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Preclusion

While the insurance carriers do not generally have bad faith in New York and the statutory attorneys fees are anemic, the rule on preclusion in the no-fault sphere acts often times acts as the great equalizer. That said, the preclusion remedy over time has been chipped away, but the “nuts and bolts” no-fault defenses still fit within that gambit.

The Fair Price family of preclusion issues has always been one of the more intriguing rules of law that have developed over time. For purposes of this post, the material misrepresentation corollary is also quite poignant as the failure to timely disclaim precludes this defense. Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc., 80 A.D.3d 603, (2d Dept. 2009)

But as the reader probably knows, these claim based rules of preclusion are quite unique to NY. In Fla, it was the rule through their Appellate Division that the material misrepresentation defense has to be timely disclaimed. The Fifth DCA has changed course:

United Auto Ins. Co. v. AFO imaging, et. al., 5D20-2442

(1) “The Florida Supreme Court has explained that section 627.736(4) describes when PIP benefits are due and the method by which notice must be given. Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885, 891 (Fla. 2003). The Florida Supreme Court has also observed “the insurer is not barred from contesting the claim just because a payment becomes overdue.” Id. “

(2) “Because section 627.736(4)(i) does not alter the penalties for overdue payments, the Florida Supreme Court’s previous pronouncement still applies: United Auto is not barred from contesting the claim just because the
payment became overdue. In so holding, we do not address the propriety.”

So there you go