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ALBANY – Doctors who injure patients during the independent medical examinations required for plaintiffs in personal injury cases are subject to medical malpractice claims, not actions for ordinary negligence, a widely divided state Court of Appeals ruled yesterday. The majority of the 4-3 Court held that a “limited physician-patient relationship” exists during such examinations, typically performed at the behest of insurers to determine the extent of injuries plaintiffs suffered in prior accidents. The the 2 1/2-year statute of limitations for medical malpractice should apply to any claims brought against doctors for harm done during the exams, the majority said. The Court also split 4-3 yesterday in holding that state law recognizes “negative equity” rolled over in auto financing arrangements as having repayment priority if drivers file for bankruptcy. And it declined unanimously to change the pension calculations made for Port Authority police officers based on the extra pay they earned in the wake of Sept. 11. In the medical examination case, Bazakos v. Lewis, 112, the nature of Lewis L. Bazakos’ claim was crucial to the timeliness of his action. Yesterday’s Court of Appeals decisions begin on page 42 of the print edition of today’s Law Journal. He contended that Dr. Philip Lewis, a Manhattan orthopedic surgeon, had caused him various neck injuries by simultaneously pulling and twisting his head during an independent medical examination. Mr. Bazakos filed suit two years and 11 months after the examination, which was performed in 2001, to determine the extent of his injuries from a 1998 car accident. The insurer of the other driver selected Dr. Lewis to perform the exam. Mr. Bazakos claimed that Dr. Lewis’ actions constituted ordinary negligence, which carries a three-year statute of limitations. The physician countered that Mr. Bazakos’ action sounded in medical malpractice and, as such, was time-barred. The Court found that while Mr. Bazakos was not Dr. Lewis’ patient and did not come to him seeking medical treatment, Mr. Bazakos’ claim is still based on Dr. Lewis’ alleged failure to properly perform a “specialized skill” as a medical professional. “The act on which Bazakos’s lawsuit is based — Lewis’s manipulation of a body part of a person who came to his office for a physical examination — constitutes ‘medical treatment by a licensed physician,’ and the negligent performance of that act is not ordinary negligence, but a prototypical act of medical malpractice,” Judge Robert S. Smith wrote, citing Weiner v. Lenox Hill Hosp., 88 NY2d 784 (1996), and Bleiler v. Bodnar, 65 NY2d 65 (1985). “We see no good reason why the statute of limitations should be longer than it would be if Lewis were accused of making exactly the same error on a patient who came to him for consultation or care.” Judges Carmen Beauchamp Ciparick, Victoria A. Graffeo and Susan Phillips Read joined in Judge Smith’s ruling. Chief Judge Jonathan Lippman countered for the dissenters that the majority was embracing the “novel and highly problematic notion that there may be medical malpractice in the absence of medical treatment.” He wrote that medical treatment is decidedly not the point of independent medical examinations. “These exams, far from being independent in any ordinary sense of the word, are paid for and frequently controlled in their scope and conduct by legal adversaries of the examinee,” the chief judge wrote. “They are emphatically not occasions for treatment, but are most often utilized to contest the examinee’s claimed injury and to dispute the need for any treatment at all.” Judge Lippman wrote that despite the majority’s ruling, he doubted a viable claim for medical malpractice could ever successfully be brought for injuries suffered in independent medical examinations because the examinations lack the element of patient treatment required under state medical malpractice statutes. “I am confident that the majority has not the slightest intention to open the vistas of malpractice so wide as to actually permit such claims in the absence of anything cognizable as treatment,” Judge Lippman wrote. “What is involved then is simply the arbitrary creation of an exception for a group of practitioners who, as a group, neither seek nor are entitled to the protection properly afforded and reserved to those engaged in the delivery of medical care and treatment.” Judges Eugene F. Pigott Jr. and Theodore T. Jones Jr. also dissented. Mr. Bazakos, a Long Island chiropractor, brought a personal injury suit against the driver of a vehicle that back-ended his in a 