IME Watchdog advertises themselves as follows: "an innovative company poised to arm plaintiff's' firms with a new defensive weapon against insurance companies and their IME hired guns. In the event that defendant files a motion to dismiss based on a 'serious injury'threshold, the Watchdog Advocate who attended the examination will be available to prepare an affidavit and/or provide in-court testimony in support of your opposition. Watchdog affidavits and testimony can highlight which tests were not performed, possible mischaracterization of the results, and any other information that tends to show a triable issue of fact."

IME Watchdog filed an application in Bronx County before Judge Tapia seeking an injunction v. Baker, McEvoy, Morrissey & Moskovits, P.C., counsel for American Transit Insurance Company, claiming the law firm interfered with their contractual rights with plaintiffs' law firms by excluding IME Watchdog personnel from Independent Medical Examinations (IME).

There is well settled law that an attorney has the right to be present for the IME. "A party is 'entitled to be examined in the presence of [his or] her attorney or other ...... so long as [that person does] not interfere with the conduct of the examinations' ..., 'unless [the] defendant makes a positive showing of necessity for the exclusion of' such an individual" (A.W. v. County of Oneida, 34 A.D.3d 1236, 1237-1238, 827 N.Y.S.2d 790; Jessica H. ex rel. Arp v. Spagnolo, 41 A.D.3d 1261, 1262, 839 N.Y.S.2d 638, 639 (2007). "This is not to suggest that counsel may interfere with the conduct of the physical examination or that the examining room should be turned into a hearing room with lawyers and stenographers from both sides participating. The lawyer's role at the physical examination should be limited to the protection of the legal interests of his client apart from the actual physical examination in which he has no role "Jakubowski v. Lengen, 86 A.D.2d 398, 401, 450 N.Y.S.2d 612, 614 (1982).

Judge Tapia found an injunction was valid noting, "a defendant's blanket notice excluding non-lawyers across the board [WatchDogs in this instant matter] from being present during the PE is placing the proverbial "cart before the horse." Here, defendants would have this Court believe that only through a blanket prophylactic exclusion of every plaintiff's lawyer designated representative, can the integrity of the PE process be assured. The assumption underlying defendants' reasoning is that PE observers [WatchDogs here] will always interfere with the exam. This may or may not be the case. In any event, allegations of PE interference are best decided on a case-by-case basis, with Defendants bearing the burden. Accordingly, IME Watchdog has shown likelihood of success on the merits regarding a rupture of its contracts with their clients."

This dispute will surely land in the First Department. As the Appellate Division Fourth Department has ruled: "In order to perform his function the examining physician should be allowed to ask such questions as, in his opinion, are necessary to enable him as a physician to determine and report freely on the nature and extent of the injuries complained of. This may include inquiry into the peculiar manner in which the injuries were received (see Wood v. Hoffman Co., 121 App.Div. 636, 106 N.Y.S. 308). The presence of plaintiff's attorney at such examination may well be as important as his presence at an oral deposition. A physician selected by defendant to examine plaintiff is not necessarily a disinterested, impartial medical expert, indifferent to the conflicting interests of the parties. The possible adversary status of the examining doctor for the defense is, under ordinary circumstances, a compelling reason to permit plaintiff's counsel to be present to guarantee, for example, that the doctor does not interrogate the plaintiff on liability questions in order to seek damaging admissions." Jakubowski v. Lengen, 86 A.D.2d 398, 400-01, 450 N.Y.S.2d 612, 614 (1982).
Read the decision here.

A U.S. Mail truck stops in the right lane of the North Service Road of the Long Island Expressway approximately 300 feet east of Roslyn Road on Thursday, September 10, 2011, at 5:52 a.m. The postal truck driver gets out of his truck to assist a driver of a vehicle that overturned on the wet road and hit a tree, off the road. The truck is blocking the view of the overturned vehicle for cars approaching westbound. The Postal worker, either oblivious or unaware of oncoming traffic, steps into the travel lane and is tragically killed by an oncoming vehicle. The plaintiff files suit against the vehicle operator/owner that hit the postal worker and the driver of the vehicle that overturned, creating the emergency. The lower court denied the summary judgment motion filed by counsel for the overturned vehicle's driver finding:

"The motion of defendant Aiuto, which seeks summary judgment dismissing the plaintiff's complaint and any cross-claims, is denied. The danger invites rescue doctrine creates a duty of care towards a potential rescuer where the culpable party has placed himself in an imminently perilous situation which invites rescue (Provenzo v. Sam, 23 NY 2d 256, 260, 296 NYS 2d 322, 244 NE 2d 26; Ha-Sidi v. South Country Cent. School Dist., 148 AD 2d 580, 539 NYS 2d 47)....it is for the jury to determine whether the decedents reasonably believed that he (the defendant) was still in peril (see Provenzo v. Sam, supr.)" (Khalil v. Guardino, 300 AD 2d 360, 362, 751 NYS 2d 518 [2d Dept. 2002]).

