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VOLUME 127, NUMBER 1 / January 11, 2016
A CINN Group, Inc. Publication
Serving: New York, New Jersey, Connecticut, Eastern Pennsylvania and Washington D.C.
PANTS ON FIRE!
Courtroom drama as Judge Calls IME Doctor “Liar,” Sanctions Attorneys, Threatens Criminal Prosecution
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Contents
January 11, 2016 | volume 127 number 1
[ COVER STORY ]
41
Classifieds
18
42
Guest Opinion: Who Has Constitutional Rights? Jane M. Orient, M.D.
Pants on Fire! Lawrence N. Rogak, Esq.
[FEATURES] 4
Foreword: Now I Know What That Means Steve Acunto, Publisher
6
Insight: The Multiple Faces of Transparency Peter H. Bickford
10
On the Level: An Important Resolution for 2016 Jamie Deapo
12
The Social Notebook: Achieving the Right Balance… Chris Paradiso
32
In the Associations: McFadden is PIANY’s MetroRAP Industry Professional of the Year
[ AD FEATURES] 11
MSO: Hoverboards Burst Onto the Scene
23
IIABNY: Education Calendar Spring 2016
18
Melchionni Honored by City and State Reports 34
In the Associations: IFNY Elects Officers and Directors for 2016
36
Looking Back: December, 1990
38
On My Radar: Accident Must “Arise out of” the Use of Auto Barry Zalma
40
Courtside: Unsigned Peer Report in Motion Papers is “Cured” by Signed Copy in Reply Papers Lawrence N. Rogak, Esq.
12
32
info@insurance-advocate.com www.insurance-advocate.com INSURANCE ADVOCATE / January 11, 2016 3
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[ FOREWORD ]
STEVE ACUNTO
Now I Know What That Means uAs a new year’s gift to readers, note our redesign – not radical, but quite clean and easy to read. Compliments to Gina Marie Balog for executing this. Our web presence has become greatly enhanced as well, for which we thank Claudia Palmira and her team. We have had a good run and will be adding more to the formula this year, including new staff members and more pages of content regarding the laws and the trends that affect you. … Like the ones that have been identified for 2016 by Deloitte’s U.S. Insurance Leader, Gary Shaw. In the words of a Deloitte missive, here is what they see as having serious influence this year: Blockchain Technology: “This technology is slowly being applied to certain sectors within financial services and could soon be coming to disrupt the insurance industry. “The potential for the cyber Blockchain technology, being complete and verifiable, could be used to insurance market to take off is verify identity, auto insurance coverhuge, while insurance for new age, health status, or to settle claims expeditiously. The potential for this to technologies—such as drones, cause a significant transformation of where the potential for crashes the insurance space over the medium and invasion of privacy lawsuits to long term is already obvious.” Whew, now I know what that means. abounds—will require that Insurance in New Sectors: “Innovation in other industries may also lead to insurers be nimble and proactive new opportunities. The potential for in helping companies navigate the cyber insurance market to take off accompanying legislation that is huge, while insurance for new technologies—such as drones, where the could put them at risk.” potential for crashes and invasion of privacy lawsuits abounds—will require that insurers be nimble and proactive in helping companies navigate accompanying legislation that could put them at risk. Regulation: This is a disruptor that will not go away any time soon, but which has the greatest potential to disrupt the industry in the short-term. Collectively, regulatory activity in 2015—including the Department of Labor’s (DOL) new proposed fiduciary role, which has the potential to severely disrupt the life insurance and annuities model—may represent the cresting of a new wave of regulatory changes to which insurers must adapt this year.” Deloitte does a lot to hold its own as a thought leader. … Slim Pickens is the actor who played Taggart in Blazing Saddles and who rode the A bomb in Dr. Strangelove. No relation, Don Pickens is now playing a starring role as chief underwriting officer for Zurich Insurance-Zurich Global Corporate in North America. He succeeds Patrick Daley, who will assume a new role as head of property for the East Region within Global Corporate in North America. Pickens most recently served as senior vice president and chief risk officer of American International Group Inc.’s Global Commercial business. We trust his fate will be better than the characters Slim played, especially given Don Pickens’ evident talent and experience. … These are the Committees of the New York State Senate. Makes you think. Aging, Agriculture, Alcoholism and Drug Abuse, Banks, Children and Families, Cities, Civil Service and Pensions, Codes, Commerce, Economic Development and Small Business, Consumer Protection, Corporations, Authorities and Commissions, Crime Victims, Crime and Corrections, Cultural Affairs and Tourism, Education, Elections, Energy, Environmental Conservation, Ethics, Finance, Health, Higher Education, Housing, Infrastructure and Capital CONTINUED ON PAGE 16
4 January 11, 2016 / INSURANCE ADVOCATE
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VOLUME 127, NUMBER 1 JANUARY 11, 2016
EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Kelly Donahue-Piro Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com COPY EDITOR & PROOF READER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Group P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto
CINN G R O U P, I N C .
INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in July, August, September and December by CINN ESR, Inc., 131 Alta Avenue, Yonkers, NY 10705. Periodical postage paid at Yonkers, NY and additional mailing offices. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $110.00. TO ORDER Call 914-966-3180, fax 914-966-3264, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2015. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Office.
For high-quality article reprints (minimum of 100), including e-prints, contact Gina Balog at g@cinn.com or call 914-966-3180, x113
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[ INSIGHT ]
PETER H. BICKFORD
The Multiple Faces of Transparency uIn December, Governor Cuomo vetoed two bills intended by their sponsors to strengthen New York’s freedom of information law, or FOIL. In his veto message the Governor stated: “While I appreciate the Legislature’s attempt to further transparency in government, these bills provide an unworkable, inequitable, and piecemeal approach to FOIL reform.” Sounds like the legislation was seriously flawed. Both bills were proposed by New York’s Committee on Open Government (COOG) in its December 2014 Annual Report to the Governor and the Legislature, and passed during the 2015 legislative session. The first bill would have significantly reduced the time for a state agency to appeal a court’s decision overturning the denial of an information request. The second bill would have provided attorney fees to a party successfully overturning an agency’s denial of a request for information where there was no reasonable basis for the denial. In both cases, the COOG argued that the changes were necessary deterrents to unreasonable denial of access by state agencies. “Compliance would improve, and costly and time-consuming litigation would diminish.” What is it about the legislation that makes it “unworkable, inequitable, and piecemeal” as the Governor suggests? His primary issue with the attorney fee bill is that it does not apply equally to all parties to a lawsuit, but only to the state agency. Further, he argues, the bill does not define “material violation,” thus leaving state agencies open to multiple interpretations resulting in a lack of clarity. The Governor’s main argument against the bill condensing the time to appeal by a state agency is that it “would substantially alter the balance of appellate rights between state agencies and non-state agency requestors” by (i) applying only to state agencies, (ii) eliminating judicial discretion, and (iii) placing an undue burden on state agencies to meet the condensed timetable. While these may seem to be valid arguments to some, they are subject to criticism in the context of the strong
public policy in favor of open and “transparent” government. Among other things, objectors would certainly point to the executive order signed by the Governor a day after issuing his veto message directing all state agencies “to adhere to the spirit”
This direction to state agencies in the name of open and transparent government seems a bit incongruous and contrary to his veto message. So what is really going on?
of the bill requiring state agencies to fasttrack appeals. This direction to state agencies in the name of open and transparent government seems a bit incongruous and contrary to his veto message. So what is really going on? Transparency in government is often fraught with multiple layers of meaning, interpretation and limitations. At the fore is the standard universal political message extolling the virtues of conducting the state’s business in an open and forthright manner – no secrets and no doubts about the motives behind the actions. When it comes to the details, however, there are all kinds of exceptions and limitations on openness, including privacy concerns, protection of trade secrets or interference with judicial proceedings, among others. But from a cynic’s perspective “transparency” often has a totally different meaning, as in “I can see right through you!” You are saying one thing and meaning quite another. Is that the case with the Governor’s veto? What is it about the two bills that really offends the Governor? Is he really concerned with the details of the two bills or is there another motivation to his veto? Upon closer reading, what seems to gall the Governor most about the vetoed
Peter Bickford has over four decades of experience in the insurance and reinsurance business, with particular focus on regulatory, solvency, agency, alternative market and dispute resolution issues. In addition to his experience as a practicing attorney, he has been an executive officer of both a life insurance company and of a property/casualty insurance and reinsurance facility. A complete biography for Mr. Bickford may be accessed at www.pbnylaw.com.
bills is that they do not expand FOIL’s applicability to the Legislature. This feeling is summed up in an introductory clause to his executive order requiring state agencies to follow the spirit of the bill condensing the appeal process: “. . . while their goals were wellintended, these bills are seriously flawed and would radically transform the litigation process, are myopic in their scope and focus only on one branch of government, and would only serve to perpetuate a fractured system of transparency and data production by intentionally excluding other branches of government.” In its 2014 Annual Report, the Committee on Open Government had also recommended amending FOIL to, among other things, include the State Assembly and Senate within the definition of state agencies, stating that “. . . the Committee believes that FOIL should be amended to require the State Legislature to meet standards of accountability and disclosure in a manner analogous to those maintained by state and local agencies.” These recommendations, however, were not addressed by the Legislature to the apparent chagrin of the Governor. It is reasonable to conclude that the vetoes of these bills is not so much about flaws in the legislation, but about pressurCONTINUED ON PAGE 8
6 January 11, 2016 / INSURANCE ADVOCATE
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[ INSIGHT ] CONTINUED FROM PAGE 6
ing lawmakers to expand the applicability of FOIL to the Legislative Branch. Naively one might suggest that if the vetoed bills would actually improve compliance with the freedom of information law by state agencies, shouldn’t that be the overriding consideration? Is it right to reject them simply because they do not apply to the Legislature? How FOIL should be properly applied to legislators is a topic unto itself and should not be mixed in with mean-
ingful improvements to the “transparency” of state agencies. Naivety aside, however, it is clear that the Governor wants to force the expansion of the applicability of FOIL to the Legislature as a price for improving compliance by state agencies. In its 2015 annual report recently released, the COOG seems to acknowledge this reality: “Although the proposals concerning the award of attorney’s fees and accelerating the appeals process in litigation involving FOIL were vetoed, we will work with the Governor and the
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Naively one might suggest that if the vetoed bills would actually improve compliance with the freedom of information law by state agencies, shouldn’t that be the overriding consideration?
Legislature to overcome his objections and continue to press for changes to advance the public’s right to know.” Frankly, however, the vetoed legislation does not address the most serious shortcoming of the freedom of information statute – bureaucratic inertia. Stalling litigation is a time honored method of delay, but most users of the FOIL process rely on the good faith of our public servants to meet their statutory obligations without having to resort to litigation to compel compliance. In other words, the vetoed bills deal with the back end of the process – litigation and appeal – rather than the front end of the process where bureaucrats rule supreme. In my experience, FOIL works exceptionally well when a state agency has nothing to hide, or where the information sought is readily available and issue neutral. On the other hand, where the information is not so neutral, or even slightly embarrassing, bureaucratic delay at its most sophisticated becomes the rule rather than the exception. Bureaucratic inertia is a talent honed over numerous millennia, and it is unlikely that even the vetoed changes will seriously interfere with that expertise.[IA]
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[ ON THE LEVEL ]
JAMIE DEAPO
An Important Resolution for 2016 uIf I had one wish for 2016, it would be that independent agents make a resolution to better communicate their value. It seems like a simple thing but is actually quite involved and touches every aspect of their business. I say communicate instead of advertise or market because today’s consumer, especially millennials, don’t want to be sold to. They want to research you, get to know you and then decide whether you represent what they are looking for in an agent. That means being able to communicate effectively what makes you different than every other way to buy insurance protection. It also means not only talking the talk but actually walking the walk. Consumers are fairly savvy and can spot someone faking it. Make sure your value proposition speaks to what is in it for the consumer and not all about you. Another question is how are they going to find you? Social media, your website, your blog and news about you on the internet will be their reference. If you’re lucky you might be mentioned or referred by an existing client but you can’t count on that. Have you checked all these sources, and what do they say about you that would motivate a consumer to reach out and discuss their needs? What about SEO (search engine optimization)? All that means is when a consumer searches for something on the internet how quickly your agency appears. If you’re not coming up in the first entries or page, you may not attract their attention. You control your website, your social media and your blog; does the message on them support your value proposition and is it written in a way that would attract consumers to search you out? If you need help we have resources to assist you in evaluating and improving your social media. Give us a call. What about your activity in the community you serve? Many consumers, especially millennials, like to do business with organizations that are socially minded and give back to their community. What causes do you support both in time, people resources and money? How would con10 January 11, 2016 / INSURANCE ADVOCATE
sumers find out about it? A little modest promotion on your website and social media would help. It also wouldn’t hurt if you were written up in the news for your efforts.
