New York Hosp. Med. Ctr. of Queens v Countrywide Ins. Co. (2009 NY Slip Op 50764(U))

Supreme Court, Nassau County

15212/08

TO:Joseph Henig, PC

Attorneys for Plaintiffs

1598 Bellmore Avnue

Bellmore, NY 11710

Jaffe & Koumourdas, LLP

Attorneys for Defendant

40 Wall Street, 12th Floor

New York, NY 10005

William R. LaMarca, J.

Relief Requested

Plaintiffs, THE NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS a/a/o TOPAZ CASTRO (hereinafter referred to as “NYU QUEENS”), and ST. VINCENT’S HOSPITAL & MEDICAL CENTER a/a/o RONNY MUNOZ (hereinafter referred to as “ST. VINCENT’S”), move for an order, pursuant to CPLR §3212, granting them summary judgment on the first and second cause of action against defendant, COUNTRYWIDE INSURANCE COMPANY (hereinafter referred to as “COUNTRYWIDE”), on the ground that COUNTRYWIDE has failed to make timely payment on the claims submitted under the subject policy of insurance and that plaintiffs are entitled to interest and attorneys fees because of the delay in payment. COUNTRYWIDE opposes the motion and cross-moves for summary judgment dismissing the complaint on the ground that the claims are premature and that plaintiffs fail to state a cause of action. The motion and cross-motion are determined as follows:

This matter arises out of the alleged failure of COUNTRYWIDE to pay two (2) separate no-fault billings and counsel for plaintiffs states that the actions are joined pursuant to CPLR §1002(a) as the claims arise out of a uniform contract of insurance and involve the interpretation of the same no-fault provisions of the Insurance Law, citing [*2]Hempstead General Hospital v Liberty Mutual Insurance Company, 134 AD2d 569, 521 NYS2d 469 (2nd Dept. 1987).

The Statute

11 NYCRR, Part 65, the regulations implementing the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault Law, provides that “No- Fault Benefits are overdue if not paid within 30 calendar days after the insurer receives proof of Claim…”. (11 NYCRR 65-3.8[a][1]). Within thirty (30) days of receiving a claim, the insurer is required to either pay or deny the claim in whole or in part (see, Insurance Law §5106[a]; 11 NYCRR 65-3.8 [c]). However, this thirty (30) day period may be extended by a timely demand by the insurance company for further verification of a claim (see, 11 NYCRR 65-3.5). Within 10 business days after receipt of the completed application for no fault benefits, the insurer must forward, to the parties required to complete them, the prescribed verification forms it will require prior to payment of the initial claim (see, 11 NYCRR 65-3.5[a]). If the demanded verification is not received within thirty (30) days, the insurance company must follow up within ten (10) calendar days of the claimant’s failure to respond, either by telephone call or mail (see, 11 NYCRR § 65-3.6[b]); New York Hospital Medical Center of Queens v State Farm Mutual Automobile Insurance Company, 293 AD2d 588, 741 NYS2d 86 [2nd Dept. 2002]). As a complete proof of claim is a prerequisite to receiving no-fault benefits, a claim need not be paid or denied until all demanded verification is provided (see, 11 NYCRR 65-3.5[c]; Montefiore Medical Center v New York Central Mutual Fire Insurance Company, 9 AD3d 354, 780 NYS2d 161 (2nd Dept. 2004); New York & Presbyterian Hospital v American Transit Insurance Co., 287 AD2d 699, 733 NYS2d 80 (2nd Dept. 2001); Hospital for Joint Diseases v Elrac, Inc., 11 AD3d 432, 783 NYS2d 612 (2nd Dept. 2004). Statutory interest and attorneys fees may be directed If payment is not timely made on a completed claim. See, Insurance Law § 5106(a), 11 NYCRR §65-3.9 and §3.10.

