Contact Chiropractic, P.C., as Assignee of Girtha Butler, Respondent,v.New York City Transit Authority, Appellant.BriefN.Y.March 21, 2018 APL-2016-00111 To be Argued by: AARoN J. PERRETTA TIME REQUESTED: 15 MINUTES §upreme Qlnurt nf tije §tate nf Nem I nrk APPELLATE DMSION-SECOND DEPARTMENT CONTACT CHIROPRACTIC, P.C., --------~-a.~o't'r-a;:s~ ignee of GIRTHA BUTLER, r - OCI 2 9 2.0\4 Jones Jone& llC .J -against- Plaintiff-Respondent, 2014-05446 2014-05448 NEWYORKCITYTRANSITAUTHORITY, Defendant-Appellant. BRIEF FOR PLAINTIFF-RESPONDENT LAw OFFICE oF CoHEN & JAFFE, LLP Attorneys for Plaintiff-Respondent 2001 Marcus Avenue, W 295 Lake Success, New York 11042 (516) 358-6900 AARoN J. PERRETTA of Counsel Queens County Clerk's Index No. 03291/07 Press of Fremont Payne, Inc. · 55 Broad Street, Third Floor, New York, NY 10004 · (212) 966-6570 TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. 111-IV QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 COUNTER-STATEMENTOFTHEFACTS ................................. 2-4 PRELIMINARY STATEMENT................................................ 5 ARGUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-27 I. THE SECOND DEPARTMENT CONSISTENTLY HOLDS THAT SELF-INSURED ENTITIES, INCLUDING APPELLANT SPECIFICALLY, ARE SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS................ 6-19 A. The Lower Court Correctly Held That Pursuant to Elrac v. Suero, Matters Arguably Contractual in Nature With Self-Insured Entities Warrant the Imposition of a Six-Year Statute of Limitations............... 6-14 B. The Appellate Term Correctly Affirmed The Lower Court's Order, Pursuant to Matter of Manhattan & Bronx Surface Tr. Operating Auth. v. Evans And Mandarino v. Travelers, Holding There is No Legislative Intent to Confer a Lesser Duty on a Self-Insured Public Carrier........................... 15-19 1 II. APPELLANT'S ARGUMENTS AND RELIANCE UPON FIRST DEPARTMENT CASE LAW IS MISGUIDED . . . . . . . . . . . . . . . 20-27 A. Appellant's Brief Does Not Discuss VTL § 370 In Any Context......................................... 20 B. Appellant's Attempts to Liken Itself to MVAIC is Misplaced..................................... 21-23 C. The First Department Fails to Consider Issues and Statutes Germaine to The Application of the Statute of Limitations to Appellant........................ 24-27 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 11 TABLE OF AUTHORITIES CASES Acupuncture Works, P.C. v. MV AIC, 27 Misc. 131(A) (App. Term, 2nd Dept. 2010) ............ ........ ...... .... .. .... 22 Aetna Life and Cas. Co. v. Nelson, 67 N.Y.2d 169 (1986) .. .. .. .. .. .. .. .. .. .. .. .. .. .... .. .. .. .. .. .. .. .. .. 10, 11, 13, 25, 26 Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818 (1980) ............................................................ 7, 8, 20 Application of Country-Wide Ins. Co., 464 N.Y.S.2d 786 (App. Div., 1st Dept. 1983) ....................................... 7 Boulevard Multispec Med. P.C., v. MVAIC, 19 Misc. 3d 138(A) (App. Term, 2nd Dept. 2008).......................... ... 22, 23 Bulova Watch Co., Inc. v. Celotex Corp., 46 N.Y.2d 606 (1979) ................................................................... 14 Contact Chiropractic, P.C. v. New York City Transit Authority, 42 Misc. 3d 60 (App. Term, 2nd Dept, 11th & 13th Jud. Dists. 2013) ............ 3 Hartnett v. New York City Transit Authority, 86 N.Y.2d 438 (1995) .. .. .. .. .... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ... 14 Mandarino v. Traveler's Prop. Cas. Inc. Co., 37 A.D.3d 775 (App. Div., 2nd Dept. 2007) .... .... 1, 3, 10-12, 14, 15, 17, 18, 26 Matter ofElrac, Inc., v. Exum, 18 N.Y.3d 325 (2011) ............................................................... 7, 8, 20 111 Matter of ELRAC, Inc., v. Suero, 38 A.D.3d 544 (App. Div., 2nd Dept. 2007) ........................... 1, 2, 6-10, 14, 26 Matter of Manhattan & Bronx Surface Tr. Operating Auth. v. Evans, 95 A.D.2d 470 (App. Div., 2nd Dept. 1983) ....................... 1, 3, 15, 16, 20, 26 M.N. Dental Diagnostics, P.C. v. New York City Transit Authority, 82 A.D.3d 409 (App. Div., 1st Dept. 2011) ................................ 2, 6, 24-26 MV AIC v. Aetna Cas. & Sur. Co., 89 N.Y.2d 214 (1996) ............ ...... ...... ............................. 10, 11, 13, 22 New York City Transit Auth. v. Hill, 968 N.Y.S.2d 134 (App. Div., 2nd Dept. 2013) .. .. .. .. .... .. .. .. .. .. .. .. .. .. .. .. .. .. 9 New York City Transit Auth. v. Thorn, 70 A.D.2d 158 (App. Div., 2nd Dept. 1979) .......................... 8, 9, 16-18, 20 Richard Denise, M.D., P.C. v. New York Transit Authority, 96 A.D.3d 561 (App. Div., 1st Dept. 2012) .......................................... 24 Shtarkman v. MV AIC, 20 Misc.3d 132 (A) (App. Term, 2nd Dept. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Stracar Med. Svcs., P.C. v. MVAIC, 10 Misc.3d 1 056(A)(Civ. Ct, Kings, 2005) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 22 Spring World Acupuncture, P.C. v. NYC Transit Authority, 884 N.Y.S.2d 556 (App. Term, 2nd Dept. 2009) .. .... .. .. .. .. .. .. .. .. .. .. .. .. . 