Aetna Health Plans,, Appellant,v.Hanover Insurance Company, Respondent.BriefN.Y.May 4, 2016APL-2015-00009 Bronx County Clerk’s Index No. 303241/12 Court of Appeals STATE OF NEW YORK AETNA HEALTH PLANS, as assignee of LUZ HERRERA, Plaintiff-Appellant, against HANOVER INSURANCE COMPANY, Defendant-Respondent. >> >> BRIEF FOR DEFENDANT-RESPONDENT CRISCI, WEISER & MCCARTHY Attorneys for Defendant-Respondent 17 State Street, 8th Floor New York, New York 10004 212-943-8940 Of Counsel: Erin M. Crowley Date Completed: April 14, 2015 To Be Argued By: Erin M. Crowley Time Requested: 15 Minutes i STATE OF NEW YORK COURT OF APPEALS ------------------------------------------------------------------X AETNA HEALTH PLANS, DISCLOSURE as assignee of LUZ HERERRA, PURSUANT TO RULE §500.1(f) Plaintiff-Appellant, -against- HANOVER INSURANCE COMPANY, Defendant-Respondent. -------------------------------------------------------------------X PLEASE TAKE NOTICE, the defendant-respondent, HANOVER INSURANCE COMPANY, by its attorneys, the Law Offices of CRISCI, WEISER & MCCARTHY, as and for its Disclosure Pursuant to Rule §500.1(f), certifies that the following is a list of its parents, subsidiaries and affiliates: The Hanover Insurance Group, Inc.; VeraVest Investments, Inc.; Campania Holding, Inc.; Benchmark Professional Insurance Services, Inc.; The Hanover Insurance International Holdings Limited; Educators Insurance Agency, Inc., Opus Investment Management, Inc.; Verlan Holdings, Inc.; Campania Shared Services Company, Inc.; Campania Management Company, Inc.; Campania Insurance Agency, Inc.; Chaucer Holdings, PLC; The Hanover Insurance Company; Citizens Insurance Company of Illinois; CitySquare II Development, Co., LLC; Hanover Specialty Insurance Brokers, Inc.; Professionals Direct, Inc.; Allmerica Plus Insurance Agency, ii Inc.; The Hanover American Insurance Company; Hanover Texas Insurance Management Company, Inc.; Massachusetts Bay Insurance Company; Allmerica Financial Alliance Insurance Company; The Hanover New Jersey Insurance Company; 440 Lincoln Street Holding Company, LLC; CitySquare II Investment Company, LLC; Citizens Insurance Company of Ohio; Citizens Insurance Company of the Midwest; Professionals Direct Insurance Services, Inc.; Professionals Direct Finance, Inc.; One Mercantile Place, LLC; AIX Holdings, Inc.; Campmed Casualty & Indemnity Company, Inc.; The Hanover National Insurance Company; Allmerica Financial Benefit Insurance Company; Verlan Fire Insurance Company; Professionals Direct Insurance Company; Citizens Insurance Company of America; AIX Insurance Services of California, Inc.; AIX, Inc.; Nova American Group, Inc.; NOVA Insurance Group, Inc.; NOVA Alternative Risk, LLC; NOVA Casualty Company; Professional Underwriters Agency, Inc.; AIX Specialty Insurance Company; Allmerica Securities Trust; Glencoe Acquisition, Inc.; Hanover Lloyd’s Insurance Company; First Home Insurance Company; Chaucer Corporate Capital Limited; Chaucer Freeholds Limited; Hayward Brick Stuchbery Holdings Limited; Aberdeen Underwriting Advisers Limited; ALIT Underwriting Limited; CH 1997 Limited; Chaucer Consortium Underwriting Limited; Chaucer Dedicated iii Limited; Chaucer Underwriting A/S; Insurance 4 Cargoservices Limited; Chaucer Syndicates Limited; Chaucer GmbH; Chaucer Insurance Services Limited; Chaucer Latin America SA; Chaucer Singapore Pte. Limited; Chaucer Syndicate Services Limited; and Chaucer Osio AS. Dated: New York, New York April 14, 2015 Yours, etc. ____________________________________ ERIN M. CROWLEY CRISCI, WEISER & MCCARTHY Attorneys for the Defendant-Respondent 17 State Street, 8 th Floor New York, New York 10004 (212) 709-2185 ECrowley@Hanover.com iv STATE OF NEW YORK COURT OF APPEALS -------------------------------------------------------------------X AETNA HEALTH PLANS, DISCLOSURE as assignee of LUZ HERERRA, PURSUANT TO RULE §500.13(A) Plaintiff-Appellant, -against- HANOVER INSURANCE COMPANY, Defendant-Respondent. --------------------------------------------------------------------X PLEASE TAKE NOTICE, as and for its Disclosure Pursuant to Rule §500.13(A) of the Rules of Practice of the New York State Court of Appeals (22 NYCRR §500.13[a]), the defendant-respondent, HANOVER INSURANCE COMPANY, by its attorneys, the Law Offices of CRISCI, WEISER & MCCARTHY advises and certifies that there are no related actions presently pending. Dated: New York, New York April 14, 2015 Yours, etc. ____________________________________ ERIN M. CROWLEY CRISCI, WEISER & MCCARTHY Attorneys for the Defendant-Respondent 17 State Street, 8 th Floor New York, New York 10004 (212) 709-2185 ECrowley@Hanover.com v TABLE OF CONTENTS Page TABLE OF AUTHORITIES…………………………………………………….vi PRELIMINARY STATEMENT…………………………………………………1 SUMMARY OF ARGUMENT…………………………………………………...3 COUNTERSTATEMENT OF QUESTIONS INVOLVED…………………….7 COUNTERSTATEMENT OF FACTS………………………………………….8 ARGUMENT POINT I AETNA FAILS TO STATE A CAUSE OF ACTION UPON WHICH RELIEF MAY BE GRANTED AND THE APPELLATE DIVISION SHOULD BE AFFIRMED…………………………………………………….13 A. Aetna Lacks the Requisite Standing …………….………………..13 B. Aetna is Not a Provider of Health Care Services. …………..…...14 C. Aetna Does Not Have a Proper Assignment……….……………..17 D. Aetna Is Not in Privity of Contract with Hanover…………….....25 E. Aetna Cannot and Did Not Submit “Bills”……………………….26 F. Aetna is Collaterally Estopped from Raising any Arguments Regarding its Alleged Submission of “Bills”……………………..28 G. Public Policy Considerations ………………………………….......31 CONCLUSION…………………………………………………………………..35 vi TABLE OF AUTHORITIES CASES: Page A.B. Med. Servs. PLLC v Highland Ins. Co., NYLJ, May 27, 2003, at 21, col 3 ………………………………………………………..14 A.B. Medical Services PLLC v. Liberty Mut. Ins. Co., 339 Misc 3d 36, (App Term 2nd and 11th Jud Dist. 2005)………………………………………………………………………………16 Advanced Med. Rehabilitation P.C. v Travelers Prop. Cas. Ins. Co., 2 Misc 3d 1004[A], 2004 NY Slip Op 50141[U] ……………………………………………14 Allstate Ins. Co. v Belt Parkway Imaging, Inc.,33 AD3d 407 (1st Dept. 2006) .………………………………………………………………….16 Allstate Ins. Co. v. Mazzola, 175 F.3d 255 (2d Cir. 1999)………………………..20 A.M. Med. Servs., P.C. v. Progressive Cas. Ins. Co., 101 AD3d 53, 62 (2d Dept. 2012)..……………………………………………….12 Axelrod v New York State Teachers' Retirement Sys., 154 AD2d 827 (1989)……………………………………………………………..13 Byrne v. Oester Trucking, Inc., 386 F Supp 2d 386, 391 (S.D.N.Y. 2005)……….34 Craig Antell, DO, PC v. New York Cent. Mut. Fire Ins. Co., 11 Misc. 3d 137[A], 2006 NY Slip Op 50521[U] [App Term 1st Dept 2006]…………………………………………………….12, 16 Dezer Properties II, LLC v. Kaye Insurance Associates, Inc., 38 AD3d 213 (1st Dept. 2007)……………………………………………………17 ELRAC, Inc. v Ward, 96 NY2d 58, 75 (2001)…………………………………….17 Federal Ins. Co. v. Spectrum Ins. Brokerage Services, Inc., 304 AD2d 316, 317 (1 st Dept. 2003)…………………………………...