Wade Clark Mulcahy LLP

In <em><a href="http://blog.wcmlaw.com/wp-content/uploads/2018/05/Contact-Chiropractic-P.C.-v.-New-York-City-Transit-Authority.pdf">Contact Chiropractic, P.C. v. New York City Transit Authority</a>,</em> the Court of Appeals, the highest Court in NY, tackled the split between the First and Second Departments regarding the statute of limitations in no-fault claims.  In 2001, Girtha Butler was injured as a passenger on a bus owned by the New York City Transit Authority.  NYCTA did not have no-fault coverage, but was self-insured with respect to that risk.  Contact Chiropractic provided medical treatment to Butler and she assigned to them her right to recover first-party benefits from NYCTA.  Contact Chiropractic submitted its claims to NYCTA from March 14, 2001 – August 27, 2001.  On January 8, 2007, plaintiff commenced an action seeking reimbursement for outstanding invoices under CPLR §213 (2) which establishes a six-year period of limitations for an action based upon contractual obligation or liability.
NYCTA moved for dismissal under CPLR §214 (2) which applies a three-year statute of limitations to actions to recover upon a liability created or imposed by a statute because NYCTA is self-insured.  NYCTA relied on the First Department case of <em>M.N. Dental Diagnostics, PC v. NYCTA</em> which stated that the obligation to provide no-fault benefits arises out of the no-fault statute and as such, the three-year statute of limitations applies.  Contact Chiropractic opposed based on the Second Department case of <em>Matter of ELRAC, Inc. v. Suero</em> which stated that while an injured person’s claims for benefits are statutorily mandated, they arise out of an insurance contract and as such, are subject to the six-year statute of limitations.  The Court of Appeals resolved the split in authority in favor of the First Department and held that <strong><em><u>self-insured</u></em></strong> entities are bound by a three, not six, year statute of limitations.
In matters involving no-fault claims against insurance companies liable for no-fault benefits due to the issuance of an insurance policy, the six-year statute of limitations still applies.  This is a critical distinction among those of us who deal in No Fault or PIP law from time to time.   Thanks to Mehreen Hyatt for her contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.