13, 26 Universal Acupuncture Pain Services, P.C. v. MVAIC, 13 Mise 3d 1244(A) (Dist. Ct., Nassau 2006) ....................................... 22 lV STATUTES CPLR § 213 . . . . . . . . . . ...................................... 4, 5, 7, 8, 10, 17, 21, 22, 26 CPLR § 214 ............................................................... 6, 14, 17, 21, 25 N.Y. Insurance Law, Article 52 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 21 N.Y. Insurance Law§ 5103 ............................................. 1, 3, 15, 18, 25 N.Y. Insurance Law§ 5102 ............................................................ 23 N.Y. Public Authorities Law§ 1215 ................................................... 9 N.Y. Vehicle & Traffic Law§ 321 ...................................................... 9 N.Y. Vehicle & Traffic Law§ 370 .................. 1, 3, 7, 9, 15, 17, 18, 20- 23, 25 v FIRST QUESTION: ANSWER: QUESTIONS PRESENTED Did the Civil Court correctly hold Defendant-Appellant, a self-insured entity, is subject to a six-year statute of limitations as an uninsured motorist coverage matter is contractual in nature, citing Matter ofELRAC, Inc. v. Suero, 38 A.D.3d 544 (App. Div. 2nd Dep't. 2007)? No, the Civil Court did not err in its holding. SECOND QUESTION: Did the Appellate Term correctly affirm the Civil Court's Order, citing to VTL § 370, Ins. Law§ 5103(a)(l), Matter of Manhattan & Bronx Surface Tr. Operating Auth. v. Evans, 95 AD2d 470 (App. Div., 2nd Dept. 1983) and Mandarino v. Traveler's Prop. Cas. Inc. Co., 37 A.D.3d 775 (App. Div., 2nd Dept. 2007)? ANSWER: Yes. 1 COUNTER-STATEMENT OF THE FACTS On January 5, 2007, Plaintiff-Respondent (hereinafter "Respondent") brought an action in Queens Civil Court against Defendant-Appellant (hereinafter "Appellant"), seeking to recover $1,503.40 in No-Fault benefits, for services rendered from January 11, 2001 to August 23, 2001. Appellant interposed its Answer on January 25, 2007, and issue was subsequently joined. Appellant then moved for dismissal on the basis that Respondent failed to commence the subject action within a three-year statute of limitations. On December 4, 2007, the Civil Court denied Appellant's motion, stating that based upon the Appellate Division, Second Department holding of Matter of ELRAC, Inc. v. Suero, 38 A.D.3d 544 (App. Div., 2nd Dep't. 2007), self-insureds such as Appellant are subject to the six-year statute of limitations. Following this decision, Appellant moved to renew the December 4, 2007 decision based upon what it perceived as a change in case law. On July 27, 2011, the Civil Court granted Respondent's Motion to Renew, but adhered to its original decision, acknowledging that the existence of Elrac v. Suero and M.N. Dental Diagnostics, P.C. v. New York City Transit Authority, 82 AD3d 409, 410 (App. Div., 1st Dept. 2011) creates a clear, "split in authority among the appellate departments as to the applicable statute of limitations." Specifically, the Civil 2 Court held that such No-Fault matters, "are arguably contractual in nature, even when dealing with a self-insured entity such as the NYCTA. Thus, the 2nd Department has found that such matters warrant imposition of a 6-year statute of limitations [.]" See Record at p. 5. Appellant then appealed the order of the Civil Court to the Appellate Term, Second Department, on the basis that the three-year statute of limitations applies to all matters involving Appellant NYCTA, and that this matter should subsequently be dismissed. On December 2, 2013, the Appellate Term affirmed the Civil Court's holding in Contact Chiropractic, P.C. v. New York City Transit Authority, 42 Misc. 3d 60 (App. Term, 2nd Dept, lith & 13th Jud. Dists. 2014). The Appellate Term's rationale went beyond that of the underlying Civil Court, holding that pursuant to VTL § 370, Ins. Law § 5103(a)(l), Matter of Manhattan & Bronx Surface Tr. Operating Auth. v. Evans, 95 AD2d 470 (App. Div., 2nd Dept. 1983) and Mandarino v. Traveler's Prop. Cas. Inc. Co., 37 A.D.3d 775 (App. Div., 2nd Dept. 2007), public carriers that elect to self-insure are still subject to the six-year statute of limitations, "'where a plaintiffs action is based upon both a contractual obligation or liability,' and upon a, "liability, penalty or forfeiture created or imposed by statute[.]""' SeeR. at pp. 9-12. Appellant then moved for leave to appeal to the Appellate Division, of which the Appellate Term granted. SeeR. at p. 15. 3 It is respectfully submitted that because Respondent timely brought this matter within the applicable six-year statute of limitations pursuant to CPLR § 213(2), of which the Second Department continuously holds Appellant is privy to in these specific No-Fault lawsuits, the rulings of both the Civil Court and of the Appellate Term should be upheld. 