This defamation action was dismissed on motion by the Supreme Court of Kings County. The Appellate Division affirmed.

The plaintiff allegedly was struck by an automobile driven by Igal Shaul. She filed a claim for no-fault benefits with Shaul’s insurer, the defendant Response Insurance Company (RIC). After conducting an investigation, including examinations under oath of the plaintiff and Shaul, RIC denied her claim, concluding that she had made “material misrepresentations and false statements” and that the incident was a “deliberately staged event.” The denial of claim form was sent to three medical providers who had treated the plaintiff. After a referee determined that Shaul had been involved in the accident, the plaintiff brought this action alleging that she had been defamed when RIC sent the denial to her medical providers. “Contrary to the plaintiff’s contention, the Supreme Court properly granted the defendants’ motion pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action. The statements made in the denial of claim form were subject to a qualified privilege as both RIC and the medical providers treating the plaintiff had an interest in that communication (see Golden v Stiso, 279 AD2d 607, 608). In order to overcome the privilege, the plaintiff was required to allege that RIC’s statements were made solely with malice, either under the constitutional or common-law standard (see Liberman v Geldstein, 80 NY2d 429, 438; Rohrlich v Consolidated Bus Tr., Inc., 15 AD3d 561, 562). The plaintiff failed to allege any facts from which malice could be inferred and her conclusory allegations of malice were insufficient to overcome the privilege (Red Cap Valet v Hotel Nikko [USA], 273 AD2d 289, 290; see Rohrlich v Consolidated Bus Tr., Inc., 15 AD3d at 562; Serratore v American Port Servs., 293 AD2d 464; Freidman v Ergin, 110 AD2d 620, affd 66 NY2d 645; see also Breytman v Olinville Realty, LLC, 54 AD3d 703, 704; Baker v City of New York, 44 AD3d 977, 981).” “The plaintiff ’s remaining contention that the motion should have been denied as premature is without merit.”

Comment: This decision is based on the principle of “qualified privilege.” In the field of defamation law, a statement which might otherwise constitute libel or slander does not support a defamation suit if the person who made the statement did so in the course of some legal or business duty to do so, and without malice. In the context of a no-fault claim, or any insurance claim, if the insurer conducts an investigation and comes to a rational conclusion that the claimant has staged an accident, as in this case, or otherwise has engaged in conduct that is questionable or fraudulent, the insurer is under a business duty to communicate that fact to certain persons. In the case of a no-fault claim, the reasonable belief that the accident was staged, forms the basis for the denial which then must be communicated to medical providers.

Now, say, hypothetically, the insurer in this case had issued a press release to the public stating that this claimant staged a fraudulent accident. Would that be protected by the qualified privilege? Most likely not (unless the statement was proved to be true).

Claimant Who Lost His Dentures Due to Post Accident Memory Impairment Gets Award for Replacements

In the Matter of the Arbitration between [Applicant] and OneBeacon Insurance Co., AAA Case No. 412008040607, AAA Assessment No. 17 991 02213 09, Insurer’s Claim File No. 0AA145872 (Andrew M. Horn,arbitrator)

In dispute in this no-fault arbitration were, inter alia, the Applicant’s claims for reimbursement for dentures received by the 81 year old man on May 1, 2007, purportedly as a result of injuries sustained in an automobile accident on November 28, 2005.

One Beacon Insurance Company timely denied the dentures claim, which was received on October 16, 2007, on November 1, 2007, alleging that “reimbursement for misplacing/losing your dentures… after this motor vehicle accident is not reimbursable under this no-fault policy”. The insurer also asserted that the fee charged was not in accordance with the fee schedule. “In regards to the disputed dentures, Respondent interposed the defense that assignor’s injuries were not causally related to the accident. That is, that there was no causal nexus between the accident and the loss of Applicant’s dentures, which the injured person alleged were ‘missing’ ‘a day or so after the accident’ and he ‘thought would turn up’”.

