Chapa Products, Corp. v MVAIC
Attorneys and Parties
Brief Summary
No-fault insurance verification and denial timing under 11 NYCRR 65-3.8(b)(3) [allows an insurer to issue a denial if, more than 120 days after the initial verification request, the applicant still has not submitted all verification or a reasonable justification].
The Appellate Term held the insurer was precluded from asserting the 120-day verification defense because it did not issue a denial within 30 days after the 120-day period (i.e., within 150 days of the initial verification request).
The Appellate Division reversed the Appellate Term’s denial of the insurer’s cross-motion and reinstated the Civil Court’s grant of summary judgment dismissing the complaint.
The regulation does not impose any post–120-day deadline for issuing a denial; if the Department of Financial Services intended a mandatory 150-day limit, it would have said so. The court cited Patrolmen's Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d 205, 209, to decline reading additional terms into the regulation.
Background
A medical provider sought assigned no-fault benefits from the insurer. The insurer requested verification, and the provider failed to supply it within 120 days. The insurer denied the claim for failure to provide verification. The provider sued for benefits; the parties moved and cross-moved for summary judgment on whether the denial was timely and whether the verification defense was preserved.
Lower Court Decision
The Civil Court denied the plaintiff’s motion and granted the defendant’s cross-motion for summary judgment dismissing the complaint. On appeal, the Appellate Term modified by denying the defendant’s cross-motion and, upon searching the record, dismissed the complaint without prejudice, reasoning the insurer was precluded because it did not deny the claim within 30 days after the 120-day verification period.
Appellate Division Reversal
The Appellate Division reversed the Appellate Term’s modification, holding there is no 150-day cap in 11 NYCRR 65-3.8(b)(3), and affirmed the Civil Court’s grant of the insurer’s cross-motion dismissing the complaint, with costs.
Legal Significance
Clarifies that 11 NYCRR 65-3.8(b)(3) does not impose a 150-day deadline for no-fault denials based on a claimant’s failure to provide requested verification. Insurers are not precluded from asserting the verification defense merely because they did not issue a denial within 30 days after the 120-day period.
In New York no-fault claims, there is no judicially created 150-day deadline for denials premised on failure to provide verification; an insurer may deny after the 120-day period without being precluded by timing alone.