Contact Chiropractic, P.C., as Assignee of Girtha Butler, Respondent,v.New York City Transit Authority, Appellant.BriefN.Y.March 21, 2018APL-2016-00111 To be Argued by: AGNES NEIGER (Time Requested: 15 Minutes) J»upntm G4ntrt nf t}J~ J»lah nf N~w turk 1\pp.ellate iiuininu - ~.ecnub i.epurtm.eut ------~~~------- CONTACT CHIROPRACTIC, P.C. as assignee of GIRTHA BUTLER, Docket Nos.: 2014-05446 2014-05448 P laintijf-Respondent, -against- NEW YORK CITY TRANSIT AUTHORITY, Defendant-Appellant. BRIEF FOR DEFENDANT -APPELLANT JONES JONES LLC Attorneys for Defendant-Appellant 5 Hanover Square, Suite 1001 New York, New York 10004 (212) 776-1808 Queens County Clerk's Index No.: 03291/2007 APPELLATE INNOVATIONS (91 4) 948-2240 ~ ,. ,. Printed on Recycled Paper 8423 STATEMENT PURSUANT TO CPLR 5531 &upntttt Grnurt nf t}J~ &lah nf -~w lurk Apprllutr IHutntnu - §rrnub llrpurtmrut ------~~~------ CONTACT CHIROPRACTIC, P.C. as assignee of GIRTHA BUTLER, Plaintiff-Respondent, -against- NEW YORK CITY TRANSIT AUTHORITY, Defendant-Appellant. 1. The Index Number in the Court below is 3291/2007. 2. The names of the original parties are as set forth above. There has been no change in the names of the parties. 3. The action was commenced in the Civil Court of the City ofNew York, County of Queens. 4. The action was commenced on January 5, 2007. The Summons and Complaint were personally served upon the Defendant on January 8, 2007. Issue was joined on January 25,2007. 5. The nature and object of the action is to recover payment ofNo-Fault benefits in the form of unpaid medical bills, statutory interest and statutory attorney's fees pursuant to Article 51 of the Insurance Law. 6. This appeal is from the Order of the Appellate Term, Second Department (Hon. Michael L. Pesce, Hon. Michelle Weston, Hon. Jaime A. Rios), entered December 3, 2013, which affirmed an Order ofthe Civil Court ofthe City ofNew York, County of Queens (Hon. Richard G. Latin, JCC), entered on July 27, 2011. 7. The appeal is being perfected on a full reproduced record. TABLE OF CONTENTS TABLE OF AUTHORITIES ...................................................... .ii QUESTIONS PRESENTED ....................................................... 1 STATEMENT OF FACTS ......................................................... ! ARGUMENT I. Overview ......................................................... 3 II. Application of the three-year statute of limitations to the instant action is supported · by Court of Appeals authority ........................................................ 5 III. The Appellate Division has held that a three-year statute of limitations is applicable to No-Fault actions against self-insurers .................................................... 7 IV. No-Fault coverage is statutory, not "contractual in nature" .......................................................... 9 V. A comparison between the obligations of insurers and self-insurers under the No-Fault law is irrelevant to the issue of the appropriate statute of limitations ............ 13 CONCLUSION ...................................................................... l7 1 TABLE OF AUTHORITIES CASES Acupuncture Works, P.C. v. MV AIC, 27 Misc.3d 131(A) (App. Term, 2nd Dept. 2010) ..................................... 12 Aetna Life and Cas. Co. v. Nelson, 67 N.Y.2d 169 (1986) ... 6, 7, 10, 11, 12 Boulevard Multispec Medical, P.C. v. MV AIC, 19 Misc.3d 138(A) (App. Term, 2nd Dept. 2008) ......................................... .12 Bulova Watch Co., Inc. v. Celotex Corp., 46 N.Y.2d 606 (1979) ... 5, 11, 16 Hartnett v. New York City Transit Authority, 86 N.Y.2d 438 (1995) ................................... 5, 6, 11, 15 Mandarino v. Traveler's Prop. Cas. Ins. Co., 37 A.D.3d 775 (2nd Dept. 2007) ................. · ................. 16 Matter ofDaimmler Chrysler Corp. v. Spitzer, 6 Misc.3d 228 (Sup. Ct. Albany 2004 ) ......................................... 8 Matter ofElrac, Inc. v. Exum, 18 N.Y.3d 325 (2011) .............. 11, 12 Matter ofELRAC, Inc. v. Suero, 38 A.D.3d 544 (2nd Dept. 2007) .. 9, 11, 12 Matter of Manhattan and Bronx Surface Transit Operating Auth. · nd v. Evans, 95 A.D.2d 470 (2 Dept. 1983) .......................... 14 M.N Dental Diagnostics, P.C. v. New York City Trans. Auth., 82 A.D.3d 409 (1st Dept. 2011) ................................. 7, 8 Mountain View Coach Lines v. Storms, 102 A.D.2d 663 (2nd Dept. 1984 ) ............................................... 9 MV AIC v. Aetna Cas. & Sur. Co., 89 N.Y.2d 214 (1996) ........... 10, 12 Richard Denise, M.D., P.C. v. New York City Trans. Auth., 96 AD3d 561 (1st Dept., 2012) .................................... 8 11 Sheridan v. Tucker, 145 A.D.145, 147 (4th Dept. 1911) ................ 