A trial court in New York has denied a no-fault insurer's unopposed motion for a default judgment, finding that it had not met a requirement contained in the no-fault regulations.
The Case
On November 9, 2015, Ines Cervantes allegedly was injured in a motor vehicle collision while driving a car insured by American Transit Insurance Company (“ATIC”).
Ms. Cervantes was treated for the injuries she allegedly sustained in the collision by Main Street Radiology at Bayside, LLC, Mount Sinai Hospital Queens, and University Orthopedics of New York, PLLC ( collectively, the “medical providers”).
Ms. Cervantes submitted a claim for no-fault benefits to ATIC, and then assigned her right to collect no-fault benefits to the medical providers. They, in turn, sought reimbursement from ATIC for the treatment they had rendered, claiming that the treatment was compensable under the terms of Ms. Cervantes' policy.
ATIC filed a declaratory judgment action against Ms. Cervantes and the medical providers on December 27, 2016. The defendants did not answer.
According to ATIC, a no-fault claims supervisor for ATIC received an “NF-2” claim form from Ms. Cervantes on November 30, 2015; on March 16 and April 7, 2016, Ms. Cervantes was sent notices to appear for a medical examination on April 6 and 20, 2016; and Ms. Cervantes failed to appear for an examination on either day.
ATIC moved for a default judgment against the defendants, arguing that Ms. Cervantes had violated a condition precedent to coverage under the policy by failing to appear for a physical examination. ATIC further asserted that, because Ms. Cervantes was not entitled to coverage under the policy, the medical providers were not entitled to coverage by means of her assignment to them of her rights pursuant to the policy.
The defendants did not submit any opposition to the motion.
The Court's Decision
The court denied ATIC's motion.
In its decision, the court pointed out that although ATIC demonstrated that it properly served the defendants with process and provided them with an additional copy of the summons and verified complaint, they had not appeared in the action.
However, the court continued, because ATIC “failed to establish the facts constituting the claim, its motion for a default judgment must be denied.”
In particular, the court ruled that ATIC failed to demonstrate that it timely scheduled Ms. Cervantes' initial medical examination within 15 days after it received the NF-2 as required by the no-fault regulations, 11 NYCRR § 65-3.5(b).
The court explained that ATIC received notice of the claim on November 30, 2015 but did not mail Ms. Cervantes the initial notice seeking her physical examination until March 16, 2016, approximately 3 1/2 months later.
As a result, the court denied ATIC's motion.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].