this record and these regulations and statutes * * * [W]e discern no justification for penalizing injured parties or their provider assignees by recognizing disincentives against prompt attention and action for otherwise valid, first-party insurance payment claims."
It therefore appears to this court that the arbitral determination relied upon by the defendant is in contravention of
Presbyterian Hosp. and
Central Gen. Hosp., as well as
Mt. Sinai Hosp. (
supra). To allow insurers who have not timely denied no-fault claims to, in lawsuits brought to compel payment of those claims, for the first time attack the plaintiff's showing of medical necessity would be to allow them precisely the "second bite of the apple" which
Presbyterian Hosp. and its progeny prohibit, and therefore act as the "disincentive against prompt attention" to the initial claims procedure which
Presbyterian Hosp. abjures. This court therefore concludes that a plaintiff establishes a prima facie case under these circumstances simply by showing, as the instant plaintiff has, that insurance coverage existed; that a facially valid claim was presented; and that the claim was not timely denied. Once that prima facie burden is met by the plaintiff, the defendant's only recourse would be to make out a defense by itself coming forward with "facts or else * * * a belief founded on facts" that there is no insurance coverage for the claimed person or event at all. (
Mt. Sinai Hosp. v Triboro Coach, supra, 263 AD2d, at 19.) As observed by the
concurrence in
Central Gen. Hosp., "[t]he distinction [is] between `coverage' defenses (which are not precluded) and `noncoverage' defenses (which would be precluded under the majority's holding in this case and in
Presbyterian)" (
90 NY2d, at 203). Consequently, plaintiff's motion for summary judgment is granted, and defendant's cross motion for summary judgment is denied. Plaintiff is entitled to judgment on its first cause of action for the sums sought, including interest, as demanded in the complaint, and on its second cause of action for attorney's fees to be determined by inquest on affidavit. [Portions of opinion omitted for purposes of publication.]