…11, 17, 19 vii Health Insurance Plan of Greater New York a/s/o Jamwantie Chatoredussy v. Allstate Ins. Co., 2007 NY Slip Op 33925(U), 2007 WL 4367045 (Sup. Ct. N.Y. Co. 2007)………………………………………………….12, 16, 17, 19, 20, 25, 26 Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 373 (1998)…………………………………………………………17 Kaf-Kaf, Inc. v. Rodless Decorations, Inc., 90 NY2d 654, 659 (1997)…………………………………………………………19 Rockaway Blvd, Med. P.C. v. Progressive Ins., 9 Misc.3d 52 (2005)……………………………………………………………….15 Stark v Goldberg, 297 AD2d 203, 204 (1st Dept. 2002)………………………….13 T&G Medical Supplies, Inc. v. State Farm Insurance Company, 7 Misc.3d 1017(A) (2005)………………….....................................................13, 14 Trans-Resources, Inc. v Nausch Hogan & Murray, 298 AD2d 27, 34 (2002)……17 V.S. Medical Services, P.C. v New York Central Mutual Fire Ins. Co., 14 Misc.3d 134 (A) (App Term 2nd and 11thJud Dist. 2006)………………………………...16 STATUTES: Page CPLR 3211 (a)(7)…………………………………………………………………..1 Ins. L. §5105(a)…………………………………………………………………...21 Ins. L. §5102(a)(1)………………………………………………………………...18 Ins. L. §5106(a)………………………………………………………...4, 10, 14, 17 11 NYCRR §52.16 …………………………………………………………...22, 34 11 NYCRR § 65-1……………………………………………………………...1, 29 11 NYCRR §65.15 (g)………………………………………………….4, 10, 14, 17 viii 11 NYCRR §65.15 (j)(1) …………………………………………………………15 11 NYCRR §65-3.11……………………………………………………...15, 16, 21 11 NYCRR §65-3.11(a)…………………………….2, 3, 4, 7, 10, 11, 14, 15, 16, 17 11 NYCRR §65-3.11 (b)(2) ………………………………………………………14 OTHER: NY St Ins. Dept Office of General Counsel Opinion Letter- January 28, 2008…………………………………………………………..18, 21, 22 - 1 - PRELIMINARY STATEMENT This brief is respectfully submitted in opposition to the appeal by Plaintiff- Appellant, Aetna Health Plans, as assignee of Luz Herrera (“Aetna”), from the Decision and Order of the Appellate Division, First Department, dated April 15, 2014 [CA6-7] 1 , which unanimously affirmed, with costs, the Order of the Supreme Court, Bronx County (Mary Ann Briganti-Hughes, J.) entered on January 7, 2013, that denied Aetna’s motion for summary judgment on the issue of liability and granted Defendant-Respondent, Hanover Insurance Company’s (“Hanover”), cross-motion to dismiss the complaint pursuant to CPLR §3211(a)(7). Aetna has not demonstrated that the Courts below misapprehended any fundamental question of law. In fact, the Order Aetna seeks to appeal merely upheld well-established rules of law. With this appeal, Aetna seeks to expand the scope of 11 NYCRR §65 (New York State No-Fault Regulation 68) beyond that of its clear intent and purpose. Specifically, Aetna seeks to create a right for health insurers to assert direct claims for first party benefits (no-fault benefits) from a No-Fault insurer; a right which the Regulation affords only to the eligible injured party or that eligible injured party’s 1 Numbers preceded by “CA” refer to pages added by Plaintiff-Appellant to the original Appellate Division Record on Appeal. - 2 - assigned medical provider. Contrary to Aetna’s assertions, no such right exists and for good reason as will be demonstrated herein. The Respondent agrees with the Appellant that this case involves issues of great import for the insurance industry. However, the Respondent vehemently objects to any assertion by Aetna that the relief they seek to obtain is based upon well-established rules of law and equity. In fact, as will be set forth herein, to disturb the underlying determinations would go entirely against the plain meaning and long-settled interpretation of current law to create a wholly new right. No such right is afforded under existing law. This is not because of a legal loophole as Aetna would suggest but rather was the conscious intention in the establishment of the No-Fault Regulation. To hold otherwise disrupts the established rights/obligations to the extreme prejudice of a no-fault insurer. The underlying Courts and the Appellate Division’s unanimous determination to uphold the existing and intended scope of the NYS No-Fault Regulation was both correct and proper. As will be set forth herein, the Order sought to be appealed by Aetna should be affirmed. Aetna has no standing to bring this action as Aetna is not a provider of health care services as defined by 11 NYCRR §65-3.11(a). - 3 - As such, the Appellate Division correctly determined that Aetna cannot be a valid assignor in seeking direct payment of no-fault benefits pursuant to 11 NYCRR §65-3.11(a). Aetna’s secondary attempts to create such a right under the alternative theories of equitable subrogation and/or breach of contract were also properly denied. There can be no sustainable cause of action under such theories as Aetna fails to meet even the most basic necessary components. Simply put, Aetna is not seeking to enforce the rights of its insured but rather its own alleged loss and thus, there is no right to subrogation. Furthermore, there is no contract between the no- fault insurer and the private insurer and thus, there can be no sustainable breach of contract claim. In any event, there was no breach of contract by Hanover as Aetna cannot and did not submit valid claims for no-fault reimbursement. Accordingly, all arguments raised by Aetna regarding Hanover’s failure to issue denial of benefits are irrelevant and a red herring meant to distract from the real issues and shift the focus on obligations of a no-fault carrier that are inapplicable to the matter at hand. SUMMARY OF ARGUMENT As determined in the Courts below and as will be set forth in the arguments herein, Aetna has failed to state a cause of action upon which relief can be granted. Preliminarily, Aetna’s complaint seeks reimbursement of no-fault benefits solely - 4 - pursuant to Insurance Law §5106(a) and 11 NYCRR §65.15(g) [18-25]. Both of these statutes apply to a medical provider, are inapplicable to a health care insurer and thus, Aetna maintains no basis for the relief sought herein. In fact, 11 NYCRR §65-3.11(a) clearly identifies who is eligible for the direct payment of no-fault benefits. As Aetna is not a “health care provider” under the statute, but rather a health care insurer, it is not entitled to seek direct payment of first-party benefits. Accordingly, Aetna lacks standing to bring this action. Aetna failed to plead in its summons and complaint any alternative theories for the relief in which it seeks herein; namely relief pursuant to the doctrines of subrogation and/or indemnification [18-25]. As Aetna failed to plead whatsoever any alternative theories, any attempt to pursue their claims under such theories should be precluded at the appellate level. However, should this Court be willing to consider such arguments, the underlying Courts have addressed and properly determined such alternate theories for relief nonetheless fail [CA6-7, CA14-15]. As will be set forth in detail herein, there is no statutory or decisional authority which would authorize Aetna to maintain a subrogation action against a no-fault insurer to recover the sums it was contractually obligated to pay its own insured. In addition, the underlying Courts correctly determined that Aetna cannot assert a breach of contract claim against Hanover [CA6-7, CA14-15]. Aetna and Hanover - 5 - are contractually obligated to