Decided on June 3, 2016

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Devin P. Cohen, J.), entered June 13, 2013. The order, insofar as appealed from, denied defendant’s 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 moved for summary judgment dismissing the complaint on the ground that it had timely and properly denied the claims at issue based on the failure of plaintiff’s assignors to appear for duly scheduled independent medical examinations (IMEs), and plaintiff cross-moved for summary judgment. The Civil Court denied defendant’s motion but made, in effect, CPLR 3212 (g) findings that defendant’s denial of claim forms had been timely and proper, that plaintiff had established its prima facie case and that the sole issue for trial was whether plaintiff’s assignors had failed to appear for duly scheduled IMEs.

On appeal, defendant fails to articulate a sufficient basis to strike the Civil Court’s CPLR 3212 (g) findings in plaintiff’s favor (see EMC Health Prods., Inc. v Geico Ins. Co., 43 Misc 3d 139[A], 2014 NY Slip Op 50786[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).

In support of its motion, defendant submitted affidavits from the doctor and chiropractor who were to perform the IMEs, which affidavits were sufficient to establish that plaintiff’s assignors had failed to appear for duly scheduled IMEs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). However, in opposition, plaintiff submitted affidavits in which the doctor and chiropractor had previously sworn, under penalty of perjury, that when the IMEs were scheduled to occur, they were at a location other than the address set forth in the IME scheduling letters. To the extent defendant’s counsel asserted in a reply affirmation that the discrepancy was due to typographical errors in the prior affidavits, counsel did not demonstrate that she possessed personal knowledge sufficient to establish, as a matter of law, that the doctor and chiropractor were at the correct location when the IMEs were to be held.

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

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

Decided on June 3, 2016

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Decided on June 3, 2016

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Decided on June 3, 2016

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Decided on June 3, 2016

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Petitioner appeals from an order and judgment (one paper) of the Civil Court of the City of New York, New York County (Jennifer G. Schecter, J.), entered on or about January 15, 2015, which denied the petition to vacate an arbitration award in favor of respondent awarding it unpaid no-fault benefits in the principal sum of $3,833.85 and granted respondent’s cross-motion to confirm the arbitration award.

Per Curiam.

Order and judgment (one paper) (Jennifer G. Schecter, J.), entered on or about January 15, 2015, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim.

An arbitrator’s award directing payment in excess of the monetary limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822-823 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]; 11 NYCRR 65-1.1). Moreover, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” [citation omitted] (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822).

Petitioner’s submissions in support of its petition to vacate the award and in opposition to the cross motion to confirm – including an attorney’s affirmation, the policy declaration page showing the $50,000 policy limit, and a payment ledger listing in chronological order the dates the claims by various providers were received and paid – raised triable issues as to whether the $50,000 policy limit had been exhausted by payments of no-fault benefits to respondent and [*2]other health care providers before petitioner was obligated to pay the claims at issue here (see 11 NYCRR 65-3.15; Mount Sinai Hosp. v Zurich Am. Ins. Co., 15 AD3d 550 [2005]; brief for plaintiff-appellant in Mount Sinai Hosp. v Zurich Am. Ins. Co., supra, available at 2004 WL 3417457, *4 [insurer relied upon “affirmation of its attorney with attachments of alleged payout sheets, bills submitted by providers, and other documents” to show policy limits exhausted]; Allstate Ins. Co. v DeMoura, 30 Misc 3d 145[A], 2011 NY Slip Op 50430[U][App Term, 1st Dept. 2011]). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.

We note that, contrary to respondent’s contention, defendant was not precluded by 11 NYCRR 65-3.15 from paying other legitimate claims subsequent to the denial of respondent’s claims (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]). Adopting respondent’s position, which would require petitioner to delay payment on uncontested claims pending resolution of respondent’s disputed claim “runs counter to the no-fault regulatory scheme, which is designed to promote prompt payment of legitimate claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]; Harmonic Physical Therapy,P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], supra).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

[*1]

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

The Law Office of Sukhibir Singh, Richmond Hill (Ralph C. Caio of counsel), for respondent.

