Alan Green claimed he was defamed in a written medical report to his insurance carrier. He filed suit in New York County against the Combined Life Insurance Company of New York seeking damages for the statements of Dr. Downie in a written medical report to the carrier. Dr. Downie attributed the plaintiff's acute episodes of vertigo to Meniere's Disease and indicated the episodes were not disabling and were of short duration.  Mr. Green claimed the statements were defamatory because it lead the carrier to deny his application for disability benefits claiming he was exaggerating his illness. Judge Doris Ling-Cohan dismissed the claim in New York County Supreme Court and the plaintiff appealed to the First Department. In Green v. Combined Life Ins. Co. of New York 2010 WL 308289 (N.Y.A.D. 1 Dept.), 2010 N.Y. Slip Op. 00572, the Appellate Court unanimously affirmed the lower Court indicating, "Even if defamatory, the statements are protected by a qualified privilege because they were made in a medical report to the insurer (see Gould v. Broad, 22 A.D.2d 800 [1964], affd 16 N.Y.2d 666 [1965] ). Plaintiff's conclusory allegations of malice are insufficient to overcome the privilege (see Ferguson v. Sherman Sq. Realty Corp., 30 AD3d 288 [2006] ).

The collapse of a retaining wall in Roslyn and the subsequent damage caused during a storm in October of 2005 led to lengthy decision by the Second department in Wilner v. Allstate Insurance Company --- N.Y.S.2d ----, 2010 WL 114363 N.Y.A.D. 2 Dept., January 12,2010.

The Court indicated a cause of action to recover damages for a violation of General Business Law § 349 should identify consumer-oriented misconduct which is deceptive and materially misleading to a reasonable consumer, and which causes actual damages. A plaintiff seeking to state a cause of action under General Business Law § 349 must plead that the challenged act or practice was "misleading in a material way".  Here, the plaintiffs alleged that Allstate "has engaged in deceptive acts and practices in violation of General Business Law § 349 of New York by refusing to reach a timely decision on coverage, thereby compelling Plaintiffs to comply with the provision ... which requires Plaintiffs to protect" the defendant's interests. According to the plaintiffs, the defendant's failure to reach a timely decision is "part of a pattern and practice by [Allstate] to force claimants to litigate its claims and incur the costs and expense of hiring an attorney to prevent forfeiture of coverage for a covered loss under the Allstate Policy of insurance." Under General Business Law § 349 consumers may recover actual damages in any amount, and may recover treble damages under General Business Law § 349(h) up to $1,000 ( see Teller v. Bill Hayes, Ltd., 213 A.D.2d 141, 147;Hart v. Moore, 155 Misc.2d 203, 207). The plaintiffs also may seek both treble damages and punitive damages ( see Volt Sys. Dev. Corp. v. Raytheon Co., 155 A.D.2d 309;Bianchi v. Hood, 128 A.D.2d 1007). The Appellate Division indicated the Allstate Insured properly articulated the cause of action under General Business Law § 349 and denied a CPLR section 3211(a)(7) motion to dismiss. The Court further held under General Business Law § 349(h) that the court has the discretion to award reasonable attorney's fees, and therefore the plaintiffs' request for attorney's fees should not be dismissed. I would suggest that a quick decision is now being made to settle this claim.