The danger invites rescue doctrine was born of the principle that the law has so high a regard for human life that it will not impute negligence to an effort to preserve it...The doctrine was created to avoid a plaintiff being found contributorily negligent as a matter of law when he voluntarily placed himself in a perilous situation to prevent another person from suffering serious injury or death...the doctrine was subsequently expanded to create a duty of care towards a potential rescuer where one party, by his culpable act, has placed another person in a position of imminent peril which invites a third person, the rescuing plaintiff, to come to his aid...the doctrine also encompasses a situation where the culpable party has placed himself in a perilous situation which invites rescue..." (Ha-Sidi v. South Country Central School District, 148 AD 2d 580, 582, 539 NYS 2d 47 [2d Dept.]). In the present case the plaintiff has raised a sufficient question of fact concerning whether the decedent reasonably believed that defendant Aiuto was still in peril in the overturned vehicle, that precludes the granting of summary judgment."

The Appellate Division, Second Department in a decision dated March 30, 2016, reversed the Lower Court, in Pierre v Olshever (2016 NY Slip Op 0234) holding: "In support of his motion for summary judgment, Aiuto established his prima facie entitlement to judgment as a matter of law by presenting evidentiary proof that he was not negligent in causing the accident involving the decedent and the vehicle operated by Olshever, and that his conduct merely furnished the condition for the accident involving the decedent, and was not a proximate cause of the decedent's injuries and resulting death. In opposition to the motion, neither the plaintiff nor Olshever and Nenadich raised a triable issue of fact. Contrary to the finding of the Supreme Court, as well as the contentions of the plaintiff, and Olshever and Nenadich, the doctrine of "danger invites rescue" is inapplicable to the facts of this case There is nothing in the record to suggest that Aiuto was a culpable party who voluntarily placed himself in imminent, life-threatening peril which invited rescue. (Citations omitted.)" Read the decision here.

A dismissal order against a plaintiff for failure to sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of a motor vehicle accident stands as the law of the case, precluding the plaintiff from proceeding against all defendants, whether they joined the motion for dismissal or elected to sit on the sidelines and await the decision of the Court. After all, if the Court found the plaintiff could not sustain a breach of the serious injury threshold as to one defendant, how could that plaintiff present a prima facie case v. the non-moving defendants. Sounds reasonable? NO! c.f. Ciaravino v Brody, decided on February 24, 2016, (2016 NY Slip Op 01284) by the Appellate Division, Second Department. Here the lower court found:

"Based on the foregoing, it is the opinion of this Court that defendants have met their prima facie burden of demonstrating a right to judgment as a matter of law through the submission of competent medical evidence establishing that the plaintiff did not sustain any injury to, e.g., her cervical spine or left knee, sufficient to meet the statutory threshold of "serious injury." (see Insurance Law §5102[d] Felix v. Duane, 117 AD 3d 780 [2d Dept. 2014]; Burgett v. Schaffhauser, 114 AD 3d 822 [2d Dept. 2014]).... In the opinion of this Court, plaintiff's failure to establish a "serious injury" requires dismissal of the complaint, even as to the non-moving defendants (see CPLR 3212[b])."

How can the plaintiff appeal the order only against the non-moving defendants, who were not part of the motion below? Here, the Appellate Court decided, "the Supreme Court should not have searched the record and awarded the non-moving defendants summary judgment dismissing the complaint in Action No. 2 insofar as asserted against them." The Court revived the case as to the one defendant noting, "the plaintiff raised a triable issue of fact as to whether she sustained serious injuries to the cervical and lumbar regions of her spine under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d), and as to whether these alleged injuries, as well as the alleged injury to her left knee, were caused by the accident. (see Perl v Meher, 18 NY3d 208, 218-219)".

What happens to the defendants who were let out of the case below and did not participate in the appeal? Can the non-moving defendants now implead them for contribution, on a case where they prevailed below? Stay tuned on this one for the motion to re-argue.

Read the decision here.