Getting consumer attention to the advantages of working with your independent agency is critical. What about speaking engagements and information you provide in the media that helps consumers better understand various insurance products and their need? It might also be about financial news and information that helps consumers in their day-to-day lives. How to improve their credit score, protecting themselves against having their personal information hacked or stolen, and things they should be aware of if traveling outside the United States would all be useful and confirm your expertise and knowledge. What about the charities you participate in and your community service? Most agencies are very involved in their communities but for whatever reason don’t really make a point of publicizing their activities. Modesty is a wonderful thing but when consumers are deciding who they will do business with based on this information, you have to find a way for them to be aware of it. Like I already said earlier, you need to find a way to modestly promote all that you do. If you are a member of our association display the Trusted Choice® brand on everything you can. It identifies you as an independent agent and promotes the value of working with you and having protection through you. The brand is being promoted through advertising and on search engines. It has a professional website associated with it that has excellent educational articles about various insurance coverages and needs. It also will direct consumers to you who are looking for an agent in their area. All of this is important but remember, if your agency isn’t set up to provide an
Jamie Deapo is AVP of Membership & Member Programs for IIABNY and is an approved CE instructor in New York. Prior to being with IIABNY, he was an independent agent in the Syracuse area for 15 years. Jamie started his career in 1972 working for insurance carriers, and he has held various underwriting and marketing positions with several national as well as regional companies. He is a past president of the Independent Insurance Agents of Central New York and served on the board of directors of IIABNY.
awesome customer experience you may not get the opportunity to take advantage of the consumer contacting you. How is a potential customer handled when they reach out to you? Are they made to feel welcomed? When they speak with your staff do they get the feeling that their needs are important and you’re happy to be helping them? Does their interaction with your staff confirm the value proposition they heard or read about? It won’t matter how good your initial reach out was if when they contact your agency everything they determined in their research isn’t confirmed by your actions. Remember it’s all about them, their needs, their satisfaction and their happiness at having selected you to protect them. Our business is changing. Competition is significant and expanding. It’s not business as usual. Getting consumer attention to the advantages of working with your independent agency is critical. You have to change what you’re doing and you have to use today’s tools for attracting customers. Make the commitment and effort to do what is necessary and then be prepared to make them feel special when they reach out to you. Failing to do so will surely have a negative effect on your agency and its future.[IA]
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ADVERTORIAL
Hoverboards Burst Onto the Scene IN THE MOVIE Back to the Future II, Marty McFly travels to the year 2015 and rides a skateboard that hovers above the ground. While such floating transportation may not be economically feasible yet, one of the most popular new items is a hoverboard, a two-wheeled self-balancing scooter that is battery-operated and self-propelled. Hoverboards are certainly a hot item – unfortunately in more ways than one, as they can be dangerous even when they are not being operated. Alerting clients to the possible hazards of hoverboards is another value-added service of the professional insurance agent. Hoverboards can travel at speeds up to 12 miles per hour, with a range of about 12 miles on a single charge. They weigh approximately 25 pounds and can carry up to 300 pounds. Some of the fancier models include bluetooth speakers, LED lights and remote controls. There have been numerous reports of hoverboards exploding and bursting into flames while being charged or operated. What causes the explosions/ fires? Two sources – lithium-ion batteries and defective chargers. The Consumer Products Safety Commission (CPSC) (www.cpsc.org) is actively investigating and testing hoverboards to determine why some have exploded and/or caught fire while in use or being charged. At least 22 investigations were started in 2015, reviewing incidents in 13 states. A number of lawsuits have already been brought against manufacturers and retailers. Hoverboards sold in the United States are not currently subject to quality, safety or inspection requirements. This is a concern for insureds and insurers alike, from both a property and liability standpoint. Homeowners and retailers should consult their insurance advisor to be sure their coverage is up to date. Fearing the risk of fire, major airlines, including American, Delta, Southwest and United, have banned hoverboards in checked or carry-on luggage (www.insurancejournal.com). In response to the safety issues, online
Hoverboards sold in the United States are not currently subject to quality, safety or inspection requirements. retailers, including Amazon.com and overstock.com halted sales of many types of hoverboards. Before listing hoverboards for sale, Amazon.com now requires sellers to provide proof that the items comply with safety requirements (www.money.cnn.com). Guidelines for purchasing hoverboards include a UL certified charger. This reduces the risk of explosion and fire. Stick with reputable dealers who provide contact information for the manufacturer in the event of a problem. Remember, what appears to be a bargain may not be one – cheaper products may not be up to safety standards. In addition, knowledge of local laws and regulations is essential. For example, it is illegal to use hoverboards or “personal transporters” in New York City, bringing initial fines of $200 (www.nydailynews.com). CPSC suggests that the hoverboard be charged and stored outside in an open dry area, away from flammable materials, and not left unattended
while charging. The normal charge time is three to four hours. In addition, hoverboards should be allowed to cool down before recharging after use. Explosions and fires are not the only issue. The CPSC has dozens of reports of hoverboard-related injuries, some of which are very serious, including at least 70 visits to emergency rooms during the 2015 holiday season. Safety gear is essential when riding a hoverboard, including a helmet, preferably with a face shield, wrist guards and knee and elbow pads. Hoverboards should not be operated in inclement weather or over rough terrain. Any issues with hoverboards, such as explosions, fires or injuries, should be reported to the CPSC (www.cpsc.org) to aid in their investigations. By all accounts, riding a hoverboard can be a lot of fun. But before anyone attempts an impression of Marty McFly in Back to the Future, there are important safety factors to consider. Helping clients understand the dangers is another sign of the true insurance professional.
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INSURANCE ADVOCATE / January 11, 2016 11
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[ THE SOCIAL NOTEBOOK ]
C H R I S PA R A D I S O
Achieving the Right Balance… uAs more insurance agencies start to undergo a digital transformation, we will see an influx of money pouring into digital technologies. The aim is to somehow get like-minded with our insurance buyers and keep our agency in front of our clients. It can be intimidating for most agencies starting out in the digital marketing world. Finding the right company with the right technology for their agency can be daunting. Furthermore, after they do find the “right fit,” they need to avoid over-automation and becoming less humanized. The key is achieving the right balance. The Digital Age Many insurance buyers are faced with high stake decisions. Recently, Google said they are going into the small commercial insurance space, and that shows us that the buyer is ready to be educated and purchase from the internet. In today’s very fast moving world where people are willing to pay more based on convenience, not all decisions are as complex. But, for some, making decisions on a $10k-$25k purchase can still feel like a million dollar decision. But, as Flo and the Lizard continue to convince the consumer that insurance is a commodity, the mindset of people is changing. As they continue to spend billions of dollars reinforcing that message, people will continue to believe it.
…humanity will always play a huge role in the insurance buying process. One thing we can all be assured of is this – if an insurance purchase decision, regardless of the dollar amount, feels like a million dollar decision, it will NOT be made with one click from a desktop, laptop, iPad, smartphone, or tablet. Such a decision is filled with human fears and emotions, because the average American has a lot to lose. In the ever-evolving hyper-digital world economy, it is easy to get lulled into the belief that every decision becomes a digital one, with no human interactions required. That is simply not true; humanity will always play a huge role in the insurance buying process. Human Interaction Absolutely Matters Today What people care about most in the new digital economy is interaction in a high-tech world. Insurance agencies must find balance in offering high touch interactions in both digital and person-to-person formats. Let me elaborate a bit on this point: Marketers in today’s modern world must take care to not be out of balance with digital marketing automation. Balance is key.
Christopher Paradiso, CPIA , is President of Paradiso Financial & Insurance Service. He has been acknowledged by several insurance publications as a leader in the industry for his use of digital marketing and social media to help brand his agency and promote other small businesses within his community. Chris has also been recognized for his charity work with The Connecticut Children’s Medical Center. In 2011, Chris introduced “Paradiso Presents LLC,” a social media program aimed at teaching small agencies to not only survive, but compete in today’s complex online marketing world. Chris resides in Stafford Springs, CT with his wife and two children, Mia and Gianni.
Focusing entirely on automating processes could be the death of your insurance agency’s digital marketing strategy, but on the other hand, not having a digital presence could have the same results. Having an entire focus on automation isn’t the best option, and instead we must understand how to use digital technologies to enhance human interactions. Look at the digital world to aide your human interaction, because it also helps with the customer’s experience. Without a human-centered marketing approach we’re simply automating a really bad process. And, unintentionally, we would be automating the very things our customers and/or prospects dislike, which will cause you to lose them. The Human-Centered Approach to Marketing For insurance agencies that have a sales and marketing-minded approach, I would ask you to look at these steps to help your agency stay human-focused with the aide of technology. 1. Get to Know and Understand your Prospects and Clients CONTINUED ON PAGE 14
12 January 11, 2016 / INSURANCE ADVOCATE
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[ THE SOCIAL NOTEBOOK ] CONTINUED FROM PAGE 12
For many agencies, getting to know their customers and prospects can be a fragmented experience. This involves the use of CRM, sales automation, ability to track inbound marketing, store and gather data, and much more. What’s missing is a disciplined approach to understanding your clients and prospects qualitatively, so you can connect with them as people, as real human beings. The modern marketing agency will need to take a disciplined approach to understanding how data and qualitative research can blend together to tell the story of their clients and prospects. Now, you’re probably thinking that I’m off the wall, and have no idea what I’m saying by telling you that you don’t know or understand your clients. Let me give you a quick example. If I asked you what your agency does very well, the answer is almost the same every time – “we give great service.” Okay, now my question back to you is, are you open 24 hours a day, 7 days a week? If the answer is no, then how can we say we give great customer service? Our competition, like the Lizard and Flo, are open 7 days a week and 24 hours a day. Do you and your agency ask how the customer likes to communicate with the agency? If you ask a 25year-old they will say text, and a 40-yearold will say email in most cases, while a 65-year-old will say by phone. I’m hitting this point because we insurance agency owners need a process through a CRM (digital marketing technology) to ask for this information so that we can continue to provide that “human touch.” 2. Persona Development The “NEW” digital economy is changing the way people work, buy, and operate. We are constantly creating new means of digital and virtual pathways towards getting things done, such as an on-boarding process for every new client, and a renewal system which is automated once the sale is over. Overall, this leads to one-size-fitsall content and interactions designed for your clients. Lets not forget, once the automated process starts, it doesn’t end there; you still need human touch within your process. Human marketers will need to develop persona-based understanding. • Creating personas of your clients can help you understand how your existing customers are evolving, and how your agency should be interacting 14 January 11, 2016 / INSURANCE ADVOCATE
with them. Treating existing customers generically as a “new” purchase may cause you to lose clients. The age of leaving a sleeping bear
Although we may deal in a highly complex and competitive industry, it does not mean we have to approach such in a cold and inhuman way.