Order, Supreme Court, Bronx County (Kenneth L. Thompson, Jr., J.), entered July 10, 2015, which denied the petition to vacate a master arbitrator’s award, unanimously reversed, on the law, without costs, the petition granted, and the award vacated. The Clerk is directed to enter judgment accordingly.

The master arbitrator’s award was arbitrary because it irrationally ignored the law, which petitioner insurer had presented to the master arbitrator, that the no-fault policy issued by petitioner was void ab initio due to respondent’s assignor’s failure to attend duly scheduled independent medical exams (see American Tr. Ins. Co. v Lucas, 111 AD3d 423, 424 [1st Dept 2013]). The alleged error in petitioner’s denial of claim form is of “no moment” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [1st Dept 2011], lv denied 17 NY3d 705 [2011]), and was not a sufficient or rational basis for the award (see Auto One Ins. Co. v Hillside Chiropractic, P.C., 126 AD3d 423, 424 [1st Dept 2015], citing Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]).

Respondent waived its objections regarding improper service of the petition, since it never moved to dismiss the petition on those grounds (see CPLR 3211 [e]; B.N. Realty Assoc. v Lichtenstein, 21 AD3d 793, 796 [1st Dept 2005]; Matter of Resnick v Town of Canaan, 38 AD3d 949, 951 [3d Dept 2007]). Concur—Friedman, J.P., Renwick, Moskowitz, Richter and Kapnick, JJ. [Prior Case History: 48 Misc 3d 1202(A), 2015 NY Slip Op 50936(U).]

13672/13

Baker Sanders, LLC Attorney for the Plaintiff 100 Garden City Plaza, Suite 500 Garden City, New York 11530 Ph: (516) 741-4799

Bruno, Gerbino, & Soriano, LLP Attorney for the Defendant 445 Broad Hollow Road, Suite 220 Melville, New York 11747 Ph: (631) 390-0010

Papers Submitted:

Upon the foregoing papers, the Defendant STATE FARM AUTO INS. CO.’s motion (“State Farm”) seeking an order pursuant to CPLR § 3212 granting it summary judgment dismissing the complaint against it or in the alternative, an order pursuant to CPLR § 3212 (e) granting it partial summary judgment, is determined as provided herein.

The Plaintiff in this action, NY Rehab Pain Management & Medical Services, P.C. (“NY Rehab”) seeks to recover first party no-fault benefits for services allegedly supplied to its [*2]assignor, Gamal Elshekh, to treat him for injuries he allegedly suffered as the result of an automobile accident on December 26, 2008. State Farm maintains that the Plaintiff’s failure to appear for an Examination Under Oath (“EUO”) is violative of both the terms and conditions of the applicable insurance policy as well as the No-Fault regulations and entitles it to dismissal of the complaint.

The facts pertinent to the determination of this motion are as follows:

In response to 21 bills submitted by NY Rehab for services it allegedly provided Elshekh on December 29th , 30th and 31st and January 2nd, 3rd, 5th, 6th, 7th, 8th, 9th, 12th, 14th and 17th, by letter dated February 2, 2009, which was allegedly mailed on February 3rd, State Farm allegedly notified NY Rehab that it must submit to an EUO, which would be conducted on March 2, 2009. Similarly, in response to bills submitted by NY Rehab for services it allegedly provided Elshekh on January 17th, 19th, 21st, 26th and 28th, by letter dated February 11, 2009, which was allegedly mailed on February 12th, State Farm allegedly notified NY Rehab that payment for those services would not be made either until it appeared for the previously noticed EUO. A copy of the February 2nd letter was enclosed with that notification. Once again, in response to bills submitted by NY Rehab for services it allegedly provided Elshekh on January 17th, 19th, 21st, 24th, 26th, 27th, 28th and 31st, by letter dated February 17, 2009, which was allegedly mailed on February 18th, State Farm allegedly notified NY Rehab that payment for those services would also not be made until it appeared for the previously noticed EUO and a copy of the February 2nd letter was again enclosed.

Finally, in response to NY Rehab’s bills submitted for services it allegedly rendered to Elshkeh on January 28th, and 31st and February 2nd and 4th, by letter dated February 24, 2009, which was allegedly mailed on February 25th, State Farm allegedly notified NY Rehab that payment for those services would not be made until it appeared for the previously noticed EUO and a copy of the February 2nd letter was again enclosed.