9 Shtarkman v. MV AIC, 20 Misc.3d 132(A) (App. Term, 2nd Dept. 2008) .. 12 Stracar Med.Svcs., P.C. v. MV AIC, 10 Misc.3d 1056(A) (Civ. Ct., Kings 2005) ......................................... 12 Universal Acup. Pain Svcs., P.C. v. MV AIC, 13 Misc.3d 1244(A) (Dist. Ct., Nassau 2006) ....................................... 12 STATUTES AND REGULATIONS 11 NYCRR 65-1 .............................................. 14 11 NYCRR 65-2 .............................................. 14 CPLR § 213(2) .......................................... 1, 10, 12 CPLR § 214(2) .................................. 1, 4, 5, 6, 7, 10, 12 CPLR § 214(4) ............................................... 14 CPLR § 214(5) ............................................... 14 Gen. Mun. Law§ 50-i(1) ....................................... 14 Ins. Law§ 5103 ....................................... 1, 3, 14, 16 Public Authorities Law§ 1215 ................................... 15 Vehicle and Traffic Law§ 321 (1) ................................ 15 Vehicle and Traffic Law § 321 (2) ................................ 15 111 QUESTIONS PRESENTED 1. Question: Did the trial court err in denying the Defendant-Appellant's motion to dismiss? Lower Court's Answer: No. 2. Question: Did the Appellate Term err in affirming the lower court's order denying Defendant-Appellant's motion seeking dismissal. Lower Court's Answer: N/A. 3. Question: Is a self-insurer's obligation to provide No-Fault benefits created and/or imposed by statute as opposed to contractual in nature? Lower Court's Answer: No. 4. Question: Is the within action for recovery of No-Fault benefits governed by the three-year limitation period set forth in CPLR § 214(2) or the six-year limitation period set forth in CPLR § 213(2)? Lower Court's Answer: The six-year limitation period applies. STATEMENT OF FACTS This is an action for recovery of No-Fault benefits pursuant to Insurance Law § 5103. The Plaintiff-Respondent herein seeks to recover $1,503.40, plus interest, attorney's fees and filing fees, for services provided from January 11, 2001 through August 23, 2001. [46-47] The action was commenced on January 5, 2007. [45] The Complaint includes an allegation that the claims at issue were submitted to the 1 Defendant-Appellant between March 14, 2001 and August 27, 2001, thereby establishing that the relevant causes of action accrued between April 19, 2001 and October 2, 2001, more than three years prior to the commencement of this action. [ 4 7] In March, 2007, the Defendant-Appellant served and filed a motion seeking dismissal based on the Plaintiff-Respondent's failure to commence the action within the three-year statute of limitations. [31-92] In an order dated December 4, 2007 the Civil Court, Queens County denied said motion. At that time, there was no appellate case law directly on point. In denying the Defendant-Appellant'.s motion, the civil court relied on case law addressing the statute of limitations in uninsured motorist actions, which it found to be analogous to the issues in this action. [24-25] On March 1, 2011, the Appellate Division, First Department rendered a decision directly addressing the question of whether No-Fault actions against self-insured entities such as the New York City Transit Authority are subject to a three-year or a six-year statute of limitations. The Appellate Division held that such actions are subject to the three-year statute of limitations applicable to causes of action arising from liabilities created or imposed by statute. Based on the above-referenced decision of the Appellate Division, First Department, the Defendant-Appellant moved on June 24, 2011 to renew its prior motion for dismissal. [16-125] In an order dated July 27, 2011, renewal was granted, but upon renewal the Civil Court adhered to its prior order denying the Defendant-Appellant's 2 motion to dismiss. [5] Defendant-Appellant appealed said order and the Appellate Term affirmed. [9-12] Upon motion of Defendant-Appellant, the Appellate Term granted leave to appeal to this Court. [ 15] Defendant-Appellant now appeals the order of the Appellate Term, which affirmed the lower court's order denying Defendant-Appellant's motion for dismissal of the within complaint as time-barred. ARGUMENT OVERVIEW The instant action seeks reimbursement of No-Fault benefits for medical services provided by the Plaintiff-Respondent to its assignor. It is undisputed that the Defendant- Appellant, New York City Transit Authority is a self-insurer required under Insurance Law§ 5103 to provide No-Fault coverage to eligible injured persons injured as a result of the use or operation of a Transit Authority vehicle. As a self-insurer, the New York City Transit Authority does not write insurance policies or otherwise enter int~ insurance contracts with its passengers. Thus, the Transit Authority's obligation to provide No- Fault benefits to the Plaintiff-Respondent's assignor would not exist but for the provisions of the Vehicle and Traffic Law, Insurance Law § 5103, and the No-Fault Regulations. 