LMK ARGUMENTS AT THE COURT OF APPEALS

LMK was a popular roadtrip. Progressive reps, Freiberg, Spina, Short & Billy, Lau, Picciano, Dodson, and Israel were all there. Not the actual people generally, just people from the firms.

Only six Judges sitting, no Lippman, who was sworn in that day.

Evan Krinick, of Rivkin Radler was there for the Appellant, State Farm.
Craig Mayerson was there for the Respondent, LMK.
And there was someone from the Insurance Department (Amicus).

Mr. Krinick started off swinging for the fences. His argument: there is one 850.00 cap per patient, per provider, regardless of the dates of treatment, or lawsuits. That was how he defined claim. So, if in one lawsuit, an $850.00 attorney fee is recovered, attorney fees are no longer recoverable for that patient, ever.

Judge Pigott asked him whether several bills over a three year period should be considered one claim, receiving only one attorney fee. Mr. Krinick said yes, and that the insurance department agrees with him. Mr. Krinick didn't stop there, because that would have made sense. No, he pushed it further. He said that if a hypothetical patient treated every day over a year, there would be only $850.00 in attorney fees available, period.

The hypotheticals continued. Judge Pigott asked, and I'm paraphrasing here, assuming a patient gets in one accident and Mr. Krinick's $850.00 cap was reached in one lawsuit, couldn't an insurance company decide not to pay anymore, knowing that the attorney fees were exhausted.

Judge Smith asked whether the insurance company ever really said that there is one attorney fee for multiple lawsuits, and what happens when a plaintiff can't find a lawyer to take on the case without attorney fees available.

Mr. Krinick's response was that no carrier will deny claims just because attorney fees aren't available. Judge Pigott added that to do that would be bad faith on the insurer's part. Mr. Krinick commented that one attorney fee would encourage prompt submission of the bills, as would the preclusion remedy and the interest provisions.

*Not addressed: there is no pure bad faith cause of action in New York, so even it an insurance company did act in bad faith, the provider would have no remedy*

Mr. Krinick pressed his point that if the statute is unclear, the Insurance Dept is the entity that interprets it, not the Court.

For some reason, Mr. Krinick avoided the facts in LMK, namely, one lawsuit, several bills. Instead of addressing that, he wanted to give the Court only one option, and a nuclear one at that. He argued that plaintiff's should have to pay their attorneys out of their pockets, despite the clear wording of the applicable regulations. I thought he was trying the "here is a terrible idea, but what about this," approach. You know, the one teenagers use. For example:

"Mom, Dad, can I got out tonight and smoke some crack then rob a bank"?
"No?"
"Ok, then, can I stay out one hour past curfew"

Nope, he wasn't trying to do that. He was going for the gold. No silver or bronze for him.

Next up was the Insurance Dept. as Amicus.

Almost immediately Judge Pigott questioned the attorney, saying 5106 says "valid claim" but doesn't define claim as an amalgam of bills. The attorney said that it wasn't a clear case of statutory interpretation, and that the Insurance Dept can interpret the statute. Because it can interpret the statute, it did, and it has decided that a claim is indeed an amalgam of bills. Judge Pigott followed by asking why, if the Insurance Dept defines claim that way, it isn't defined in the Regs. The response: we feel it's the best interpretation. Further pressed, the attorney agreed that once the attorney fee is exhausted in an earlier suit, the fees are exhausted.

Both Judge Pigott and Smith asked, where, once the second claim comes around, the plaintiff will find a lawyer who will work for free. The Insurance Dept's response was that the provider can make its own personal arrangement with the lawyer. And when further questioned, said that the money for attorney fees can come out of the interest recovered.

The Insurance Dept., like Mr. Krinick, argued that this was not a case for the Court, that it should be left to the Insurance Dept.

Once Mr. Meyerson's turn came, the issue of interest and how it should be tolled was addressed in detail. He argued that if a denial is late, and based upon a precluded defense, the insurance company should pay interest from when the claim is overdue, because that would encourage insurance companies to pay the bill rather than stall and hope that the provider never sues.

Judge Smith questioned him on this point, asking whether it should be OK for a provider to sit back and not sue, while collecting interest up to the SOL. Mr. Meyerson responded in the affirmative, arguing that insurance company that knows it issued a bad denial should pay promptly, instead of waiting to be sued to pay.

Judge Pigott also questioned him. He asked whether the tolling interest until the lawsuit would encourage providers to promptly sue. That is assuming the provider continues to treat no-fault patients, after not getting paid over and over again, was Mr. Meyerson's response.

The Court then addressed what kind of deference it should give the Insurance Dept's opinion. Judge Graffeo brought up Serio and reminded Mr. Meyerson of the standard in cases such as this is: whether the Superintendent's opinion is irrational.

He responded that it was in fact irrational as it is plainly contrary to the legislative intent; that the Insurance Dept's interpretation of the interest tolling provision is contrary to the quick payment portion of the statute. He added that a toll would only encourage lawsuits and further delay.

Shifting back to attorney fees, Judge Smith asked, shouldn't the Court be especially deferential to the Insurance Dept on that issue; why doesn't the Insurance Dept. know, more so than him? As well as whether the $850.00 per patient per provider, aggregate definition of claim is too little. Judge Graffeo asked a similar question. Meyerson responded that the Superintendent can define claim, however its interpretation must be consistent with the legislative intent, which it isn't.

Judge Pigott also asked whether a provider could put more bills in one lawsuit. The response was that it isn't practical.

*Addressed by neither the Court or any of the attorneys, was the fact that bills must be submitted in accordance with the statutory timeline. If they are submitted late, they can be denied due to the late submission. So it would be impossible and contrary to the regulations to put everything together, especially if there is one attorney fee per patient. Also not addressed was what happens if there is no assignment and the injured party sues. Should that person be crap out of luck because a provider sued on one of the bills?*

Finally, Mr. Krinick came back for his rebuttal. He again pressed his argument that this is a decision for the Insurance Dept to make. If the result of their interpretation is that providers cannot find attorneys who will represent them because they can't get paid, then the Insurance Dept. should be the one to fix that, not the Court. He also said that no insurance company ever violates the 30 day rule purposefully; that the insurance companies only find out that their denial is late during litigation when a court finds that a verification request was improper and did not toll the time to pay or deny.
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I'm going to review another attorney's notes on the case later today to see if I missed anything.