State Farm alleges that no one appeared for the EUO on March 2, 2009 and so by letter dated March 5, 2009, which was allegedly mailed on March 6th, State Farm alleges it sent a follow up letter to NY Rehab rescheduling its EUO for March 23, 2009 with respect to the aforementioned bills as well as with respect to additional bills it had received for services NY Rehab allegedly provided Elshek on Febraury 9th, 11th, 13th, 16th, 18th and 23rd.

State Farm alleges that no one appeared for that EUO, either, as a result of which, by notices dated March 31, 2009, which were allegedly accompanied by Explanations of Review, State Farm allegedly notified NY Rehab, via NF-10s, that all of the aforementioned claims were denied based on its policy violation, i.e., its failure to appear for its EUO. Those notices were allegedly mailed on April 1, 2009.

One hundred and eleven additional claims for services rendered between February 9, 2009 and May 18, 2010 were also allegedly denied via NF-10s and accompanied by Explanations of Benefits based upon NY Rehab’s failure to provide the verification that had previously been sought, i.e., again, based upon its failure to appear for the EUO on March 2, 2009 and March 23, 2009. Two other bills for services rendered February 4, 2009 and June 11, 2009, in the amount of $ 33.70 each along with statutory interest, were paid on July 9, 2013. Seven other claims for services allegedly rendered to Elshek on January 8, 2009, January 28-31, 2009, January 31, 2009, June 9, 2009 and June 18-22, 2009 were allegedly denied on June 26, 2013 as duplicative and [*3]claims for services allegedly rendered on January 26, 2009 and February 2, 2009 were allegedly denied as duplicative on October 13, 2013.

State Farm maintains that after an investigation by its Special Investigative Unit, it determined that it had a reasonable and objective basis to request an EUO to ascertain whether NY Rehab was entitled to collect no-fault benefits under 11 NYCRR 65-3.16 (a) (12). More specifically, in support of its motion, State Farm has submitted an affidavit of its investigator Joseph Farrington who attests that he had reason to believe that NY Rehab might be fraudulently incorporated as the purported owner of the facility was suspected of being a nominal owner. See, State Farm Mut. Auto. Ins. Co. v Robert Mallela, 4 NY3d 313 (2005).

In support of its motion, State Farm has submitted copies of all of the letters sent to NY Rehab accompanied by Certificates of Mailing Lists indicating that correspondence was sent on each of the cited dates to “NY REHAB PAIN MANAGEMENT’ at “32-44 31st ST, Long Island City, NY 11106.”

State Farm has also submitted the affidavit of David Warfel who attests in detail to State Farm’s business practices and procedures which lead to the creation of the all of the notices allegedly sent to NY Rehab, including the letters dated February 2, 2009, February 11, 2009, February 17, 2009, February 24, 2009, March 5, 2009 and March 31, 2009. He also attests to the creation of the NF-10 denial of claim forms denying claims for services provided from February 9, 2009 up to and including May 18, 2010.

While State Farm relies on the Certificates of Mailing issued by the United States Post Office, standing alone, they establish only that something was mailed to NY Rehab on the dates in question, however, they do not establish what was mailed.

Nevertheless, State Farm has submitted an affidavit of George Perry attesting to the procedures regarding both the creation and the mailing of requests for EUOs as well as for additional verification and denials that were in place at the pertinent times. He explains how those documents are generated and how the Claim Service Assistant(s) compile them in packages for mailing, create the Certificates of Mailing logs, bundle the envelopes along with the corresponding log and places them in a bin for pick up by its mail department. He explains that beginning in April 2008, State Farm has, in its ordinary course of business, paid for and secured a Certificate of Mailing from the United States Post Office for all letters containing requests for EUO and/or additional verification as well as for denials or NF-10s. The Post Office places a postmark on the Certificates of Mailing log indicating the date on which it took possession of the listed envelopes and those Certificates are returned to State Farm’s Office where they are maintained.