Consequential damages for breach of an insurance policy can be "reasonably foreseeable and contemplated by the parties." In 2008 the New York Court of Appeals held: "When an insured in such a situation suffers additional damages as a result of an insurer's excessive delay or improper denial, the insurance company should stand liable for these damages. Bi-Econ. Mkt., Inc. v. Harleysville Ins. Co. of New York, 10 N.Y.3d 187, 195, 886 N.E.2d 127, 132 (2008)."

Gutierrez v. Government Employees Ins. Co., (2016 NY Slip Op 01292) was decided on February 24, 2016 by the Appellate Division, Second Department and involved a claim for supplementary uninsured/underinsured motorist (SUM) benefits where the plaintiff opted to file a direct suit against the insurance carrier rather than proceed to arbitration before the American Arbitration Association. In July 2014, the plaintiff commenced suit asserting three causes of action. The first cause of action, sounded in a breach of contract, demanded payment of the SUM benefits. The second cause of action sought damages in tort for GEICO's alleged breach of "its duty to act in good faith" by unreasonably withholding payment of SUM benefits. The third cause of action alleged that GEICO "breached its contract and/or policy, and absolute duties and obligations to the Plaintiff and its insureds."

GEICO moved pursuant to CPLR 3211(a)(7) to dismiss the second and third causes of action in the complaint for failure to state a cause of action. It argued, inter alia, that if the second and third causes of action sounded in breach of the implied covenant of good faith and fair dealing, that covenant was implicit in every contract, and therefore those causes of action were duplicative of the cause of action sounding in breach of contract. In the order appealed from, the Supreme Court denied GEICO's motion on the ground, inter alia, that the second and third causes of action were not duplicative of the cause of action sounding in breach of contract.

The Appellate Division refused to dismiss the claim for consequential damages noting: "An insurance carrier has a duty to investigate in good faith and pay covered claims." (Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d 187, 195). Damages for breach of that duty include both the value of the claim, and consequential damages, which may exceed the limits of the policy, for failure to pay the claim within a reasonable time (see Panasia Estates v Hudson Ins. Co., 10 NY3d 200, 203; Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d at 195). Such a cause of action is not duplicative of a cause of action sounding in breach of contract to recover the amount of the claim (see Michaan v Gazebo Hort., Inc., 117 AD3d 692; Genovese v State Farm Mut. Auto. Ins. Co., 106 AD3d 866, 868). Such consequential damages may include loss of earnings not directly caused by the covered loss, but caused, instead, by the breach of the implied covenant of good faith and fair dealing (see Mutual Assn. Adm'rs, Inc. v National Union Fire Ins. Co. of Pittsburgh, PA, 118 AD3d 856). The second cause of action states a claim for consequential damages for breach of the implied covenant of good faith and fair dealing. Therefore, that branch of GEICO's motion which was to dismiss that cause of action was properly denied."

Read the decision here.

Your Insurance Carrier's claim representative calls you in a panic. A complaint received months earlier by the carrier from its insured has gone unanswered as the complaint was lost in the wrong "workflow queue" and a default has been entered. Is all lost? You know there is such a thing as "law office failure" as a reasonable excuse, but there is no "insurance company failure". How can you muster a reasonable excuse for failing to timely answer the complaint when the insured was served properly and timely sent the complaint to his or her carrier for an answer?

All is not lost. Consider a gift from the First Department in Heskel's W. 38th St. Corp. v. Gotham Const. Co. LLC, 14 A.D.3d 306, 787 N.Y.S.2d 285 (2005). This negligence action claimed that plaintiffs' building was damaged by construction, demolition, excavation and development work performed on defendants' adjacent property. The action was commenced by filing on October 10, 2003, and on October 24, 2003 defendant general contractor Gotham Construction Company, LLC, forwarded the summons and complaint to its insurer, Allied North America. However, Allied, through the inadvertence of its assigned adjuster at AIG, failed to forward the complaint to counsel, and this failure was discovered only after defendants' time to answer had expired. Defendants then filed a motion to vacate the default and for an extension of their time to answer. They submitted the affidavit of the AIG claims adjuster, who explained the circumstances that led him to inadvertently file plaintiffs' complaint without forwarding it to defense counsel. They also furnished the affidavits of the parties in order to establish a meritorious defense. The IAS court denied defendants' motion, holding (1) that defendants had failed to offer a reasonable excuse for their default because defendants further delayed in answering even after they were apprised of their default, (2) that plaintiffs would be prejudiced by granting the relief, and (3) that defendants had failed to establish the existence of a meritorious defense.

