For many owners and contractors that perform construction in New York, they are very well aware and frustrated with defending against New York’s oppressive Labor Law §§ 240(1)[1], 241(6)[2] and 200[3] claims. Notwithstanding the unreasonableness of the absolute liability nature of the statutes (which is a topic of a number of articles and papers[4]), organizations are also alarmed by the nature of the injuries alleged from simple accidents that increase the exposure on these claims.
With the significant deductibles that commercial general liability insurers request from owners and contractors involved in construction projects in New York, the financial exposure for these parties can be substantial. One of the main reasons that insurers require such high deductibles is due to the large exposure associated with these Labor Law claims.
There have been countless bodily injury claims where, for example, a construction worker may trip and fall on a small object or fall from short distances which leads to multiple injuries and serious surgeries. They commence lawsuits premised upon the NY Labor Law statutes claiming that these surgeries were necessitated by these accidents, which have large verdict values for the pain and suffering associated with those procedures. Additionally, these injuries and surgeries are the basis for claims that the plaintiffs are unable to return to their employment as construction workers for the remainder of their work life, which may exponentially increase the value of a claim. This has led to years of questions of as to the validity of these claims.
The recent lawsuit commenced by Roosevelt Road Re, Ltd and Tradesman Program Managers, LLC[5], 1:24-cv-01549-NG-LB (E.D.N.Y. March 31, 2024) (“Roosevelt Road lawsuit”) has brought these questions to the forefront. The plaintiffs have filed a Racketeer Influenced and Corrupt Organizations Act (“RICO”) action against a number of medical facilities, radiology facilities, doctors and law firms asserting that they are all part of a scheme to commit insurance fraud in connection with fake construction site accidents. In essence, the lawsuit claims that the defendants committed fraud by staging construction site accidents and then having these medical facilities and doctors provide fraudulent treatment and procedures in an effort to maximize the alleged injured worker’s Labor Law claims. In support of their civil RICO claim, they allege that all of the defendants were working as an enterprise to defraud the insurers and cite to a number of specific examples to substantiate their claims.
The Roosevelt Road lawsuit has had a cascading effect to the litigation landscape in New York. Many factors have come into play such as the inability of plaintiff’s law firms to have some of these medical providers testify at trial as they have been advised to refrain from testifying in light of the Roosevelt Road lawsuit and other potential implications. Additionally, there is an indication that some law firms have requested to withdraw as counsel in an unusually high volume of cases citing different reasons, including that they received the case through a potentially fraudulent referral source. The impact of the Roosevelt Road lawsuit is continuing and it will be interesting to see how it will further develop.
Recently, the New York Appellate Division, First Department has provided the defendants another tool for the defense bar to utilize. Typically, when defendant Independent Medical Examination (“IME”) of a plaintiff are conducted in NY, it is composed primarily of a physical examination of the plaintiff and the doctor’s review of the plaintiff’s medical records from their treating doctors. However, these physical examinations will not be able to verify whether a plaintiff actually underwent the surgeries claimed. The IME doctors would rely on the medical records and diagnostic imaging done by the plaintiff’s treating doctors to form the assumption that the surgeries were performed. But the case of Pettinato v. EQR-Rivertower, LLC, 213 A.D.3d 46, 182 N.Y.S.3d 64 (1st Dept. 2023) can now support the argument that defendants are entitled to their own MRIs and diagnostic tests of the plaintiff.
In Pettinato, the New York Appellate Division First Department discussed the scope of an IME that defendants are entitled to. In Pettinato, the plaintiff brought a personal injury action due to an alleged slip and fall. Plaintiff claimed that she suffered serious injuries, including a vulvar laceration, tenderness and swelling of the labia, pelvic pain, pudendal neuralgia, and dyspareunia.
After plaintiff's deposition, defendants designated their IME medical doctor specializing in urogynecology to examine plaintiff regarding her genital injuries. Plaintiff appeared for the IME but declined to remove her clothes. Subsequently, defendants moved to compel the plaintiff to appear for a comprehensive gynecological examination that included the use of a speculum, a digital examination, and a bimanual examination of the pelvis.