State Farm has also submitted the affidavit of Kevin O’Leary, Esq., of Bruno, Gerbino & Soraiano, LLP, the attorneys for State Farm. He attests that he was present at the office where the EUOs were scheduled on March 2, 2009 and March 23, 2009. He attests that had someone from NY Rehab appeared at the office on either of those dates, the receptionist would have so notified him and he would have either conducted the EUO himself or assigned another attorney to do so. He attests that no one appeared on either of the dates on behalf of NY Rehab and that no one contacted his office to confirm or reschedule the EUOs, either.

It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists. (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]) A party seeking [*4]summary judgment bears the initial burden of demonstrating its entitlement to judgment as a matter of law by submitting evidentiary proof in admissible form. (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]) A failure to make that showing requires the denial of that summary judgment motion, regardless of the adequacy of the opposing papers. (Ayotte v. Gervasio, 81 NY2d 923 [1993]) If the movant makes a prima facie showing, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact. (Alvarez v. Prospect Hospital, supra at 324) “[T]o defeat a motion for summary judgment the opposing party must show facts sufficient to require a trial of any issue of fact’ “. (Friends of Animals v. Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067—1068 [1979], quoting CPLR § 3212, subd. [b]) “On a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party”. (Ortiz v. Varsity Holdings, LLC, 18 NY3d 335, 339 [2011])

11 NYCRR 65-1.1provides as follows:

In the case of a claim for health service expenses, the eligible injured person or that person’s assignee or representative shall submit written proof of claim to the Company, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered. The eligible injured person or that person’s representative shall submit written proof of claim for work loss benefits and for other necessary expenses to the Company as soon as reasonably practicable but, in no event later than 90 days after the work loss is incurred or the other necessary services are rendered. The foregoing time limitations for the submission of proof of claim shall apply unless the eligible injured person or that person’s representative submits written proof providing clear and reasonable justification for the failure to comply with such time limitation. Upon request by the Company, the eligible injured person or that person’s assignee or representative shall:

(a) execute a written proof of claim under oath;

(b) as may reasonably be required, submit to examinations under oath by any person named by the Company and subscribe the same;

(c) provide authorization that will enable the Company to obtain medical records; and

(d) provide any other pertinent information that may assist the Company in determining the amount due and payable.

The eligible injured person shall submit to a medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require.

An Insurer has 30 days after proof of claim is received in which to pay or deny a claim. 11 NYCRR 65.5 (g)(3). However, 11 NYCRR 65.15 (d) (1) affords an insurance company 10 days after receipt of an application for no-fault benefits or a bill for payment of benefits in which to seek additional verification. And, upon receipt of the prescribed verification forms, an insurance company may seek additional verification within 15 days. (11 NYCRR 65.3.5 [b]). In the event that the requested verification is not received by the insurance company within 30 days from the date of the request, the insurance company has an obligation to follow-up either by telephone or by mail within 10 days. (11 NYCRR 65.15 [e] [2]). If the Insurance company [*5]complies with all of these conditions, and all of the verification is still not received, the insurance company may deny the claim. In fact, the insurance company’s 30 days to pay or deny a claim does not begin to run until all requested verification information is received, (11 NYCRR 65.15 [g][1][I]) including the performance of an Examination Under Oath if one has been requested. (11 NYCRR 65-3.8 [a][1])