3 It is also undisputed that the causes of action at issue herein accrued more than thre.e years, but fewer than six year, prior to the commencement of this lawsuit. Therefore, the sole issue presently before this Court is whether the instant action is governed by a three-year statute of limitations or a six-year statute of limitations. The Civil Court determined that the six-year statute of limitations applicable to actions arising from breach of contract governs the within action, as opposed to the three- year statute of limitations applicable to liabilities created or imposed by statute, as argued by Defendant-Appellant. The Appellate Term affirmed, albeit based on slightly different reasoning than the lower court. Both the Civil Court and the Appellate Term erred in applying a six-year statute of limitations. In doing so, both courts misapplied prior precedent and relied on inapplicable case law. As a result, their holdings are in direct conflict with the plain language of the relevant statutes, as well as precedent established by the Court of Appeals and Appellate Division, First Department. The Appellate Division, First Department is the highest court that has addressed the exact issue raised by this appeal and has held that the three-year statute of limitations set forth in CPLR § 214(2) is applicable to No-Fault actions against self-insured entities. There is no other Appellate Division or Court of Appeals case law directly on point. However, the First Department precedent is consistent with Court of Appeals decisions addressing the nature of No-Fault law and the proper application of CPLR § 214(2). As 4 such, the lower courts should have applied a three-year statute of limitations to the instant action and dismissed the complaint accordingly. APPLICATION OF THE THREE-YEAR STATUTE OF LIMITATIONS TO THE INSTANT ACTION IS SUPPORTED BY COURT OF APPEALS AUTHORITY Although the Court of Appeals has not directly addressed the issue of the statute of limitations applicable to No-Fault actions against self-insurers, the high court has established guidelines for the application of the three-year statute of limitations set forth in CPLR § 214(2) and has set precedent identifying No-Fault coverage as the type of obligation governed by said three-year limitation period. In determining the statute of limitations applicable to a particular cause of action, "it is necessary to examine the substance of that action to identify the relationship out of which the claim arises and the relief sought." Hartnett v. New York City Transit Authority, 86 N.Y.2d 438, 443-444 (1995). Similarly, in Bulova Watch Co., Inc. ·v. Celotex Corp., 46 N.Y.2d 606 (1979), the Court of Appeals stated that in order to determine the applicable statute of limitations "we must look to the form of the remedy sought." Here, it is undisputed that neither an express nor an implied contract existed between the Defendant-Appellant and the Plaintiff-Respondent or the Plaintiff- Respondent's assignor. It is therefore clear that there is no "relationship" between the parties out of which the liability arises. Furthermore, the remedy sought is statutory rather 5 than contractual. As the Transit Authority has not contracted with the Plaintiff- Respondent or its assignor for the provision of No-Fault insurance, or insurance of any kind, the remedy sought cannot be considered contractual. Rather, the Plaintiff- Respondent seeks to recover benefits which the Transit Authority is required to provide pursuant to the Insurance Law and No-Fault regulations. Thus, the "form of the remedy sought" is statutory, not contractual. In Hartnett v. New York City Transit Authority, supra, the Court of Appeals established the standard for determining the applicability of the CPLR § 214(2) three- year limitation, holding that "(l]t is settled that in determining the applicability of CPLR 214(2), the pertinent inquiry is whether the statute creates a liability 'for wrongs not recognized in the common or decisional law,' and which would not exist but for the statute. (Citations omitted)" Hartnett v. New York City Transit Authority, supra. In Aetna Life and Cas. Co. v. Nelson, 67 N.Y.2d 169 (1986), the Court of Appeals stated that "the No-Fault Law does not codify common-law principles; it creates new and independent statutory rights and obligations in order to provide a more efficient means for adjusting financial