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Allstate Insurance Co. v. Stein2/19/2004
This opinion is uncorrected and subject to revision before publication in the Official Reports.
This appeal concerns the timeliness of an action by an insurance company as subrogee of an accident victim to whom the insurance company has paid Additional Personal Injury Protection (APIP) benefits. The question presented is whether the statute of limitations runs from the date of the accident or the date when the first APIP benefits were paid. We hold that the statute runs from the date of the accident, and that the insurer's action is therefore time-barred.
Factual Background
On May 24, 1995, a vehicle operated by Daniel Stein struck a vehicle being operated by Amy Walker and injured her. New York's no-fault law required that Walker have insurance coverage providing "first party benefits" consisting of reimbursement, to the extent specified by statute, for "basic economic loss" (health expenses, loss of earnings, and other reasonable and necessary expenses) (Insurance Law §§ 5102 , , 5103 ). As the term "no-fault" implies, these first party benefits were payable to Walker regardless of who was at fault, and neither Walker nor her insurer could recover them from Stein (Insurance Law § 5104 ).
As authorized by New York Insurance Department regulations, 11 NYCRR 65-1.3 (though not required by statute), Walker had also purchased an APIP endorsement from Allstate Insurance Company covering her for "extended economic loss" i.e., economic loss exceeding the time and dollar limits of the "basic economic loss" that is subject to mandatory no-fault coverage. Recovery of "extended economic loss" from third parties is not restricted by the no-fault statute.
On August 2, 1996, Walker began an action against Stein in Supreme Court, alleging that she had sustained a serious injury, which would permit her to recover non-economic loss without violating the no-fault statute, (Insurance Law § 5104 , and also seeking to recover economic loss other than her basic economic loss. Thus, Walker sought to recover from Stein the same "extended economic loss" that was covered by the APIP endorsement in her Allstate policy.
By June 29, 1998, Walker's basic no-fault coverage had evidently been exhausted, and Allstate made its first payment of APIP benefits to Walker. Allstate alleges that by May of 2001 it had paid more than $42,000 to Walker in APIP benefits. By making those payments, Allstate became subrogated to a portion of Walker's claim against Stein.
On February 20, 2001, counsel for the parties in Walker's action against Stein appeared, along with counsel for Allstate, at a conference before Supreme Court. Walker's counsel stated that Walker and Stein had agreed on a $300,000 settlement of the action. Counsel for Stein stated that the release Stein expected to get from Walker "cuts off any rights that Allstate would have against either Mr. Stein or [Stein's insurance carrier]" and requested a "clarification . . . to that effect" from Allstate's counsel. Allstate's counsel, without commenting directly on the request for clarification, stated that Walker "has been made aware of the possible subrogation claim in the amount of 43 thousand dollars . . . and that she understands that in entering into this release ...." Counsel for Walker added his own "clarification" stating that Walker is "giving a general release to the defendant . . . is reserving whatever rights or obligations or defenses she or her husband may have to any party to this proceeding, including Allstate Insurance Company, and I'm not conceding on the record that there's a right of subrogation or anything else."
Thus, it seems that the three parties represented at t
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