Decided on March 31, 2017
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : MARTIN M. SOLOMON, J.P., MICHAEL L. PESCE, DAVID ELLIOT, JJ.
2015-1189 K C

Gallo Vitucci Klar, LLP, Yolanda L. Ayala, Esq., for appellant. Sierra K. Page, Esq., P.C., Zara Javakov, Esq., for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Carol Ruth Feinman, J.), entered February 19, 2015. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order of the Civil Court as denied defendant’s cross motion for summary judgment dismissing the complaint on the ground that there were triable issues of fact regarding the insured’s alleged material misrepresentations in the procurement of the insurance policy.

In support of its cross motion, defendant submitted the affidavit of its senior claims examiner which failed to establish that defendant had timely denied plaintiff’s claims (see Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc., 80 AD3d 603 [2011]; Gutierrez v United Servs. Auto. Assn., 47 Misc 3d 152[A], 2015 NY Slip Op 50797[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Thus, defendant failed to demonstrate that it was not precluded from asserting the insured’s alleged misrepresentations in connection with the issuance of the [*2]policy. Consequently, defendant failed to establish its prima facie entitlement to summary judgment dismissing the complaint.

Accordingly, the order, insofar as appealed from, is affirmed.

Solomon, J.P., Pesce and Elliot, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk

Decision Date: March 31, 2017

Decided on March 31, 2017
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : MARTIN M. SOLOMON, J.P., MICHAEL L. PESCE, DAVID ELLIOT, JJ.
2015-1172 K C

The Rybak Firm, PLLC, Damin J. Toell, Esq., for appellant. Law Office of Bryan M. Rothenberg, Sharon A. Brennan, Esq., for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Reginald A. Boddie, J.), entered January 22, 2015. The order granted defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint.

In support of its motion, defendant contended that the insured had fraudulently procured the insurance policy in question. Although defendant timely raised this defense in its denial of claim form, it presented no evidence that plaintiff’s assignor, a passenger in the insured’s vehicle at the time of the accident, had “participated in or was aware of” the insured’s alleged fraudulent scheme to obtain the insurance policy (Alexander Alperovich, M.D., P.C. v Auto One Ins. Co., 24 Misc 3d 141[A], 2009 NY Slip Op 51721[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]; see also Matter of Metlife Auto & Home v Agudelo, 8 AD3d 571, 572 [2004]). [*2]Consequently, defendant is not entitled to summary judgment on that ground.

To the extent that defendant also sought summary judgment on the ground of lack of coverage, a defense which is not subject to preclusion (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), we find that defendant’s proffered evidence was insufficient to establish, as a matter of law, that the assignor’s alleged injuries did not arise from an insured incident so as to warrant the dismissal of the complaint (see Central Gen. Hosp., 90 NY2d at 199; Tam Med. Supply Corp. v 21st Century Ins. Co., 51 Misc 3d 131[A], 2016 NY Slip Op 50402[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Infinity Health Prods., Ltd. v American Tr. Ins. Co., 30 Misc 3d 137[A], 2011 NY Slip Op 50195[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is denied.

Solomon, J.P., Pesce and Elliot, JJ., concur.

ENTER:

Paul Kenny

Decision Date: March 31, 2017

Decided on March 31, 2017
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : MICHAEL L. PESCE, P.J., MICHELLE WESTON, THOMAS P. ALIOTTA, JJ.
2015-964 K C

Bruno, Gerbino & Soriano, LLP, Mitchell L. Kaufman, Esq., for appellant. Law Office Ilona Finkelshteyn, for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Ingrid Joseph, J.), entered September 11, 2013. The order, insofar as appealed from as limited by the brief, denied defendant’s motion to vacate a default judgment.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

In September 2010, plaintiff commenced this action to recover assigned first-party no-fault benefits for supplies it had provided to its assignor for injuries the assignor had sustained in a motor vehicle accident on March 9, 2011. Defendant appeals from so much of an order of the Civil Court, entered September 23, 2013, as denied its motion to vacate a default judgment entered on January 12, 2012 pursuant to an order dated October 13, 2011 granting plaintiff’s motion for summary judgment upon defendant’s failure to submit written opposition papers.