the insured under their own respective policies. The two carriers are not in privity of contract with one another. Aetna does not have standing to submit bills/claims for direct no-fault reimbursement from Hanover per the No-Fault Regulation. Moreover, assuming arguendo, that Aetna could submit such claims directly to Hanover for no-fault reimbursement, no “bills” were submitted to Hanover. The correspondence issued to Hanover by The Rawlings Company (as the recovery company on behalf of Aetna) did not constitute “bills” to trigger Hanover’s obligations under the No- Fault Regulation [63-86, 94-170]. Thus, there was no obligation imposed upon Hanover to issue denial of claim form(s). That the correspondence submitted to Hanover by The Rawlings Company did not constitute “bills” was already determined at arbitration and upheld in master arbitration review in Herrera’s underlying arbitration proceedings in this very matter [87-89, 90-93]. Thus, the issue is subject to collateral estoppel. In any event, there was never any valid claim submitted to Hanover to trigger any obligations to process the bills; ie: pay/deny. Given Aetna’s inability to submit a claim for direct payment and the failure to do so in this matter, any arguments regarding timeliness of denials and the waiver of a lack of standing defense in a timely no-fault denial are respectfully, unfounded and irrelevant. Moreover, any lack of standing defense would be non- waivable and not subject to a thirty-day preclusion rule. - 6 - Accordingly, it is respectfully submitted that the Decision/Order appealed from be affirmed. - 7 - COUNTERSTATEMENT OF THE QUESTIONS INVOLVED I. QUESTION PRESENTED: Was the Appellate Division, First Department, correct in its determination that a health insurer lacks the requisite standing to pursue a claim under Insurance Regulation 11 NYCRR §65-3.11(a) for direct payment of No-Fault benefits? DETERMINATION OF THE COURT BELOW: The Appellate Division, First Department, correctly answered this question in the affirmative. II. QUESTION PRESENTED: Was the Appellate Division, First Department, correct in its determination that Insurance Regulation 11 NYCRR §65-3.11(a) prevents a health insurer from being a No-Fault Subrogee? DETERMINATION OF THE COURT BELOW: The Appellate Division, First Department, correctly answered this question in the affirmative. III. QUESTION PRESENTED: Was the Appellate Division, First Department, correct in its determination that the private health insurer cannot maintain a cause of action based upon a breach of contract against the no-fault insurer? DETERMINATION OF THE COURT BELOW: The Appellate Division, First Department, correctly answered this question in the affirmative. - 8 - COUNTERSTATEMENT OF THE FACTS PRESENTED On April 25, 2008, Luz Herrera (“Herrera”), was involved in a motor vehicle accident with an automobile insured by Hanover [5, 20]. Herrera was also covered under her private medical insurance through Aetna [5, 12]. Herrera underwent medical treatment with various medical providers [5]. All medical providers submitted their bills for treatment rendered for a period of time ranging from June, 2008 through December of 2008 directly to Aetna. Aetna paid all such submitted bills in the total amount of $19,649.10 [5-6]. Attached to Aetna’s summons and complaint in the underlying Supreme Court, Bronx County action was a print-out from The Rawlings Company, Aetna’s recovery subrogor, dated November 10, 2009 2 [63-68]. However, it is unknown what this print-out is and there is no reference on this document as to whether or not it was ever forwarded to Hanover. On January 6, 2010, The Rawlings Company issued correspondence with a cover sheet from Herrera’s counsel to Hanover that consisted of documentation for dates of service ranging from June, 2008 through December, 2008 [69-86]. Many of the claims list the “payor” as “Aetna” and all seek payment to be issued directly to The Rawlings Company, LLC. All such documents clearly state, “This is not a bill” [69-86]. 2 Please note that Aetna’s brief states that this dated “March, 2009”. It is believed that this was a typographical error on Aetna’s part as the document is clearly dated November, 10, 2009 [63- 68]. - 9 - On April 12, 2010, Herrera herself submitted a claim within the American Arbitration Association for the medical expenses paid by Aetna, totaling $19,649.10 [87-89]. Arbitrator Jonathan Hill, in an arbitration award dated February 14, 2011, denied the claims in the entirety [89]. Arbitrator Hill found that the documents forwarded to Hanover were not bills and, Hanover, was therefore under no obligation to pay or deny any “claims” [88]. Arbitrator Hill further held that, even if one were to consider the documentation submitted to Hanover by Aetna’s subrogation company as “bills”, Hererra had not paid any sum of money and thus, lacked standing to pursue the claims paid by Aetna [88]. Arbitrator Hill’s award was affirmed in its entirety by the award of Master Arbitrator Donald T. DeCarlo dated June 9, 2011 [90-93]. Master Arbitrator DeCarlo affirmed, finding that there were “no bills submitted” to trigger Hanover’s obligation to pay or deny and that the Applicant’s health care provider and not Hererra herself who had not actually incurred any expenses, was the proper party to assert any claims [90-91]. Despite the above timeline of events, Herrera’s medical providers continued to submit their bills for payment directly to Aetna and Aetna continued to pay an additional $23,525.73 [6, 21]. On February 6, 2012, Herrera’s counsel submitted correspondence from the Rawlings Company again with the same prior documents and new documentation regarding the additional $23,525.73 paid (for medical - 10 - treatment rendered from 2008 through 2011) [96-170]. Again, such documentation was in the same exact format from Aetna’s subrogation company as already determined by the arbitration forum to not constitute submission of “bills”. Thus, there was no obligation imposed upon Hanover to pay/deny. On April 9, 2012 (almost one year after the Master arbitration award) and after years of continued voluntary payment by Aetna, Aetna filed the underlying summons and complaint in Supreme Court, Bronx County [18-53]. Aetna sought reimbursement of the medical bills paid in the total amount of $43,174.83 plus interest and attorney’s fees [21-25]. Aetna sought such reimbursement pursuant to Insurance Law §5106(a) and 11 NYCRR §65.15(g) solely [21]. By Decision/Order dated January 3, 2013, the Supreme Court denied Aetna’s motion for summary judgment and granted Hanover’s cross-motion for summary judgment [5-10]. The Court held that “the matter must be dismissed because Plaintiff, Aetna, is not a ‘health care provider’ under the statute” [9]. The Court further held, “11 NYCRR 65-3.11[a] provides, in relevant part, for the payment of no-fault benefits ‘directly to the applicant…or upon assignment by the applicant…[to] the providers of health care services’ [9]. The term ‘providers of health care services’ logically denotes