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Freiberg and Peck Get a Favorable Decision in the Nyack Hospital v. GMAC Case
The New York State Court of Appeals ruled in favor of the defendants in the PIP system-based case.
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May 15, 2008 (FPRC) -- The Court of Appeals rendered a decision in Nyack Hospital v. GMAC, which was favorable to the insurers of the State of New York. Attorneys Freiberg & Peck represented the Respondent.
The central issue to the case being argued was the priority of PIP payments under the No-Fault Regulations. Plaintiff argued that pursuant to the Priority of Payments section 11 NYCRR 65-3.15 "claims" must be paid in the order in which they are received. Since that section does not speak of "proof of claim" plaintiff argued that when a bill, which would ultimately exhaust a PIP policy, is presented to a carrier, then the carrier has a duty to keep in reserve all monies demanded by the provider if a verification request is sent on the bill.
Defendant/respondent argued that to narrowly read the Priority of Payments section, without reading the Statute as a whole, would cause chaos with the entire PIP scheme. Defendant also argued that a reading of the entire regulation, particularly the sections regarding payment or denial of claim 65-3.8 (a)(1) and verification requests 65-3.5, mandate that claims can only be delayed when verification is needed to prove the claim. Thus, plaintiff's narrow reading of the aforementioned section would frustrate this purpose.
The Court in a unanimous decision agreed with defendant's argument. Further, and more importantly, the Court agreed with defendant's position that it is improper for Courts to rely on individual sections of the regulation, without taking into consideration the entire regulation as a whole.
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