The Appellate Division reversed and vacated the default, "We find that defendants offered a reasonable excuse for their delay, an absence of willfulness, and a meritorious defense. Because, in addition, the prejudice plaintiffs claim cannot be said to have been caused by defendants, we reverse and vacate the default. Excusable delay is sufficiently established since the failure to forward the complaint to counsel prior to December 1, 2003 was concededly due to the inadvertence of the insurer (see Parker v. I.E.S.I. N.Y. Corp., 279 A.D.2d 395, 720 N.Y.S.2d 59 [2001], lv. dismissed 96 N.Y.2d 927, 733 N.Y.S.2d 363, 759 N.E.2d 361 [2001] ), and the additional delay through the time defendants attempted to serve their answer in February was not unreasonable. And, given the form of the complaint and the causes of action pleaded, the defenses raised by defendants may not be rejected out of hand as meritless, but require determination on their merits upon a more complete review of the facts, in a summary judgment motion or at trial. There is a "strong public policy favoring the determination of actions on their merits" (Damselle Ltd. v. 500-512 Seventh Ave. Assocs., 184 A.D.2d 367, 584 N.Y.S.2d 846 [1992] ). While this policy may give way when a defendant's failure to timely answer the complaint causes prejudice to the plaintiff (see Mayers v. Cadman Towers, 89 A.D.2d 844, 845, 453 N.Y.S.2d 25 [1982] ), here, such prejudice as plaintiffs may have experienced cannot properly be attributed to defendants' delay in answering......Under the circumstances, the claimed prejudice cannot properly be blamed on defendants' failure to timely answer the complaint. The denial of defendants' motion therefore constituted an improvident exercise of discretion. "

In the No-Fault world, the failure to attend duly scheduled medical exams voids the policy ab initio (see Unitrin Advantage Ins. Co. v. Bayshore Physical Therapy, PLLC, 82 A.D.3d 559, 560, 918 N.Y.S.2d 473 [1st Dept.2011], lv. denied 17 N.Y.3d 705, 2011 WL 2535157 [2012] ), allowing the carrier to deny reimbursement to the provider. The regulations require the Eligible Injured Party (EIP) to receive proper notice of the examination. (11 NYCRR 65-1.1.) What if the EIP is represented by counsel. Will notice to the EIP and his/her attorney suffice?

No says the Third Department on December 3, 2015, at least not in the context of a motion to vacate a decision of a master Arbitrator from the American Arbitration Association. See In re Mercury Cas. Co. (Patient Care Associates), 20 N.Y.S.3d 728 (N.Y. App. Div. 2015) "We cannot agree with petitioner's argument that it was entitled to a presumption that the IME notification letters were received by the insured. Our review of a master arbitrator's award in an arbitration proceeding to resolve a disputed no-fault insurance claim requires us to determine whether the award "was arbitrary and capricious, irrational or without a plausible basis" (Matter of Farrell [Allstate Ins. Co.], 232 A.D.2d 934, 935 [1996] [internal quotation marks and citation omitted]; accord Matter of Steinauer [New York Cent. Mut. Fire Ins. Co.], 272 A.D.2d 771, 772, 707 N.Y.S.2d 706 [2000]; see Matter of Petrofsky [Allstate Ins. Co.], 54 N.Y.2d 207, 211, 445 N.Y.S.2d 77, 429 N.E.2d 755 [1981] ). The presumption of receipt of a properly mailed item attaches only if the fact finder first determines that sufficient evidence exists to show that the mailing was proper (see e.g. Preferred Mut. Ins. Co. v. Donnelly, 22 N.Y.3d 1169, 1170, 985 N.Y.S.2d 470, 8 N.E.3d 847 [2014]; Matter of Gallahue [Sweeney], 234 A.D.2d 881, 881, 651 N.Y.S.2d 692 [1996]; Matter of Rea [Hartnett], 175 A.D.2d 441, 442, 572 N.Y.S.2d 493 [1991] ). Here, the arbitrator correctly declined to apply this presumption in light of her rational factual determination that petitioner's evidence was insufficient to show that the IME notices were properly addressed. Indeed, none of the evidence related to the mailing correctly listed the insured's address."

