Contact Chiropractic, P.C. v. N.Y.C. Transit Auth.
| Decision Date | 01 May 2018 |
| Docket Number | No. 39,39 |
| Citation | 31 N.Y.3d 187,99 N.E.3d 867,75 N.Y.S.3d 474 |
| Parties | CONTACT CHIROPRACTIC, P.C., as Assignee of Girtha Butler, Respondent, v. NEW YORK CITY TRANSIT AUTHORITY, Appellant. |
| Court | New York Court of Appeals Court of Appeals |
Jones Jones LLC, New York City (Agnes Neiger of counsel), for appellant.
Law Office of Cohen & Jaffe, LLP, Lake Success (Tricia C. Smith of counsel), for respondent.
Zachary W. Carter, Corporation Counsel, New York City (Tahirih M. Sadrieh, Richard Dearing and Devin Slack of counsel), for City of New York, amicus curiae.
Short & Billy, P.C., New York City (Skip Short of counsel), and Greenberg Traurig, LLP, New York City (Carmen Beauchamp Ciparick of counsel), for American Transit Insurance Company, amicus curiae.
Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for Gary Tsirelman, P.C., amicus curiae.
This appeal presents the question whether the three-year statute of limitations set forth in CPLR 214(2) applies to no-fault claims against a self-insurer. We conclude that it does.
In January 2001, Girtha Butler sustained personal injuries in a motor vehicle accident involving a bus on which she was a passenger. The bus was owned by defendant, New York City Transit Authority. It did not have no-fault coverage and instead was self-insured with respect to that risk.1 Plaintiff, Contact Chiropractic, P.C., subsequently provided health services to Butler for the personal injuries she sustained in the accident. Butler assigned to plaintiff her right to recover first-party benefits from the self-insured defendant. To that end, plaintiff submitted its claims, bills, and no-fault verification forms to defendant between March 14, 2001 and August 27, 2001.
On January 8, 2007, plaintiff commenced this action seeking, among other things, reimbursement for allegedly outstanding invoices. After joining issue, defendant moved for an order to, among other things, dismiss the complaint "based on [plaintiff's] failure to commence the action within the three-year statute of limitations." Defendant contended that the three-year statute of limitations under CPLR 214(2), which applies to actions to recover upon a liability created or imposed by statute, governs this case because defendant was self-insured at the time of the subject accident and therefore had no contract for insurance with respect to that loss, as opposed to CPLR 213(2), which establishes a six-year period of limitations for an action based upon a contractual obligation or liability. Defendant relied upon authority of the Appellate Division, First Department, providing that a self-insured's "obligation to provide no-fault benefits arises out of the no-fault statute," and that "the three-year statute of limitations as set forth in CPLR 214(2)" applies to disputes with respect to the payment of such benefits by a self-insured ( M.N. Dental Diagnostics, P.C. v. New York City Tr. Auth., 82 A.D.3d 409, 410, 917 N.Y.S.2d 856 [1st Dept. 2011] ).
In opposition to the motion, plaintiff maintained that the six-year statute of limitations controls this case. For its part, plaintiff relied upon authority of the Appellate Division, Second Department, providing that an injured person's "claim for uninsured motorist benefits against a self-insured vehicle owner, while statutorily mandated, remains contractual rather than statutory in nature and, as such, is subject to the six-year statute of limitations" ( Matter of ELRAC, Inc. v. Suero, 38 A.D.3d 544, 545, 831 N.Y.S.2d 475 [2d Dept. 2007] [internal quotation marks and citations omitted], lv denied 9 N.Y.3d 811, 846 N.Y.S.2d 601, 877 N.E.2d 651 [2007] ).
Civil Court denied the motion, holding that a six-year statute of limitations applies to no-fault benefit claims against both insurers and self-insurers. The court reasoned that "[n]either self-insured nor governmental status supports a shortened statute of limitations"; in support of that point, the court noted that the Second Department has applied a six-year statute of limitations to no-fault claims, regardless of whether the prospective payor has an insurance policy or is self-insured (see Suero, 38 A.D.3d at 544, 831 N.Y.S.2d 475 ).