the specific provider or providers of health care services to the applicant/insured giving rise to the assigned claim” [9]. The Court further determined that Aetna could not sustain a cause of action based upon - 11 - breach of contract with the argument that they had submitted “bills” and demand payment as the “Plaintiff is not in privity of contract with Defendant, and has not shown that it was an intended third-party beneficiary of Defendant’s contract with Ms. Herrera [9-10]. Instead, Plaintiff is seeking as a purported assignee to recover its own losses, not those of the insured. (Federal Ins. Co. v. Spectrum Ins. Brokerage Services, Inc., 38 A.D.3d 213 [1 st Dept. 2007] [9-10]”. Finally, the Supreme Court concluded that Aetna could not sustain a cause of action (despite the fact that no such cause of action was plead) under subrogation principles [10]. The Court went on to define that, to proceed under a cause of action based upon subrogation, the insurer has the right to stand in the shoes of the insured [10]. Here, however, the Supreme Court correctly determined that, the equitable doctrine of subrogation does not allow a health insurer to bring an action against a no-fault insurer for sums the health insurer was obligated to pay its insured. [10]. Aetna sought to appeal the Supreme Court’s decision [3-4]. By Decision/Order dated April 15, 2014, the First Department unanimously affirmed the Decision/Order below, with costs [CA6-7]. The Appellate Division properly affirmed the determination that “11 NYCRR 65-3.11(a) provides, in relevant part, for the payment of no-fault benefits ‘directly to the applicant…or, upon assignment by the applicant… to [the] providers of health care services’ [CA6-7]. Plaintiff Aetna Health Plans is not a ‘health care provider’ under the statute, but rather a - 12 - health care insurer (see A.M. Med. Servs., P.C. v. Progressive Cas. Ins. Co., 101 AD3d 53, 62 [2d Dept 2012; Craig Antell, DO, PC v. New York Cent. Mut. Fire Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50521[U] [App Term, 1 st Dept 2006])” [CA6]. The Appellate Division further held that the No-Fault law does not pertain to a health insurer and thus, there can be no claim against Hanover under a principle of subrogation, citing to Health Insurance Plan of Greater New York a/s/o Jamwantie Chatoredussy v. Allstate Ins. Co., 2007 NY Slip Op 33925(U), 2007 WL 4367045 (Sup. Ct. N.Y. Co. 2007) [CA7]. Finally, the Appellate Division affirmed the determination that Aetna cannot pursue the claim under a breach of contract claim since it is not in privity of contract with Hanover and that there had been no showing by Aetna that they were an intended third party beneficiary of any contract [CA7]. Aetna’s motion to reargue was denied by the Appellate Division [CA4]. Aetna then sought leave to appeal to this Honorable Court; such right was granted by Order dated January 8, 2015 [CA3]. - 13 - ARGUMENT POINT I AETNA FAILS TO STATE A CAUSE OF ACTION UPON WHICH RELIEF MAY BE GRANTED AND THE APPELLATE DIVISION SHOULD BE AFFIRMED. A. Aetna Lacks the Requisite Standing The Decision/Order of the Supreme Court of the State of New York, County of Bronx (Brigantti-Hughes, J.) dated January 3, 2013, determined that applicable case law, relevant statutes and the documentary evidence supported a finding that Aetna cannot sustain a cause of action against Hanover as Aetna lacks standing [5- 10]. Standing is requisite for bringing an action, and its absence negates a court’s authority to adjudicate any litigation. T & G Medical Supplies, Inc. v. State Farm Insurance Company, 7 Misc.3d 1017(A) (2005). That Aetna lacked the requisite standing was plead as an affirmative defense to the plaintiff’s underlying complaint [57]. Moreover, the defense of a lack of standing to sue, unlike other defenses, is not a waivable defense. Id. “As such, the issue of standing cannot be waived even if a defendant fails to object to the issue of standing beforehand. (See Stark v Goldberg, 297 AD2d 203, 204 [1st Dept 2002]; Axelrod v New York State Teachers' Retirement Sys., 154 AD2d 827 [1989].) In order to establish standing in a no-fault claim, plaintiff health care providers must produce ‘properly executed’ assignments of insurance benefits, signed by the patient naming the - 14 - provider as assignee (see 11 NYCRR §65-3.11 (b)(2); A.B. Med. Servs. PLLC v Highland Ins. Co., NYLJ, May 27, 2003, at 21, col 3; Advanced Med. Rehabilitation P.C. v Travelers Prop. Cas. Ins. Co., 2 Misc 3d 1004[A], 2004 NY Slip Op 50141[U]; T&G Med. Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 1017(A) (2005 NY Slip Op 50636[U]).” B. Aetna Is Not A Provider Of Health Care Services Aetna filed a summons and complaint in the underlying Supreme Court, Bronx County action, seeking reimbursement of payments issued for medical bills to Herrera pursuant to Insurance Law §5106(a) and 11 NYCRR §65.15(g) [21]. Both Insurance Law §5106(a) and 11 NYCRR §65.15(g) pertain to a no-fault insurer’s obligations for payment of first-party benefits and are inapplicable to the case at hand. More specifically, both statutes discuss the requirements for an insurer upon receipt of a claim for first-party benefits by a claimant. A “claimant” as intended under these statues would be the eligible injured person or his or her medical provider through a proper assignment of benefits. The plain reading of the statutes as well as the longstanding law are clear that Aetna, as an insurer and not a medical provider, is not entitled to direct no-fault reimbursement. In fact, 11 NYCRR 65-3.11(a) (Regulation 68), governs the direct payment of No-Fault benefits by an insurer to an applicant for first-party benefits and is clear on this issue. - 15 - 65-3.11 Direct Payments. (a) An insurer shall pay benefits for any element of loss, other than death benefits, directly to the applicant or, when appropriate, to the applicant’s parent or legal guardian or to any person legally responsible for necessities, or, upon assignment by the applicant or any of the aforementioned persons, shall pay benefits directly to providers of health care services as covered under section five thousand one hundred two (a)(1) of the Insurance Law, or to the applicant’s employer for loss of earnings from work as authorized under section five thousand one hundred two (a)(2) of the Insurance Law. Death benefits shall be paid to the estate of the eligible injured person. “The applicable insurance regulations governing ‘direct payments’ of no- fault benefits by the insurer provide that ‘an insurer shall pay benefits … directly to the applicant or … upon assignment by the applicant …[to] the providers of services (11 NYCRR 65.15[j][1], now 11 NYCRR 65-3.11[a]). Pursuant to 11 NYCRR 65.15(j)(1), a provider’s entitlement to recovery of no-fault benefits directly from the insurer is contingent upon an assignment of such benefits, and the assignment must be made to the ‘providers of services’.” Rockaway Blvd. Med. P.C. v. Progressive Ins., 9 Misc.3d 52 (2005). - 16 - In Health Insurance Plan of Greater