In viewing motions for summary judgment, it is well settled that summary judgment is a drastic remedy which may only be granted where there is no clear triable issue of fact (see, Andre v Pomeroy, 35 NY2d 361, 362 NYS2d 131, 320 NE2d 853 [C.A. 1974]; Mosheyev v Pilevsky, 283 AD2d 469, 725 NYS2d 206 [2nd Dept. 2001]. Indeed, “[e]ven the color of a triable issue, forecloses the remedy” Rudnitsky v Robbins, 191 AD2d 488, 594 NYS2d 354 [2nd Dept. 1993]). Moreover “[i]t is axiomatic that summary judgment requires issue finding rather than issue-determination and that resolution of issues of credibility is not appropriate” (Greco v Posillico, 290 AD2d 532, 736 NYS2d 418 [2nd Dept. 2002]; Judice v DeAngelo, 272 AD2d 583, 709 NYS2d 817 [2nd Dept. 2000]; see also S.J. Capelin Associates, Inc. v Globe Mfg. Corp., 34 NY2d 338, 357 NYS2d 478, 313 NE2d 776 [C.A.1974]). Further, on a motion for summary judgment, the submissions of the opposing party’s pleadings must be accepted as true (see Glover v City of New York, 298 AD2d 428, 748 NYS2d 393 [2nd Dept. 2002]). As is often stated, the facts must be viewed in a light most favorable to the non-moving party. (See, Mosheyev v Pilevsky, supra ). The burden on the moving party for summary judgment is to demonstrate a prima facie entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issue of fact (Ayotte v Gervasio, 81 NY2d 1062, 601 NYS2d 463, 619 NE2d 400 [C.A.1993]; Winegrad v New York University Medical Center, 64 NY2d 851, 487 [*3]NYS2d 316, 476 NE2d 642 [C.A. 1985]; Drago v King, 283 AD2d 603, 725 NYS2d 859 [2nd Dept. 2001]). If the initial burden is met, the burden then shifts to the non-moving party to come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. (CPLR§ 3212, subd [b]; see also GTF Marketing, Inc. v Colonial Aluminum Sales, Inc., 66 NY2d 965, 498 NYS2d 786, 489 NE2d 755 [C.A. 1985]; Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595, 404 NE2d 718 [C.A. 1980]). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. (Mgrditchian v Donato, 141 AD2d 513, 529 NYS2d 134 [2nd Dept. 1988]).

First Cause of Action: TOPAZ CASTRO

Plaintiff, NYU QUEENS, is the assignee for health services rendered to TOPAZ CASTRO during the period from March 3, 2008 through March 5, 2008, arising out of an automobile accident that occurred on March 3, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on April 17, 2008, in the sum of $4,188.25, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on April 18, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on April 18, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. It appears that, on May 15, 2008, COUNTRYWIDE issued verification requests that sought the completed NF-2, question #

20, on the revised form, the NF-5 on the revised form, signed, no stamps, and the assignment of benefits on the revised form, which were requested again on June 14, 2008 A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, it is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Finally, plaintiff states that a copy of the signed assignment of benefits was faxed to COUNTRYWIDE on May 29, 2008, and this action was commenced on August 18, 2008, when the claim was overdue and unpaid.

After a careful reading of the submissions herein, it is the judgment of the Court that NYU QUEENS established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay [*4]the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for NYU QUEENS that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Second Cause of Action: RONNY MUNOZ

Plaintiff, ST. VINCENT’S, is the assignee for health services rendered to RONNY MUNOZ, during the period from April 29, 2008 through May 1, 2008, arising out of an automobile accident that occurred on April 29, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on June 12, 2008, in the sum of $10,508.72, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on June 16, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on June 16, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. COUNTRYWIDE claims that, on July 16, 2008, it sent a verification request for the NF-5 on the revised form, the assignment of benefits on the revised form and the “in linear calculation sheet”. It is claimed that, when the plaintiff failed to respond, on August 15, 2008, is issued a second verification request. A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form [*5]that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Moreover, counsel for plaintiff argues that COUNTRYWIDE’s verification requests are defective because the verification requests are untimely. Counsel contends that although the bill was received on June 16, 2008, COUNTRYWIDE’s verification requests are dated July 16, 2008 and August 15, 2008, respectively, and are both beyond the statutory deadlines. 11 NYCRR §63-3.5(b), §65-3.6(b).

After a careful reading of the submissions herein, it is the judgment of the Court that ST. VINCENT’S established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for ST. VINCENT’S that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Conclusion

Based on the foregoing, it is hereby

ORDERED, that plaintiff’s motion for summary judgment on the first and second causes of action is granted; and it is further

ORDERED, that defendant’s cross-motion for summary judgment on the first and second causes of action is denied.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court. Settle Judgment on Notice.

Dated: March 17, 2009 [*6]

_________________________

WILLIAM R. LaMARCA, J.S.C.

nyhospaaocastro,stvincentsaaomunoz,#

1,#

2/sumjudg