In order to vacate the default judgment, defendant had to demonstrate a reasonable excuse for its failure to submit written opposition to plaintiff’s motion for summary judgment and the existence of a potentially meritorious opposition to plaintiff’s motion (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Estrada v Selman, 130 AD3d 562, 562 [2015]; Hogan v Schwartz, 119 AD3d 650, 651 [2014]). The determination [*2]of what constitutes a reasonable excuse for a default generally lies within the sound discretion of the motion court (see Scarlett v McCarthy, 2 AD3d 623 [2003]) and, in the exercise of its discretion, a court can accept a claim of law office failure as such an excuse (see CPLR 2005) if the facts submitted in support thereof are in evidentiary form and are sufficient to justify the default (see Dodge v Commander, 18 AD3d 943, 946 [2005]; Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]). However, courts do not have to excuse a pattern of neglect which amounts to “a serious lack of concerned attention to the progress of [the] action” (Lauro v Cronin, 184 AD2d 837, 839 [1992]). In the case at bar, the record demonstrates a pattern of neglect which should not be excused (see Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d at 554). Consequently, the Civil Court did not improvidently exercise its discretion in denying defendant’s motion to vacate the default judgment.

Accordingly, the order, insofar as appealed from, is affirmed.

Pesce, P.J., Weston and Aliotta, JJ., concur.

ENTER:

Paul Kenny
Chief Clerk

Decision Date: March 31, 2017

Decided on March 29, 2017

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2nd, 11th & 13th JUDICIAL DISTRICTS

Law Offices of Emilia I. Rutigliano, P.C., Marina Josovich, Esq., for appellant.

Law Office of Printz & Goldstein, Lawrence J. Chanice, Esq., for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Terrence C. O’Connor, J.), entered March 26, 2015. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

In support of its cross motion, defendant established that its denial of claim form had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). Furthermore, contrary to plaintiff’s argument, the affirmed peer review report submitted by defendant demonstrated, prima facie, that the injury treated by plaintiff was not causally related to the accident in question. Thus, defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint. In opposition to the motion, plaintiff submitted an affidavit from a doctor which failed to meaningfully refer to, let alone sufficiently rebut, the conclusions set forth in the peer review report (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). In light of the foregoing, we need not consider the parties’ remaining contentions.

Accordingly, the order is affirmed.

Pesce, P.J., Weston and Aliotta, JJ., concur.

Decision Date: March 29, 2017

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, March 29, 2017

APPEARANCES OF COUNSEL

Peter C. Merani, P.C. (Brian Kratenstein of counsel) for appellant.

Gary Tsirelman, P.C. (Irena Golodkeyer of counsel) for respondent.

Ordered that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, it is undisputed that defendant denied plaintiff’s claim on May 10, 2011 on the ground of lack of medical necessity. In May 2014, defendant moved for summary judgment dismissing the complaint on the ground that the amount of available coverage had been exhausted. By order entered April 1, 2015, the Civil Court denied defendant’s motion.

At the outset, we note that, although defendant did not deny the claim on the ground that the coverage limits of the insurance policy at issue had been exhausted, this defense is not precluded (New York & Presbyt. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]; Flushing Traditional Acupuncture, P.C. v Infinity Group, 38 Misc 3d 21 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).

In Nyack Hosp. v General Motors Acceptance Corp. (8 NY3d 294 [2007]), the Court of Appeals, noting that no-fault benefits are overdue if not paid within 30 calendar days after receipt of a fully complete claim, held that the word “claims,” as used in 11 NYCRR 65-3.15, the priority-of-payment regulation, does not encompass claims that are not yet complete because they have not been fully verified in accordance with 11 NYCRR 65-3.5 (b). In contrast, in the instant case, by denying the claim on May 10, 2011, defendant implicitly declared that the claim at issue was fully verified. As we read Nyack Hosp. to hold that fully verified claims are payable in the order they are received (see 11 NYCRR 65-3.8 [b] [3]; 65-3.15; Nyack Hosp., 8 NY3d 294), defendant’s argument—that it need not pay the claim at issue because defendant paid other claims after it had denied the instant claim, which subsequent payments exhausted the available coverage—lacks merit (see 11 NYCRR 65-3.15; cf. Nyack Hosp., 8 NY3d 294; but see Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], 2015 NY Slip Op 50525[U] [App Term, 1st Dept 2015]). Consequently, defendant{**55 Misc 3d at 46} has not established its entitlement to summary judgment dismissing the complaint.