New York v. Allstate Ins. Co., supra, Health Insurance Plan of Greater New York, (hereinafter referred to as “HIP”), brought an action pursuant to NYCRR 65-3.11 to recover the payments it made for the medical expenses HIP believed to be subject to reimbursement from the no- fault insurer (Allstate) [191]. The Court dismissed HIP’s complaint stating, HIP, as a health insurer, is clearly not a “provider of health care service.” [191-193]. The Court agreed and held that HIP could not proceed with an action pursuant to NYCRR 65-3.11. The Court acknowledged that this narrow construction of the Regulation has remained constant. See e.g. Allstate Ins. Co. v Belt Parkway Imaging, Inc.,33 AD3d 407 (1 st Dept. 2006); V.S. Medical Services, P.C. v New York Central Mutual Fire Ins. Co., 14 Misc.3d 134 (A) (App Term 2 nd and 11 th Jud Dist. 2006); Craig Antell, D.O., P.C. v. New York Cent. Mut. Fire Ins. Co.,11 Misc.3d 137 (A) (App Term 1 st Dept. 2006); A.B. Medical Services PLLC v. Liberty Mut. Ins. Co., 339 Misc 3d 36, (App Term 2 nd and 11 th Jud Dist. 2005) [192]. Aetna is a health insurance carrier and like HIP, is not a provider of health care services and therefore, not entitled to assert it may proceed under 11 NYCRR § 65-3.11. - 17 - C. Aetna Does Not Have A Proper Assignment Aetna’s brief essentially acknowledges the well-established precedent that precludes Aetna as an insurer and not a medical provider, from pursuing their claims pursuant to 11 NYCRR 65-3.11(a). Aetna next argues that the real intention of the within appeal is “primarily predicated” upon Aetna’s contention that Aetna has standing through principles of subrogation and common law indemnification. It is noteworthy that Aetna’s complaint plead relief pursuant to Insurance Law §5106(a), 11 NYCRR §65.15(g) and breach of contract only [21- 25]. Aetna did not plead any basis for recovery through subrogation or indemnification as alternate theories for recovery. Aetna should not be afforded the opportunity to raise alternative theories of relief during the appellate process. Nevertheless, such theories of relief were addressed and properly denied by the underlying Courts. The very doctrine of subrogation is to allow an insurer to “stand in the shoes” and seek to assert the rights the rights of its insured. There is no authority for Aetna to maintain a subrogation action against Hanover to recover for its own and not it’s insured’s loss. See, Federal Ins. Co. v. Spectrum Ins. Brokerage Services, Inc. 304 A.D. 2d 316 (1st Dept. 2003); see also, ELRAC, Inc. v Ward, 96 N.Y.2d 58, 75 [2001]; Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 N.Y.2d 363, 373 [1998]; Trans-Resources, Inc. v Nausch Hogan & Murray, 298 A.D.2d - 18 - 27, 34 [2002]); Health Insurance Plan of Greater New York v. Allstate Ins. Co., supra; Dezer Properties II, LLC v. Kaye Insurance Associates, Inc., 38 AD3d 213 (1 st Dept. 2007). In fact, the State of New York Insurance Department’s Office of General Counsel issued an Opinion Letter dated January 28, 2008, in which it stated, “In most no-fault cases, an insured assigns her benefits under Insurance Law § 5102(a)(1) to the health service provider [194-195]. In exchange, the health service provider undertakes the responsibility of bringing the claim against the no-fault insurer, including appeals of any denial by that insurer.” [9, 194-195] Aetna alleges that they had a valid assignment from the eligible injured party, Luz Herrera (“Herrera), to proceed with this action for reimbursement. However, there is no valid assignment. First and foremost, as set forth above, a claimant can only maintain his/her own rights to no-fault reimbursement themselves or by assignment to their treating medical provider for direct payment of first-party benefits pursuant to 11 NYCRR 65-3.11(a). It can be necessarily deduced that Herrera assigned her rights to each of her treating medical providers and those medical providers, pursuant to such assignment, were able to bill and recoup payment from Aetna. Thus, not only can Herrera, not assign her rights to direct no-fault reimbursement to an insurer per the No-Fault Regulation; there are no longer any outstanding rights/claims for Herrera to assign to Aetna. - 19 - Notwithstanding the inability of an insurer to be an assignor for direct no- fault reimbursement, any theory that Aetna’s assignment can somehow survive under a theory of subrogation respectfully fails. There is simply no valid assignment as Herrera can only assign what rights she maintains herself. Here, any purported loss belongs to that of Aetna, and not Herrera. The underlying Court’s determination that an insurer cannot seek to recoup its own loss under a theory of subrogation is consistent with established precedent [10, CA7]. As cited in HIP, and by the court below, “Subrogation, an equitable doctrine, allows an insurer to stand in the shoes of its insured and seek indemnification from third parties whose wrongdoings has caused the loss for which the insurer is bound to reimburse.” Kaf-Kaf, Inc. v. Rodless Decorations, Inc., 90 N.Y. 2d 654, 659 (1997) [10, 191-193]. As held in Federal Ins. Co., v. Spectrum Ins. Brokerage Services, Inc., supra, and as cited in Health Insurance Plan of Greater New York, supra, there is no authority authorizing Aetna to maintain a subrogation action against Hanover to recover for its own and not its insured’s loss [191-193]. In fact, the case law utilized by Aetna in support of its subrogation theory of relief all stand for the proposition that an insurer is subrogated to the insured’s rights to recover a loss caused by a third party. Under the doctrine of subrogation, “It seeks, first, to prevent the insured from recovering twice for one harm, as it - 20 - might if it could recover from both the insurer and from a third person who caused the harm, and second, to require the party who has caused the damage to reimburse the insurer for the payment the insurer has made.” Allstate Ins. Co. v. Mazzola, 175 F.3d 255 (2d Cir. 1999). This theory is inapplicable here, where there is no third party responsible for any wrongdoing and/or damages to the insured and the insured has not suffered a loss. Aetna acknowledges that the Insurance Department Regulations allow the insured to assign his or her right to proceed directly against the no-fault insurer to the health care provider. Aetna attempts to argue that there is nothing to suggest “that such right lies exclusively with the health care provider”. However, the plain reading of the Regulation, the legislative intent and long-established precedent not only suggest but have consistently held that this right does, in fact, lie exclusively with the eligible injured party and his or her medical provider. In fact, in Health Insurance Plan of Greater New York, supra, the Court held that there was no “statutory or decisional authority which would authorize it [HIP] to maintain a subrogation action against Allstate to recover the sums it was contractually obligated to pay its insured, Chatoredussy [191-193]. To allow it to