On January 26, 2010 the Appellate Division, Second Department in St. Vincent's Hosp. & Medical Center v. Allstate Ins. Co. 2010 NY Slip Op 00668 N.Y.A.D. 2 Dept. 2010, affirmed the principals enunciated in the Court of Appeals decision of 1997 in Central General Hospital  v. Chubb Group of Insurance Companies  90 N.Y. 2d 195 granting a narrow window to Insurance Carriers to avoid the 30 day rule found in Insurance Law § 5106 (a), which provides interest accrues on overdue no-fault insurance claims at a rate of 2% per month. A claim is overdue when it is not paid within 30 days after a proper demand is made for its payment (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g]). The Superintendent's regulation tolls the accumulation of interest if the claimant "does not request arbitration or institute a lawsuit within 30 days after receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations" (11 NYCRR 65-3.9 [c]). (LMK Psychological Services, P.C v State Farm Mutual Automobile Insurance Company 12 N.Y.3d 217, 2009; Presbyterian Hospital in the City of New York v. Maryland Casualty. Co., 90 NY2d 274 (1997). The Second Department reversed a Judgment for the Hospital totaling $32,086.70 entered in Nassau County Supreme Court holding: "In support of its cross motion, the defendant made a prima facie showing of entitlement to judgment as a matter of law by demonstrating that the accident in which the plaintiff's assignor was injured was not an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199; see generally Alvarez v Prospect Hosp., 68 NY2d 320). In opposition to the defendant's prima facie showing, the plaintiff failed to raise a triable issue of fact. Contrary to the plaintiff's contention, the defense of lack of coverage is not precluded by the defendant's failure to pay or deny the subject no-fault claim within the requisite 30-day period (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318; Central Gen. Hosp. v Chubb Group of Ins. Co., 90 NY2d at 199)." The Court of Appeals in Central General Hospital v. Chubb (supra) held the Insurance Carrier "may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident."

The Second Department also issued an important decision on the issue of an Insurance Carrier's burden to prove proper mailing in Government Employees Ins. Co. v. Brunner 2010 NY Slip Op 00512 decided on January 19, 2010. Here Geico petitioned the Court to permanently stay an Underinsured Motorist Arbitration claiming an endorsement change to the policy was properly mailed reducing the benefits to $25,000 per person/ $50,000 per occurrence. Judge Costello of Suffolk County Supreme Court denied the Petition after a hearing holding the carrier failed to prove proper mailing of the endorsement. The Appellate Division affirmed holding, "The Supreme Court properly concluded that the petitioner failed to meet its burden of proving that an insurance policy endorsement dated October 21, 2005, which purportedly reduced the limits applicable to the uninsured/underinsured motorist endorsement of the relevant policy to the sums of $25,000 per person and $50,000 per accident, was properly mailed to the policy holder prior to the date of the subject accident. The underwriter who testified at the hearing failed to offer "evidence of an office [procedure] geared to insure the likelihood that [the endorsements are] always properly addressed and mailed" (Federal Ins. Co. v Kimbrough, 116 AD2d 692, 692; see Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830; Matter of Transcontinental Ins. Co. v Gibbs, 34 AD3d 488; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547; Lumbermens Mut. Cas. Co. v Gamble, 250 AD2d 540; Matter of Allstate Ins. Co. v Ramirez, 208 AD2d 828, 830; Sea Ins. Co. v Kopsky, 137 AD2d 804; Anzalone v State Farm Mut. Ins. Co., 92 AD2d 238; cf. Kaufmann v Leatherstocking Coop. Ins. Co., 52 AD3d 1010, 1012; Morales v Yaghoobian, 13 AD3d 424, 425; Matter of Metlife Auto & Home v Pennella, 10 AD3d 726)." In order to provide proof of mailing of a policy endorsement or change the carrier must show evidence of an office practice geared to insure the likelihood that a notice of cancellation is always properly addressed and mailed.