Defendant subsequently moved for leave to renew the motion, and the court granted renewal but adhered to the prior determination. In this order, the court acknowledged the "split of authority" in the Appellate Division with respect to this statute of limitations question, and deemed controlling the Second Department case law applying a six-year statute of limitations in cases such as this one on the ground that "no-fault matters ... are arguably contractual in nature, even when dealing with a self-insured entity such as [defendant]."
The Appellate Division granted defendant's subsequent application for leave to appeal to this Court and certified this question for our review:
"Was the decision and order of the [Appellate Division], which determined that an action to recover first-party benefits from a party which is self-insured is subject to a six-year statute of limitations, properly made?"
We now answer that question in the negative.
This case arises from the No-Fault Law, which "is aimed at ensuring 'prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists' " ( Viviane Etienne Med. Care, P.C. v. Country–Wide Ins. Co., 25 N.Y.3d 498, 504–505, 14 N.Y.S.3d 283, 35 N.E.3d 451 [2015], quoting Matter of Medical Socy. of State of N.Y. v. Serio, 100 N.Y.2d 854, 860, 768 N.Y.S.2d 423, 800 N.E.2d 728 [2003] ). We previously have recognized the complex "nature of the statutory and regulatory scheme of the No–Fault Law" ( id. at 505, 14 N.Y.S.3d 283, 35 N.E.3d 451 ), characterizing it as a "Rube–Goldberg" like maze ( Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 286, 660 N.Y.S.2d 536, 683 N.E.2d 1 [1997] ).
This matter is another illustration of the intricacy of that law.
Inasmuch as the registrant of a motor vehicle may prove "financial security" through, among other things, evidence of a "financial security bond" ( Vehicle and Traffic Law § 312 ), it follows that registration of a motor vehicle in this state is not contingent upon proof of insurance. To the extent a registrant elects to forgo insurance, the alternative form of financial security chosen (be it self-insurance under Vehicle and Traffic Law § 316 or the financial security bond referenced in section 312 ) must satisfy Insurance Law § 5103, which generally requires the payment of no-fault benefits (minimum amounts of which are specified in 11 NYCRR 65–1.1 ) and which applies its provisions to any contract for insurance that does not meet the demands of that article ( Insurance Law § 5103[h] ; see Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818, 820, 436 N.Y.S.2d 873, 418 N.E.2d 388 [1980] ).
In matters involving questions with respect to no-fault claims against insurance companies liable for no-fault benefits due to the issuance of an insurance policy, the Appellate Division has applied a six-year statute of limitations (see Travelers Indem. Co. of Connecticut v. Glenwood Med., P.C., 48 A.D.3d 319, 319, 853 N.Y.S.2d 26 [1st Dept. 2008] ; Mandarino v. Travelers Prop. Cas. Ins. Co., 37 A.D.3d 775, 776, 831 N.Y.S.2d 452 [2d Dept. 2007] ; Benson v. Boston Old Colony Ins. Co., 134 A.D.2d 214, 215, 521 N.Y.S.2d 14 [1st Dept. 1987] ; Micha v. Merchants Mut. Ins. Co., 94 A.D.2d 835, 835, 463 N.Y.S.2d 110 [3d Dept. 1983] ; see also Flatlands Acupuncture, P.C. v. Fireman's Fund Ins. Co., 32 Misc.3d 17, 18, 927 N.Y.S.2d 281 [App. Term, 2d Dept. 2011] ; Chester Med. Diagnostic, P.C. v. Kemper Cas. Ins. Co., 21 Misc.3d 1108[A], 2008 WL 4491503 at *2 [Civil Ct., Kings County 2008] [collecting Appellate Division cases] ). This dispute, however, arises from an instance in which the party responsible for the payment of no-fault benefits is self-insured and, as noted, the law is unsettled regarding what statute of limitations applies to no-fault benefit claims involving such entities.
We conclude that the three-year statute of limitations as set forth in CPLR 214(2), which governs disputes with respect to penalties created by statute, should control this case. There is no dispute "that it is the gravamen or essence of the cause of action that determines the applicable Statute of Limitations" ( Western Elec. Co. v. Brenner, 41 N.Y.2d 291, 293, 392 N.Y.S.2d 409, 360 N.E.2d 1091 [1977] ), or that a three-year...
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