do so would create an entirely new right of action unsupported by the long settled subrogation principles” [192-193]. - 21 - Indeed, the Office of General Counsel for the State of New York Insurance Department addressed this exact issue in the same January 28, 2008 advisory opinion [194-195]. The Insurance Department concluded that “an HMO is not entitled to subrogate its recovery pursuant to New York Insurance Law §5105(a) (McKinney 2007), because it does not fit the definition of ‘insurer’ under the no- fault insurance law scheme” [195]. Specifically, the HMO sought to recover payments it issued under a claim of equitable subrogation against the no-fault insurer in Supreme Court [194]. The Insurance Department found that the HMO could not maintain such a cause of action because an insured has no right to seek no-fault reimbursement from the HMO and, similarly, the HMO has no entitlement to subrogate its recovery pursuant to Insurance Law §5105(a) [194-195]. Again, the Regulation provides that direct payment of no-fault benefits can only be maintained by the claimant themselves or through assignment by the claimant to his/her medical provider. Since an HMO, like Aetna, is not a “provider of health care services” under 11 NYCRR §65-3.11, it is not entitled to maintain a cause of action as a no-fault subrogee [194-195]. Contrary to Aetna’s assertions, Aetna is not without recourse when it mistakenly issued payment to medical providers it later suspects should have been reimbursed by the No-Fault insurer. Aetna’s relief is to recoup those payments directly from the medical providers. The medical providers will then bill the No- - 22 - Fault insurer who can then process and verify those claims in their ordinary course of business. To allow Aetna to argue that they can directly seek no-fault reimbursement from a no-fault carrier years after mistakenly issuing payment is absolutely prejudicial and turns existing law on its face. The no-fault carrier had no knowledge of the medical claims that had been billed and paid directly by Aetna in the first instance. The no-fault carrier should not then later be subject to litigation that essentially demands payment of alleged first-party benefits based solely upon the assertion that Aetna mistakenly paid. This leaves the no-fault carrier without any ability to verify and process the claims [rights afforded the no- fault carrier in the Regulation when processing claims for first-party benefits]. Moreover, Aetna, as a primary insurance carrier, in its respective agreements with medical providers, customarily has a method for seeking a refund from the provider where it issued payment in error. Most agreements between the private insurer and medical provider can and should have a clause that would allow Aetna to maintain a no-fault exclusion. In fact, the State of New York Insurance Department in its January 28, 2008 advisory opinion discussed that the Regulation contemplated and addressed this very issue [195]. §52.16 of 11 NYCRR Pt. 52 (Regulation 62) permits an HMO contract to provide a no-fault exclusion: (b) No policy shall limit or exclude coverage by type of illness, accident, - 23 - treatment or medical condition, except as follows: (8) treatment provided in an government hospital; benefits provided under Medicare or other governmental program (except Medicaid), any State or Federal workers’ compensation, employer’s liability or occupational disease law; benefits to the extent provided for any loss or portion thereof for which mandatory automobile no-fault benefits are recovered or recoverable; services rendered and separately billed by employees of hospitals, laboratories or other institutions; services performed by a member of the covered person’s immediate family; and services for which no charge is normally made. In short, Aetna has standing to pursue repayment of the monies issued from each medical provider to which it claims to have mistakenly paid. Similarly, should the medical providers return the monies improperly billed directly to Aetna, those medical providers would then have a claim to pursue reimbursement for those services through the claimant and/or the No-Fault carrier. However, to allow Aetna to create a direct right of a private insurer to seek no-fault payments from the no-fault insurer violates the Regulation and the long-settled precedent on this issue. Furthermore, to create a new right for Aetna to proceed directly against the no-fault carrier in this manner essentially ties the hands of a no-fault carrier. The - 24 - no-fault insurer would be bound to pay whatever claims/amounts the private insurer unilaterally alleged should have been covered by the no-fault insurer. The no-fault insurer would be without any of its Regulatory rights to verify the claim, determine what is medically necessary/causally related to the motor vehicle accident, determine whether or not the charges were the permissible amounts pursuant to the NY State Worker’s Compensation Fee Schedule, etc. In short, if we were to follow Aetna’s rationale for recovery, a no-fault carrier, could be sued indefinitely for sums mistakenly paid by a private carrier years later and without any of the built-in mechanisms for processing the claims afforded the no-fault carrier pursuant to the Regulation. Nowhere is the prejudice this would impose upon the no-fault insurer more blatant than with the very fact pattern of the within action. Here, Aetna seeks to demand payment of $43,174.83 plus interest and attorney’s fees through the filing of a complaint in 2012 for claims associated with a motor vehicle accident that occurred in 2008 and medical treatment rendered from 2008 through 2011. There were several years where Aetna knowingly continued to make payments it now claims should have been submitted to the no- fault insurer. The no-fault carrier cannot verify, handle, dispute the amounts and claims paid and demanded. - 25 - D. Aetna Is Not In Privity Of Contract With Hanover Aetna then attempts to assert a theory for recovery based upon indemnification and unjust enrichment. Again, neither theory for recovery was plead in the underlying Supreme Court Bronx action [18-25]. Aetna cannot, in the appellate phase, attempt to change arguments in a last-ditch effort to create standing. Notwithstanding the failure to allege a cause of action under these legal principles, the underlying Courts addressed and properly held that any such arguments also fail. Any breach of contract theory asserted by Aetna to pursue the rights and demand the obligations imposed upon the No-Fault insurer by virtue of the insurance policy it maintained with Herrera must necessarily fail. Any rights or obligations that exist under the No-Fault insurance policy exist between Herrera or Herrera’s assigned medical providers and Hanover. This is the case under contract principles and pursuant to the NY No-Fault Regulation. Aetna is not in privity of contract with Hanover and is not an intended third-party beneficiary to that contract. Both Hanover and Aetna were “contractually