“He further contended that, prior to the accident, he ‘had no problems with (his) memory’, and waited for eighteen months before replacing his dentures ‘hoping they would be found’, but ‘paid the $2,400…because the doctor told him that (he was) ruining his health’ without them.” “Unlike negligence actions where claimants must prove causation, claimants seeking No-Fault payments bear no such initial burden, as causation is presumed, and establishes his or her prima facie case by proof that the claim forms were mailed and received, and that the insurer failed to pay within the 30-day statutory period. Causation is presumed since it would not be reasonable to insist that an applicant must prove as a threshold matter that a patient’s condition was caused by the automobile accident.”

“Thus, the burden is on the insurer to come forward with proof establishing by fact or founded belief its defense that the claimed injuries have no nexus to the accident.” “An insurer disclaiming coverage has the burden of establishing that the medical condition for which the assignor was treated was not related to the accident at all, and the question of whether such conditions were wholly unrelated to his automobile accident or not exacerbated by the accident cannot be resolved without recourse to medical facts.”

“In the instant case, Respondent relied on an independent medical examination conducted by its psychologist Dr. Michael H. Rosenfeld more than a year after the accident, on December 13, 2006. In his report, Dr. Rosenfeld noted that Applicant’s prior medical history included treatment for depression ‘for the past 50 years’, as well as ‘a history of hypertension, diabetes, osteoarthritis in his bilateral knees for the past 15 years, and neuropathy in his bilateral feet for the past ten years’. After reviewing available medical records, including a report of a psychological consultation with Dr. Paul Gunser, a psychologist, on October 21, 2006, taking Applicant’s history and conducting a psychological examination, Dr. Rosenfeld diagnosed the EIP with a resolved Adjustment Disorder with Anxious Mood, a history of Chronic Pain Disorder and Depression ‘unrelated to MVA’, and a history of ‘Possible Cognitive Dysfunction’ ‘Secondary to Long-Term Usage of Psychiatric Medication’, and concluded that ‘the original psychological complaints are only partially causally related to the…motor vehicle accident’, inasmuch as ‘the claimant has a pre-existing medical and psychiatric history that clearly has a direct effect on his current psychological and cognitive status.”

“Dr. Gunser, a Diplomate of the American Board of Medical Psychotherapists and Psychodiagnosticians, challenged the IME findings and pointed out that psychological testing of Applicant was conducted because ‘his neurologist was concerned about his complaints of failing memory’. Among the tests performed were: Wechsler Adult Intelligence Scale III, Wechsler Memory Scale III, the Stroop Color and Word Test, Trail Making Part A and B Tests, REY Complex Figure Test, Controlled Oral Word Association Test (FAS), Animal Naming, Boston Naming Test, and Purdue Pegboard Test.”

“Dr. Gunser noted that: Significant differences were observed when comparing verbal comprehension to working memory. The results were significant at the .15 level with a difference score of 10. Likewise, a significant discrepancy between perceptual organization and working memory at the .15 level was obtained. This was also a 10 point difference. These results suggest that working memory was significantly weaker than verbal comprehension and perceptual organization abilities.”

“Dr. Gunser further reported that: Applicant demonstrates some weaknesses with working memory, auditory attention, mild weakness with tasks examining impulsive tendencies, and a significant weakness with planning, organization and the execution of the plan. It is also significant to make a note that the patient added information about his experiencing depression at the time of this evaluation. His processing speed was not reflective of depressed performance. It is therefore unlikely that his weakness and impairment would be attributed to depression. His Depression was pre-existing to his current injuries sustained from the motor vehicle accident of 11—28-05.”