4 PRELIMINARY STATEMENT It is submitted that the Second Department consistently holds, as recently as 2013, that self-insured entities such as Appellant NYCTA specifically, are subject to the six-year statute of limitations, pursuant to CPLR § 213. All of the statutes cited by the Second Department directly support these decisions, decisions that are all in conformity with all applicable cases from the Court of Appeals. Conversely, Appellant's attempts to liken itself to MVAIC are misguided, and Appellant's brief fails to address certain arguments and statutes relied upon by the Second Department. Furthermore, the First Department case law cited within Appellant's Breif should not be followed by this Court, as it fails to addresses notable key issues this Department consistently considers. Thus, because Appellant's brief fails to demonstrate any compelling reason to carve out a statute of limitations exception for Appellant, it is respectfully submitted this Court continue to properly subject Appellant to a six-year statute of limitations. 5 ARGUMENTS I. THE SECOND DEPARTMENT CONSISTENTLY HOLDS THAT SELF-INSURED ENTITIES, INCLUDING APPELLANT SPECIFICALLY, ARE SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS A. The Civil Court Correctly Held That Pursuant to Elrac v. Suero, Matters Arguably Contractual in Nature With Self-Insured Entities Warrant the Imposition of a Six-Year Statute of Limitations Foremost, the Civil Court correctly held this underlying lawsuit was subject to a six-year statute of limitations, citing Elrac v. Suero. Specifically, the Civil Court held: Both no-fault matters (MN Dental) and uninsured motorist coverage matters are arguably contractual in nature, even when dealing with a self-insured entity such as the NYCT A. Thus, the 2nd Department has found that such matters warrant imposition of a 6-year statute of limitations (Matter of Elrac, supra). Thus, the motion to renew is granted, and, upon renewal, the Court adheres to its original decision dated December 4, 2007 (J. Lebedeff). SeeR. at p. 5. In Elrac v. Suero, the respondent-passengers served the petitioner ELRAC, Inc. -an entity doing business as "Enterprise Rent a Car," a self-insured car rental company - a demand for arbitration three and a half years after a collision with an uninsured motorist. Id. at 544. ELRAC, Inc. commenced a proceeding to stay the arbitration on the ground that the demand for arbitration was barred by the three-year statute of limitations enumerated in CPLR § 214(2). Id. at 545. The 6 Supreme Court determined the claim was governed by the six-year statute of limitations contained within CPLR § 213(2), and dismissed ELRAC's petition. Id. This Court affirmed the Supreme Court's determinations. Specifically, this Court held, "From an injured claimant's perspective, '[t]he right to obtain uninsured motorist protection from a self-insurer is no less than the corresponding right under a policy issued by the insurer,"' quoting directly from the Appellate Division, First Department case of Application of Country-Wide Ins. Co., 464 N.Y.S.2d 786 (App. Div., 1st Dept. 1983), affd sub. nom. 62 N.Y.2d 748 (1984). In Elrac v. Suero, this Court also cites to Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818 (1980), where the Court of Appeals held that pursuant to VTL § 370, both, "corporations engaged in the business of carrying passengers for hire in motor vehicles," and, "motor vehicle rental corporations 'shall be subject to the provisions of this section in the same manner and to the same extent' (emphasis added) as corporations engaged in transporting passengers for hire," by either filing a corporate surety bond of policy of insurance with the Commissioner of Motor Vehicles. Id. Allstate v. Shaw also pointedly states VTL § 370(3), "merely gives leasing companies an additional option to demonstrate their financial security," in that they have the option to, "file a certificate of self-insurance in lieu of a bond or an insurance policy." See also Matter of Elrac, Inc., v. Exum, 18 7 NY3d 325 (2011)("1n [Allstate v. Shaw, we] held that a self-insurer had the same liability for uninsured motorist coverage that an insurance company would have. We said that, by authorizing self-insurance, the Legislature 'in no way intended to decrease the insurance protection presently available' (id. at 820).") This Court underscores this very point in Elrac v. Suero, stating: The respondents' claim for uninsured motorist benefits against a self-insured vehicle owner, while statutorily mandated, remains 'contractual rather than statutory in nature' (Matter of Manhattan & Bronx Surface Tr. Operating Auth. v Evans, 95 AD2d 470, 472 [1983]; cf Matter of DeLuca [Motor Veh. Ace. Indem. Corp.], 17 NY2d 76, 79 [1966]) and, as such, is subject to the six-year statute of limitations (see Matter of New York City Health & Hosps. Corp. [Degorter], 133 Mise 2d 93, 97 [1986])." Furthermore, the language in Elrac v. Suero pertaining to, "respondents' claim for uninsured motorist benefits against a self-insured vehicle owner, while statutorily mandated, remains 'contractual rather than statutory