The defendant, Loup Hacking Corp. has moved by Order to Show Cause, dated January 20, 2006 for an Order pursuant to CPLR §2214(d), §5019(b), §5041(a) vacating the Judgment for plaintiff - reflecting a jury verdict of $179,000 and instead entering a judgment of $129,000 on the grounds that $50,000 in Basic Economic Loss cannot be recovered through litigation under Motor Vehicles Reparation Act §5104(a). The motion to vacate the judgment is denied. Plaintiff's cross-motion to award her attorney fees for time spent responding to the defendant's motion is granted in accord with Motor Vehicles Reparation Act §5106(a), which allows recovery of reasonable attorney fees for services necessarily performed in connection with securing payment of overdue compensation for claims resulting from automobile accidents.

The defendant claims that $50,000 in Basic Economic Losses covering past and future medical expenses, may not be recovered through litigation under the New York Motor Vehicles Insurance Reparation Act, commonly known as the No-Fault Law. The statue in §5104(a) provides that a covered person' which includes a passenger in an insured vehicle, like the plaintiff here may not litigate to recover for Basic Economic Loss, defined in §5102 as up to $50,000 in medical expenses.

The Plaintiff, Anne Klaus, contends that the judgment should not be reduced because attempts to recover payment under the No-Fault Law have been repeatedly thwarted by the defendants' insurer, American Transit Insurance Company, necessitating the very action that yielded this judgment. If American Transit had ever intended to pay her medical expenses, the plaintiff argues, it would have done so in 2001 when she initially made her claim, sparing itself this litigation and the greater judgment of $179,000 that it generated.

Further, the plaintiff argues that attorney fees in the amount of $4250 should be awarded because the defendant's post-verdict motion - like its prior dealings with her when she attempted to recover medical expenses - was made in the utmost bad faith'. Motor Vehicle Reparations Act §5106 states that benefit payments must be made as the loss is incurred, and are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. Since the No-Fault Law was enacted to afford automobile accident victims prompt compensation for out-of-pocket expenses, the section also provides that if a valid claim or [*2]portion was overdue, the claimant may recover reasonable attorney fees for services necessarily performed in connection with securing payment.

On October 12, 2001, at noon, the Plaintiff Anne Klaus was a passenger in Defendant Mohammed N. Hoque's taxicab when the defendant abruptly stopped his vehicle, causing Ms. Klaus to hit her face on the partition between the passenger and the driver's seats. She sustained injuries to her lips, mouth and front teeth and was taken by ambulance to St. Vincent's Hospital, where she was advised to see a dental surgeon. Ms. Klaus subsequently met with two dentists, incurring medical expenses of approximately $25,000.

Shortly thereafter, in the same month, Mortimer Klaus, the plaintiff's father, contacted the Defendant Loup Hacking Corp. to settle his daughter's claim for the actual medical expenses incurred after the accident in the cab, approximately $25,000. He enclosed a copy of the police and hospital reports, a paid dental invoice and a color photo of the injury. He also applied for motor vehicle No-Fault benefits on his daughter's behalf with American Transit, defendant's insurer, using the standard form.

On December 12, 2001 American Transit advised him that a doctor's appointment with Dr. Lafranchi had been made to verify Ms. Klaus's claims. The next day American Transit sent another letter, arranging an additional No-Fault examination with a different doctor. On January 9, 2002, Ms. Klaus visited Dr. Lafranchi, who turned out to be a chiropractor. All chiropractic benefits were denied on the basis of this examination, although plaintiff never sought chiropractic benefits. Astonishingly, the insurer next sent her to a neurologist, which resulted in a denial of neurological benefits, even though Ms. Klaus never sought neurological benefits. American Transit had yet to send her to a dentist, although that was the only benefit she sought, but denied the plaintiff's entire claim on January 16, 2002.

The plaintiff's father attempted to correct the insurer's error in ordering chiropractic and neurological exams, but was ignored. Calls to the No-Fault Claims Examiner were not returned, so in March 2002 Mr. Klaus reached out to the New York State Insurance Department. The state agency then contacted the insurer, inquiring about the Klaus claim.

On April 8, 2002, American Transit requested five additional types of information, all of which had previously submitted by the plaintiff. Four days later, the insurer scheduled another examination and on May 9, 2002 the plaintiff visited a Dr. Esposito, who was, finally, a dentist. However, American Transit did not inform the plaintiff of the results of the exam, and on July 10, Mr. Klaus again queried the insurer. In response, on August 14 over three months after the plaintiff saw the insurer's dentist - American Transit's No-Fault Claims Examiner sent a brief handwritten note stating only that the insurer maintained its position regarding the claim. There was no explanation given for this determination and all subsequent attempts to reach American Transit failed.