“Dr. Gunser concluded that Applicant suffered from a Cognitive Disorder. In an addendum dated January 11, 2007 prepared in response to Dr. Gunser’s letter, Dr. Rosenfeld pointed out that ‘there was no documented head injury or head trauma’, and that Applicant ‘did not even go (to) the hospital on the same day of the accident’. However, he also acknowledged that the ‘neurological report does indicate memory complaints, but these could be attributable to a number of factors (i.e. advanced aging, chronic usage of psychotropic medications, etc.)’, and that while the psychologist indicated that the claimant has deficits in ‘working memory’,…such a finding in a 79-year old man would not be that uncommon in that it is well documented that some aspects of memory decline with advanced aging. He further contended that, even though the claimant did report some memory complaints during (the IME) examination, he said that these occurred `mostly’ at home (i.e. not in the working setting).”

“Such a finding, Dr. Rosenfeld claimed, would not be consistent with a head injury, which would be likely to occur across multiple settings, and might also suggest that any memory complaints he might have could be attributable to emotional or psychological factors. In any event, Dr. Rosenfeld’s opinion remained unchanged. Respondent’s attorney also pointed out that Applicant continued to work as a pharmacist subsequent to the accident, from which she argued it was fair to assume that any memory loss was not disabling enough to be the cause of the EIP losing his dentures. Applicant, on the other hand, countered that prior to the accident he worked a total of eight hours per week (and afterwards less), but that he held a babysitting job, employed solely because he had a license and the law required that a licensed pharmacist be present even if the actual work was undertaken by unlicensed individuals. He was adamant that he had no problems with memory prior to the accident.”

“As unsavory as the picture is that it conjures up—an individual without dentures and with the EIP’s documented psychiatric history working as a pharmacist— I find that it is not dispositive of the issues of whether Applicant suffered from memory loss and, if so, whether said condition was in no way attributable or exacerbated by the accident.”

“After consideration of credible evidence in the record, I find that, given Dr. Gunser’s medical report and the history of complaints of memory loss documented by both Applicant’s treating neurologist and the insurer’s own IME doctor, Applicant was indeed suffering from memory loss. Furthermore, I conclude that Respondent has failed to establish that said injury was casually incompatible with the subject accident. Dr. Rosenfeld is far from definitive on the subject: In his original IME report, he did not conclude that Applicant’s memory loss complaints were totally unrelated to the accident, but rather that they were only partially causally related to the…motor vehicle accident because of the EIP’s preexisting medical and psychiatric history.”

“I am further convinced that the insurer failed to prove that the accident did not aggravate any pre-existing memory loss condition, and I note that exacerbations of pre-existing conditions are covered by the No-Fault Law. See, e.g., Wolf v. Holyoke Mut. Ins. Co., 3 A.D.3d 660 (3d Dept. 2004); Mount Sinai Hosp. v. Triboro Coach, 263 A.D.2d 11, 18 (2d Dept. 1999).”

“After careful review of the record, and in spite of Respondent’s attorney’s fine advocacy, it is my opinion that the insurer has failed to meet its heavy burden of proving that the medical condition which resulted in the loss of Applicant’s dentures was not related to the accident at all.” “An insurance carrier’s timely asserted defense that the bills submitted were not properly No-Fault rated or that the fees charged were in excess of the Workers’ Compensation fee schedule is sufficient, if proven, to justify a reduction in payment or denial of a claim. Notwithstanding that Respondent was given the opportunity to make a post-hearing submission in support of its excessive charge defense, it declined to avail itself of the chance, contending instead that it was unable to do so without a proper NF3/Bill which include the dx codes and CPT codes, an item that I duly note the insurer never sought as additional verification of the claim. In light of the insurer’s failure to submit proof in support of its defense of nonconformity with the worker’s compensation fee schedule, said defense is unproven.”

“Accordingly, Respondent’s denial is vacated and Applicant’s dentures claim is granted in its entirety: $2,400.00.” Comment: Boy oh boy—a 79- year old man can’t find his dentures after an accident, and he gets reimbursement for them because he claims his memory was affected by the accident even though he has a 50-year psychiatric history? It’s a good thing he didn’t claim he couldn’t remember where he parked his Lamborghini.