in nature"' is in concert with CPLR § 213(2), which states that actions based, "upon a contractual obligation or liability, express or implied," must be commenced within six years. (Emphasis added.) Even before the existence of Elrac v. Suero, this Court held in New York City Transit Auth. v. Thorn, 70 A.D.2d 158 (App. Div., 2nd Dept. 1979), affd. 52 N.Y.2d 1032 (1981) that Appellant NYCTA herein is not exempt from any portion 8 of VTL § 370- which directly addresses Appellant's argument on page 15 of its Brief pertaining to the applicability of VTL § 321 and Pub. Auth. Law§ 1215- specifically holding: We agree with the court below that the New York City Transit Authority does not qualify as a political subdivision of the State for purposes of the exception found in subdivision 1 of section 3 70 of the Vehicle and Traffic Law for "motor vehicles owned and operated by a municipality." In regard to the Transit Authority's remaining contention, we have held that section 3 70 of the Vehicle and Traffic Law does not exclude self- insurers from the requirements of providing uninsured motorist coverage. (Matter of Allstate Ins. Co. v Shaw, 52 NY2d 818.) Furthermore, just this past year this Court upheld the longstanding notion that Appellant NYCTA is subject to the six-year statute of limitations in New York City Transit Auth. v. Hill, 968 N.Y.S.2d 134 (App. Div., 2nd Dept. 2013), while citing again to Elrac v. Suero, holding, "Hill's claim for uninsured motorist benefits against the NYCTA, a self-insurer, is subject to the six-year statute of limitations of CPLR 213[2] (see Matter of ELRAC Inc. v. Suero, 38 A.D.3d 544, 545, 831 N.Y.S.2d 475; CPLR 213[2]; see also Jenkins v. State Farm Ins. Co., 21 A.D.3d 529, 801 N.Y.S.2d 42)." Thus, the rationale of this Court in Elrac v. Suero, and the other cases cited herein, is as follows: under VTL § 370, self-insured entities and insurers that issue 9 msurance policies are essentially the same animal; there is no discernible difference between these two creatures under the law. Because there is no difference between these two entities - especially from an injured claimant's standpoint - the rights conferred under both an actual policy of insurance and through a self-insured entity are also identical, which invokes the six-year statute of limitations to bring a claim under CPLR § 213(2). And since these aforementioned rights are identical, it runs contrary to the cited case law and black letter law to unilaterally confer a lower, three-year statute of limitations upon an entity simply because it opts to self-insure its vehicle(s). Conversely, Appellant argues the lower court's reliance upon Elrac v. Suero is incorrect because this holding specifically pertains to uninsured motorist (UM) coverage, and not No-Fault coverage. See Appellant's Brief, pp. 9-10. Appellant also argues that Elrac v. Suero runs contra to MV AIC v. Aetna Cas. & Sur. Co., 89 N.Y.2d 214 (1996) and Aetna Life and Cas. Co. v. Nelson, 67 N.Y.2d 169 (1986), arguing the Court of Appeals, "clearly indicates that the obligation to provide No-Fault coverage is statutory in nature." Id. But, this Court previously distinguished both MVAIC v. Aetna Cas. and Aetna Life v. Nelson from No-Fault matters like this one, m Mandarino v. Travelers. 10 In Mandarino v. Travelers, this Court distinguished the facts of that matter from those of MV AIC v. Aetna Cas., which also has a completely different set of facts from this matter, holding: MVAIC v. Aetna is distinguishable from the present case because it did not involve a claim asserted by an insured (or his or her assignee) directly against his or her no-fault insurer. In that case, Aetna denied coverage under an automobile liability policy, claiming that the policy had been cancelled prior to the subject accident. After paying no-fault benefits to the claimants, MVAIC sought to recoup those payments from Aetna by demanding arbitration pursuant to Insurance Law §§ 5105(a) and 5105(b). In seeking recoupment, MV AIC asserted a right of action against Aetna that, in addition to being unknown at common law, could not properly be viewed as arising out of any contract. Indeed, Aetna and MV AIC had no contract between themselves. It was under these circumstances that the Court of Appeals held that MV AIC's claim was governed by the three-year statute of limitations provided in CPLR 214(2)[.] (Citations omitted). Mandarino v. Travelers, 776-77. This Court then spoke directly of Aetna Life v. Nelson, and distinguished itself it that matter, holding: The defendant's reliance upon Aetna Life & Cas. Co. v Nelson (67 NY2d 169 [1986]) (hereinafter Aetna Life v Nelson), is also misplaced. In that case, the injured claimants had successfully recovered first-party benefits from their insurance carrier, Aetna Life, based on injuries suffered in a one-car accident. They later obtained a judgment against the State of New York in the Court of Claims, a judgment that was in part duplicative of the first-party benefits awarded to