” It is well established that the failure to comply with the standard policy provision requiring disclosure by way of submission to an [EUO] as often as may be reasonably required, as a condition precedent to performance of the promise to indemnify, constitutes a material breach’ of the policy, precluding recovery of the policy proceeds (citations omitted)”. (IDS Prop. Cas. Ins. Co. v. Stracar Med. Services, P.C., 116 AD3d 1005, 1007 [2d Dept. 2014], quoting Bulzomi v. New York Cent. Mut. Fire Ins. Co., 92 AD2d 878, 878 [2d Dept. 1983]) An insurance company which establishes ” that it twice duly demanded an examination under oath’ from the assignees, that the assignees twice failed to appear, and that [it] issued a timely denial of the claims’ arising from the assignees’ provision of medical services to the assignors” establishes its prima facie entitlement to judgment as a matter of law. (IDS Prop. Cas. Ins. Co. v. Stracar Med. Services, P.C., 116 AD3d at 1007, quoting Interboro Ins. Co. v. Clennon, 113 AD3d 596, 597 [2d Dept. 2014]; citing Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2d Dept. 2006]). It must establish that “it timely and properly mailed its EUO scheduling letters and its denial of claim forms, which denied the claims on the ground that plaintiff had failed to appear at duly scheduled EUOs.” Bay LS Med. Supplies, Inc. v. Allstate Ins. Co., 50 Misc 3d 147(A) (App Term 2016), citing St. Vincent’s Hosp. of Richmond v. Government Empls. Ins. Co., 50 AD3d 1123 [2d Dept. 2008]) “[A]dmissible evidence in the form of an affidavit of an employee with knowledge of the [insurance company’s] standard office practices or procedures designed to ensure that items were properly addressed and mailed” may be used to establish the mailing of required documents. (St. Vincent’s Hosp. of Richmond v. Govt. Employees Ins. Co., 50 AD3d at 1124, citing New York & Presbyt. Hosp. v. Allstate Ins. Co., 29 AD3d 547 [2d Dept. 2006]; Hospital for Joint Diseases v. Nationwide Mut. Ins. Co., 284 AD2d 374 [2d Dept. 2001]; Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept. 2001]; Delta Diagnostic Radiology, P.C. v. Chubb Group of Ins., 17 Misc 3d 16 [App Term 2007]; see also, Five Boro Psychological Services, P.C. v. Progressive Northeastern Ins. Co., 27 Misc 3d 141(A) [App Term 2010]; cf. Westchester Med. Ctr. v. Countrywide Ins. Co., 45 AD3d 676 [2d Dept. 2007]). An attorney “who would have conducted the EUO if the [assignee] had appeared certainly [is] in a position to state that the [assignee] … did not … appear in his office on the date[s] indicated as directed in the notice and did not otherwise appear in his office on the date indicated”. (Hertz Corp. v. Active Care Med. Supply Corp., 124 AD3d 411, 411 [2d Dept. 2015]). And, belated objections to an EUO demand based upon a lack of grounds therefor which are first made in an action are not permitted. Rutland Med., P.C. v. State Farm Ins. Co., 45 Misc 3d 1033, 1034 (Civ Ct Kings County 2014), citing Five Boro Psychological and Licensed Master Social Work Servs. PLLC v. Geico Gen. Ins. Co., 38 Misc 3d 354 (Civ Ct Kings County 2012); see also, Eagle Surgical Supply, Inc. v. Allstate Ins. Co., 46 Misc 3d 128(A) (App Term 2014), citing Viviane Etienne Med. Care, P.C. v. State Farm Mut. Auto. Ins. Co., 35 Misc 3d127(A) (App Term 2012); Crescent Radiology, PLLC v. American Tr. Ins. Co., 31 Misc 3d 134 (A) (App Term 2011); All Boro Psychological Services, P.C. v. State Farm Mut. Auto. Ins. Co., 46 Misc 3d [*6]127(A) (App Term 2014)

NY Rehab alleges that State Farm has not properly established that its notices for Examinations Under Oath were properly addressed or mailed. The affidavits of David Warful and George Perry adequately establish State Farm’s practices and procedures leading to the creation of the subject notices as well as their mailing. Contrary to NY Rehab’s contention, the correspondence was not erroneously addressed to Long Island City instead of Astoria. There is only one address at 32-44 31st Street in those towns which is identical.

NY Rehab also maintains that State Farm has not established its nonappearance at the scheduled EOUs. State Farms’s attorney’s affidavit attesting to NY Rehab’s nonappearance at the scheduled EUOs satisfies its obligation to establish NY Rehab’s nonappearance. Hertz Corp. v. Active Care Med. Supply Corp., 124 AD3d at 411; New Capital Supply, Inc. v. State Farm Mut. Auto. Ins. Co., 45 Misc 3d 758, 761 (Civ Ct New York County 2014), citing Natural Therapy, Accupuncture, P.C. v. State Farm Mut. Ins. Co., 42 Misc 3d 137(A) (AppTerm 2014) (attorney’s affirmation stating that he was present at office on the date the EUO was scheduled and that had the provider appeared he would have conducted the EUO or assigned an attorney to do so suffices to establish a provider’s nonappearance at an EUO); see also, Palafox PT, P.C. v. State Farm Mut. Auto. Ins. Co., 49 Misc 3d 144(A) (App Term 2015)