alone is gone thanks to the social and the digital world. • Buyer personas are focused on how goals and behaviors influence the insurance purchase decision. The goals and behaviors of people engaged in buying can be very different than when they are existing customers. In today’s complex world, we have to treat a new client much different than renewals, and we must have a process to follow for each. • The voice of users (clients’ voices in the social world) becomes increasingly important on how to be more efficient and effective on getting referrals. Interestingly enough, we find our agency’s marketing team out in the social media world listening to what others are saying, and this is what’s helping us build more trust and a better relationship. • Does your agency have a human-centered marketing/sales process? Our understanding of clients, prospects, and users is at the agency’s core of human-centered marketing. Strategies related to visual content, communications (such as text), digital or social interactions, and engagement should be about understanding how to help people accomplish their goals along with helping our clients understand our agency’s brand. If we translate our efforts to use personas to truly understand our customers, we’ll be able to connect with them in a very human way. Our marketing and sales strategies deliver the desired types of human interactions that prospects/customers are looking for. If you’re looking to deliver in ways that clients can see, you will see that this
is where your agency’s mobile app can also come in and play a role. This point does echo my mention above. The difference here is in having a disciplined approach to translating our understanding of clients/prospects. Adopting digital technologies, such as a CRM tool, to help your agency market and sell better should have the aim to enhance the human interactions, along with human fulfillment. This all comes down to the fact that we (insurance agency owners) should be looking at all touch points involving marketing, sales, service, and support with this explicit goal. Far too often, it is easy to fall into the trap of not bringing in new technologies to help internal operations and efficiencies, because of cost, and because our office staff doesn’t like change. We have to remember who signs the check; it’s not the owner of the agency, it’s actually the client. 3. Human-Centered Marketing vs Commodity Marketing Without establishing a personal touch and an emotional connection with your prospect or client – a human connection – many agencies will be left to compete on only one thing, and that is price. That Price Club is relegated to the very cold and inhuman place we call The Commodity Club. The Commodity Club is a fancy name for an order taker. I promise you, commodity marketing is today’s marketing dead-end. The human-centered approach to marketing has changed in the past 15 years, and today we consider social media marketing a part of a human-centered marketing strategy. Social media allows us to have and keep a human side to selling and servicing our clients in today’s fast and complex world. Although we may deal in a highly complex and competitive industry, it does not mean we have to approach such in a cold and inhuman way. Today’s modern prospect seeks to have goals fulfilled and emotions understood, whether they be education, fear, or passion. Be part of a human experience – this is key for your agency to win.[IA]
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FOREWORD CONTINUED FROM PAGE 4
Investment, Insurance, Investigations and Government Operations, Judiciary, Labor, Local Government, Mental Health, Racing, Gaming and Wagering, Rules, Social Services, Transportation, Veterans, Homeland Security and Military Affairs, Libraries Select Committee, State-Native American Relations Select Committee, Science, Technology, Incubation and Entrepreneurship Select Committee, Administrative Regulation Review Commission, Rural Resources. We pay a lot for this set of structures. I wonder if it will be worth it in 2016. … Arent Fox LLP recently represented Clear Blue Financial Holdings LLC in its launch of two fully licensed fronting carriers. Clear Blue is a newly-formed commercial insurance fronting provider that offers fronting and related services to the US insurance marketplace. Elliott M. Kroll, lead Arent Fox partner on the transaction, told us “More hedge funds and private equity groups are entering the insurance and reinsurance market today because there is less correlated economic risk. Many of the insurance and reinsurance vehicles formed by hedge funds and private equity firms are offshore and need a vehicle to assume risk in the United States. Clear Blue has capacity and an excellent rating to service that slice of the market.” The combined carrier group has received an A.M. Best rating of A- (Excellent). The Companies are backed by Pine Brook, a private equity firm with deep financial services and insurance sector expertise. “More hedge funds and private equity groups are entering the insurance and reinsurance market today because there is less correlated economic risk,” said Elliott M. Kroll. “Many of the insurance and reinsurance vehicles formed by hedge funds and private equity firms are offshore and need a vehicle to assume risk in the United States. Clear Blue has capacity and an excellent rating to service that slice of the market.” TAG Financial Institutions Group raised capital to finance the business, identified and advised on the acquisition of the two insurance subsidiaries, and advised on aspects of the rating and regulatory processes. Clear Blue president and CEO Jerome Breslin built Bank of America’s commercial insurance division. He is joined by Chief Risk Officer Jim Mann and Chief 16 January 11, 2016 / INSURANCE ADVOCATE
Operating Officer Peter Klope, both of whom worked with Breslin at Bank of America. The management team is rounded out with Jeff Downey, former TAG Financial Principal, Manuel Lebron and Scott Palladino, all of whom bring significant experience in the P&C industry to the Clear Blue team. Steven Nigro, Managing Partner of TAG Financial has
Let’s hope that PIANY and the other insurance lobbies in Albany have a banner year. The industry has fared fairly well as a result of the several teams of association professionals who attack the problems that beset insuring in the state and that drive prices up. … Let’s hope that our legislators will now understand that…and act.
been named to the Board of Directors of Clear Blue. Clear? ... Insurers continue to fight for market share and, as a result, US P&C composite rate was down four percent in December. Richard Kerr, CEO of MarketScout, outlined the current pricing environment: “While it may seem the insurance industry has already been in a prolonged soft market cycle, we are only four months in. The market certainly feels like it has been soft for much longer, because rates bumped along at flat or plus 1 to 1½ percent from July 2014 to September 2015. The technical trigger of a soft market occurs when the composite rate drops below par for three consecutive months.” MarketScout has been tracking the US property and casualty market since July 2001. Kerr profiled the cycles by pointing out, “It seems the length and veracity of the market cycles has become less volatile in the last five or six years. Thus, the impact of a hard or soft market in today’s environment may be 5 or 6 percent up or down. Can you imagine how we would react today in a market such as that of July 2002 when the
composite rate was up 32 percent? Or in December 2007 when the composite rate was down 16 percent? Underwriters today have better tools to price their products and forecast losses. Further, the chances of a rogue underwriter or company are greatly reduced by the industries’ checks and balances. There may be less excitement but there are probably far fewer CEO heart attacks.” MarketScout’s historical barometer reflects a mean average rate increase of 30 percent in calendar year 2002. For calendar year 2007, the mean average decrease was 13 percent. The current environment is relatively benign in relation to these volatile years. … Now I understand that. … Building on successes realized for agents and brokers in 2015—including the enactment of the landmark certificates of insurance law; the increased timeframe of photo inspection requirements from five to 14 days; and the passage of a bill that would standardize the triggers for homeowners’ hurricane deductibles, the Professional Insurance Agents of New York State, has announced its focus for the 2016 session, as identified both by its member agents through a formal survey and input obtained by directors and Advisory Council members. PIANY will seek a number of reforms including, it reports: “ensuring proper coverage is in place for ride hailing/ride sharing; the elimination of the State Insurance Fund’s 30-day rule; enacting workers’ compensation policyholder protections; hurricane deductible trigger standardization; and scaffold law/tort reform.” “PIANY is committed to working with lawmakers to identify and advance legislation that will benefit the professional, independent insurance agent and their policyholders,” said PIANY president Gene Sandy, CIC. Let’s hope that PIANY and the other insurance lobbies in Albany have a banner year. The industry has fared fairly well as a result of the several teams of association professionals who attack the problems that beset insuring in the state and that drive prices up. … Let’s hope that our legislators will now understand that…and act.[IA]
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IN THE MATTER OF THE ANCILLARY RECEIVERSHIP OF LUMBERMENS MUTUAL CASUALTY COMPANY Supreme Court, County of New York Index No.: 400534/2013 NOTICE 321 0/2.1 -,+1 *)-(+1 '/&%.$&.2#1 "/!/ 1 #/ ! 1 & 2 1 '/&%.$&.2# 1 #1 . 1 2! 1 2 $ 1 receivership and, the Superintendent of Financial Services of the State of New York and her successors in .1 $.1 #.$ 2 1 #1 2 $ 1 $. . .$1 2 $ 1 . . .$ 1 1 '/&%.$&.2#1 2 1 #1 & 2 #!$ ! $1 & 2 #!$ ! $ 1 1 ! .1 . 1 $ 1 $ .$! #/ ! Insurance Security Fund ( . /$ ! 1 /2 1 21 connection with the ancillary receivership proceeding of Lumbermens. The Ancillary Receiver has, pursuant to New York Insurance Law Article 74, appointed Scott D. Fischer, . 1 . /! 1 / .$ 2!.2 .2!1 . 1 . /! +1 #1her agent to liquidate the business of Lumbermens. The Special Deputy carries out his duties through the New York Liquidation Bureau, 110 William Street, New York, New York 10038. The Ancillary Receiver has submitted an application to the Court for an $ .$ 11 1 $ 2 1 1 $ . /$.1 $1 / 1$. . 1 1! .1 & 2 #!$ ! $ #1$. . ! 21 1any claim(s) under Lumbermens policies that are presented for payment from the Security Funds in this proceeding; and (ii) granting the Ancillary Receiver such other and further relief as this Court may deem just and proper. A hearing on the application is scheduled for the 20th day of January, 2016+1 .!/$21 !. 1 !19:30 a.m., before the Court at the Courthouse, IAS Part 13, 71 Thomas Street, Room 210, New York, New York. If you wish to object to the relief sought, you or your counsel must serve a written statement setting forth your % . ! 2#1 2 1 1#/ $! 2 1 /&.2! ! 21 2# .$ 2 1 .$# 1/ 21! .1 2 $ 1 . . .$ at least seven (7) days prior to the Return Date and file the Answering Papers, together with an affidavit of service, with the Court on or before the Return Date. Service on the Superintendent shall be made at the following address: Acting Superintendent of Financial Services of the State of New York as Ancillary Receiver of Lumbermens Mutual Casualty Company, 110 William Street, 15th Floor, New York, New York 10038, Attention: General Counsel. The Ancillary Rece .$ #1 ! 21 #1 % .1 $1 2# . ! 21 !1http://www.nylb.org. In the event of any discrepancy between this notice and the documents submitted to Court, the documents control. Requests for further information should be directed to the New York Liquidation Bureau, Creditor and Ancillary Operations Division, at (212) 341-6809. Dated: December 9, 2015. SHIRIN EMAMI, Acting Superintendent of Financial Services of the State of New York as Ancillary Receiver of Lumbermens Mutual Casualty Company.
INSURANCE ADVOCATE / January 11, 2016 17
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PANTS ON FIRE!
Bermejo v New York City Health
Courtroom Drama as Judge Calls IME Doctor “Liar,” Sanctions Attorneys, Threatens Criminal Prosecution Appellate court clears doctor Compiled by Insurance Advocate® staff with Lawrence Rogak
18 January 11, 2016 / INSURANCE ADVOCATE
uAt a personal injury trial, it came out during the cross-examination of the Independent Medical Exam (IME) doctor that the plaintiff ’s attorney had surreptitiously videotaped the IME on his iPhone. The attorney then attempted to use the video to impeach the IME doctor about how long the IME exam took. When the doctor testified that he could not recall, the judge forced him to come up with an estimate. The judge then used that answer not only to call the doctor a liar in open court but to threaten him with criminal prosecution, and announced that he, the judge, wanted to end the doctor’s career as an IME physician. The judge also imposed sanctions on the plaintiff ’s attorney for taking the secret video, and on the defense attorneys for putting a “liar” on the witness stand. A mistrial was also declared. Both sides appealed to the Appellate Division, which announced a new rule: no videotaping of IMEs without court permission; ruled that & Hosps. Corp. the IME doctor did not commit perjury; and ordered a new IME and a new trial before a different judge. “These appeals require us to determine whether a plaintiff ’s attorney must obtain approval from the court before making a video recording of an IME of the plaintiff, and whether CPLR 3101 requires that such a recording be disclosed to opposing counsel before trial. We answer both questions in the affirmative. We further conclude that the declaration of a mistrial in this case was attributable to the conduct of the plaintiff ’s trial attorney. Moreover, we find that the orthopedist was unwilling to testify voluntarily at the new trial because of that conduct and because the Supreme Court repeatedly, without any basis in fact, accused the orthopedist of lying during his cross-examination. The court also repeatedly threatened to recommend that the District Attorney’s office prosecute the orthopedist for perjury.” The plaintiff, Manuel Bermejo, fell from a scaffold at a construction site. Plaintiff was awarded summary judgment against the appellants on the issue of liability on the cause of action alleging a violation of Labor Law § 240. Prior to the trial on the issue of damages, an orthopedic physician, Michael J. Katz, conducted an IME of the plaintiff. The plaintiff was accompanied at the IME by his
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trial attorney, Patrick J. Hackett, who was of counsel to Constantinidis & Associates, the law firm representing the plaintiff, as well as Yury Ramirez, a paralegal employed by the same firm. In the report he prepared after conducting the IME, Dr. Katz noted that “the evaluation took place between the hours of 6:00 p.m. and 6:45 p.m.” Dr. Katz interviewed the plaintiff, took various measurements, examined his spine, right foot and ankle, and reviewed approximately 30 medical reports generated by various physicians since the time of his accident. Dr. Katz’s report stated that Mr. Hackett “had a series of nasty outbursts regarding the history of this injury.” The report asserted that Mr. Hackett refused to allow the plaintiff to answer any questions relating to the happening of the accident, the medical treatment he received afterward, or his present complaints, and instead advised Dr. Katz, among other things, that he should get the information from defense counsel. The report also contained the following comments: “Mr. Hackett presented quite a nasty and obstructive front toward getting a proper history.... Mr. Hackett just became nastier as questions were asked.... It is highly unusual for an individual’s attorney to behave as Mr. Hackett did in order to mislead the examiner and try to get them (sic) to believe that these changes were acute and not chronic.” Later, after surgery on the plaintiff ’s shoulder, Dr. Katz performed a second IME, which focused on the plaintiff ’s shoulder. Once again, Mr. Hackett and Ms. Ramirez were with the plaintiff in the examining room. In April 2013, the damages trial commenced in the Supreme Court. The plaintiff was represented at the trial by Mr. Hackett and Gus J. Constantinidis, and Ms. Ramirez was also present in the courtroom. Dr. Katz testified regarding the IMEs he performed and the findings he made. During the cross-examination of Dr. Katz by Mr. Hackett, the testimony that lies at the heart of the controversy presented on these appeals was given. Dr. Katz was questioned as follows: “Q: Doctor, on that first exam I believe you said you took 45 minutes; is that correct? “A: Right. “Q: And on that second exam of the shoulder, how long did that take?