them by Aetna Life. 11 Accordingly, Aetna Life sought to enforce a lien on that judgment in order to recoup its payment of first-party benefits, and also in order to obviate what would otherwise be a "double recovery" by the no-fault claimants. In arguing that its claim was not time-barred, Aetna Life relied upon the "residual" six-year statute of limitations set forth in CPLR 213 ( 1 ), and did not argue that its claim sounded in contract. In finding that the applicable statute of limitations was the three-year term provided in CPLR 214 (2), the Court of Appeals noted that the right to recoupment being pursued by Aetna Life was "made available to [it] pursuant to Insurance Law § 673 (2) [currently section 5104 (b)]" (67 NY2d at 175). In contrast to MVAIC v Aetna and Aetna Life v Nelson, the instant case involves a dispute between the defendant, an insurer, and the plaintiff, an insured's assignee, regarding the recovery of no-fault benefits under the terms of an insurance policy. Although the terms of the insurance policy may be mandated by various provisions of the Insurance Law, this does not alter the fact that the dispute is fundamentally contractual in nature and not a creature of statute. Accordingly, the six-year statute of limitations set forth in CPLR 213 (2) applies to this action, and the Appellate Term properly affirmed so much of the Civil Court's order denying that branch of the defendant's cross motion which was for summary judgment dismissing the complaint as time-barred (see Gurnee v Aetna Life & Cas. Co., supra). Mandarino v. Travelers Prop. Cas. Ins. Co., 777-778. Here, the Respondent provider is directly suing Appellant NYCTA pursuant to the No-Fault law via an assignment of benefits on an implied policy of insurance, for unpaid monies owed for chiropractic treatment performed upon the assignee. There is no issue of policy cancellation here; there is no claim between 12 an insurance company and MV AIC not based in contract here; nor is there is an issue of "double recovery" based upon a judgment against New York State that encompasses a prior recovery against an insurance carrier. Thus, this case is clearly distinguishable from both MV AIC v. Aetna Cas. and Aetna Life v. Nelson. The Appellate Term also addressed this issue of the uninsured motorist endorsement versus the No-Fault endorsement in Spring World Acupuncture, P.C. v. NYC Transit Auth., 884 N.Y.S.2d 556 (App. Term, 2nd Dept. 2009), holding: Like the UM endorsement, the Personal Injury Protection Endorsement (no-fault endorsement) is also mandatory. Just as the rights and remedies of an injured claimant are set forth in the mandatory UM endorsement, so are the rights and remedies of an insured person set forth in the mandatory no-fault endorsement. Since the right to obtain UM protection from a self-insurer "is no less than the corresponding right under a policy issued by an insurer" [ ... ], it follows that the right to obtain first-party no-fault coverage from a self-insurer is no less than the right to obtain the same from an insured under a policy [.] Accordingly, we hold that an action to recover first- party no-fault benefits from a self-insured entity is subject to the same six-year statute of limitations as an action against an insurer pursuant to the policy. The Civil Court, therefore, should not have granted defendant's motion for summary judgment dismissing the complaint. (Internal citations omitted.) Throughout its Brief, Appellant states that all No-Fault coverage is not contractual m nature, so as it place itself within the 13 three-year statute of limitations concerning No-Fault matters. This, however, is a curious proposition. Even assuming this sentiment was true, then all No-Fault matters would be subject to the three-year statute of limitations under CPLR § 214(2). Clearly, this is not the current state of the law anywhere in New York State. Appellant also argues that based upon the holdings of Bulova Watch Co., Inc. v. Celotex Corp., 46 N.Y.2d 606 (1979) (a matter involving a roofing contract where a three year statute of limitations is not at issue) and Hartnett v. New York City Transit Authority, 86 N.Y.2d 438 (1995) (a matter concerning NYCTA workers who refused to work under hazardous conditions, and suing under the Public Employee Safety and Health Act), "the relevant question before this court is whether a self-insurer's obligation to provide No-Fault benefits is 'a liability created or imposed by statute."' See Appellant's Brief, at pp. 10-11. Yet, the Appellate Term and Division already answered this question numerous times over: Appellant's obligation to provide No-Fault benefits is "fundamentally contractual in nature and not a creature of statute." Mandarino v. Travelers Prop. Cas. Ins. Co., at 777. As such, Respondent submits that based upon the Lower Court's reliance upon Elrac v. Suero, the Lower Court's determination was correct, and the Appellate Term was correct in affirming the Lower Court's Order. 