NY Rehab also opposes this motion on the grounds that State Farm did not have good cause for requiring it to appear for an EUO in the first place and that in any event, its owner appeared for an EUO with respect to the identical issues in question here in another case. Again, belated objections to the propriety of the EUO are not permitted at this juncture. Rutland Med., P.C. v. State Farm Ins. Co.,supra, citing Five Boro Psychological and Licensed Master Social Work Servs. PLLC v. Geico Gen. Ins. Co., supra; see also, Eagle Surgical Supply, Inc. v. Allstate Ins. Co., supra, citing Viviane Etienne Med. Care, P.C. v. State Farm Mut. Auto. Ins. Co.,supra; Crescent Radiology, PLLC v. American Tr. Ins. Co.,supra; All Boro Psychological Services, P.C. v. State Farm Mut. Auto. Ins. Co.,supra. And, ” an insurance company is entitled to obtain information promptly while the information is still fresh to enable it to decide upon its obligations and protect against false claims. To permit [the defendants] to give the information more than [three] years after the [loss] would [constitute] a material dilution of the insurance company’s rights’ “. (IDS Prop. Cas. Ins. Co. v. Stracar Med. Services, P.C., 116 AD3d at 1007-08, quoting Argento v. Aetna Cas. & Sur. Co., 184 AD2d 487, 487-488 [2d Dept. 1992]; see also, Johnson v. Allstate Ins. Co., 197 AD2d 672, 672 [2d Dept. 1993], lv denied 82 NY2d 664 [1994]; Lentini Bros. Moving & Stor. Co. v. New York Prop. Ins. Underwriting Assn., 53 NY2d 835, 836 [1981]; Azeem v. Colonial Assur. Co., 96 AD2d 123, 125 [4th Dept. 1983], affd 62 NY2d 951 [1984]) A belated appearance by NY Rehab in a separate proceeding does not excuse its breach of its policy and the regulations here.

Finally, NY Rehab opposes State Farm’s motion based on outstanding discovery. ” A party who contends that a summary judgment motion is premature is required to demonstrate that discovery might lead to relevant evidence or [that] the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the movant’ “. (Interboro Ins. Co. v. Clennon, 113 AD3d 596, 597 [2d Dept. 2014], quoting Cajas—Romero v. Ward, 106 AD3d 850, 852 [2d Dept. 2013]; citing CPLR 3212 [f]) NY Rehab has not met that burden.

State Farm cites to an exhibit consisting of hundreds of pages to be reviewed in an [*7]attempt to confirm its allegation that seven claims were properly denied as duplicative. Therefore, it has not established that the seven claims were properly denied as duplicative. However, it has, in any event, established that those claims were submitted following NY Rehab’s failure to appear for its EUO, thereby justifying State Farm’s denial of those claims.

Accordingly, it is hereby

ORDERED, that the Defendants’ motion seeking summary judgment is GRANTED and the Plaintiff’s complaint is dismissed.

This constitutes the Decision and Order of the Court.

All applications not specifically addressed are DENIED.

DATED: May 24, 2016
Mineola, New York
Hon. Randy Sue Marber, J.S.C.

010395/15

Plaintiff is represented by the Law Offices of Emilia Rutigliano, by Rachel Berzin, Esq., 1733 Sheepshead Bay Road, Suite 11, Brooklyn NY 11235; Defendant is represented by Bruno, Gerbino & Soriano LLP, by Catarina Oliveira, Esq., 445 Broad Hollow Road, Suite 220, Melville NY 11474.