“A: That’s uncertain. “Q: Uncertain? “A: I don’t think I have a record. I don’t think I have it recorded, no. I don’t think it’s recorded. “Q: Or would you say it’s more or less than 30 minutes? “A: I don’t really recall at this point. “Q: Well, how long do you have a custom and practice when you’re doing a shoulder exam as to how long, you generally take? “A: I don’t really have, you know, an allocated time. “Q: Well, would you believe in at least your experience that it would be more or less than 15 minutes? “A: Quite frankly, I don’t know. “THE COURT: Excuse me, Doctor, I cannot accept an ‘I don’t know.’ You have been doing this for awhile. I will have to insist on what your custom and practice would be as to what type of, the length of an exam of this type. “THE WITNESS: I think in the range of between ten and 20 minutes would be appropriate.” After Dr. Katz’s testimony was concluded, Mr. Hackett called Ms. Ramirez as a witness. With regard to the first IME of the plaintiff, Ms. Ramirez was asked how much time transpired “from the time that Dr. Katz came into the room until Dr. Katz left the room,” and she responded: “About ten minutes.” According to Ms. Ramirez, several minutes were consumed by arguments between Mr. Hackett and Dr. Katz, and then the plaintiff “was examined. It was about three minutes or four minutes tops.” When asked whether she recalled anything else about that IME, Ms. Ramirez testified: “I don’t recall the details. I just know that he examined his foot. I’m not sure but I believe he examined his back. I’m not really sure. I can’t tell you.” With regard to the second IME, Ms. Ramirez testified as follows: “Q: And how long did that exam take? “A: The actual exam was three minutes. The total evaluation was like five. “Q: And how do you know that it was three minutes? “A: I pretty much timed it. “Q: And how did you time it? “A: With my phone.” On cross-examination, Ms. Ramirez admitted that, when she attended the first
“Mr. Hackett presented quite a nasty and obstructive front toward getting a proper history.... Mr. Hackett just became nastier as questions were asked.... It is highly unusual for an individual’s attorney to behave as Mr. Hackett did in order to mislead the examiner and try to get them (sic) to believe that these changes were acute and not chronic.”
CONTINUED ON PAGE 20
INSURANCE ADVOCATE / January 11, 2016 19
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CONTINUED FROM PAGE 19
IME, she was not present when Dr. Katz was reading the plaintiff ’s medical records, so she did not know “how long he spent reviewing any records or anything like that.” No questions regarding the duration of the second IME were asked of Ms. Ramirez on cross-examination. When the cross-examination of Ms. Ramirez concluded, Mr. Hackett stated that he had “just one” question to ask on redirect examination. That questioning proceeded as follows: “Q: Other than using your phone to determine how much time Dr. Katz spent on the second exam, do you have any other information regarding how long that took? “A: Yes. “Q: And what is that? “A: A video. “Q: A video of the examination? “A: Yes. At that point, the judge asked Mr. Hackett when he had provided notice of the video to defense counsel, and Mr. Hackett responded: “We didn’t because there’s no need to do that, your Honor.” It then turned out that Mr. Hackett had taken the video on his cell phone. Defendants moved for a mistrial. The Supreme Court advised Mr. Hackett that “there is a prohibition from you acting as a witness or becoming a witness that I tried to skirt and that’s a problem and the person who can certify that video is you, Mr. Hackett.” The Supreme Court directed the attorneys to appear on the next business day to present arguments as to whether a mistrial should be declared. The court characterized the matter as “an issue of first impression,” and remarked that the law requires a party to disclose video to the other side. The parties submitted memoranda of law addressing the appellants’ motion for a mistrial. Defendants argued that a mistrial was necessitated by plaintiff attorney’s misconduct in surreptitiously making a video recording of the second IME and then not giving defendants notice of it. In opposition, plaintiff ’s attorney stated that there was no obligation to disclose the video recording because it was a recording of a non party, Dr. Katz, and that there was no obligation to disclose the recording because he had no intention of using it until Dr. Katz “lied on the stand 20 January 11, 2016 / INSURANCE ADVOCATE
about the amount of time the physical examination took.” When the parties appeared before the Supreme Court to present arguments on the mistrial motion, the court ruled that “...the tape should have been turned over. ... All tapes are supposed to be turned over. The question is, who caused the problem? ... My belief is all three parties caused the mistrial. All three caused the mistrial.” The Supreme Court then said to the attorneys, “I’m not letting the doctor take the stand again unless he has counsel. The doctor’s career doing IMEs might be over. If he gets caught in a lie on something that’s material at trial his future use to anyone is useless, correct? That will follow the doctor forever. Unless you can figure out a way to settle it, I will declare the mistrial and post mistrial I will have a sanctions hearing and I will, Doctor, be turning the record over to the district attorney. So, you got a choice. You can collectively get yourselves out of this problem or I will do what I will do.” The Judge then, addressing Dr. Katz, said, “I suggest you not say anything until you are dealing with an attorney. I would strongly suggest you not do anything because you’re in more trouble than you think. It’s probable that your career doing IMEs is over... If I find out or if I even suspect something is going on I have a duty to get in touch with the district attorney, and getting in touch with the district attorney is not a good thing for you in this case. Is that understood?” Defendants asked the judge for leave to conduct a new IME, and asked the judge to disqualify plaintiff ’s attorney because he was now a potential witness, as he had taped the IME. The Judge said, “I think it would be prudent again, Counsel, for you to explore Dr. Katz’s participation in future court matters, whether they be workers comp, whether they be in this building or any other building where somebody has to take an oath.... Parties can be sanctioned, people can go to jail. Am I making it up? No.” When Dr. Katz’s personal attorney asked the Judge whether Dr. Katz’s appearance would be necessary the next day, the judge responded: “I would think you and the doctor would be the first ones to open up this building in the morning...because, again, I am not making the determination at this point if he is lying or not, but if someone determines that the doctor was
lying or if I think that there is a hint that he was lying, I’m going to be the least of his problems. My friends in my former office in the district attorney, they might have a conversation with you, Counsel, his malpractice carrier will have a conversation, the State Department of Health would have a conversation with him, the other defendants would have a conversation with him, and I don’t think any of these conversations are going to be beneficial to him.” After settlement negotiations proved unsuccessful, the Supreme Court granted the motion for a mistrial and advised the jury that it was declaring a mistrial. After excusing the jury, the court announced: “I’m also scheduling a sanctions hearing against plaintiff ’s law firm or plaintiff ’s counsel, the defendants and the carriers for hiring Dr. Katz, and Dr. Katz.” The court noted that it would “vacate the sanctions and the trial date” if the case were settled that day. The case was not settled that day. Afterwards, defendants made a motion for a new IME and to disqualify plaintiff ’s attorneys, and the Court held a hearing. At the outset of the hearing, the Judge asserted that: “During the trial, it was determined that the expert witness, one Dr. Katz, lied about a material fact, i.e., the length of his second IME, which was recorded by plaintiff ’s counsel Mr. Hackett, not disclosed, but it basically required that I declare a mistrial.” When defense counsel argued that the events that led to the mistrial were set in motion by plaintiff ’s improper recording of the second IME, the court responded: “And what is the bigger problem? Mr. Hackett’s recording or your witness lying his whatever off ?” The court later remarked that “nothing beats a witness getting caught red-handed in an out-and-out lie. Always, always everybody’s favorite.” At that point, the following exchange took place between the court and Dr. Katz’s attorney: “MR. LENIHAN: Your Honor, if I may, the characterization of Dr. Katz’s testimony as an outright lie I think is unfair. “THE COURT: I’m sorry, when did you learn how to tell time? “MR. LENIHAN: He testified—after he originally testified, your Honor, he CONTINUED ON PAGE 22
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“I’m not letting the doctor take the stand again unless he has counsel. The doctor’s career doing IMEs might be over. If he gets caught in a lie on something that’s material at trial his future use to anyone is useless, correct? That will follow the doctor forever. Unless you can figure out a way to settle it, I will declare the mistrial and post mistrial I will have a sanctions hearing and I will, Doctor, be turning the record over to the district attorney. So, you got a choice. You can collectively get yourselves out of this problem or I will do what I will do.”
22 January 11, 2016 / INSURANCE ADVOCATE
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did not know, he did not remember, your Honor was not satisfied with that and wouldn’t let that go. You pressed him to give an answer.... If anything, you forced him to perjure himself, if you’re going to characterize it. “THE COURT: By asking him what happened? “MR. LENIHAN: When asked the question, your Honor, he said he didn’t remember. You weren’t satisfied with that. You said he had to give an answer. “THE COURT: Because he is a witness at trial. So by asking him what happened, that’s forcing him to perjure himself? “MR. LENIHAN: If what he is saying is not from his own memory, yes. “THE COURT: Now I’ve heard everything. I thought I heard everything. But asking the witness what happened and him lying, that’s forcing him to perjure himself. “MR. LENIHAN: He told what he thought the time frame was. He told you I have no recollection of that.” During a discussion of whether Dr. Katz would be testifying at the retrial, the Supreme Court commented that “Dr. Katz might not come in, because if Dr. Katz comes in somebody might call the district attorney and say indict this guy for perjury. Why would I do that? Oh, because he’s not telling the truth.” Later, the court advised defense counsel that “if Dr. Katz wants to come in at the risk of his future freedom, you’re stuck with him.” At the next court appearance, the Supreme Court opened the proceedings with the following remarks: “I cannot sanction Dr. Katz. He is not a party. I can sanction the attorneys that called him up to $10,000.00, which is my plan because you called him. Based on the conduct that he displayed in doing this IME, somebody should have known. The interesting thing is if I sanction the attorneys that called him, they will appeal it. There will be a public record. Dr. Katz’s future doing IMEs because he lied in this one will probably be finished. I can, and it is a shame Dr. Katz’s attorney is not here. I can hold him in civil contempt for causing the state to expend thousands of dollars on a trial and then coming in here to lie about what he did, causing a mistrial.... On the other hand, again I am not happy with the non-notice
of recording. I can sanction the plaintiff, but it would only be a nominal sanction.... The worst thing is that we have a doctor who clearly lied about the length of time he took to do an IME, clearly. No matter how you slice it, 10, 15, 20 minutes. It turns out he took one minute and 56 seconds. He testified as to findings that he obviously could not have had in a minute and 56 seconds.... We are wasting our time trying cases over and over and over again because a doctor who is making millions of dollars doing IMEs decides that he is going to lie. I would hope frankly that the Law Journal and everybody else that covers the news sees this.... Dr. Katz lied. I am finding that he lied. He clearly, his clear unequivocal testimony that his IME took 10, 20 minutes.... Now, he gets caught lying. There is no other way to put it. He lied. There is no other way to make it nice. He said the IME took between 10 to 20 minutes. It took a minute and 56 seconds.... Mr. Mendelsohn, I am sanctioning your law firm $10,000.00.... There is no doubt about the finding that Dr. Katz lied. I want you to appeal that finding so that every lawyer in the state that looks at the Law Journal and looks at the record will be able to see what went on during this trial.” Mr. Reilly and Mr. Mendelsohn argued that they and their law firms and their clients did not suborn perjury, had no way of knowing that Dr. Katz would give any untruthful testimony, and should not be held responsible for any untruthful testimony he may have given. The Supreme Court inquired as to how frequently the attorneys’ firms and the insurance carriers with which they worked had retained Dr. Katz. The attorneys responded that although they had retained Dr. Katz from time to time in the past, they had no reason to believe that he would give untruthful testimony. The court remarked that there had been “one lie here, a huge lie.” The court then made the following comments: “THE COURT: I am less interested in the money. I will eventually order your firm and Mr. Mendelsohn’s firm to pay. It is the scarlet letter that I am interested in. This gentleman is still doing IMEs. He is still being used by defense firms.... I can’t imagine the amount of extra trials and extra litigation and extra costs and extra everything that is occasioned by having CONTINUED ON PAGE 26
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this gentleman part of the system.... I can’t sanction him, but I can hold him in civil contempt after a hearing. Your firm, because you called him and you are responsible for him and you relied on him. That I could sanction.... I want you to appeal me. I want you to appeal the finding that two of the carriers caused this gentleman to testify and he lied. And he lied. And he lied badly.” The Judge also said he “would like to put Dr. Katz out of the business of doing IMEs, period.” Plaintiff ’s attorney observed that a sanction against him may need to be reported to the Appellate Division and bar associations, and may affect his legal malpractice insurance. After hearing from Mr. Hackett, the Supreme Court stated: “I am sanctioning your firm $250. I want you to appeal.” The Supreme Court then decided to vacate the $10,000 sanction it had imposed upon each of the appellants’ attorneys for calling Dr. Katz as a witness, as well as the $250 sanction it had imposed upon plaintiff ’s counsel for failing to disclose the video recording of the IME. However, the court noted that it was “still not finished with Dr. Katz,” and suggested that counsel’s insurance carriers “reinforce their efforts to never use him again.” The Judge said to Dr. Katz’s attorney, “I am going to refer this to the Administrative Judge and the District Attorney of Queens County so that they can do whatever they want to do. Perjury is a D felony.... He will not be doing business with Travelers or AIG anymore. I have a feeling that any attorney or adjustor within earshot or who reads this transcript will not be dealing with Dr. Katz much anymore.” And then, after a recess, the Judge said, “Let the record reflect that I gave Dr. Katz the option of and I would institute a special proceeding to retire from the medical/legal business. Retire at the time and he has declined. What I am now going to do, I am going to order a full transcript of everything, the trial and the subsequent proceedings. I will present that to both the administrative judge of Queens County and the District Attorney. I would recommend to the District Attorney that they explore prosecuting Dr. Katz for perjury. Again counsel, it is not the time so much if the doctor thinks that he can explain the 26 January 11, 2016 / INSURANCE ADVOCATE
time. It is not the time problem. It is that there are tests that he testified to that he didn’t do. That is the perjury.... Again, I am making it very clear on this record, the
“A plaintiff is generally entitled to have his or her attorney present at a physical examination ... Although counsel should be permitted to be present at the examination, the attorney’s function is limited to the protection of the legal interests of his client, and in regard to the actual physical examination, he has no role.”