Accordingly, the order is affirmed.

Solomon, J.P., Pesce and Elliot, JJ., concur.

Decided on March 24, 2017

652106/2016

For Plaintiff:
Josh Youngman of Peter C. Merani, P.C.

This matter, brought pursuant to NY Insurance Law 5106(c), seeks de novo adjudication of the dispute between the parties concerning no-fault benefits. Although the parties submitted to mandatory arbitration, since to arbitrator awarded defendant a sum greater than $5,000, plaintiff is permitted to bring this action. Both plaintiff and defendant have moved for summary judgment.

On January 31, 2014, Bujar Kaziu the assignor, was in an automobile accident and began to receive no-fault benefits. On June 6, 2014, plaintiff’s claim representative determined that additional verification in the form of an independent medical examination (“IME”) was required and properly noticed an IME for June 26, 2014. The assignor failed to appear for the IME on June 26, 2014 and verification was again sought on July 1, 2014 by scheduling an IME on July 17, 2014. On July 1, 2014, the assignor had a surgery on his right shoulder. Defendant provider Health East Ambulatory Surgical Center timely submitted a claim on July 3, 2014 seeking $30,365.16 in reimbursement.

On July 10, 2014, plaintiff rescheduled the July 17, 2014 IME to August 21, 2014. Plaintiff did not provide this Court with any reason why the IME was scheduled, nor did plaintiff [*2]state that the rescheduling was done at the request or with the consent of the assignor. The July 10, 2014 letter states that the reason for the rescheduling was due to the July 1, 2014 surgery. Plaintiff alleges that it received the bill for the surgery on July 11, 2014. On August 21, 2014, Dr. Dorothy Scarpinato performed the IME and issued her report. Dr. Scarpinato found that right shoulder surgery was not medically necessary or causally related. On September 18, 2014, plaintiff denied the July 1, 2014 claim based on a lack of medical necessity and because the amount sought was in excess of the appropriate fee schedule.

As the parties disputed the validity of the denied claims, they went to arbitration. Arbitrator Paul Israelson found that the September 18, 2014 denial was not timely and accordingly found in favor of defendant on liability. However, the arbitrator also found that defendant did not submit the claim pursuant to the proper New Jersey fee schedule and reduced the amount to $18,154.85. Plaintiff commenced this action seeking de novo adjudication of the dispute. At present, defendant acknowledges that the fee calculation was not correct and seeks an amended amount of $21,903.93 for the surgery performed on July 1, 2014.

It is well established that an insurer must pay or deny a claim within 30 days (11 NYCRR 65-3.8(1), “No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, which shall include verification of all of the relevant information requested pursuant to section 65-3.5 of this Subpart.”). A defense predicated on a lack of medical necessity must be asserted within that time period (Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 25 Misc 3d 48 [App Term 2d Dept 2009] citing Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274 [1997]; and Melbourne Med. P.C. v. Utica Mut. Ins. Co., 4 Misc 3d 92 [App. Term, 2d & 11th Jud. Dists. 2004]). Here, plaintiff alleges that it received the claim on July 11, 2014. Thus, plaintiff must have paid or denied the claim by August 11, 2014, unless plaintiff properly sought verifications.