On December 10, 2002, Mr. Klaus again wrote to the State Insurance Department making a formal complaint. The agency responded on March 10, 2003, including a letter from American Transit to the Department explaining that benefits were denied due to insufficient documentation but that it was willing to re-review the matter'. Mr. Klaus then renewed efforts to contact the insurer and explain that all of the proper documentation had already been submitted, again without success.

It was at this point that the plaintiff finally filed suit, now seeking compensation for her [*3]pain and suffering, as well as medical expenses. On December 19, 2005, a jury found for the plaintiff, awarding her $179,000, including $42,000 for past and $27,000 for future medical expenses.

The Motor Vehicle Insurance Reparation Act, commonly known as the No-Fault Law, was created to ensure that a automobile accident victims are compensated for substantially all economic loss promptly and without regard to fault, and to significantly reduce the number of automobile personal injury accident cases litigated in the courts, McKinney's Insurance Law §5104. Insurance Law §5104(a) provides that a covered person' which includes a passenger in an insured vehicle, like the plaintiff here has no right to recover for Basic Economic Loss through litigation, and §5102 relevantly defines Basic Economic Loss as up to $50,000 in medical expenses. This includes past and future medical expenses, Lloyd v Russo, 237 AD2d 359, 709 NYS2d 589.

The No-Fault Law limits tort recovery, insuring that there will be no duplicate compensation for basic economic loss. Thus, a finding that items of economic loss were or will with reasonable certainty be replaced or indemnified from any collateral source, requires a court to reduce the amount of any award, Condon v. Hathaway, 191 Misc 2d 235, 740 NYS 2d 600, see also Civil Practice Law and Rules §4545(c). For example, in Condon, an automobile accident case in which the driver had purchased an additional $25,000 in Basic Economic coverage, the plaintiff's recovery was reduced by $75,000 - that is by both the mandatory $50,000 Basic Economic Loss and additional optional $25,000 of coverage - because the plaintiff's past and future medical expenses were protected by the No-Fault Law and would very likely be compensated under that scheme. The Condon court vacated a jury award, despite the plaintiff's contention that No-Fault carriers routinely deny claims and that she might not recover medical expenses from the auto insurer in the future, because she had not yet attempted recovery and the No-Fault ensure prompt compensation.

In order to recover Basic Economic Loss benefits, a covered person need only connect her medical expenses to injuries sustained in the subject motor vehicle accident, McKinney's Insurance Law §5102. The Condon court wrote that, "Requiring plaintiff to make such a showing while burdensome to some degree, is a basic minimum requirement for an injured party to receive such benefits. Such a burden does not make the benefit less certain to the plaintiff." Id at 240.

However, the Motor Vehicle Reparations Act §5106 provides that benefit payments must be made as the loss is incurred, and are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount supported by proof is considered overdue if not paid within thirty days after such proof is supplied. Where an insurer fails to pay or effectively deny a claim within 30 days of receipt or seek any further verification of claim, it is liable for the no-fault medical payments requested, Westchester Medical Center v American Transit Ins. Co. 17 AD3d 581, 793 NYS 2d 489 (Not coincidentally the same defendant as in the instant case). With limited exception, an insurer is precluded from denying a No-Fault claim after 30 days, Bonetti v Integon Nat. Ins. Co., 269 AD2d 413, 703 NYS 2d 217. In fact, §5106 provides in pertinent part that if a valid claim or portion was overdue, the claimant shall also be entitled to recover reasonable attorney's fees for services necessarily performed in connection with securing payment. [*4]

The laws insists insurers respond promptly to No-Fault claims because the statute was enacted to remove delay in providing compensation for out-of-pocket losses to automobile accident victims and to lessen court case loads, and should be interpreted to accommodate such purposes, Taber v. Niagara Frontier Transit Authority, 1979, 101 Misc 2d 92, 420 N.Y.S.2d 692, affirmed 78 AD2d 775, 435 N.Y.S.2d 551, appeal denied 52 NY2d 704, 437 N.Y.S.2d 1027, 418 N.E.2d 1327. The No-Fault system is meant to encourage expeditious resolution of claims without imposing an additional burden on courts; resort to which is looked upon with disfavor where deemed not to have been necessary. Gretka v. General Acc. Group, 1979, 100 Misc 2d 170, 418 N.Y.S.2d 545.