insurance companies here are not going to go near him. I unsealed the record. Everybody from now on when he testifies as to the tests that he performed, it is always going to be questioned from now on.” The Judge went on to say, “He is still doing IMEs.... It is like a wound that is festering. Every time he does another IME. When is it going to stop? He is making seven figures a year doing IMEs. Then he comes to my part and lies....” At the next court appearance, the Judge stated that it was sending a copy of Dr. Katz’s testimony in this case to an assistant district attorney, and then remarked: “The man is basically out of the business of testifying.... $500,000 to a million dollar income that he got doing IMEs and the like, that is over. As soon as the State finds out about it, he is not going to do any Workers Comp exam.” And in colloquy with Dr. Katz’s lawyer, the Judge said, “Maybe I will have the contempt hearing here. He is denying that he lied. He should be happy to get away with me just saying that he lied. Let it go at that. Yes, we will have a finding forever more that a Justice of the Supreme Court of the State of New York said that he lied because he did it. I would suggest that you let it go at that.”
Finally, the trial judge denied defendants’ motion for a new IME. On appeal, the Appellate Division held, first, that “In the present case, unusual and unanticipated circumstances warranting a new IME abound. Foremost among them is Dr. Katz’s unavailability to the appellants as a witness at a retrial, due to his refusal to appear voluntarily, which, in turn, resulted from the Supreme Court’s repeated accusation that Dr. Katz ‘lied’ or committed ‘perjury’ at the first damages trial. These extraordinary circumstances were set in motion when the plaintiff ’s attorney chose to surreptitiously videotape Dr. Katz’s second IME of the plaintiff, and chose to withhold that recording from defense counsel despite the requirements of CPLR 3101(i). Thus, at the outset, we address whether that conduct was appropriate or justifiable.” “As appellate courts in other departments have recognized, there is no express statutory authority for the videotaping of medical examinations, either in the discovery statute authorizing physical examinations of parties (CPLR 3121) or in the court rule governing such examinations (22 NYCRR 202.17) ... Requests for permission to videotape IMEs have been made on a case-by-case basis, and videotaping has not been allowed in the absence of special and unusual circumstances.’” “A plaintiff is generally entitled to have his or her attorney present at a physical examination ... Although counsel should be permitted to be present at the examination, the attorney’s function is limited to the protection of the legal interests of his client, and in regard to the actual physical examination, he has no role.” “Thus...a plaintiff will normally be entitled to have his or her attorney present at an IME, but that permission to employ the additional measure of videotaping the examination will be granted only where the plaintiff establishes the existence of special and unusual circumstances. The latter proposition presupposes that a request for the court’s permission to engage in videotaping will be made. What the law of this state does not contemplate is plaintiffs’ attorneys taking it upon themselves to surreptitiously videotape an IME, without the knowledge of the examining physician, without notice to the defendants’ counsel, and without seeking perCONTINUED ON PAGE 28
1-11-16_INA 1-11-16 1/13/16 1:41 PM Page 27
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mission from the court. Contrary to the assertions made by the plaintiff ’s attorneys in the Supreme Court, surreptitious videotaping of IMEs, without court approval or even notice to the court or opposing counsel, cannot be regarded as an ‘appropriate tool’ or an activity that attorneys should feel free to engage in ‘all the time.’” “The plaintiff argues the recording was made to preserve the statements and actions of the plaintiff ’s counsel, so as to protect him from the same sort of false attacks previously made by the defendants’ expert. However, the plaintiff ’s attorney was not a party to this action, and was not in need of ‘protection.’ In any event, this argument is belied by the fact that plaintiff ’s counsel did seek to utilize the recording at trial, precisely for the purpose of attacking the examination’s validity and effectiveness and the conduct of the examination itself. The record reveals that the attorney contemplated that the recording would be used at trial.” “For the foregoing reasons, the failure of plaintiff ’s counsel to seek and obtain the Supreme Court’s permission to videotape the second IME was, by itself, a sufficient reason to prohibit the use of the recording at trial. Further compounding the improper conduct of plaintiff ’s counsel in making the recording without procuring the court’s approval in advance was the failure to disclose the recording to defense counsel prior to trial, which was a clear violation of CPLR 3101. That statute provides that: ‘There shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by: (1) a party, or the officer, director, member, agent or employee of a party.” “CPLR 3101(i)...requires disclosure of ‘any films, photographs, video tapes or audio tapes’ of a party, regardless of who created the recording or for what purpose...[and] requires ‘full disclosure,’ without regard to whether the party in possession of the recording intends to use it at trial.” Rejecting plaintiff ’s argument that the video was intended to depict the IME doctor, who was not a party to the lawsuit, the Appellate Division responded, “The videotape is a recording of a medical examination, and the person being examined is the plaintiff. Indeed, the individual who is 28 January 11, 2016 / INSURANCE ADVOCATE
most prominently depicted in the recording, and toward whom the recording device is directed for the greatest amount of time, is the plaintiff. Thus, the recording featured, or, at the very least, ‘involved’ the plaintiff, a party to the action.” “Thus, the failure of the plaintiff ’s attorneys to disclose to defense counsel the videotape depicting the plaintiff being examined by Dr. Katz violated CPLR 3101. It also violated the spirit of New York’s open disclosure policy, which, to a large extent, was intended to mark an end to the presentation of totally unexpected evidence and to substitute honesty and forthrightness for gamesmanship.” “The circumstances under which the existence of the secret recording was revealed at trial were unusual and unanticipated.... Dr. Katz was asked how long the second IME took. His response was ‘that’s uncertain.’ Under further questioning by Mr. Hackett on that subject, Dr. Katz responded ‘I don’t think I have it recorded,’ and then ‘I don’t really recall,’ and then ‘quite frankly, I don’t know.’ At this point, the court interjected: ‘I cannot accept an I don’t know.’ This remark was improper, since it is beyond the province of a court to direct from the bench that a witness change an answer to a question because the court does not like the answer or does not find it believable. After stating that it could not accept Dr. Katz’s answer, the court directed the following question to Dr. Katz: ‘I will have to insist on what your custom and practice would be.’ Dr. Katz’s answer was: ‘I think in the range of between 10 and 20 minutes would be appropriate.’” “At this point, we dispel the premise that underlies the plaintiff ’s arguments on these appeals, and the actions taken by the Supreme Court after declaring the mistrial, namely, the notion that Dr. Katz lied. The record does not reflect that Dr. Katz committed perjury. Dr. Katz was asked how long the second IME took, and his answer was that he did not know. There is no evidence in this record that, at the time Dr. Katz gave that testimony, he actually did know how long the second IME took. Thus, that answer (or series of answers) has not been shown to be untruthful. When Dr. Katz was then asked, by the court, what his custom and practice would be as to the length of an examination of this type, as noted, Dr. Katz’s answer was that he thought that ‘in the range of
between 10 and 20 minutes would be appropriate.’ There is no support in this record for the proposition that this answer was false. Moreover, even aside from the fact that the Supreme Court did not actually ask Dr. Katz about the length of the particular IME in question, it was improper to force him to specify an exact duration when his answer repeatedly was ‘I don’t know.’ Accordingly, the record does not reflect a lie that would support a declaration of perjury by the Supreme Court.” “The plaintiff ’s attorneys insist that Mr. Hackett’s video recording shows that the examination lasted one minute and 56 seconds. However, the recording is approximately five minutes in length, and it cannot be determined, from a viewing of the recording, whether the recording captured the entire examination. In other words, it cannot be determined what happened before Mr. Hackett turned his recording device on, and what happened after he turned it off. Moreover, the recording does not account for the time Dr. Katz spent reviewing the plaintiff ’s fairly extensive medical records, which could arguably be considered part of the IME. In any event, Dr. Katz did not testify as to the actual duration of the second IME, but only as to what his custom and practice would be.” “At the hearing on the appellants’ postmistrial motions, the Supreme Court apparently shifted its theory as to what was false about Dr. Katz’s testimony, advancing a new theory that Dr. Katz had lied about the quantity or nature of the tests he had performed. This theory had never been proffered by plaintiff ’s counsel, either as a justification for revealing the secret video recording for the first time in the presence of the jury, or for any other purpose. In any event, this alternate theory was likewise not supported by the video recording.” “Furthermore, unusual and unanticipated circumstances warranting a new IME certainly arose from the Supreme Court’s accusation, repeated more than 60 times on the record before us, that Dr. Katz ‘lied’ or committed ‘perjury’ during his cross-examination, the court’s repeated threats to refer Dr. Katz to the District Attorney’s office with a recommendation that he be prosecuted for perjury, and the court’s extraordinary efforts to end Dr. Katz’s career in the ‘medical/legal business.’ The court’s efforts in this regard intensified to the point that it apparently resorted to the unorthodox measure of conditioning
1-11-16_INA 1-11-16 1/13/16 1:41 PM Page 29
the vacatur of a $10,000 sanction against each of the appellants’ attorneys upon their willingness to adopt the court’s view that Dr. Katz had committed perjury. The court also represented to Dr. Katz’s counsel that at least one of the appellants’ attorneys had ‘agreed’ with the court’s view that the doctor had lied, when, in fact, the attorney stated only that he had ‘no objection’ to the court’s finding, and that statement was made under circumstances in which the court had been threatening that attorney with sanctions. Under these conditions, it is not surprising that Dr. Katz refuses to testify voluntarily at a retrial.” “These circumstances, particularly when viewed collectively, clearly satisfy the requirement that a party seeking an additional IME after the filing of a note of issue must demonstrate the development of unusual and unanticipated circumstances subsequent to the filing of the note of issue. The appellants have been effectively deprived of their expert orthopedic witness in the event of a retrial. Indeed, the Supreme Court’s conduct toward Dr. Katz was so thoroughly intimidating, and the manner in which the video recording was made, concealed, and then revealed to the jury had such a chilling effect, that regardless of any corrective measures that might be taken at a retrial, it is likely that Dr. Katz will remain unwilling to testify. Neither the appellants nor their counsel are in any way responsible for the occurrence of these events, which could not possibly have been anticipated.” “Additional examinations have been permitted where the prior examining physician has become unavailable. For instance, in Galdi v Kaliya (32 Misc 3d 128), the Appellate Term held that the unexpected death of the defendants’ orthopedist subsequent to his examination of the plaintiff constituted an unusual and unanticipated condition warranting a further physical examination of the plaintiff. In Rosado v A & P Food Store (26 Misc 3d 935, 940 [Sup Ct, Westchester County]), the court concluded that the abrupt retirement and relocation out of state of the defendants’ examining physician, which occurred after the filing of the note of issue, was an unanticipated circumstance warranting a further physical examination of the plaintiff by a new physician.” “Although Dr. Katz is physically available to testify, his unwillingness to testify voluntarily renders him effectively unavail-
able to the appellants. Dr. Katz’s unwillingness to appear at a retrial is the direct result of the Supreme Court’s conduct, which included repeatedly and baselessly accusing him of being a liar, insisting that he retain an attorney, threatening to refer him to the District Attorney’s office with a recommendation that he be prosecuted for perjury, and expressly stating that it was the court’s objective to end his career in the ‘medical/legal business.’ Under these circumstances, where Dr. Katz is not at fault—and the appellants and their attorneys are most certainly not at fault—for his unwillingness to testify, Dr. Katz must be deemed unavailable to the appellants, and the circumstances must be deemed unusual and unanticipated, thus warranting a new IME by a different orthopedist of the appellants’ choosing.” “Notably, as the Supreme Court anticipated, its condemnation of Dr. Katz has had an effect on other cases. In several recent cases in which Dr. Katz was retained to perform IMEs, courts have been presented with requests for new IMEs based on the events that transpired in the present case.” “In sum, given the avalanche of errors that occurred in this case, we find that the appellants satisfied their burden of demonstrating unusual and unanticipated circumstances justifying an additional medical examination of the plaintiff by an orthopedist to be designated by them. Under the particular circumstances of this case, a second examination by a different physician is necessary ‘to ensure that the focus of the medical testimony will be on the nature and extent of plaintiff ’s alleged injuries, rather than on any taint or irregularity surrounding the prior examination.’” “The necessity for a mistrial was created by the conduct of plaintiff ’s counsel, and was not to any extent attributable to any conduct of the appellants or their counsel. Plaintiff ’s counsel surreptitiously created a video recording of the second IME without providing any notice to the court or defense counsel, much less obtaining the court’s approval, as is required. Had counsel obtained approval, or at least provided notice, of the videotaping, the mistrial would not have occurred. Second, as discussed above, plaintiff ’s counsel compounded the prejudice to the appellants by
“The plaintiff’s attorneys insist that Mr. Hackett’s video recording shows that the examination lasted one minute and 56 seconds. However, the recording is approximately five minutes in length, and it cannot be determined, from a viewing of the recording, whether the recording captured the entire examination. In other words, it cannot be determined what happened before Mr. Hackett turned his recording device on, and what happened after he turned it off.…”
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As the Appellate Division stated, it was wrong for the judge to force the doctor to give an answer after he said he didn’t know. And then, after giving an estimate of his “usual” amount of IME time, the judge was dead wrong to call him a liar and start threatening him, much less demand that the doctor’s career come to an end. An estimate cannot be a lie and therefore cannot be perjury.