responsibilities arising out of automobile accidents." Id. at 175. The language used by the Court of Appeals in Hartnett to identify the types of claims subject to the three-year limitation period set forth in CPLR 214(2), is virtually identical to that used by the Court in Aetna Life and Cas. Co. v. Nelson, supra, to describe the nature of No-Fault coverage. It is therefore clear that No-Fault coverage is 6 fundamentally the type of obligation to which CPLR 214(2) applies. Therefore, Defendant-Appellant's motion to dismiss should have been granted. THE APPELLATE DIVISION HAS HELD THAT A THREE-YEAR STATUTE OF LIMITATIONS IS APPLICABLE TO NO-FAULT ACTIONS AGAINST SELF -INSURERS As noted above, the Appellate Division, First Department is the highest court to directly address the issue presently before this Court, to wit, whether a No-Fault action against a self-insurer is subject to a six-year or a three-year statute of limitations. In applying a three-year statute of limitations, the First Department applied the above- referenced principles established by the Court of Appeals to circumstances virtually identical to the within action, stating: It is well settled that "the No-Fault Law does not codify common-law principles; it creates new and independent statutory rights and obligations in order to provide a more efficient means for adjusting financial responsibilities arising out of automobile accidents" (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175[1986]). Since it is undisputed that there existed no contract between plaintiffs assignor and the NYCTA, the common carrier's obligation to provide no-fault benefits arises out of the no-fault statute. Therefore, the three-year statute of limitations set forth in CPLR 214(2) is applicable here. M.N. Dental Diagnostics, P.C. v. New York City Trans. Auth., 82 AD3d 409, 410 (1st Dept. 2011). Based on the above reasoning, the Appellate Division in M.N. Dental Diagnostics, P.C. v. New York City Trans. Auth., id, unanimously reversed the Order of the New 7 York City Civil Court, Bronx County which had denied defendant's motion for dismissal, and ordered defendant's motion granted and the complaint dismissed. Jd. The First Department thereafter reiterated its position on the issue in Richard Denise, M.D., P.C. v. New York City Trans. Auth., 96 AD3d 561 (1st Dept., 2012), wherein it again applied the three-year statute of limitations to a No-Fault action against the New York City Transit Authority. Here, as in M.N Dental, the plaintiff medical provider, proceeding as assignee of a No-Fault claimant, sought benefits from the New York City Transit Authority for medical services allegedly provided to its assignor and it is undisputed that there was no contractual relationship between the Defendant-Appellant and either the plaintiff or its assignor. It is similarly undisputed that the within lawsuit was commenced more than three-years after accrual of the relevant cause of action. Based on the foregoing, it is clear that the fact pattern and legal issues in M.N. Dental Diagnostics, P.C. v. New York City Trans. Auth., supra, and Richard Denise, M.D., P.C. v. New York City Trans. Auth., supra, are directly on point with those in the instant action. Though not binding on this Court, the decisions of the Appellate Term, First Department, are "entitled to respectful consideration." Matter of Daimmler Chrysler Corp. v. Spitzer, 6 Misc.3d 228 (Sup. Ct. Albany 2004). 8 As stated by the Appellate Division, Fourth Department "[t]hat uniformity of decision in this court may be fostered, if for no other reason, this branch of the court should, even in a doubtful case, accept as controlling the previous unanimous decision in another department, which is not otherwise authoritatively questioned." Sheridan v. Tucker, 145 A.D.145, 147 (4th Dept. 1911). Much more recently, this Court reiterated that, although not bound by them, it "should accept the decisions of sister departments as persuasive." Mountain View Coach Lines v Storms, 102 A.D.2d 663 (2nd Dept., 1984). In the instant action, as the above-cited First Department precedent is the only Appellate Division authority directly addressing the issue, and in light of the fact that said authority is consistent with precedent established by the Court of Appeals, as discussed above, said decisions should be given substantial consideration. NO-FAULT COVERAGE IS STATUTORY, NOT "CONTRACTUAL IN NATURE" The lower court's denial of the Defendant-Appellant's motion is based on the reasoning that, though no contract existed between the Defendant-Appellant and the Plaintiff-Respondent or its assignor, No-Fault coverage is contractual in nature and therefore subject to the six-year limitation. However, this