Plaintiff’s motion and Defendant’s cross-motion for summary judgment pursuant to CPLR 3212 came before the Court on March 23, 2016. In addition to the oral arguments of counsel, the Court has considered the following listed submissions of the parties, pursuant to CPLR 2219(a):

Title/Number

Plaintiff’s Notice of Motion for Summary Judgment dated May 5, 2015; Affidavit of Maxim Tyorkin, M.D., sworn to on May 7, 2015; and Exhibits 1-4 1

Defendant’s Notice of Cross-Motion for Summary Judgment dated August 26, 2015; Attorney Affirmation of Dianne Galluzzo, Esq., affirmed on August 26, 2015; Affidavit of Zach Trahan, sworn to on August 12, 2015; Affidavit of Tammie Ulmer, sworn to on August 14, 2015; Affidavit of Raina Lira, sworn to on August 13, 2015; Affidavit of Lashelda Moreno, sworn to on August 24, 2015; Affirmation of Michael Baskies, M.D., affirmed on August 18, 2015; and Exhibits A-F 2

Plaintiff’s Attorney Affirmation in Opposition of Ilona Finkelshteyn, Esq., affirmed on February 8, 2016; Affidavit of Maxim Tyorkin, M.D., sworn to on February 2, 2016 (Exhibit 1 is the foregoing affidavit) 3

In an action by a provider to recover first-party no-fault benefits, Defendant moves for summary judgment based upon a negative peer review of the services rendered, or, alternatively, that Plaintiff purportedly billed above New Jersey Fee Schedule and thus is not eligible for reimbursement.

Plaintiff argues that affidavits proffered by Defendant are conclusory and fail to establish that the Denial of Claim forms were properly mailed and that Defendant’s IME report is not in admissible form.

In an apparent case of first impression, the issue before the Court is whether an insurer, when receiving a bill from a medical provider, who rendered services in New Jersey and is making a claim for New York no-fault benefits, is required to issue a Denial of Claim form, specifically, the New York State NF-10.

The no-fault regulations require an insurer to either pay or deny a claim for no-fault benefits within 30 days from the date of receipt of the claim (Insurance Law§ 5106(a); 11 NYCRR 65-3.8 (a)). An insurer who fails to timely deny the claim is generally precluded from interposing a defense to that claim. Hosp. for Jt. Disease v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318, 879 N.E.2d 1291, 849 N.Y.S.2d 473 (2007); Nyack Hosp. v Metropolitan Property & Cas. Ins. Co., 16 AD3d 564, 791 N.Y.S.2d 658 (2d Dept. 2005). A review of Insurance Regulation 68 indicates that there are specific requirements for the issuance of a denial of claim form. See 11 NYCRR 65-3.8. For instance, in denying a claim, a form created by the Insurance Department, known as the NF-10, must be used. See id. In other instances, specific language is required to be inserted in the issuances of NF-10’s. See id.

11 NYCRR 65-3.8(c)(1) advises as follows:

(1) If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such a denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.

In the case at bar, Defendant’s affiant, Raina Lira, a Claims Adjuster employed by Defendant, avers that Defendant, through its vendor, Auto Injury Solutions (AIS), mailed the [*2]Explanation of Reimbursement Form (EOR) to the medical provider. There is no indication that a NF-10 form was issued in this matter although Ms. Lira avers that in applicable instances, the Denial of Claim Form (NF-10) is sent. Further, there is no indication that the EOR form, which was the only document issued in response to Plaintiff’s claim, is a form or letter approved by the Department as so allowed by 11 NYCRR 65-3.8(c)(1). Thus, notwithstanding both parties’ arguments with regards to the substantive merits of the peer review defense, the Court finds that such defense is precluded by Defendant’s failure to issue a NF-10 Denial of Claim form.

Alternatively, Defendant contends that upon a proffer of a review of the bill by its Certified Coder, Lashelda Moreno, and the same indicates that Plaintiff billed above the New Jersey Fee Schedule, summary judgment must be granted in its favor.

The Fourth Amendment to Regulation 68 states that a fee schedule defense is no longer precluded by the 30 day rule in actions for services rendered after April 1, 2013.

11 NYCRR 65-3.8(g) advises the following:

Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106 (a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:

(i) when the claimed medical services were not provided to an injured party; or

(ii) for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.

(g)(2) This subdivision shall apply to medical services rendered on or after April 1, 2013.