30 January 11, 2016 / INSURANCE ADVOCATE
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improperly failing to disclose the video recording to defense counsel, as was clearly required under CPLR 3101(i). Had counsel disclosed the recording, the mistrial would not have occurred. Third, plaintiff ’s counsel chose to reveal the existence of the recording to the jury in a way that maximized its dramatic effect, and was unfair to the appellants.” Plaintiff argues “that the mistrial was caused by Dr. Katz’s act of lying during his cross-examination. The Supreme Court appears to have ultimately adopted this view. This position is unsupportable since, as discussed above, Dr. Katz did not lie. Moreover, even if Dr. Katz had lied, that act would not be the proximate cause of the mistrial.” As for sanctions against plaintiff ’s attorneys, the defendants “are entitled to recover” from them “the costs they incurred in participating in the first trial on the issue of damages, as well as the costs they incurred in making and litigating the motions at issue on these appeals and in pursuing these appeals.” But the Appellate Division denied defendants’ request that plaintiff ’s attorneys be disqualified: “We have concluded that it was improper to make the recording and to fail to disclose it. Accordingly, that recording was not admissible at the original trial, and would not be admissible at any retrial. Indeed, even if the plaintiff could still provide adequate notice of the recording, as required by CPLR 3101(i), in time for a retrial, the fact that the recording was improperly made in the first instance would require its exclusion from evidence. Thus, since the video recording would not be admissible at any retrial, there is no possibility that Mr. Hackett would be called upon to authenticate the recording.” In conclusion, held the Appellate Division, “The mistrial that was declared in this case, as well as the effective unavailability of Dr. Katz as a witness for the appellants at a retrial, was caused by the conduct of plaintiff ’s counsel in making and failing to disclose the video recording of the second IME, as well as the conduct of the Supreme Court, and was not caused, to any extent, by any conduct of the appellants or their counsel. Consequently, the appellants are entitled to an additional medical examination of the plaintiff, to be
conducted by an orthopedist designated by them, as well as the costs they incurred in the first trial, and the costs they incurred in making and litigating the motions at issue on these appeals and in pursuing these appeals, to be paid by plaintiff ’s attorneys. All further proceedings in this case should be conducted before a different Justice of the Supreme Court.” Comment: Only a trial attorney, and in particular an insurance defense attorney, could fully appreciate the nightmare that this trial must have been — not only for Dr. Katz, but for all attorneys involved. The trial judge could have simply ruled that the video of the IME was not admissible because it was done without court permission, and the trial could have proceeded. Instead, the trial judge, for reasons unknown, took over the questioning of the IME doctor and morphed into a prosecutor — and a vindictive one at that. As the Appellate Division stated, it was wrong for the judge to force the doctor to give an answer after he said he didn’t know. And then, after giving an estimate of his “usual” amount of IME time, the judge was dead wrong to call him a liar and start threatening him, much less demand that the doctor’s career come to an end. An estimate cannot be a lie and therefore cannot be perjury. Despite the Appellate Division vindicating him, Dr. Katz has probably suffered a grievous injury to his career. But he cannot sue the judge because the judge has official immunity. However, Dr. Katz could, theoretically, sue the State of New York (the judge’s employer). The attorneys involved in the trial were browbeaten by the trial judge and had sanctions imposed on them, and although those sanctions were later vacated, the experience had to be traumatic. All of this being public record, the malpractice carriers for the attorneys involved, as well as Dr. Katz, will certainly take these events into account, and they will all have to answer “yes” in the future whenever they are asked whether they have been sanctioned by a court. Lost in all this turmoil is the injured plaintiff, whose injuries will not be compensated until some date in the distant future.[IA] 2015 NY Slip Op 08374 Decided on November 18, 2015 Appellate Division, Second Department
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[ IN THE ASSOCIATIONS ]
McFadden is PIANY’s MetroRAP Industry Professional of the Year uGLENMONT, N.Y.—The Professional Insurance Agents of New York State (PIANY) will present Renee McFadden of Distinguished Programs with its Industry Professional of the Year award at the annual Metropolitan Regional Awareness Program. The event is being held at a new location— The Roosevelt Hotel on Thursday, Jan. 28. This award recognizes an individual from an insurance company, general agency, managing general agency or other insurance industry profession, who has demonstrated qualities that foster a strong working relationship with agents and brokers, and who has exemplified a commitment to professionalism and service, according to PIANY. “Throughout her career, McFadden has demonstrated a respect for her colleagues and customers in the insurance industry,” said Gene Sandy, CIC, PIANY president. “This award reflects her dedication to the insurance industry where she has built a reputation for professionalism.”
McFadden, a graduate of St. John’s University and mother of three, is a licensed property/casualty broker in the states of New York, Connecticut and Massachusetts. Active in PIANY, she serves as vice-chair of the association’s MetroRAP Committee. She is a member of PIANY’s Advisory Council and the Young Insurance Professionals organization, sits on the board of the Insurance Brokers’ Association of the State of New York, and chairs their awards committee which serves to recognize our industry’s emerging leaders. McFadden also is active with the Council of Insurance Brokers of Greater New York. She currently holds the Certified Insurance Counselor designation as well as Target Markets’ Certified Programs Leader designation. MetroRAP is PIANY’s first Regional Awareness Program scheduled for the year—two more are scheduled for 2016; on Long Island in May and the Hudson Valley in the fall.[IA]
Melchionni Honored By City & State Reports uALBANY, N.Y.— Ellen Melchionni (pictured right), president of the New York Insurance Association (NYIA), was selected as one of City & State Reports’ Responsible 100. Melchionni was honored at the inaugural Responsible 100 gala on Dec. 15, 2015 in New York, N.Y. The Responsible 100 honors New York’s 100 most outstanding corporate citizens across all industries. Earlier this year, Melchionni was also presented with the City & State Corporate Social Responsibility Award for Outstanding Achievement in Promoting Community Engagement Throughout New York’s Insurance Industry. 32 January 11, 2016 / INSURANCE ADVOCATE
“It is an honor to be recognized by City & State Reports on behalf of the New York property and casualty insurance industry,” Melchionni said. “I am proud to represent an industry that is dedicated to giving back to the community and helping people in their greatest time of need. It is gratifying for the great work of insurance companies to be acknowledged.” Melchionni has served the insurance industry for more than 20 years. Prior to being named president of NYIA, Melchionni served as vice president of the association for 13 years and for three years as legislative analyst. Before coming to NYIA she was employed with both the New York State Senate and the New York
State Assembly. She worked in leadership offices of both houses of the New York Legislature for a combined tenure of 10 years. Melchionni also serves as president of the New York Insurance Scholarship Foundation, a charitable organization that supports the educational goals of students studying the business of insurance. She serves as a director of the New York Alliance Against Insurance Fraud and served as the organization’s president for 10 years. She serves on the board of the Insurance Industry Charitable Foundation Northeast Division and is a member of the National Association of Mutual Insurance Companies (NAMIC) Advisory Council. Melchionni holds a bachelor of arts degree from the State University of New York at Albany and graduated cum laude. She holds the Certified Association Executive (CAE) designation from the American Society of Association Executives. She is a graduate of the Empire State Society of Association Executives’ Association Leadership Academy, serves as an Academy Dean and is immediate past chair of the society’s board of directors. Melchionni is also a graduate of the Albany County Chamber of Commerce Capital Leadership Program. Melchionni resides in Loudonville, New York, a suburb of Albany, with her husband William and their two children. The New York Insurance Association, Inc. (NYIA®) is a state trade association that has represented the property and casualty insurance industry for more than 130 years.[IA] NYIA MEMBERS: As a benefit of NYIA Membership, you are eligible to receive a special group rate for a subscription to Insurance Advocate®. If you are renewing your subscription, you can simply return the renewal from Insurance Advocate®. If you do not currently subscribe and would like a 2016 subscription, contact Natalie Boivin in the NYIA office at (518) 432-4227 or nboivin@nyia.org to be eligible for the group rate.
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IN THE MATTER OF THE ANCILLARY RECEIVERSHIP OF AMERICAN MOTORISTS INSURANCE COMPANY Supreme Court, County of New York Index No.: 400532/2013 NOTICE On June 19, 2013, American Motorists Insurance +*)('&%$ #"AMICO! $ ' $ ( ' $ & *$ '& ' %$ receivership and, the Superintendent of Financial Services of the State of New York and her successors in * $ ' $ & $ ' $ '& ' %$ $ #" & ' %$ ! $ * $ AMICO and as administrator #" ) & ' * ! $ * $ $ $ * $ *( % +' ' %$ & '& $ %$ & $ #" %$ & ! $ &$ connection with the ancillary receivership proceeding of AMCIO. The Ancillary Receiver has, pursuant to New York Insurance Law Article 74, appointed Scott D. Fischer, Special Deputy Su( & & & $#" ( ' $ ( %! $' $her agent to liquidate the business of AMICO. The Special Deputy carries out his duties through the New York Liquidation Bureau, 110 William Street, New York, New York 10038. The Ancillary Receiver has submitted an application to the Court for an order: # $ '(( * & $ '$ ( * $ * $ ' $ $ * $ $ ) & ' * $ *&$ * $ any claim(s) under AMICO policies that are presented for payment from the Security Fund in this proceeding; and (ii) granting the Ancillary Receiver such other and further relief as this Court may deem just and proper. A hearing on the application is scheduled for the 20th day of January 2016 $#" &$ ' ! $' $9:30 a.m., before the Court at the Courthouse, IAS Part 13, 71 Thomas Street, Room 210, New York, New York. If you wish to object to the relief sought, you or your counsel must serve a written statement setting forth %* $* *& $'& $' $ ((* & $ * ) & ' *&$#" & & $ '( ! $ (*&$ $ & ' %$ at least seven (7) days prior to the Return Date and file the Answering Papers, together with an affidavit of service, with the Court on or before the Return Date. Service on the Superintendent shall be made at the following address: Acting Superintendent of Financial Services of the State of New York as Ancillary Receiver of American Motorists Insurance Company, 110 William Street, 15th Floor, New York, New York 10038, Attention: General Counsel. $ & ' %$ $'(( ' *&$ $' ' ' $ * $ & ( *&$'t http://www.nylb.org. In the event of any discrepancy between this notice and the documents submitted to Court, the documents control. Requests for further information should be directed to the New York Liquidation Bureau, Creditor and Ancillary Operations Division, at (212) 341-6809. Dated: December 9, 2015. SHIRIN EMAMI, Acting Superintendent of Financial Services of the State of New York as Ancillary Receiver of American Motorists Insurance Company.