reasoning incorrectly relied on Appellate Division case law applicable to uninsured motorist coverage (see, ELRAC, Inc. v. Suero, 38 A.D.3d 544, 831 N.Y.S.2d 475 [2nd Dept. 2007]), not No-Fault coverage, and is in direct conflict with precedent from the Court of Appeals, which clearly indicates 9 that the obligation to provide No-Fault coverage is statutory in nature. (see, Aetna Life and Cas. Co. v. Nelson, supra; MVAIC v. Aetna Cas. & Sur. Co., 89 N.Y.2d 214 [1996].) Initially, it should be noted that the lower court's original order denying the Defendant-Appellant's motion, wherein the Court stated that "[n]either self-insured nor governmental status supports a shortened statute of limitations" [24], implicitly proceeds from the assumption that the default statute of limitations for No-Fault actions is six years, and the within Defendant-Appellant's motion essentially sought an exception to such limitations period. Said assumption is incorrect. Neither the No-Fault law, nor the implementing regulations establish a statute of limitations specifically applicable to No- Fault actions. As such, the applicable statute of limitations is governed by Article 2 ofthe CPLR. CPLR § 214(2) clearly establishes that a three-year statute of limitations must be applied to actions arising out of a liability created or imposed by statute whereas CPLR § 213(2) provides for a six-year statute of limitations on an action based on a breach of contract, whether such contract be written or implied. Thus, the Defendant-Appellant does not seek an exception to an established statute of limitations based on its status as a self-insurer. Rather, it seeks proper application of CPLR § 214(2) to the instant action. As set forth above, the pertinent question with regard to the applicability of CPLR § 214(2) is the nature of the relief sought and the 10 relationship out of which the claim anses. See, Hartnett v. New York City Transit Authority, supra; Bulova Watch Co., Inc. v. Celotex Corp., supra. Pursuant to Hartnett and Bulova, the relevant question before the court is whether a self-insurer's obligation to provide No-Fault benefits is "a liability created or imposed by statute". The lower court incorrectly relied upon ELRAC, Inc. v. Suero, supra, in determining that the Defendant-Appellant's liability in the instant action is not imposed by statute but is "contractual rather than statutory in nature". ELRAC, Inc. v. Suero, supra, is inapplicable to the issue presently before the Court, as it addresses claims for Uninsured Motorist benefits, not claims filed under the No-Fault law. Moreover, application of the principles set forth in ELRAC, Inc. v. Suero to No-Fault actions is in conflict with case law established by the Court of Appeals. While the Appellate Division's decision in ELRAC, Inc. v. Suero is consistent with the Court of Appeals' position with respect to liability under Uninsured Motorist law (see, Matter of Elrac, Inc. v. Exum, 18 N.Y.3d 325 [2011], finding a self-insured employer's obligation to provide UM coverage to its employee "essentially contractual"), it is decidedly inconsistent with the relevant Court of Appeals precedent addressing the No-Fault law. As set forth above, the Court of Appeals has very clearly established the No-Fault law as a system of "new and independent statutory rights and obligations" Aetna Life and Cas. Co. v. Nelson, supra 11 Thus, the Court of Appeals has drawn a clear distinction between Uninsured Motorist coverage, which it regards as "essentially contractual" as set forth in Matter of Elrac, Inc. v. Exum, supra, and No-Fault coverage, which it recognizes as a system of "statutory rights and obligations" as per Aetna Life and Cas. Co. v. Nelson, supra. Therefore, application of the precedent established in the context of Uninsured Motorist law in Elrac, Inc. v. Suero, supra, to the instant No-Fault action, is improper and in direct conflict with the above-referenced Court of Appeals precedent. Notably, it is well-settled that actions for the recovery of No-Fault benefits from the Motor Vehicle Accident Indemnification Corporation (MVAIC) are subject to the three-year statute of limitations set forth in CPLR § 214(2). See, MV AIC v. Aetna Cas. & Sur. Co., supra, Acupuncture Works, P.C. v. MVAIC, 27 Misc.3d 131(A) (App. Term, 2nd Dept. 2010); Shtarkman v. MV AIC, 20 Misc.3d 132(A) (App. Term, 2nd Dept. 2008); Boulevard Multispec Medical, P.C. v. MV AIC, 19 Misc.3d 138(A) (App. Term, 2nd Dept. 2008); Stracar Med.Svcs., P.C. v. MV AIC, 10 Misc.3d 1056(A) (Civ. Ct., Kings 2005); Universal Acup. Pain Svcs., P.C. v. MV AIC, 13 Misc.3d 1244(A) (Dist. Ct., Nassau 2006). It is therefore clear that the obligation to provide No-Fault coverage is not