This is precisely one of those cases. Here, the court's involvement could easily have been avoided if American Transit had responded promptly and effectively to the plaintiff's claims. Ms. Klaus immediately informed the defendant's insurer that she wished to settle for her actual medical expenses resulting from injuries sustained to her mouth, teeth and lips in an automobile accident, and submitted the appropriate paperwork. The insurer sent her to multiple specialists incapable of assessing her injuries, finally undertaking a dental examination seven months after the accident and two months after Mr. Klaus contacted the State Insurance Department for assistance. Over four years after this relatively minor accident, when her repeated attempts to recover for dental care ended in denial, Ms. Klaus finally found herself in court demanding much more than the compensation for basic dental expenses she had initially sought. Therefore, she should not be forced to attempt another recovery by re-submitting her claims yet again to American Transit after a jury has already awarded her past and future medical expenses beyond $50,000 in Basic Economic Losses.

In addition to denying the plaintiff benefits on the basis of medical examinations unrelated to her injuries, the insurer also failed to meet the thirty-day deadline required by law for the payment or effective denial of No-Fault claims when it responded to Mr. Klaus's query about Dr. Esposito's determination in April, 2002, a full three months after the dentist had examined the plaintiff. While the insurer did seek additional information from the plaintiff's dentist in April 2002, it did not inform Ms. Klaus that her claim had been denied due to insufficient documentation when she was again rejected in August 2002. It was not until March 2003, when the State Insurance Department contacted American Transit regarding the Klaus claim, that plaintiff discovered the ostensible reason for the latest denial of her benefits: insufficient documentation.

Although the insurer may technically claim that plaintiff's request had already been denied and it no longer needed to comply with the 30-day payment or denial rule, it is quite apparent that the insurer did not observe the rule at any point. Whether roadblocks were deliberately placed in plaintiff's way to frustrate her purpose and discourage additional efforts at recovery or were just the result of insurer's ineptitude, American Transit's awkward handling of this claim thus far is a strong indication that further accommodation to the defendant's wishes will only generate more frustration and litigation. This is in direct contradiction with the policy behind the promulgation of the No-Fault Law.

Here, unlike in Condon where the plaintiff had yet to attempt to recover for her medical expenses, Ms. Klaus has already tried repeatedly to gain compensation from American Transit for her out-of-pocket losses. The insurer has imposed a substantial burden on Ms. Klaus and the [*5]courts and the defendant's request to reduce the judgment by $50,000 on the grounds that plaintiff's medical expenses fall under Basic Economic Loss barred from litigation is denied because the insurance company has flouted the very rule in which it now seeks refuge. If American Transit had responded in a timely and effective fashion to the plaintiff's claim, doing its part to implement the No-Fault Law, only $25,000 in expenses may have settled this matter and avoided all this unnecessary litigation.

Returning to the ring for yet another round, the defendant's most recent move to reduce the judgment forced the plaintiff to fight for compensation for her medical expenses anew. Thus, the plaintiff's request for reasonable attorney fees is granted under Insurance Law §5106(a), which provides that when a valid claim or portion of benefits is overdue, the claimant is entitled to recover for his attorney's reasonable fee for services necessarily performed in connection with securing payment of the overdue claim. Here, the jury initially found that the plaintiff was entitled to more than $50,000 in past and future medical expenses, yet her attorney was required to spend additional time researching the law responding to a motion to reduce the judgment because the defendant is unwilling to finally resolve this matter. Reasonable attorney fees are warranted here, on the ground that responding to the defendant's post-verdict motion to reduce the judgment by $50,000 of past and future medical expenses was essentially time spent attempting to recover Basic Economic Losses, as per Insurance Law §5106(a). Thus, the plaintiff's attorney is awarded $4,250.00 for ten hours of work at his usual rate of $425 per hour.

American Transit has already blocked plaintiff's efforts to be compensated for medical expenses under No-Fault Law, ;3858;3858necessitating this action. Forcing her to attempt further recovery after repeated bogus and delayed denials is not in the interest of justice and contradicts the policy behind the No-Fault Law. Thus, the jury award of $179,000 will remain undisturbed. It is altogether just and proper.

This constitutes the decision and order of the court.

DATED: March 17, 2006

SO ORDERED

JOHN E.H. STACKHOUSE