This Court, as well as at least two Courts in the First Department, agree on the interpretation of the statute to be there is no preclusion of the fee schedule defense. See Surgicare Surgical Assoc. v National Interstate Ins. Co., 50 Misc 3d 85 (App. Term 2015); see also East Coast Acupuncture, P.C. v Hereford Ins. Co., 26 N.Y.S.3d 684, 685 (Civ. Ct. Kings Cty 2016); Saddle Brook Surgicenter, LLC v All State Ins. Co., 48 Misc 3d 336, 345-346 (Civ. Ct. Bronx Cty 2015).

In Surgicare Surgical Assoc v National Interstate Ins Co, the Appellate Term affirmed the Civil Court’s holding that “where a reimbursable health care service is performed outside the State of New York in a jurisdiction that has enacted a medical fee schedule prescribing the permissible charge for the service rendered, an insurer may properly rely on such fee schedule to establish the “prevailing fee” within the meaning of 11 NYCRR 68.6, and demonstrate compliance therewith by payment in accordance with that fee schedule.” Surgicare Surgical Assoc. v National Interstate Ins. Co, supra. Thus, the Appellate Term found that Plaintiff was only entitled to reimbursement for the permissible rate authorized in New Jersey for the services rendered by Plaintiff as set forth in New Jersey’s no-fault statute and applicable fee schedule.

Likewise, in this instance, the Court finds that Defendant’s fee schedule defense is neither precluded by timeliness or its failure to issue a Denial of Claim form as the language of the statute strictly mandates that “no payment shall be due .under any circumstances” for medical service fees that exceed the fee schedule charges. 11 NYCRR 65-3.8(g). In other words, [*3]Plaintiff would only be entitled to the payment of the subject bill at the rates permissible and authorized in the state of New Jersey. The Court is unpersuaded by Defendant’s argument that payment for Plaintiff’s bill is outright prohibited simply because the billed amount is higher than permissible. The regulation only reduces payment to the amount authorized by the applicable fee schedule.

With regard to the amount ultimately due to Plaintiff, Defendant proffers an explanation by Lashelda Moreno, a Certified Professional Coder employed by AIS on Defendant’s behalf. Upon review of the same, the Court finds that Ms. Moreno did not explain the exact amounts allowable in a coherent manner. In one portion of Ms. Moreno’s analysis, she lists the following with no further details:

According to the New Jersey Physicians’ Fee Schedule Exhibit 1:

Physician Fee North:

CPT 29877: $3,398.38

CPT 29875: $2,712.06 x 50% for MPR = $1356.03

CPT 29877: $3,398.38 x 20% for Assistant Surgeon = $679.68 (reimbursed BA)

CPT 29875: $2,712.06 x 20% for Assistant Surgeon = $542.41 (reimbursed BA)

In Ms. Moreno’s affidavit, upon which she concludes that the proper amount of the bill would be $5,976.50, rather than the billed amount of $10,144.88, there is no further explanation as to what the sum comprises of. While the Court may consider an attorney affirmation in the explanation of fee schedule provisions and the Court may take judicial notice of the fee schedule (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 18 [App. Div. 2d Dep’t 2009]), the attorney affirmation of Dianne Galluzzo neither explains Ms. Moreno’s analysis or explains allowable reductions. The Court cannot presume to be knowledgeable of fee schedule reductions that, on its face, cannot be specifically adduced, and will not make any findings of fact as to such reductions. As such, a triable issue of fact remains as to its fee schedule defense. Further, the Court notes that while Ms. Moreno’s analysis sufficiently raises a triable issue, her analysis alone is inarticulate and insufficient to be the basis of summary judgment.

The Court finds that Plaintiff met its prima facie burden in establishing the timely mailing of the bills at issue through the affidavit of Maxim Tyorkin, M.D., the annexed bill and the annexed USPS mail extract pertaining to the bill at issue. See Viviane Etienne Med. Care v Country-Wide Ins. Co., 2015 NY Slip Op 04787 (2015).

Based on the foregoing, Plaintiff’s motion for summary judgment is granted to the extent that it established its prima facie case for purposes of trial. Defendant’s cross-motion is granted to the extent that it established its prima facie case for purposes of trial. The sole issue for trial is Defendant’s fee schedule defense for which Defendant bears the burden of establishing.

This constitutes the Decision and Order of the Court.

Dated: May 20, 2016
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Richard J. Montelione, A.J.S.C.