INSURANCE ADVOCATE / January 11, 2016 33
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[ IN THE ASSOCIATIONS ]
IFNY Elects Officers and Directors for 2016 uNew York, N.Y.,—The Insurance Federation of New York, Inc. (IFNY) has announced the election of its 2016 Board of Officers and Directors. IFNY, now in its 102nd year, is noted for its prestigious Annual Free Enterprise Award given to business leaders whose significant achievements embody the spirit of American free enterprise. The latest honoree was Don Kramer, Chairman and Chief Executive Officer, Capital Management, Ltd. (Bermuda) who received the Free Enterprise Award at IFNY’s Annual Luncheon in 2015. Nick Pearson, Esq., has been reelected as President of IFNY. Mr. Pearson is an independent Insurance Consultant who focuses on reinsurance arbitration and insurance regulatory and transactional matters after having spent nearly 40 years as a widely recognized attorney specializing in insurance. In his first term in 2012, Mr. Pearson inaugurated the IFNY Intern Program, which introduces young New Yorkers from challenging backgrounds to careers in the insurance and financial services sectors. Since its inauguration, IFNY has raised over $100,000 for the program and seen participants enter into the financial services business. Elected Officers include: • Chairman, Lance J. Albright, QBE North America; • Immediate Past Chairwoman, Cecilia E. Norat, Cecilia Norat Consulting, LLC; • Financial Vice President, Stephen Boon, Jr., Harold L. Lee & Sons, Inc.; • Vice President, Hon. Jonathan Bing, Wilson Elser Moskowitz Edelman & Dicker, LLP; • Vice President, Michael Fusco, Argo Group; • Vice President, Douglas Hayden, Wright Insurance Group; • Vice President, Hon. Manfred Ohrenstein, Ohrenstein & Brown, LLP; • Vice President, Hon. David J. Walsh, Amalgamated Life Insurance Company; • Vice President/Managing Director, Steve Acunto, CINN Worldwide, Inc. 34 January 11, 2016 / INSURANCE ADVOCATE
Re-elected to serve as Directors are: • Hon. Kermitt Brooks, AXA US (former Acting NY Superintendent of Insurance); • Maura T. Clancy, Clancy & Clancy Brokerage, Ltd.; • Hon. James P. Corcoran, Esq. (former NY Superintendent of Insurance); • Hon. Salvatore R. Curiale, Esq. (former NY Superintendent of Insurance); • Amy L. Feller, Chubb Group of Insurance Companies; • Donald D. Gabay, Stroock & Stroock & Lavan LLP; • Elizabeth Heck, Greater New York Insurance Company; • John T. Hill, II, Magna Carta Companies; • James W. March, Consultant; • Hon. Howard Mills, Deloitte (former NY Superintendent of Insurance); • Roger M. Moak, Esq., Arbitrator; • Hon. Kevin Rampe, ACE Group; • Raul Rivera, National Benefit Life Insurance Company; • William M. Savino, Esq., Rivkin Radler LLP; • Francine L. Semaya, Esq., Legal and Insurance Regulatory Consultant; • Wendy R. Shapss, FTI Consulting, Inc. Newly elected to serve as Directors are: Michael Catina is Assistant General Counsel with the Insurance Product & Regulatory Team at Zurich North America. In this capacity, Mr. Catina provides legal counsel and strategic advice to business units and internal clients on all insurance product and regulatory related matters. He advises on specific implications of potential business decisions and initiatives to enhance opportunities and reduce business risk. He provides legal advice and review with respect to drafting and/or amending of new and existing insurance products, advertising and marketing materials, training materials and non-disclosure agreements. He handles negotiation and drafting of multi-purpose contracts. Prior to Zurich, Mr. Catina was an As-
sociate Division Counsel at American International Group, Inc. from Nov. 2006May 2014. In this capacity, he would draft, review and negotiate multi-purpose contracts, insurance policies, bonds, endorsements, applications, policyholder notices, and advertising and marketing materials. He handled drafting of new cyber/internet security coverage policy materials. From 2001-2006, Mr. Catina was Senior Litigation/Coverage Associate with Wilson, Elser, Moskowitz, Edelman & Dicker, LLP; from June 2000-March 2001, he was a Litigation Associate with Silberman & Platte, P.C.; and from Sep. 1999-Jun. 2000 he was Litigation Associate with Ahmuty, Demers & Mcmanus. Mr. Catina is admitted in New York State / Southern District of New York / Eastern District of New York. He is a current Board Member for the Insurance Regulatory Forum of Greater New York. Huhnsik Chung is a partner in Baker & McKenzie’s North America Banking, Finance and Major Projects Practice Group in New York and focuses on Insurance and Reinsurance advisory and litigation. He has more than 25 years of experience in handling sensitive, complex and high value contentious and non-contentious matters for the insurance industry. On the dispute side, he has served as lead counsel in more than 70 insurance, reinsurance and commercial proceedings in the U.S. and abroad and is regularly called as New York counsel in Bermuda form arbitrations. On the advisory and transaction side, he provides insurance regulatory and structuring advice related to M&A, ILS, credit enhancement and new product development. He also advises on compliance, policy wording, and regulatory matters involving various business lines and products. Mr. Chung is a Fellow of Litigation Counsel of America and is recognized as a New York Super Lawyer. Tony Grippa is Regional President of Brown & Brown, Inc. and oversees the operations in Daytona Beach, New York, Tennessee and the Mid-West. Mr. Grippa also has oversight responsibilities for Wright Risk Insurance and Wright Specialty Insurance. He joined Brown & Brown in 2005 as leader of the operations of Public Risk Insurance Agency (PRIA) in Lake Mary CONTINUED ON PAGE 39
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IN THE MATTER OF THE ANCILLARY RECEIVERSHIP OF AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY Supreme Court, County of New York Index No.: 4005332/ 013 NOTICE On June 19, 2013, American Manuoacturers MutuaI Cnsurance +*)('&%$ #"AMM! $ ' $ ( ' $ & *$ anciIIarv receiherspid anS, tpe f uderintenSent Fo l inanciaI f erhices Fo tpe f tate Fo New YFrk anS per * $ &$* $' $ & $' $'& ' %$ $#" & ' %$ ! $* $AMM anS as aSministratFr #" ) & ' * ! $ * $ $ $ * $ *( % +' ' %$ & '& $ %$ & $ #" %$ & ! $ &$ cFnnectiFn witp tpe anciIIarv receiherspid drFceeSiny Fo AMMg . pe AnciIIarv Teceiher pas, dursuant tF New YFrk Cnsurance Raw ArticIe L7, addFinteS f cFtt 4 gl iscper, f deciaI 4 edutv f uderi& & & $#" ( ' $ ( %! $' $per ayent tF IiDuiSate tpe qusiness Fo AMMg . pe f deciaI 4 edutv carries Fut pis Suties tprFuyp tpe New YFrk RiDuiSatiFn b ureau, 110 B iIIiam f treet, New YFrk, New YFrk 1003Wg . pe AnciIIarv Teceiher pas suqmitteS an addIicatiFn tF tpe 8 Furt oFr an FrSer: # $'(( * & $'$( * $ * $ ' $ $* $ $ ) & ' * $ *&$* $anv cIaim(s) unSer AMM dFIicies tpat are dresenteS oFr davment orFm tpe f ecuritv l unS in tpis drFceeSiny; anS (ii) yrantiny tpe AnciIIarv Teceiher sucp Ftper anS ourtper reIieo as tpis 8 Furt mav Seem just anS drFderg A peariny Fn tpe addIicatiFn is scpeSuIeS oFr tpe 20tp Sav Fo Januarv 2016 $#" &$ ' ! $' $9:30 agmg qeoFre tpe 8 Furt at tpe 8 FurtpFuse, CAf Part 13, L1 . pFmas f treet, TFFm 210, New YFrk, New YFrkg Co vFu wisp tF Fqject tF tpe reIieo sFuypt, vFu Fr vFur cFunseI must serhe a written statement settiny oFrtp %* $* *& $'& $' $ ((* & $ * ) & ' *&$#" & & $ '( ! $ (*&$ $ & ' %$ at Ieast sehen (L) Savs driFr tF tpe Teturn 4 ate anS oiIe tpe Answeriny Paders, tFyetper witp an aooiSahit Fo serhice, witp tpe 8 Furt Fn Fr qeoFre tpe Teturn 4 ateg f erhice Fn tpe f uderintenSent spaII qe maSe at tpe oFIIFwiny aSSress: Actiny f uderintenSent Fo l inanciaI f erhices Fo tpe f tate Fo New YFrk as AnciIIarv Teceiher Fo American Manuoacturers MutuaI Cnsurance 8 Fmdanv, 110 B iIIiam f treet, 15tp l IFFr, New YFrk, New YFrk 1003W, AttentiFn: GeneraI 8 FunseIg $ & ' %$ $'(( ' *&$ $' ' ' $ * $ & (ectiFn at pttd://wwwgnvIqgFryg Cn tpe ehent Fo anv Siscredancv qetween tpis nFtice anS tpe SFcuments suqmitteS tF 8 Furt, tpe SFcuments cFntrFIg TeDuests oFr ourtper inoFrmatiFn spFuIS qe SirecteS tF tpe New YFrk RiDuiSatiFn b ureau, 8 reSitFr anS AnciIIarv OderatiFns 4 ihisiFn, at (212) 371-6W09g 4 ateS: 4 ecemqer 9, 2015gf HCTCN EMAMC, Actiny f uderintenSent Fo l inanciaI f erhices Fo tpe f tate Fo New YFrk as AnciIIarv Teceiher Fo American Manuoacturers MutuaI Cnsurance 8 Fmdanvg
INSURANCE ADVOCATE / January 11, 2016 35
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[ ON MY RADAR ]
BA R RY Z A L M A
Accident Must “Arise out of” the Use of Auto Nexus to Injury Required uAutomobile insurance is, by definition, limited to actions or events causing bodily injury or property damage arising out of or as a result of the operation, use, loading or unloading of a vehicle. It is not enough to find coverage that a vehicle was close to the site where the injury occurred and might have been used in the future. In Selective Ins. Co. of America v. Zurich American Ins. Co., Not Reported in A.3d, 2015 WL 6758358 (N.J.Super.A.D., 11/06/2015), Plaintiff, Selective Insurance Company of America (Selective), appealed the trial court’s granting of summary judgment to defendants Zurich American Insurance Company (Zurich), and Republic Services, Inc., doing business as Midco Waste Systems (Midco) claiming that since the vehicle was at the location to do work its insurer should provide coverage for the injury incurred by its driver. The court needed to determine, therefore, whether there was any nexus between the vehicle and the injury. FACTS In May 2009, trees and vegetation were being cleared from a right-of-way owned by Public Service Electric and Gas (PSE & G). The initial tree-cutting was done by Nelson Tree Service (Nelson). Dante Enterprises (Dante) was engaged to remove the vegetation and the trees felled by Nelson. Midco was hired to provide a truck and a driver, Nicholas Ciuba, to haul away the trees and vegetation. After all of the trees had been cut by Nelson and were left wherever they fell, Ciuba drove his truck to the site and parked near a retaining wall at the bottom of a hill. Dante employees were responsible for “staging” the logs, which required moving the logs down the hill to the edge of the retaining wall, and loading them into the Midco truck. The hill was too steep for a machine, so the logs had to be moved by hand. Dante employees brought the logs to the edge of the retaining wall, then Ciuba would move his truck as close to the wall as possible and the logs would be rolled into the truck. 38 January 11, 2016 / INSURANCE ADVOCATE
Ciuba was injured by a rogue log that rolled from the hill and over the retaining wall, striking him in the head and causing severe injuries. At the time of the accident,
All of the Dante employees confirmed that no one was near the rogue log when it began to roll down the hill. Although Dante employees were working their way up the hill clearing logs row by row, the closest Dante employee was about twenty feet from the rogue log as it was rolling down the hill. three Dante employees were on the jobsite. All of the Dante employees confirmed that no one was near the rogue log when it began to roll down the hill. Although Dante employees were working their way up the hill clearing logs row by row, the closest Dante employee was about twenty feet from the rogue log as it was rolling down the hill. Ciuba sued PSE & G, Nelson, and Dante, claiming they failed to provide him with a safe place to work. On the date of Ciuba’s accident, Selective was the general liability insurer for Dante and Zurich was Midco’s commercial automobile insurer. The underlying action settled with Selective paying $800,000 on Dante’s behalf. Zurich and Midco did not contribute to the settlement. Selective then sued seeking contribution. The trial court concluded that Zurich did not afford coverage to Dante for Ciuba’s accident because the log that struck Ciuba was never given into Midco’s possession, which is a requirement to be part of the loading and unloading process; and Dante’s “staging” of the logs was not part of the loading process because
Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide. The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http:// shop.americanbar.org/eBus/Store/Pro ductDetails.aspx?productId=214624, or 800-285-2221 which is presently available. Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.