In support of the motion, defendants submitted an affidavit from their IME doctor indicating that, in order to assess the severity of each of plaintiff's medical problems, a full gynecological examination was required. Further, the doctor explained that, in light of the injuries claimed, a routine comprehensive gynecological examination is needed in order to properly evaluate her physical complaints and the possible causes. The motion court granted the defendant’s motion to compel the IME but limited the scope of the examination, so that the comprehensive gynecological examination would not include the involvement of the use of a speculum, a digital exam and a bimanual exam of the pelvis. Interestingly, the motion court suggested that "[o]ther . . . diagnostic or investigative procedures — such as X-ray, magnetic resonance imaging or similar techniques—should be considered."
On appeal, the Appellate Division, First Department in Pettinato noted that a plaintiff in a New York personal injury action affirmatively places her physical and/or mental condition in controversy and that NY Civil Practice Law and Rules (“CPLR”) 3121 allows the defendants to require a plaintiff to submit to an IME by a physician retained by the defense. The Court held that “in determining what kind of examination to authorize, the court must balance the desire for the plaintiff to be examined safely and free from pain against the need for the defendant to determine facts in the interest of truth.” Thus, defendants must show the medical importance and safety of the particular procedure they are requesting, as well as an explanation of the relevance and the need for the information that a procedure will yield.
The First Department in Pettinato found that the trial court should not have limited the scope of the IME based on the fact that the defendants' motion was supported by a medical expert's affidavit showing that the comprehensive gynecological examination is necessary and material, that such examination was a routine procedure, and that it has no harmful effects. Additionally, the Court noted that the plaintiff’s expert did not materially controvert the defendant’s expert’s opinion.
The Court reasoned that a CPLR 3121 examination is a litigation discovery device intended to narrow, if possible, the areas of medical dispute and noted that there was a legitimate discovery basis for the pelvic exam: to establish the extent of plaintiff’s injuries and whether plaintiff’s current conditions can be attributed to such injuries.
Additionally, it noted that it could not overlook that plaintiff, who is seeking substantial damages from defendants, has already gone through a comprehensive gynecological examination by her treating physician, without any medically reported adverse effects. Thus, the Court held that a plaintiff who has voluntarily submitted to a routine pelvic examination by her own treating physician without adverse effects should be required to undergo a similar examination that is material and necessary to defend against her claims that she sustained serious gynecological injuries. Importantly, the Court noted that defendants do not have to rely upon the previous pelvic examinations conducted by the plaintiff’s treating physician. Absent any support for the claim that the pelvic examination would be harmful, the Court held that defendants are entitled to conduct their own pelvic examination for the purpose of refutation or confirmation of plaintiff's alleged serious and permanent injuries, and their correlation to plaintiff's current symptoms.
It should be noted that it is unclear whether there is any further appeal by the parties from this decision to date. Notwithstanding, based on this decision, risk managers, general counsel, or others responsible for litigation management may wish to utilize the strategy of demanding that the plaintiffs appear for MRIs and diagnostic testing in defense of these claims. The argument would be that there is medical importance and relevance to allow the defendants to conduct these tests to establish the extent of plaintiff’s injuries and whether plaintiff’s current conditions can be attributed to such injuries. Additionally, it can be argued that plaintiffs have routinely undergone these tests with their own treating physicians without any medically reported adverse effects and that these diagnostic tests are safe, non-invasive and free from pain. In the end, these diagnostic tests are routine procedures and the defendants should not have to rely upon previous tests conducted by plaintiff’s treating doctors, which may be untrustworthy.
Such testing performed by defendants’ own doctors and medical facilities should help distinguish those plaintiffs that have legitimately undergone these procedures from those possibly fraudulent claims. And if this strategy is successful, it could help eliminate or reduce these exposures on your claims program, which could potentially lead to savings of millions of dollars. At the end of the day, there is likely minimal negative impact by pursuing and utilizing this discovery device. Without pursuing your own diagnostic tests, defendants will be left to rely on the testing done by plaintiff’s treating doctors, which may or may not be reliable. Ultimately, those responsible for litigation management of your claims program should consider making this discovery demand a standard practice in all bodily injury claims. Should a claim present itself with minimal injuries and if the defendants do not want to spend the money in conducting these diagnostic tests, the defendants could merely choose not to exercise their rights to the testing. However, with the way that some of these minor injuries or accidents tend to escalate during the course of the litigation, defendants should reserve the right to do their own testing when they are called for.
Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.