Plaintiff alleges that it received the claim for the July 1, 2014 bill on July 11, 2014. Thus, any requests for an IME, including the request on June 6, 2014, the follow-up on July 1, and the rescheduling on July 10, 2014, are pre-claim requests. Following the July 11, 2014 receipt of the bill, the first communication by plaintiff was the July 31, 2014 delay letter. The insurance regulations permit pre-claim IMEs, but without consequence for the running of the 30—day claim determination period (Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d & 11th Jud. Dists 2004]). Any post-claim IME verification requests must be made within required time constraints set forth in 11 NYCRR 65—3.5 [a], [d]; 11 NYCRR 65—3.6[b], including the initial request within 10 days of the claim’s filing (to be scheduled within 30 days of the claim’s receipt) and a “follow-up” request within 10 days of a subject’s non-appearance at the initially-scheduled IME (A.B. Med. Services PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50 [2d Dept App Term 2005]).

Here, even assuming that plaintiff’s July 31 delay letter meets the criteria for an initial verification request ^[FN1] , plaintiff’s delay letter sent on July 31, 2014 was later than the period [*3]allowed to seek verification under the statute. However, said tardiness is not fatal. “An insurer that requests additional verification after the 10— or 15—business—day periods but before the 30—day claim denial window has expired is entitled to verification. In these instances, the 30—day time frame to pay or deny the claim is correspondingly reduced” (Hosp. for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007]). 10 Business days from July 11, 2014 was July 25, 2014. As the delay letter was sent out on July 31, 2014, the 30-day time frame must be reduced by 5 days, leaving plaintiff with 25 days.

In the case of an examination under oath or a medical examination, the verification is deemed to have been received by the insurer on the day the examination was performed (11 NYCRR 65-3.8(1)). The IME was performed on August 21, 2014 and the denial was sent on September 18, 2014, 28 days later. As the time frame to pay or deny was reduced from 30 to 25 days and the denial was sent 28 days later, the denial was untimely.

Further, on July 10, 2014 plaintiff rescheduled the IME from July 17, 2014 to August 21, 2014. Even assuming that this IME scheduling was for the purposes of verifying the July 11, 2014 claim (despite the assertion that the receipt of the claim was July 11, 2014, the reschedule letter states that it was done because the assignor had surgery) plaintiff does not provide any affidavit explaining the basis of scheduling the IME so far in the future. Generally speaking, the insurance regulations require that an IME be scheduled within a 30—calendar—day time frame from receipt of the claim (Am. Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841 [1st Dept 2015] citing W.H.O. Acupuncture, P.C. v. Travelers Home & Mar. Ins. Co., 36 Misc 3d 152[A] [App Term 2d Dept 2012]; American Tr. Ins. Co. v. Jorge, 2014 NY Slip Op. 30720[U], 2014 WL 1262582 [Sup Ct NY County 2014]; (11 NYCRR § 65—3.5(d)). Although, by consent, the parties can agree to a later time frame, here the record is completely devoid of any communication, let alone consent, or any other reason why the IME was scheduled past the 30-day frame permitted by statute. As the IME was re-scheduled past the 30-day time frame, the IME was not properly scheduled or sought and the denial was late and invalid.

However, even though the denial based upon on causal connection and medical necessity was not timely, services here were rendered after April 1, 2013, and the defense of excessive fees is not subject to preclusion (see 11 NYCRR 65—3.8 [g]; Surgicare Surgical Assoc. v Natl. Interstate Ins. Co., 50 Misc 3d 85 [App Term 1st Dept 2015]). Although defendant initially sought $30,365.16, defendant acknowledges that appropriate amount per the New Jersey Fee Schedule is really $21,903.93. Plaintiff disagrees and states that appropriate amount would be $18,413.80, slightly more than the amount found by the arbitrator. Thus, because the denial with respect to non-fee schedule defenses was not timely and plaintiff has made no payments, defendant is entitled to at least the portion of the claim that is undisputedly pursuant to the fee schedule $18,413.80.