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[ ON MY RADAR ] it was “not necessary for Midco’s truck to be at the site for this staging to occur.” ANALYSIS The Zurich policy covers “all sums an insured legally must pay as damages because of bodily injury … caused by an accident and resulting from the ownership, maintenance or use of a covered auto.” Because it is not disputed that the Midco truck was a covered vehicle under the auto policy, the issue is whether the accident to Ciuba arises out of the vehicle’s use. “[T]he phrase ‘arising out of ’ must be interpreted in a broad and comprehensive sense to mean ‘originating from’ or ‘growing out of ’ the use of the automobile.” Penn Nat. Ins. Co. v. Costa, 198 N.J. 229, 237 (2009) (internal citations omitted). For an injury to arise out of a vehicle’s use, there must be a substantial nexus between the injury suffered and the asserted negligent use of the motor vehicle. Automobile insurance coverage only comes into play if the injuries were caused by a negligent act and that negligent act, although not foreseen or expected, was in the contemplation of the parties to the insurance contract
IN THE ASSOCIATIONS CONTINUED FROM PAGE 34
and Tallahassee, Florida. Prior to that time, Mr. Grippa was President of the Florida Insurance Guaranty Association for two years while concurrently serving as Executive Director of the Florida Workers' Compensation Insurance Guaranty Association, Inc. for more than eight years. He commenced his insurance career with the Florida Department of Insurance and at one time served as the Legislative Director for the Office of the State Insurance Commissioner. He served as a member of the Leon County (Florida) Commission from 2001-2006, and served as its Chairman in 2003. Mr. Grippa currently serves on the boards of Florida Workers Compensation Insurance Guaranty Association, Associated Industries of Florida, AMCOMP and Council on Aging. He previously served as a member on the Florida Building Commission, the Board of Directors of the American Society of Workers' Compensation Professionals, and the Foundation Boards of Stewart-Marchman-Act, Daytona State College and Halifax Hospital.
a natural and reasonable incident or consequence of the use of the automobile. In Penn, a worker was injured as he was leaving his employer’s property after offering to assist his employer in changing a tire on a pickup truck parked in the employer’s driveway. The worker slipped on ice on the driveway and struck his head on a bumper jack that was being used to lift the truck. The Court held that there was not a substantial nexus between the maintenance of the truck by the employer and the worker’s fall because the injury occurred as a result of the employer’s failure to keep his driveway clear of ice rather than the vehicle’s maintenance. Plaintiff argues that the “staging” was done in preparation for the loading of the Midco truck, and that the purpose was to facilitate the loading of the logs. Here, it is undisputed that Dante employees were not engaged in loading the Midco truck when the rogue log struck Ciuba. Rather, they were engaged in staging the logs at the time of the accident. Dante’s staging of logs was not an integral part of the loading process. It was not even necessary for Midco’s truck to be at the site for staging to occur.
He is also the winner of two national awards: the "Above and Beyond Award," conferred by the United States Department of Defense in 2004, and the "Outstanding Young American Award," given by the Florida Jaycees in 2003. Richard White is CEO of ShelterPoint Life Insurance Company. Mr. White joined ShelterPoint, formerly known as The First Rehabilitation Life Insurance Company of America, in August 2009 as Chief Executive Officer. As of 2014, ShelterPoint is the largest provider by premium volume of Disability Benefits Law (DBL) insurance in the State of New York. ShelterPoint also provides various other employee benefit products in New York and 48 other states. Mr. White has over thirty years of experience in creating and implementing effective strategies for business growth, diversification, product development, sales expansion and operational excellence for several leading insurance companies. Prior to joining ShelterPoint, Mr. White was Executive Vice President of Domestic Markets with Pan American Life Insurance Company in New Orleans, where he was responsible for businesses in the United States. This included employee benefits as
Indeed, as the motion judge observed, the staging could have been completed “even before Midco was hired.” Therefore the motion judge correctly determined that the staging of the logs was not part of the “loading and unloading” process and did not constitute “use” of the Midco truck. Ciuba’s accident arose not from any loading or unloading activities but from the negligent acts of those involved in the clearing of the trees. As such, those involved parties were in the best position to avert harm and Dante’s insured is not entitled to contribution from defendants. ZALMA OPINION The accident did not arise out of the operation or use of the vehicle. When an accident is caused by the negligent maintenance of the premises and the only connection to that event is the fact that the motor vehicle is present, no realistic social or public policy is served by straining to shift coverage from the property owner’s insurer to the auto insurer. The only connection with the vehicle in this case was that it was close by, not a cause of the injury.[IA]
well as a focus on selling individual products to the U.S. Hispanic market. Mr. White spent almost twenty years with The Guardian Life Insurance Company of America, where he held various leadership positions, and with the last five years as Senior Vice President, Group Insurance, where he lead Guardian’s over $3 billion group insurance business. Full biographies can be viewed online at www.ifny.org. For further information, please contact Ms. Gina Marie Balog, IFNY Executive Administrator at 914.966.3180, x113 or via email at g@cinn.com/www.ifny.org.[IA]
Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889 www.insurance-advocate.com INSURANCE ADVOCATE / January 11, 2016 39
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[ COURTSIDE ]
L AW R E N C E R O G A K
Unsigned Peer Report in Motion Papers is “Cured” by Signed Copy in Reply Papers
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SAL Med., P.C. v Clarendon Natl. Ins. Co. uAppeal from an order of the Civil Court of the City of New York, Kings County (Johnny Lee Baynes, J.), entered August 12, 2010. The order denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiff ’s cross motion for summary judgment. ORDERED that the order is reversed, with $30 costs, defendant’s motion for summary judgment dismissing the complaint is granted and plaintiff ’s cross motion for summary judgment is denied.
Defendant’s prima facie showing that the services rendered by plaintiff were not medically necessary was unrebutted by plaintiff. Consequently, defendant was entitled to summary judgment dismissing the complaint
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[ COURTSIDE ] In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court which denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiff ’s cross motion for summary judgment. The papers submitted by defendant in support of its motion were sufficient to establish that defendant had timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) the denial of claim forms at issue, which denied plaintiff ’s claims on the ground of lack of medical necessity. Moreover, defendant submitted the properly affirmed report of an independent medical examination (IME) performed on plaintiff ’s assignor, as well as two affirmed peer review reports, all of which set forth a factual basis and medical rationale for the determination of defendant’s doctors that there was no medical necessity for the services rendered to plaintiff ’s assignor. The defect in one of the peer review reports submitted by defendant with its original motion papers, in that it did not bear a signature, was properly and timely remedied when the identical peer review report, this time bearing a signature, was submitted by defendant in its reply papers, and there is no indication that plaintiff was
prejudiced in opposing defendant’s motion by this defect in form (see Mazzarelli v 54 Plus Realty Corp., 54 AD3d 1008 [2008]; see also Berkman Bottger & Rodd, LLP v Moriarty, 58 AD3d 539 [2009]). Defendant’s prima facie showing that the services rendered by plaintiff were not medically necessary was unrebutted by plaintiff. Consequently, defendant was entitled to summary judgment dismissing the complaint (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]). Accordingly, the order is reversed, defendant’s motion for summary judgment dismissing the complaint is granted and plaintiff ’s cross motion for summary judgment is denied.[IA] 2015 NY Slip Op 51449(U) Decided on September 30, 2015 Appellate Term, Second Department
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[ GUEST OPINION ]
J A N E M . O R I E N T, M . D .
Who Has Constitutional Rights? uDonald Trump’s suggestion to exclude Muslims from the U.S. has been called unconstitutional as well as offensive to many. Elected officials swear an oath to “preserve, protect and defend the Constitution of the United States.” But do they know what is in it? One thing that is not in it is the poem by Emma Lazarus, which is on the Statue of Liberty. Nothing in the Law of the Land requires the U.S. to freely admit “the wretched refuse of your teeming shores”— or requires U.S. citizens to feed and provide housing and medical care for them. The load could crush our system, starting with the medical system. Our medical facilities are already overstretched. A few days ago, at “Southern Arizona’s leading provider of emergency care,” a 32-year-old man complaining of a “10-out-of-10” level of pain in his leg lay on the floor of the emergency room for more than 7 hours before leaving without being seen. He was eventually admitted to another hospital’s ICU with sepsis (“blood poisoning”), and died five days later. A security guard brought him a blanket, but evidently no one checked for fever or even looked at his leg. This ER is in the “Tucson sector,” where illegal border-crossing is very heavy. It is required to treat all comers, whether they pay or not, under the federal EMTALA (Emergency Medical Treatment and Active Labor Act) law. Where does the U.S. Constitution require people who have not been convicted of a crime to work without being paid (isn’t that involuntary servitude?) or to have part of their earnings taken to support others? According to the American College of Emergency Physicians, hundreds of emergency departments across America have closed because of uncompensated care. The ER you use might be the next to fold. Terrorism could also bring down the medical system. The attack in San Bernardino targeted public health department workers, and the pipe bombs placed by terrorists were evidently intended to kill first responders. This time, the remote det42 January 11, 2016 / INSURANCE ADVOCATE
Yet another health threat brought by swarms of refugees is emerging in Europe: diseases not seen there for 20 to 25 years. onator failed. A fully successful attack might have overwhelmed area hospitals with casualties, while killing a large fraction of emergency and public health workers. Yet another health threat brought by swarms of refugees is emerging in Europe: diseases not seen there for 20 to 25 years. Dr. Jan-Thorsten Gräsner, director of Germany’s Institute for Rescue and Emergency Medicine, said approximately five percent of the recent influx of asylum seekers—about 75,000 newcomers—are bringing resistant germs with them. The latest and worst are resistant to all antibiotics, including colistin, the last resort for resistant infections. If these organisms are not contained, simple wounds and common infections could once again be fatal, as in the pre-antibiotic era. The Constitution does not protect disease carriers against restraints on their freedom of movement, whether they are citizens or not. Legal immigrants were tested and quarantined for a time at Ellis Island. Also, the Constitution has never been held to protect those who advocate or plot the violent overthrow of the government (and thus of itself). Our Founders were neither insane nor suicidal. Even the First Amendment doesn’t protect all speech— no one has a Constitutional right to advocate setting fire to that crowded theater, to support cop-killing, or to incite riots—not even for a religious motive. But what about banning entry to adherents of one faith, only some of whom advocate and practice violence? Jimmy Carter, we recall, banned all Iranians. Why not at least ban entrants from countries that sponsor terrorists, which are, it happens, predominantly Muslim? (Obama, remember, is denying asylum to persecut-
Jane M. Orient, M.D. obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine residency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira’s Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.
ed Christians from those countries.) Once people are in the country, is it Constitutional to restrict the practice of their “religion”? Does that include actions that take lives or harm health, such as female genital mutilation, pedophilia, torturing and killing “infidels” and “apostates,” and raping or enslaving Christian women? Or the insistence that Sharia law, which either demands or tolerates such practices, overrides the Constitution? The Constitution is meant to protect the rights of people (including women) to life, liberty, and the pursuit of happiness. If such rights are non-Islamic, how can the Constitution protect Islam? [IA]
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