14 B. The Appellate Term Correctly Affirmed The Lower Court's Order, Pursuant to Manhattan & Bronx Surface Tr. Op. Auth. v. Evans And Mandarino v. Travelers, Holding There is No Legislative Intent To Confer a Lesser Duty on a Self-Insured Public Carrier, Including NYCTA The Appellate Term correctly affirmed the Lower Court's Order, citing VTL § 370, Ins. Law§ 5103 (a)(l), as well as Manhattan & Bronx Surface Tr. Op. Auth. v. Evans, and Mandarino v. Traveler's Prop., both cases of which were also born out of this Court. SeeR. at pp. 9-12. The Appellate Term first references VTL § 3 70 to reinforce the notion that, "any entity engaged in the business of transporting passengers," regardless of being a self-insured entity, must provide proof of insurance or a surety bond should damages arise out of an accident (Emphasis added). See R. at p. 10. The Appellate Term then shifts its focus to Ins. Law§ 5103 (a)(1), which discusses the legal imposition of a duty upon bus owners to provide first party No-Fault benefits to its passengers. Specifically, Ins. Law§ 5103 (a)(1) states that first party benefits shall be afforded to passengers under any applicable policy or policies. But if a policy of insurance does not exist, "first party benefits shall be provided by the insurer of such bus." Id. at p. 11. Once again, the Second Department stresses the fact that New York State's black letter law intends for all entities that transport passengers - whether they obtain policies of insurance from third parties or elect to self-insure -must both 15 ensure their passengers are sufficiently provided first party No-Fault benefits. No exception is carved out for either entity regarding an applicable statute of limitations. This Court should not carve one out at this juncture. The Appellate Term then references this Court's holding of Manhattan & Bronx Surface Tr. Op. Auth. v. Evans, which is particularly relevant to this instant matter. For, the Manhattan and Bronx Surface Transit Operating Authority ("MaBSTOA") is a subsidiary of Appellant NYCTA, created by the State legislature in 1962, of which took over operations of private companies Fifth A venue Coach Lines, Inc. and Surface Transit, Inc. Subsequently, in Manhattan & Bronx Surface Tr. Op. Auth. v. Evans the Appellate Term highlighted this Court's assessment that Appellant's subsidiary, "could not be exempt from the statutorily-imposed insurance coverage 'by the fortuity that it had chosen the self-insurance option as to financial security' (Id. at 473, quoting Matter of New York City Tr. Auth., 70 AD2d 158,171 [1979], affd. 52 NY2d 1032 [1981])." The Appellate Term also gleamed from this decision that this Court, "saw no reason to treat the obligations of a self-insurer different from those imposed on the owner of a single vehicle." SeeR. at p. 11. It is important to reproduce infra the entire passage that the Appellate Term quoted supra from this Court's holding in the aforementioned NYCTA v. Thorn, as 16 it discusses the probable legislative intent behind VTL § 3 70, and how it applies specifically to Appellant NYCT A: It is not rational to believe that the 1971 Legislature intended that the mandate of uninsured motorists coverage as applied to a carrier of persons depended upon whether the carrier had previously chosen to be a self-insurer to save the conceived additional expense of an indemnity bond or insurance policy. If anything, a carrier's insurance responsibility to its passengers and others should be greater, and not less, than that of other owners or operators of motor vehicles. This is indicated by the fact that as far back as 1932, long before New York provided for compulsory insurance of motor vehicles registered in the State, such carriers were required to be insured or to provide an indemnity bond. It would indeed be strange that a carrier was to be exempt from the obligation to provide uninsured motorists coverage when the owner of even a single vehicle is required to provide it - merely by the fortuity that it had chosen the self-insurance option as to financial security and safety responsibility. The Appellate Term's Order next cites to this Court's holding in Mandarino v. Traveler's Prop., which states that "strict statutory interpretation," in a matter, "based upon both a 'contractual obligation or liability' and upon a 'liability, penalty or forfeiture created or imposed by statute,' the longer, six-year statute of limitations, as provided in CPLR 213(2), is applied to the exclusion of the three-year statute of limitations provided in CPLR 214(2)." Id. at 776. This Court reasoned that, despite the fact that the Insurance Law and other regulations may mandate certain provisions of an insurance contract, "a no-fault 17 claimant's right (or that of his or her assignee) to recover first-party benefits derives primarily from the terms of the relevant contract of insurance," and that the inclusion of certain terms, "which might be mandated by various statutes or regulations, does not necessarily alter the fundamentally