American Tr. Ins. Co. v Smiley, 2021 NY Slip Op 05807 (1st Dept. 2021)
(2) âBefore Supreme Court, defendants did not contest the affiantâs assertion that the September 7, 2017 notice was mailed the same day, three days before Ortiz signed the general release in question (see CPLR 2103[b][2] [service completed when mailed])â
(1) âThe notice dated September 7, 2017, advising defendantsâ insurer of the payment of PIP benefits covering the medical bills of nonparty Damaris Ortiz and demanding reimbursement, establishes that plaintiff insurerâs âright to subrogation âaccrue[d] upon payment of the loss’â on September 5, 2017âł
(3) Contrary to defendantsâ contention, the notices were not required to be sent directly to them, instead of their insurer, which was their âagent acting within the scope of [its] agencyâ (Center v Hampton Affiliates, 66 NY2d 782, 784 [1985]), and from which plaintiff had already recovered payments it made for another injured individualâs medical bills due to defendantsâ liability arising from the same automobile accident (see Insurance Law § 5105[a]). The insurerâs âknowledgeâ of plaintiffâs subrogation right âis imputed to [its] principal[s],â who are âbound by such knowledge although the information is never actually communicated to [them]â (Center, 66 NY2d at 784 [citations omitted]). Notably, prior to plaintiffâs first payment of benefits covering Ortiz, the bill of particulars served by Ortiz upon defendants in her personal injury action advised of the expected PIP coverage by plaintiff. As such, defendants âkn[e]w[] or should have known that a right to subrogation exist[ed]â at the time Ortiz signed the general releaseâ
Under the law of agency, âDefendantâ knew of APIP subrogration prior to the release execution. The end result is the defendant carrier will either stick its insured with ATICâs bill or pay over the limits.