December 4, 2018
Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C. (2018 NY Slip Op 08238)
https://www.beynensonlaw.com/case-law/matter-of-country-wide-ins-co-v-bay-needle-acupuncture-p-c-2018-ny-slip-op08238/
- Decided
- December 4, 2018
- Citation
- 2018 NY Slip Op 08238 · 167 AD3d 404
- Posture
- Article 75 petition
- Outcome
- Provider prevailed
- Later treatment
- Followed in 2 later decisions (see Cited by)
Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.
Summary
Editorial summary by Beynenson Law, not part of the court’s decision.
Reported in New York Official Reports at Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C. (2018 NY Slip Op 08238)
| Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C. |
| 2018 NY Slip Op 08238 [167 AD3d 404] |
| December 4, 2018 |
| Appellate Division, First Department |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
[*1]
| In the Matter of Country-Wide Insurance Company,
Appellant, v Bay Needle Acupuncture, P.C., as Assignee of Jasmine Walker, Respondent. |
Thomas Torto, New York (Jason Levine of counsel), for appellant.
Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for respondent.
Judgment, Supreme Court, New York County (Arlene P. Bluth, J.), entered June 5, 2017, in favor of respondent, unanimously affirmed, with costs, and the matter is remanded to Supreme Court for a determination of respondent’s reasonable attorneys’ fees for this appeal.
Petitioner failed to demonstrate that the arbitration award underlying the judgment was irrational and incorrect as a matter of law and that therefore the master arbitrator exceeded his power in affirming it (see CPLR 7511 [b] [1] [iii]). Petitioner’s primary argument is that the no-fault arbitrator’s refusal to accept its untimely opposition papers asserting a Mallela defense (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) was irrational and incorrect because such a defense may not be waived or precluded on the ground of untimeliness (see Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). We reject this argument.
We find that petitioner’s defense is not a Mallela defense. It is based on the guilty plea of Andrey Anikeyev, who, according to petitioner, is respondent’s “de facto owner,” to conspiracy to commit health care fraud and mail fraud. Anikeyev pleaded guilty to billing insurance companies “for health care services for time periods in excess of the actual time period the patient spent with [the] acupuncturist.” This plea supports nothing more than “a defense that the billed-for services were never rendered,” which is “more like a ‘normal’ exception from coverage (e.g., a policy exclusion) [than] a lack of coverage in the first instance” (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 565 [2008]), and therefore does not fall into the “settled law recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage” (Matter of MVAIC v Interboro Med. Care & Diagnostic PC, 73 AD3d 667, 667 [1st Dept 2010] [citation omitted]).
Petitioner failed to present any evidence that respondent was improperly or fraudulently incorporated. In fact, there is no evidence in this record that Andrey Anikeyev was the owner of respondent so that his actions could be imputed to respondent. In any event, Anikeyev’s guilty plea does not amount to an admission of improper incorporation.
Respondent is entitled to reasonable attorneys’ fees for this appeal, to be determined by [*2]Supreme Court (11 NYCRR 65-4.10 [j] [4]; see Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407 [1st Dept 2018]).
We have considered petitioner’s remaining arguments and find them unavailing. Concur—Acosta, P.J., Renwick, Mazzarelli, Gesmer, Singh, JJ.
Legal questions (4)
Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.
On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?
This decision: Alleged conduct legally cannot support the ineligibility defense
Held the insurer's defense, based on an alleged de facto owner's guilty plea to billing for more time than patients spent with the acupuncturist, was billing fraud rather than a Mallela defense and so was precludable by untimeliness.
Of the 17 decisions on this question in the First Department courts and the Court of Appeals, 5 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
When does a court vacate, modify or confirm a no-fault arbitrator’s or master arbitrator’s award under CPLR article 75?
This decision: No ground for vacatur or modification shown: the award is confirmed or left in place
Affirmed the judgment for the provider because the arbitrator's refusal of untimely papers was not irrational, the defense based on a guilty plea being a precludable not-rendered defense rather than a Mallela defense.