contractual nature of the dispute between the insured[ ... ] and his or her 'no-fault' insurer[.]" Id. Based upon the wording and legislative intent of VTL § 3 70 and Ins. Law § 5103 (a)( 1 ), this Court's interpretation of these laws as applied to Appellant, its subsidiary and all other self-insured entities is sound: If entities engaging in the business of transporting passengers must all provide first party benefits to their patrons, then their obligations under the law are identical, which in tum indicates the act of insuring their patrons is fundamentally contractual in nature. And if all things are equal, there is no reason to believe entities that self-insure are entitled to the benefit of a lesser statute of limitations in litigation or arbitration. Furthermore, there is no indication that the legislative intent was to halve the amount of time injured parties have to commence a lawsuit against a self-insured entity by three years, over all other entities that are subject to a six-year statute of limitations, as this Court stated within NYCT A v. Thorn infra. Finally, the Civil Court's holding is proper, the Appellate Term's affirming of the Civil Court's holding is proper, and the Appellate Division cases relied upon 18 by those two courts are proper. Thus, Respondent herein also respectfully submits that this Court affirms the Appellate Division's ruling. 19 II. APPELLANT'S ARGUMENTS AND RELIANCE UPON FIRST DEPARTMENT CASE LAW IS MISGUIDED A. Appellant's Brief Does Not Discuss VTL § 370 In Any Context Appellant's papers completely fail to even mention VTL § 370. Appellant's omission of this statute is fatally detrimental to its arguments, as VTL § 3 70 is the very statute relied upon in the Appellate Term's holding at issue, and in part the basis of this Court's rationale in the aforementioned Manhattan & Bronx Surface Tr. Op. Auth. v. Evans, and NYCTA v. Thorn, as well as the Court of Appeals holdings of Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818 (1980) and Matter of Elrac, Inc., v. Exum, 18 N.Y.3d 325 (2011). Appellant cannot argue its position on the matter without even referencing one of the most important statutes that appears in this Court's rulings. It is extremely problematic (and incorrect) for Appellant to proclaim within its papers that, "it is undisputed that neither an express nor implied contract existed," while completely ignoring VTL § 3 70, a statute of which this Court interprets to address, in part, this very issue. See Appellant's Brief at pp. 5, 16. 20 B. Appellant's Attempts to Liken Itself to MVAIC is Misplaced Instead of arguing its position against VTL § 370 and the Second Department's interpretation of same against CPLR §§ 213, 214, Appellant includes a plethora of case law that involves the Motor Vehicle Accident Indemnification Corporation ("MV AIC"), in an attempt to liken itself to this entity so that it may bolster its argument that it be given the benefit of the three-year statute of limitations MV AIC enjoys. In fact, Appellant claims, "[T]here is no appreciable difference between the Transit Authority and MVAIC 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 MVAIC." See Appellant's Brief, at p. 13. Appellant's arguments are misguided. MVAIC was created by the New York State Legislature in 1958 via the enactment of Article 17-A (now Article 52) of the New York Insurance Law. MVAIC, a non-profit organization, provides, in part, No-Fault benefits to eligible injured parties involved in motor vehicle accidents in which no insurance policy exists. The main difference between MVAIC and Appellant, is that MVAIC steps in to provide insurance coverage where none exists, as created by statute. MVAIC, 21 unlike Appellant, is not a self-insured entity with a fleet of vehicles transporting persons, and is subsequently not subject to VTL § 370. Simply because Appellant opted to self-insure its vehicles does not and cannot - in any conceivable way - place Appellant in the category of being "statutorily created"; Appellant NYCT A is clearly not a policy of coverage created by statute. And this is precisely why the Appellate Division repeatedly holds that a contract of insurance is implied with Appellant under CPLR § 213: since every vehicle under Appellant's umbrella is self-insured, there is a de facto contract of insurance implied between NYCT A and every individual riding these vehicles. While Appellant cites to MVAIC v. Aetna Cas., Acupuncture Works, P.C. v. MVAIC, 27 Misc. 131(A) (App. Term, 2nd Dept. 2010), Shtarkman v. MVAIC, 20 Misc.3d 132 (A) (App. Term, 2nd Dept. 2008), Stracar Med. Svcs., P.C. v. MV AIC, 10 Misc.3d 1056(A)(Civ. Ct., Kings, 2005), and Universal Acupuncture Pain Services, P.C. v. MVAIC, 13 Mise 3d 1244(A) (Dist. Ct., Nassau 2006), none of these cases are relevant to the statute of limitations debate herein, as these matters apply specifically to MV AIC. Conversely, these cases do NOT reference either self-insured entities or VTL § 370, both currently at issue herein. Appellant also cites to Boulevard Multispec Med. P.C., v. MVAIC, 19 Misc. 3d 138(A) (App. Term, 2nd Dept. 2008); however, this case also stands for the proposition that MVAIC is subject to the three-year statute of limitations, 22 which only commences when the eligible injured party is "qualified" by MVIAC under Insurance Law § 5202. Once again, this case does NOT reference self-insured entities or VTL § 370. Respondent submits that because Appellant is not a statutorily created entity that provides insurance where none exists, all cases pertaining to MVAIC and arguments referencing same are wholly irrelevant to this matter. 