The difference between the two amounts is whether the portion of the claim pursuant to CPT Code 29826 and 64415 are reimbursed at 100% or 50%. Specifically, the provider billed $6,462.39 under CPT 29826. Plaintiff reduced the amount by 50% to $3,231.20 pursuant to NJ 11:3-29.5(d). Similarly, the provider billed $517.89 under CPT 64415 and plaintiff reduced the amount by 50% to $258.95 pursuant to NJ 11:3-29.5(d). Both sides have submitted the affidavits [*4]of their fee schedule/coding experts. The Court finds that pursuant to NJ Admin Code 11:3-29.4(f)(2)^[FN2] , add-on codes are exempt from the multiple procedure reduction. Therefore, CPT 29286 should be reimbursed at 100%, or $6,462.39. Similarly, the claim included a modifier for CPT 64415 and defendant should be reimbursed at 100% or $517.89. Accordingly, defendant is entitled to a total amount of $21.903.93.

It is therefore

ORDERED, that plaintiff’s motion for summary judgment is denied; and it is further

ORDERED, that defendant’s cross-motion for summary judgment is granted.

Date: March 20, 2017

David B. Cohen, JSC

Footnotes

Footnote 1: The Court makes no ruling that the delay later was a valid initial verification request (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2d Dept 2005][holding that a delay later which did not seek verification in it did not toll the 30-day period to pay or deny]).

Footnote 2:NJ Admin Code 11:3-29.4(f)(2) states “There are two types of procedures that are exempt from the multiple procedure reduction In addition, some related procedures are commonly carried out in addition to the primary procedure. These procedure codes contain a specific descriptor that includes the words, “each additional” or “list separately in addition to the primary procedure.” These add-on codes cannot be reported as stand-alone codes but when reported with the primary procedure are not subject to the 50 percent multiple procedure reduction.” CPT 29826 is listed as an “add-on” code.

Decided on March 20, 2017

Decided on March 20, 2017

[*1]

The Law Office of Jason Tenenbaum, P.C., Garden City (Jason Tenenbaum of counsel), for appellant.

Costella & Gordon, LLP, Garden City (Matthew K. Viverito of counsel), for respondent.

Order, Supreme Court, Bronx County (Fernando Tapia, J.), entered October 24, 2016, which denied the petition seeking to vacate the award of a master arbitrator, dated August 12, 2016, to the extent it affirmed a lower arbitrator’s award of no-fault compensation to respondent in the unadjusted amount of $2,679.39, unanimously reversed, on the law, without costs, the petition granted to the extent of vacating that portion of the master arbitration award, and the matter remanded to a different arbitrator for arbitration of the fee schedule defense on the merits.

Respondent sought recovery for physical therapy services provided to its assignor before April 1, 2013, and petitioner insurer disclaimed parts of the claim on the ground that it had already reimbursed a different provider for “eight units” for services on some of the same dates. Respondent checked the box on the prescribed disclaimer form indicating that it was relying on a “fee schedule” defense, specifically the “eight unit rule.” The lower arbitrator held that respondent was precluded from asserting its defense because the disclaimer was insufficiently specific in that the other provider was not named. Respondent appealed to the master arbitrator, arguing that it adequately preserved its defense. The master arbitrator, without addressing the issue of preservation, incorrectly found that the lower arbitrator had “considered the fee schedule defense” and “determined that [r]espondent failed to provide evidence as to the other provider.”

The master arbitrator’s award was arbitrary, because it irrationally ignored the controlling law presented on the preservation issue (Matter of Global Liberty Ins. Co. v Professional Chiropractic Care, P.C., 139 AD3d 645, 646 [1st Dept 2016]; see generally Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982])—namely, that an insurer adequately preserves its fee schedule defense “by checking box 18 on the NF-10 denial of claim form to assert that plaintiff’s fees [were] not in accordance with the fee schedule” (Megacure Acupuncture, P.C. v Lancer Ins. Co., 41 Misc 3d 139[A], 2013 NY Slip Op 51994[U] *3 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013] [internal quotation marks omitted]; Surgicare Surgical v National Interstate Ins. Co., 46 Misc 3d 736, 745-746 [Civ Ct, Bronx County 2014], affd 50 Misc 3d 85 [App Term, 1st Dept 2015]). Accordingly, we remand the matter to the extent indicated. Concur—Sweeny, J.P., Renwick, Mazzarelli and Manzanet-Daniels, JJ.