obligated, under separate and distinct policies, to pay first-party benefits.” Aetna cannot pursue a breach of contract directly against Hanover as Aetna was not “legally answerable for” or “legally compelled to pay” the no-fault claims at issue. Health Insurance Plan of Greater New York v. Allstate Ins. Co., supra. - 26 - In Health Insurance Plan of Greater New York, supra, the Court also discussed the breach of contract claim that HIP asserted stating: Contrary to HIP’s contention, it may not assert a breach of contract claim against Allstate on behalf of Chatoredussy. HIP, of course, is not in privity of contract with Allstate, and has not shown it was an intended third- party beneficiary of the contract. Indeed, both HIP and Allstate were both contractually obligated under separate and distinct policies, to pay first-party benefits to Chatoredussy. Thus, even assuming that HIP established that it demanded payment and Allstate refused to pay, HIP may not maintain this cause of action against this defendant. Allstate’s assertion that HIP was “not legally answerable for” or legally compelled to pay” Chatoredussy’s no-fault claims, to the extent they are intended to argue the same, are correct. [192]. Aetna, like HIP, is not in privity of contract with Hanover and is not an intended third-party beneficiary of the contract. Aetna and Hanover are contractually obligated to Herrera under separate and distinct policies. Although Aetna made payments under its policy of insurance to providers of health care services for Herrera, Aetna was “not legally answerable for” or “legally compelled to pay” Herrera’s no-fault claims. E. Aetna Cannot and Did not Not Submit “Bills” Any arguments by Aetna with regard to Hanover’s inability to raise standing by failure to assert the defense in a timely no-fault denial are respectfully, nonsensical. The obligations imposed upon a no-fault carrier upon receipt of a - 27 - claim for payment of first-party benefits were never even triggered in this matter. The treating medical providers billed and were paid directly by Aetna. Hanover never received bills seeking reimbursement from the medical providers and, thus, there never existed any claims to process or to pay/issue denials on. Any attempt by Aetna to argue that the correspondence submitted by The Rawlings Company on its behalf on January 6, 2010 and February 6, 2012, are “bills” to trigger any obligations on the part of Hanover must fail. Such correspondence attached a series of documents that list the payer as “Aetna Health Plan” and seek payment be issued to “The Rawlings Company, LLC” [70-86, 90- 170]. Each and every one of these documents clearly state “this is not a bill” [70- 86, 90-170]. The Regulation clearly states that claims for direct payments of first- party benefits can only be made by the claimant or his/her treating provider. Here, documents attached with a cover letter, years following services, which clearly denote payment already issued by Aetna, clearly state they are not bills and seek payment to be made to Aetna’s subrogation company are not “bills” as contemplated by the No-Fault Regulation. Thus, such correspondence comes from a party other than the treating medical provider in violation of the Regulation. Such correspondence and the party it was issued by are ineligible for direct payment of first-party benefits. Such documents do not constitute “bills” that would obligate any responsibility on the part of the no-fault carrier to process, pay - 28 - or deny. To hold otherwise, violates the No-Fault Regulation mandates and defies logic. F. Aetna is Collaterally Estopped from Raising any Arguments Regarding its Alleged Submission of “Bills” Aetna acknowledges the preclusive effect of the underlying arbitration awards to support its argument regarding standing; an interpretation of the underlying award language that the Respondent respectfully disagrees with. 3 However, a proper application of the doctrine of res judicata, if taken to its necessary conclusion, is self-defeating for Aetna. In spite of any such argument regarding standing under the “doctrine of inconsistent positions”, no matter what party asserts the claim, the determination remains that the correspondence issued was held to not constitute “bills” to trigger any obligations on the part of the no- fault insurer. Contrary to the issue of Aetna’s standing, the very documents claimed to be “bills” in this Supreme Court action have already been subject to review and determination in the underlying arbitration [87-89]. Such arbitration award was then affirmed upon review by the Master Arbitrator and thus, subject to issue preclusion [90-93]. Aetna is collaterally estopped from raising the issue in this appeal. Herrera filed an arbitration and the Award, which was affirmed by the 3 The Arbitrators clearly referenced that the “private health care provider” had the requisite standing, if any. Even if we were to accept Aetna’s argument that this was a typographical error and that the Arbitrators intended to make reference to Aetna, this was mere dicta. Aetna was not a party to that arbitration action and thus, the issue of whether Aetna (as opposed to Herrera herself) has standing was not properly heard and determined and thus, not subject to issue preclusion or judicial estoppel. - 29 - Master Arbitrator determined that the documents Herrera submitted were “not bills and there was no late notice as no bills were submitted” [87-89, 90-93]. “although the documents forwarded to the Respondent appear at first blush to be bills, it is clearly noted in box 31 of said documents that “This is not a bill”. As the aforementioned documents were not bills, the Respondent was under no legal obligation to either pay or deny same within the statutory period.” Counsel, who represented Herrera at arbitration, thereafter, on behalf of Aetna, submitted these same documents to Hanover after the Arbitrator and Master Arbitrator held they were not bills. In order to have standing to receive any benefits assigned, the assignor, or Eligible Injured Person (EIP) as defined, must comply with all policy requirements. As discussed, Aetna is not the EIP or assignor and thus, not a proper party to submit such claims. Even if Aetna could be deemed an appropriate party for such claims, the insurer must receive the bills in order to begin processing the claim. By not receiving bills, Hanover was precluded from conducting its factual investigation to determine payment or denial of no-fault benefits. Hanover has a statutory right to conduct its investigation under 11 NYCRR §65-1, which provides that no action may lie against an Insurer unless, as a condition precedent thereto, the applicant shall have been in full compliance with the terms of the policy. The applicant may be required, where requested to: - 30 - a. execute a written proof of claim under oath b. as may reasonably be required submit to examinations under oath by any person named by the Company and subscribe the same; c. provide authorization that will enable the Company to obtain