Matter of State Farm Mut. Auto. Ins. Co. v Bonifacio (2010 NY Slip Op 00523) decided on January 19, 2010 by the Appellate Division, Second Department addressed the issue of "residency" in a Petition to stay Arbitration filed by State farm in Westchester County. Judge Bellantoni denied the Petition after a hearing where Ms. Bonifacio testified that she lived most of her life at her parents' residence in Yorktown Heights until she graduated from college in 2005. Shortly thereafter, in September of that year, she rented an apartment in Manhattan with two other people. Two months later, the respondent began employment in Manhattan where she worked five days a week, 11 to 12 hours a day. More than two years later, the respondent, after spending a Sunday afternoon with some friends near her hometown, was struck by a car while crossing Route 9A in Ardsley. The Appellate Division reversed indicating, "Although the respondent testified at the hearing that she visited her parents at the Yorktown residence at least once a month, "most often more," and that her parents maintained a room for her there where she kept some of her personal belongings, the respondent was emancipated from her parents, paid rent at the Manhattan residence, filed her own tax returns, and was no longer a dependent on her parents' tax returns. Evidence that the respondent's driver's license still listed her parents' address as her home address, that she possessed a key to her parents' home and, in 2008, voted in Yorktown Heights, and that she previously opened a bank account at a Chase branch in Yorktown Heights, was insufficient to establish that the respondent was residing at the Yorktown residence of her parents at the time of the accident. Moreover, physical presence in the parents' home was insufficient to establish residency, particularly where, as here, the respondent had previously established another legal residence in Manhattan and signed a new one-year lease at that residence only two months before the accident (see Hollander v Nationwide Mut. Ins. Co., 60 AD2d 380, 383; Appleton v Merchants Mut. Ins. Co., 16 AD2d 361; Allstate Ins. Co. v Jahrling, 16 AD2d 501)." The Court found Ms. Bonifacio was not a covered person under her the State farm policy and the lower Court should have permanently stayed the Arbitration demand.

The New Year did not start off well for one Insurance Carrier or their counsel based on the precarious default provisions which are omnipresent in PIP Litigation in New York.  Westchester Med. Ctr. v Philadelphia Indemnity Ins. Co. 2010 NY Slip Op 00138 decided on January 5, 2010 by the Appellate Division, Second Department found a Carrier in default and the motion to vacate under CPLR 5015(a)(1) deficient. Here service was effectuated on the Pennsylvania Insurer under the provisions of New York Insurance law. The Special Deputy Superintendent of the State of New York Insurance Department acknowledged service upon him of the summons and complaint in this matter and notified the defendant at its Pennsylvania office, of service of process (see Insurance Law § 1212; Montefiore Med. Ctr. v Auto One Ins. Co., 57 AD3d 958, 959). The Appellate Division reversed the order of Nassau County Supreme Court Justice Iannacci which vacated the default indicating, "the defendant failed to meet its burden of showing a reasonable excuse for its failure to timely appear or answer the complaint and the existence of a meritorious defense". The affidavit of a senior claims examiner employed in the defendant's Texas office averred that there was no record of the summons and complaint in the defendant's computer system, but failed to demonstrate any knowledge of the office procedures employed in the handling of a summons and complaint received at the defendant's Pennsylvania office. Thus, that affidavit was insufficient to show that the failure to timely appear and answer was due to a clerical error which caused the summons and complaint to be overlooked (see Montefiore Med. Ctr. v Auto One Ins. Co., 57 AD3d at 959; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 968; Kaperonis v Aetna Cas. & Sur. Co., 254 AD2d 334; cf. Hospital for Joint Diseases v Lincoln Gen. Ins. Co., 55 AD3d 543, 544)."

The Insurance Carrier also failed the two pronged test for vacature of a default, "The affidavit of the plaintiff's biller showed that the Forms N-F5 and UB-92 relating to this matter were mailed on April 23, 2008, and signed for by the defendant on April 28, 2008. At that time, according to the defendant's own records, there were still sufficient funds remaining under the policy to pay this bill (see 11 NYCRR 65-3.15; Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294). In response, the defendant offered only the same aforementioned affidavit, which also averred that there was no record of the bill in question in the defendant's computer system. This was insufficient for a similar reason; that is, the affiant failed to show any knowledge of the office procedures employed in the handling of billing forms received at the defendant's Pennsylvania office (see St. Barnabas Hosp. v American Tr. Ins. Co., 57 AD3d 517; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d at 968; see generally New York Hosp. Med. Ctr. of Queens v Insurance Co. of State of Pa., 16 AD3d 391, 392; Peacock v Kalikow, 239 AD2d 188, 190; cf. St. Vincent's Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123)." The Lower Court also denied the Provider's motion for contempt as academic based on the decision to vacate the default. Now that the Appellate Division reversed, the matter was remanded to the lower Court for a decision on the contempt motion. This undoubtedly made someone in Philadelphia disappointed and perplexed by the NY PIP landscape.