1998 accident. By law, he was required to undergo the independent medical examination. Yesterday’s ruling reversed a 3-2 Appellate Division, Second Department decision in Bazakos v. Lewis, 56 AD3d 15 (2008), in which Mr. Bazakos’ claim for simple negligence was upheld because the justices determined that no physician-patient relationship arose during the independent medical examination between the doctor and accident victim ( NYLJ, Sept. 30, 2008). Mr. Bazakos’ attorney, Ralph A. Hummel of Woodbury, said yesterday the medical malpractice versus negligence question was a close one that different judges saw in different ways. Of the 13 judges who ruled in the case, counting the Nassau County Supreme Court, seven decided Mr. Bazakos’ claim was for medical malpractice and six ruled for negligence, he noted. “I feel the dissenters on the Court of Appeals had the stronger argument, but they were outvoted 4-3 and that was it,” Mr. Hummel said. Peter C. Kopff of Kopff Nardelli & Dopf represented Dr. Lewis. Mr. Kopff said he was “absolutely thrilled” for his client and for examining physicians in general by recognizing the medical malpractice claim and the shorter statute of limitations period. “They are really a creature of what the Court created,” Mr. Kopff said. “It is good that the Court respects them enough to treat them as physicians.” Security Interest Recognized The Court was also divided in Matter of Peaslee (Reiber v. GMAC, LLC), 109, over whether an increasingly common auto financing transaction, favored by lenders because it gives them priority for repayment if motorists declare bankruptcy, is recognized under the Uniform Commercial Code. The 4-3 Court concluded that the phrase “purchase money obligation” in state law is the equivalent of the “purchase-money security interest” in the U.S. Bankruptcy Code for purposes of giving lenders priority to recover the amount of “negative equity” debtors rolled over into their financing package when buying new vehicles. Negative equity is the difference between the value of the motorist’s previous car and the greater amount outstanding on a loan when the driver trades in the vehicle to take out a new loan to buy another vehicle. If the Court had not recognized the “purchase-money security interest” under state law, the negative equity could be converted by debtors into so-called cramdown in a bankruptcy proceeding and not be considered part of the lenders’ secured claims. The Court was answering a certified question from the U.S. Court of Appeals for the Second Circuit ( NYLJ, Nov. 4, 2008). Judges Pigott, Graffeo, Read and Jones were in the majority. Writing for the dissent, Judge Smith held that the Court was giving holders of purchase-money security interest priority over other liens under the Uniform Commercial Code. “I can imagine no reason to enlarge the priority lien of that seller or lender because … it refinances the debt remaining from another purchase that took place years ago,” Judge Smith wrote. The bankruptcy trustee in Faith Ann Peaslee’s Chapter 13 bankruptcy case, George M. Reiber, argued for the debtors. Barkley Clark of Washington, D.C., represented GMAC and other auto financing companies. Pension Ruling The Court was unanimous in the Port Authority pension case, Matter of Port Authority Police Benevolent Association, Inc. v. Anglin, 110, in rejecting officers’ contention that time-and-a-half payments they earned for working what would have been vacation days in the emergency following the destruction of the authority’s World Trade Center towers on Sept. 11, 2001, should be applied toward the calculations of their final salaries for pension purposes. The Court held in a memorandum ruling that the state comptroller’s office properly removed the payments when establishing the Port Authority workers’ pension levels. “In all these cases, inclusion of additional payments for working vacation days, whether compulsory or not, would amount to crediting the hours in a paid vacation day twice; once, because the eight hours of straight time as a part of the regular salary is already included in final average salary for pension purposes, and again, because any additional payments for working those same hours would also be included,” the Court ruled. The decision affirmed a 4-1 determination by an Appellate Division, Third Department, in Matter of Port Authority Police Benevolent Association, Inc. v. Anglin, 54 AD3d 495 (2008). James B. Tuttle of Latham argued for the Port Authority police officers. Assistant Solicitor General William E. Storrs defended the state comptroller’s office. @

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