medical records; and d. provide any other pertinent information that may assist the Company in determining the amount due and payable. e. submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require. Receipt of correspondence from a subrogation recovery company demanding payment for medical services leaves the no-fault carrier without the ability to avail itself of its rights in processing the claim as set forth above. The Rawlings Co, LLC, as a third-party subrogation recovery company for Aetna, has no standing to assert the claim and could not provide any of the above information that may have been deemed necessary on the part of the no-fault insurer to process the no-fault claims. This is precisely why only a claimant (who has the sole authority to provide any needed HIPAA authorizations and/or attend an independent medical examination, Examination Under Oath, etc.) or that claimant’s assigned medical provider has the ability to seek direct payments under the No-Fault Regulation. - 31 - In short, Hanover never received any bills that necessitated any obligations to pay or issue a denial of benefits. The “bills” Aetna relies upon in support of this argument are not bills (as they clearly state themselves) and were submitted by and seek reimbursement of no-fault benefits directly to Aetna’s recovery subrogor; an entity which does not have standing to assert such a claim and to which is not entitled to direct payment of first-party benefits. Under the line of reasoning as advanced by Aetna, Hanover is afforded no regulatory rights to process the claims upon submission of these documents alleged to be “bills”, but is imposed with the regulatory obligations to pay/deny? Not only is this illogical but extremely prejudicial on the part of a no-fault carrier. G. Public Policy Considerations For all of the foregoing reasons, the unanimous Decision/Order of the Appellate Division, First Department, was proper and should be affirmed in its entirety. The Respondent respectfully disagrees with the mischaracterization of the issue as promoted in Aetna’s public policy argument section. Specifically, Aetna claims the Decision of the Appellate Division allows the no-fault insurer “that has wrongfully refused to pay its insured’s health services to escape liability therefor simply because the insured’s private health insurer paid the health care provider.” Respectfully, there has been no “wrongful refusal to pay its insured’s health services” on behalf of the no-fault insurer in this action. Unbeknownst to the no- - 32 - fault insurer, medical bills were sent to a private health insurer who paid those bills over a span of years; even after the private insurer alleged payment should be covered under no-fault. Aetna did not seek to notify the medical providers to issue such bills to the no-fault carrier. Aetna did not seek to recoup whatever sums of money the private insurer claims were mistakenly paid from the medical providers. Aetna improperly demanded direct no-fault reimbursement from the no-fault insurer in violation of the existing No-Fault Regulation and established precedent. With this appeal, Aetna seeks to create a wholly new right for direct no-fault reimbursement on behalf of the private insurer against an unsuspecting no-fault insurer. Aetna asserts that public policy dictates this right be created so that the no- fault insurer cannot “escape liability and be unjustly enriched”. The Respondent, respectfully, disagrees with such mischaracterization. The interests of public policy are only served in upholding the existing law as determined in the Appellate Division’s Order herein. To hold otherwise, leaves the no-fault insurer subject to direct claims from private insurers for no-fault reimbursement without any recourse other than to accept that whatever sums demanded be paid. The no-fault insurer is without its statutory rights to verify and process the no-fault claims. In short, the no-fault insurer played no role in the alleged mistake of the medical provider seeking and being paid by the private insurer. To disturb the underlying - 33 - determination would subject the no-fault insurer to indefinite demands by private insurers for payment in the amount and under the unilateral assertion by the private insurer that the no-fault carrier is liable. Allowing the private insurer to circumvent the standard practice and demand direct no-fault reimbursement from the no-fault insurer as sought herein, discards the entire system (with its rights/obligations) created under New York’s no-fault law in extreme prejudice to the no-fault carrier. Aetna claims that to hold otherwise, would leave “injured policyholders” with nowhere to turn for “payment of their outstanding health bills”. Respectfully, no such harm was incurred by the injured party here whose medical bills had always been paid. Similarly, there is no threat for such harm to an injured party seeking payment of their health bills. Customarily, Aetna, upon receipt of bills, would have rejected the bills and advised the medical provider that the bills should be directed to the no-fault insurer. In turn, the no-fault insurer, upon proper receipt of the claims/bills from the appropriate party, would have processed the claims with full access to their Regulatory rights and subject to the Regulatory obligations. Aetna, as a private insurer who mistakenly issues payment later alleged should be covered by a no-fault insurer is not without recourse. Aetna can seek reimbursement of funds it alleges were inadvertently issued directly from the - 34 - medical provider pursuant to its rights under §52.16 of 11 NYCRR Pt. 52 (Regulation 62). The purpose of New York’s no-fault scheme was “to promote prompt resolution of injury claims, limit cost to consumers and alleviate unnecessary burdens on the courts.” Byrne v. Oester Trucking, Inc., 386 F. Supp. 2d 386, 391 (S.D.N.Y. 2005). It cannot be that the legislative intent was for a no-fault insurer to be without any of the rights/burdens it was imparted by the New York No-Fault law. The interpretation asserted by Aetna in this appeal flies in the face of existing and well-established law and improperly places a private insurer’s rights above those of the no-fault insurer. Moreover, it is in direct contravention of the intended legislative purpose under the New York no-fault scheme as it would open the flood gates of litigation between a no-fault insurer and private insurer for all past claims indefinitely. - 35 - CONCLUSION For the reasons set forth herein, it is respectfully submitted that the Decision/Order of the Appellate Division, First Department, that unanimously upheld the Order of the Supreme Court, Bronx County, appealed from should be affirmed, with costs, to the Defendant-Respondent and attorney’s fees. Dated: New York, NY April 14, 2015 Respectfully submitted, CRISCI, WEISER & MCCARTHY ______________________________________ By: Erin M. Crowley, Esq. Attorneys for Defendant-Respondent 17 State Street, 8 th Floor New York, New York 10004 (212) 709-2185 ecrowley@hanover.com