23 C. The First Department Fails to Consider Issues and Statutes Germaine to The Application of the Statute of Limitations to Appellant Finally, in regards to the remaining First Department cases Appellant cites to support its position, namely M.N. Dental v. NYCTA and Richard Denise, M.D., P.C. v. New York City Transit Authority, 96 A.D.3d 561 (App. Div., 1st Dept. 2012), Respondent respectfully submits that the First Department's rationale in these matters is simply not as comprehensive of that of this department, and fails to consider key issues that ultimately created this inconsistency in the law between these two departments. In M.N. Dental v. NYCTA, of which Denise, M.D., P.C. v. NYCTA simply relies upon in its entire decision, held on the issue of the applicable statute of limitations: 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 N.Y.2d 169, 175, 501 N.Y.S.2d 313, 492 N.E.2d 386 [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 as set forth in CPLR 214(2) is applicable here. 24 The extent of the First Department's rationale on the matter is that because NYCTA is not privy to an insurance contract, and because NYCTA's obligation to provide No-Fault benefits is solely created by No-Fault law- which the First Department considers a right created by statute- the three-year statute of limitations pursuant to CPLR § 214(2) always applies to Appellant NYCT A. Respondent respectfully submits that this line of reasoning in M.N. Dental v. NYCTA is incomplete because it fails to consider any of the applicable laws cited within the Second Department's case law cited throughout this brief, and misapplies the holding of Aetna Life v. Nelson. Specifically, M.N. Dental v. NYCTA never discusses the applicability of either VTL § 370(3) or Ins. Law§ 5103 (a)(1) to Appellant, both of which apply to NYCTA- a self-insured business entity that owns buses, which are utilized for public transport. Moreover, M.N. Dental v. NYCTA does not addresses the specific wording of CPLR § 213(2), which states that actions based, "upon a contractual obligation or liability, express or implied," must be commenced within six years. (Emphasis added.) In fact, the only reasoning the Appellate Division, First Department provides within M.N. Dental v. NYCTA to support its three-year statute of limitations 25 theory is its citation to Aetna Life v. Nelson, and the notion that a contract of insurance is non-existent as it pertains to NYCTA. But as was discussed at length supra at pages 10-12, this Court rejected Aetna Life v. Nelson in a No-Fault setting as being "misplaced." See Mandarino v. Travelers Prop. Cas. Ins. Co., 777-778. Specifically, the First Department never considered the Second Department's rationale that, "Although the terms of the insurance policy may be mandated by various provisions of the Insurance Law, this does not alter the fact that the dispute is fundamentally contractual in nature and not a creature of statute." I d. In regards to the First Department's contention that "it is undisputed that there existed no contract between plaintiff's assignor and the NYCTA," again, Respondent again respectfully submits that the court failed to consider the relationship as being "contractual in nature," failed to consider "protection from a self-insurer 'is no less than the corresponding right under a policy issued by an insurer,"' as well as the specific language ofCPLR § 213(2). See Manhattan & Bronx Surface Tr. Op. Auth. v. Evans; Elrac v. Suero; Spring World Acu. v. NYCTA. Respondent submits that because the First Department fails to properly consider or address the issues tackled by the Second Department regarding the 26 applicable statute of limitations, the First Department case law cited in Appellant's Brief should not have any bearing on this Department's position on the matter. 27 CONCLUSION In conclusion, Respondent respectfully submits that the Appellate Term's Order affirming the Civil Court's Order should be affirmed by this Honorable Court, in its entirety. Dated: Lake Success, New York October 17, 2014 LAW OFFICE OF COHEN & JAFFE, LLP Attorneys for Plaintiff-Respondent CONTACT CHIROPRACTIC, P.C. 2001 Marcus Avenue - Suite W 295 Lake Success, New York (516) 358-6900 28 CERTIFICATE OF COMPLIANCE PURSUANT TO 22 NYCRR 670.10.3(f) The foregoing brief was prepared on a computer. 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