in and of itself "contractual in nature" as held by the Civil Court in its order denying Defendant- Appellant's motion. Otherwise No-Fault actions against MV AIC would have to be subject to the six-year statute of limitations established by CPLR § 213(2). To the 12 contrary, as indicated above, it is well-settled, based on the fact that there is no contractual relationship between MV AIC and its claimants and MV AIC's obligation to provide No-Fault benefits would not exist but for statute, that No-Fault actions against MV AIC are subject to a three-year statute of limitations. The New York City Transit Authority likewise has no contractual relationship with claimants seeking No-Fault benefits and its obligation to provide No-Fault coverage to eligible injured persons is imposed solely by statute. As such, there is no appreciable difference between the Transit Authority and MV AIC with respect to the applicable statute of limitations in No-Fault actions, and the three-year statute of limitations clearly applies to the Transit Authority as it does to MV AIC. A COMPARISON BETWEEN THE OBLIGATIONS OF INSURERS AND SELF- INSURERS UNDER THE NO-FAULT LAW IS IRRELEVANT TO THE ISSUE OF THE APPROPRIATE STATUTE OF LIMITATIONS The Appellate Term affirmed the lower court's order denying Defendant- Appellant's motion, but in doing so, relied on different reasoning than the lower court. Whereas the lower court found that No-Fault coverage is "contractual in nature" and therefore subject to a six-year statute of limitations, the Appellate Term reasoned that because insurers and self-insurers are equally liable for the provision of No-Fault coverage, they must also be subject to the same statute of limitations for disputes arising out of the failure to provide such benefits. [11] However, this reasoning fails to recognize the fact that the extent of a party's liabilities and/or substantive obligations has no bearing 13 on the applicable statute of limitations, which is a procedural tool designed to protect defendants from prosecution of stale claims. · While the relevant law clearly establishes that a self-insurer such as the Defendant- Appellant bears a liability virtually identical to that of an insurer who provides coverage under a policy containing the mandatory No-Fault endorsement (see, Ins. Law§ 5103,11 NYCRR 65-1, and llNYCRR 65-2), there is no precedential support for the court's determination that such equal liability necessa~ily results in an equal statute of limitations. This principle is illustrated by the fact that, though a municipality's liability for personal injury and property damage arising from negligence is no different than that of . . any individual or corporation, such claims against municipalities are subject to a one year and ninety day limitation period pursuant to Gen. Mun. La~ § 50-i(1) while identical claims against private citizens and corporations are subject to a three-year statute of limitations pursuant to CPLR § 214( 4) and CPLR § 214(5). Thus, it is clear that the Appellate Term's reliance on Matter of Manhattan and Bronx Surface Tr. Operating Auth. v. Evans, 95 A.D.2d 470 (2nd Dept. 1983) is misplaced, as the key question with respect to the applicable statute of limitations is not the extent of the defendant's liability, but the source of the liability. In that regard, No- Fault insurers and self-insurers are distinctly different. 14 In this instance, the Defendant-Appellant's obligation to provide No-Fault coverage to the. Plaintiff-Respondent's assignor is imposed entirely by statute. Specifically, Vehicle and Traffic Law § 321 (1) and Public Authorities Law § 1215 exempt the Transit Authority from compliance with Article 6 of the Vehicle and Traffic Law, which mandates that all vehicle registrants maintain proof of financial security in the form of either insurance coverage or a bond. However, Vehicle and Traffic Law § 321 (2) provides that the Transit Authority is nevertheless "subject to the provisions of article fifty-one of the insurance law". Thus, despite the fact that it has not contracted to provide insurance coverage, the Transit Authority is required, by operation of the above- referenced statutes, to provide No-Fault coverage to eligible injured persons. Thus, with respect No-Fault coverage, absent the provisions of Vehicle and Traffic Law § 321 (2), the within Defendant-Appellant would be nothing more than an uninsured vehicle owner. In other words, the Transit Authority's obligation to provide No-Fault coverage would not exist but for the provisions of Vehicle and Traffic Law § 321 (2). This is distinctly different from insurers. Although the terms of the PIP endorsement may be statutorily mandated, an insurer is not statutorily