Of the 55 decisions on this question in the First Department courts and the Court of Appeals, 34 (this one included) are in the same category. 4 decisions in other departments that cite or are cited by this one are on the full map.
May the insurer raise and investigate a Mallela (fraudulent incorporation) defense, or is it precluded, waived or denied discovery?
This decision: Insurer may not pursue or investigate the Mallela defense here (rules on the question, but another ground decided the case)
Left standing the arbitrator's refusal to accept untimely opposition papers asserting the defense, because a billing-fraud guilty plea by the alleged de facto owner supported only a services-not-rendered defense, not a non-precludable Mallela defense.
Of the 24 decisions on this question in the First Department courts and the Court of Appeals, 7 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
How is the applicant’s attorney’s fee fixed for no-fault article 75 proceedings, de novo actions and appeals?
This decision: Applicant is entitled to a court-fixed fee for the proceeding or appeal; granted, or remitted to set the amount (rules on the question, but another ground decided the case)
Held the provider entitled to reasonable attorneys' fees for the appeal under 65-4.10 (j) (4) and remanded for Supreme Court to determine them.
Of the 18 decisions on this question in the First Department courts and the Court of Appeals, 8 (this one included) are in the same category. 3 decisions in other departments that cite or are cited by this one are on the full map.
Cited in this decision
A label shows how this decision treated the case it cites.
- State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416) DistinguishedFraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
- Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co. (2017 NY Slip Op 02785)An insurer's fraudulent incorporation defense is not precluded by failure to raise it in a timely denial.
- Fair Price Med. Supply Corp. v Travelers Indem. Co. (2008 NY Slip Op 04946) FollowedAn insurer's defense that billed supplies were never delivered is subject to preclusion for an untimely denial.
- Matter of MVAIC v Interboro Med. Care & Diagnostic PC (2010 NY Slip Op 04522) FollowedMVAIC's lack-of-coverage defense is not precluded by failure to pay or deny a no-fault claim within 30 days.
- Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C. (2018 NY Slip Op 03929) FollowedThe insurer's Mallela challenge failed because it presented no evidence that the provider was fraudulently incorporated.
Cited by
A label shows how the later decision treated this one.
- Matter of Global Liberty Ins. Co. of N.Y. v North Shore Family Chiropractic, PC (2019 NY Slip Op 08951) FollowedThe insurer failed to establish that the assignor was injured in the course of employment and eligible for workers' compensation.
- Matter of Global Liberty Ins. Co. of N.Y. v Avangard Supply, Inc. (2020 NY Slip Op 06855) FollowedAn insurer's vague IME-based denial supported a rational arbitration award of no-fault benefits to the providers.
- Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co. (2019 NY Slip Op 07249)A master arbitrator exceeds the permitted review power by reweighing evidence of fraudulent incorporation and reaching a different factual conclusion.
- Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07245)An arbitrator acts within discretionary authority by refusing to consider late submissions.
- Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07265)A master arbitrator may assess legal sufficiency but may not weigh evidence or make independent factual findings.
Similar decisions
- Country-Wide Ins. Co. v Valdan Acupuncture, P.C. (2017 NY Slip Op 04068)The insurer failed to establish grounds to vacate an award rejecting its fraudulent incorporation defense.
- Matter of Bay Needle Care Acupuncture, P.C. v Country Wide Ins. Co. (2019 NY Slip Op 07061)The provider's challenge to its arbitration attorney fee failed because it submitted no documentation of hours worked.
- Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 20493)The provider's prima facie case and licensing eligibility remained disputed, precluding a trial limited to excessive fees.
- Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C. (2017 NY Slip Op 08007)A nonphysician's guilty plea and forfeiture allegations did not establish that the providers were fraudulently incorporated.
- Matter of Country-Wide Ins. Co. v TC Acupuncture, P.C. (2021 NY Slip Op 01120)An alleged error in the burden of proof for a fraudulent incorporation defense does not alone warrant vacatur of an arbitration award.