8 NYCRR 29.1 Provides: (a) Unprofessional conduct shall be the conduct prohibited by this section. (b) Unprofessional conduct .... shall include: (4) permitting any person to share in the fees for professional services, other than: a partner, employee, associate in a professional firm or corporation, professional subcontractor or consultant authorized to practice the same profession, or a legally authorized trainee practicing under the supervision of a licensed practitioner. This prohibition shall include any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a professional licensee constitutes a percentage of, or is otherwise dependent upon, the income or receipts of the licensee from such practice, except as otherwise provided by law with respect to a facility licensed pursuant to article 28 of the Public Health Law or article 13 of the Mental Hygiene Law.

Can illegal fee sharing be used as a defense to a medical provider's claim for no fault benefits?

No, so says the First Department in Supreme Court, Allstate Prop. & Cas. Ins. Co. v. New Way Massage Therapy P.C., 2015 NY Slip Op 09184 (N.Y. App. Div. 1st Dept. December 10, 2015), "Whether or not the fee-sharing arrangement at issue constitutes unprofessional conduct (see 8 NYCRR 29.1[b][4] ), it does not constitute a defense to a no-fault action (compare State Farm Mut. Auto. Ins. Co. v. Mallela, 4 N.Y.3d 313, 794 N.Y.S.2d 700, 827 N.E.2d 758 [2005] ["insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims"]). It is solely a matter for the appropriate state licensing board (see e.g. Necula v. Glass, 231 A.D.2d 457, 647 N.Y.S.2d 501 [1st Dept.1996]; see also H & H Chiropractic Servs., P.C. v. Metropolitan Prop. & Cas. Ins. Co., 47 Misc.3d 1075, 1078, 6 N.Y.S.3d 469 [Civ.Ct., Queens County 2015] )."

What's On Your Facebook Page?

Social Media postings are the greatest gift to defendants since the advent of the collateral source rule. What a Plaintiff posts on Facebook, Instagram, YouTube and dozens of other social media sites is amazing and often fatal to their case. Just take a peek at this young man (click here) who claimed continuing pain and suffering from a tibia and fibula fracture.You truly cannot make this stuff up!

What can the defendant expect to obtain from the plaintiff's Facebook postings? Consider Forman v. Henkin, 2015 NY Slip Op 09350 (N.Y. App. Div.1st Department Dec. 17, 2015) from the First Department in December of 2015. Here, a horseback rider who had fallen from a horse filed a personal injury action against the owner of the horse. Defendant sought an order compelling plaintiff to provide an unlimited authorization to obtain records from her Facebook account, including all photographs, status updates and instant messages. Judge Bluth granted the motion to the extent of directing plaintiff to produce: (a) all photographs of herself privately posted on Facebook prior to the accident that she intends to introduce at trial; (b) all photographs of herself privately posted on Facebook after the accident that do not show nudity or romantic encounters; and (c) authorizations for Facebook records showing each time plaintiff posted a private message after the accident and the number of characters or words in those messages.

In Forman v. Henkin, the Appellate Division noted "Other Departments of the Appellate Division, consistent with well-established case law governing disclosure, have required some threshold showing before allowing access to a party's private social media information (see e.g. Richards v. Hertz Corp., 100 A.D.3d 728, 730-731, 953 N.Y.S.2d 654 [2d Dept 2012] [striking demand for Facebook information of one of the plaintiffs because there was no showing that the disclosure of that material would result in disclosure of relevant evidence or would be reasonably calculated to lead to discovery of information bearing on the claim]" "The fact that plaintiff had previously used Facebook to post pictures of herself or to send messages is insufficient to warrant discovery of this information (see Tapp, 102 A.D.3d at 620, 958 N.Y.S.2d 392 [the plaintiff's mere utilization of a Facebook account is not enough] ). Likewise, defendant's speculation that the requested information might be relevant to rebut plaintiff's claims of injury or disability is not a proper basis for requiring access to plaintiff's Facebook account (see id. at 621, 958 N.Y.S.2d 392 [the defendants' argument that the plaintiff's Facebook postings might reveal daily activities that contradict claims of disability is "nothing more than a request for permission to conduct a fishing expedition."

In Forman, the Court refused to adopt new rules for social media postings holding, "Contrary to the dissent's view, this Court's prior decisions do not stand for the proposition that different discovery rules exist for social media information. The discovery standard we have applied in the social media context is the same as in all other situations - a party must be able to demonstrate that the information sought is likely to result in the disclosure of relevant information bearing on the claims ....This threshold factual predicate, or "reasoned basis" in the words of the dissent, stands as a check against parties conducting "fishing expeditions" based on mere speculation."