obligated to provide coverage to any particular person or vehicle. Rather, that obligation arises from, and would not exist but for, the issuance of a contractual insurance policy. As set forth above, determination ofthe applicable statute of limitations is based on "the relationship out of which the claim arises and the relief sought" (Hartnett v. New 15 York City Transit Authority, supra) and "the form of the remedy sought.'' (Bulova Watch Co., Inc. v. Celotex Corp., supra). Here, it is undisputed that neither an express nor an implied contract existed between the Defendant-Appellant and the Plaintiff-Respondent or the Plaintiff- Respondent's assignor. It is therefore clear that there is no "relationship" between the parties out of which the liability arises. Furthermore, the remedy sought is statutory rather than contractual. As the Transit Authority has not contracted with the Plaintiff- Respondent or its assignor for the provision of No-Fault insurance, or insurance of any kind, the remedy sought cannot be considered contractual. Rather, the Plaintiff- Respondent seeks to recover benefits which the Transit Authority is required to provide pursuant to the Insurance Law and No-Fault regulations. Thus, the "form of the remedy sought" is statutory, not contractual. In short, the Transit Authority's obligation to provide No-Fault coverage to the within assignor would not exist but for the provisions of Vehicle and Traffic Law§ 321 (2) and Insurance Law§ 5103. Finally, the Appellate Term's reliance on Mandarino v. Traveler's Prop. Cas. Ins. Co., 37 A.D.3d 775 (2nd Dept. 2007) is misplaced. Mandarino involved a No-Fault claim by an insured against an insurance company. As such, the defendant's obligation to provide coverage in that case arose from an insurance contract. Nevertheless, the insurer argued that a three-year statute of limitations should apply because the PIP endorsement of the policy was statutorily mandated. Thus, the court addressed the question of the 16 applicable statute of limitations when an obligation is based upon both a contractual obligation and an obligation imposed by statute, finding that under such circumstances, the six-year limitations period applies because the statutory requirements were incorporated into a contract. The instant action is clearly distinguishable as it is undisputed that there is no contractual relationship between the parties. Based on the foregoing, the Appellate Term erred in affirming the lower court's order denying Defendant-Appellant's motion based on the determination that a six-year statute of limitations applies to the instant action. CONCLUSION Application of a three-year limitation period to the within action is consistent with Court of Appeals precedent. In contrast, application of a six-year statute of limitations would be in direct conflict with the relevant statutes and well-settled principles established by the Court of Appeals. The Appellate Division, First Department is the highest court to directly address the legal issues presently before this Court. In finding No-Fault actions against self- insurers subject to a three-year statute of limitations the First Department carefully considered and properly applied precedent established by the Court of Appeals. Although not binding on this Court, the First Department's decision is entitled to due consideration and deference. 17 The trial court erred in applying a six-year statute of limitations based on its finding that the dispute is "contractual in nature" despite the undisputed fact that there is no contractual relationship between the parties. The Appellate Term likewise erred in affirming the lower court's order based on the determination that because insurers and self-insurers are subject to the same liability under the No-Fault law they must also be subject to the same statute of limitations. Based on all of the foregoing, the order appealed from must be reversed and the instant action dismissed as time-barred. Dated: To: New York, New York September 18, 2014 Jones Jones LLC Attorneys for New York City Transit Authority 5 Hanover Square, Suite 1 00 1 New York, New York 10004 (212) 776-1808 File#: 1-1863 Law Office of Cohen & Jaffe LLP 2001 Marcus Avenue, Suite W295 Lake Success, NY 11042 18 CERTIFICATE OF COMPLIANCE PURSUANT TO 22 NYCRR § 670.10.3(f) The foregoing brief was prepared on a computer. A proportionally spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 Line spacing: Double The total number of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service, certificate of compliance, or any authorized addendum containing statutes, rules, regulations, etc., is 4, 131. Dated: New York, New York September 18, 2014 Agnes Neiger, Esq 19