SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Pamela L. Fisher, J.), entered June 18, 2010. The order denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

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

In support of its motion, defendant submitted an affidavit by its biomechanical engineer, which affidavit was in admissible form, as it was accompanied by a certificate of conformity pursuant to Real Property Law § 299-a, and was therefore in compliance with CPLR 2309 (c) (cf. Andromeda Med. Care, P.C. v Utica Mut. Ins. Co., 24 Misc 3d 139[A], 2009 NY Slip Op 51629[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). The engineer concluded that the injuries of plaintiff’s assignors could not have arisen out of the accident in question, after he reviewed, among other things, the photographs of the vehicle involved in the accident, the medical records of plaintiff and other providers regarding their treatment of the assignors, and copies of the transcripts of plaintiff’s assignors’ testimony at their examinations under oath, all of which defendant attached to its moving papers.

As defendant established its entitlement to judgment as a matter of law by submitting proof in admissible form showing the lack of a causal connection between the accident and the injuries claimed by plaintiff’s assignors, the burden shifted to plaintiff to rebut defendant’s showing. Plaintiff, in its opposition papers, failed to do so. Defendant’s motion for summary judgment dismissing the complaint should therefore have been granted.

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

Golia, J.P., and Weston, J., concur. [*2]

Rios, J., dissents in a separate memorandum.

Rios, J., dissents and votes to affirm the order in the following memorandum:

I respectfully dissent and vote to affirm the order.

Contrary to the finding of the majority, the affidavit of defendant’s biomechanical engineer was insufficient to establish as a matter of law that the injuries claimed by plaintiff’s assignors could not have arisen from the accident. Instead, the affidavit merely demonstrated a “founded belief” that the alleged injuries did not arise out of the accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Accordingly, defendant’s motion for summary judgment dismissing the complaint was properly denied.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered May 10, 2010. The order, insofar as appealed from, granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order.

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

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from so much of an order as granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order. At issue on this appeal is whether defendant’s failure to assert a defense pursuant to State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]) precludes it from seeking discovery related to that defense. We conclude that, based on the record before us, defendant made sufficient allegations of fraudulent incorporation to warrant disclosure.

It is well settled that a party is entitled to full disclosure of all matter that is “material and necessary in the prosecution or defense of an action” (CPLR 3101 [a]). What is “material and necessary” is left to the sound discretion of the court and includes “any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason” (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]; Young v Tierney, 271 AD2d 603 [2000]). Where, as here, an insurer requests discovery concerning a Mallela defense, the request should be granted as long as there are sufficient allegations supporting such a defense (see e.g. Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58 [App Term, 2d & 11th Jud Dists 2006]; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]). A Mallela defense is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial (see Midwood Acupuncture, P.C. v State Farm [*2]Auto. Ins. Co., 14 Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d & 11th Jud Dists 2007]).

Here, although defendant never moved to amend its answer to assert a defense based on fraudulent incorporation, it did submit an affidavit containing sufficient allegations of fraudulent incorporation. Defendant included an affidavit from its Senior Special Investigator, who set forth, in detail, plaintiff’s close connection with another medical provider whose owner was convicted of, among other things, fraud and falsifying business records. Since defendant made adequate allegations of fraudulent incorporation, the Civil Court did not abuse its discretion in granting those branches of defendant’s motion seeking to compel disclosure on that issue, and in denying plaintiff’s cross motion for a protective order (see Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U]).

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

Rios, J.P., and Weston, J., concur.

Golia, J., concurs in a separate memorandum.

Golia, J., concurs in the following memorandum:

I concur for the reasons stated in my concurrence in Lexington Acupuncture, P.C. v General Assur. Co. (___ Misc 3d ___, 2012 NY Slip Op ______ [Appeal No. 2010-165 K C], decided herewith). While there exist certain differing factual elements in these two matters, those facts have no significance here, and consequently play no part in the legal issues in controversy.

Additionally, the failure of the defendant in this matter to assert every affirmative defense asserted in Lexington Acupuncture, P.C. is of no consequence. The inclusion of any one satisfactory affirmative defense would be sufficient. Furthermore, and just as importantly, as stated in my Lexington Acupuncture, P.C. concurrence, a Mallela claim is non-precludable and can be raised at any time (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Sylvia G. Ash, J.), entered December 17, 2009. The order, upon an amended cross motion by defendant for, among other things, leave to amend its answer and to direct plaintiff “to disclose management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records, or in the alternative, granting . . . leave to serve supplemental demands for same,” granted defendant leave to amend its answer and directed that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer.”

ORDERED that the order is modified by striking so much of the order as directs that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer” and by providing that the branch of defendant’s cross motion seeking to direct disclosure is denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and, by an amended cross motion, defendant cross-moved for, among other things, leave to amend its answer to assert the additional affirmative defense to the effect that plaintiff was not entitled to receive no-fault benefits because it failed to comply with applicable state or local licensing laws. Defendant’s cross motion also sought an order, pursuant to CPLR 3104, directing plaintiff “to disclose management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records, or in the alternative, granting . . . leave to serve supplemental demands for same.” By order dated November 18, 2009, the Civil Court denied plaintiff’s motion. By order entered December 17, 2009, the Civil Court granted the branch of defendant’s amended cross motion seeking to amend the answer and directed plaintiff to “provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer.”

Leave to amend pleadings should be freely granted absent prejudice or surprise resulting from the delay (see CPLR 3025 [b]; Lucido v Mancuso, 49 AD3d 220, 225 [2008]; see also Worthen-Caldwell v Special Touch Home Care Servs., Inc., 78 AD3d 822 [2010]). As plaintiff was neither prejudiced nor surprised by defendant’s delay in asserting the foregoing affirmative [*2]defense, the Civil Court did not improvidently exercise its discretion in granting the branch of defendant’s amended cross motion seeking leave to amend its answer (see e.g. New York First Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 25 Misc 3d 134[A], 2009 NY Slip Op 52217[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

A review of the record indicates that defendant’s initial discovery demands had not requested any “management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records,” and were merely comprised of a “Demand for Disclosure of Witness(es),” a “Notice Pursuant to CPLR 3101” for, among other things, the identities of expert witnesses intended to be called at trial, and a “Declination of Service by Electronic Means.” Since defendant had not served any supplemental discovery demands upon plaintiff prior to making its cross motion, and did not submit any proposed supplemental discovery demands with its cross motion, so much of the order as states that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer” is stricken.

We note that, contrary to plaintiff’s contention, there is no requirement that a CPLR 321 change or withdrawal of attorney form be notarized. We further note that nothing in our decision herein is intended to preclude defendant from serving supplemental discovery demands.

Rios, J.P., Weston and Golia, JJ., concur.
Decision Date: February 21, 2012

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Elizabeth A. Taylor, J.), entered August 31, 2010, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Elizabeth A. Taylor, J.), entered August 31, 2010, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

The defendant insurer made a prima facie showing of entitlement to judgment as a matter of law by submitting, inter alia, a chiropractor’s sworn peer review report, setting forth a factual basis and medical rationale for his stated conclusion that the diagnostic testing giving rise to plaintiff’s no-fault claim lacked medical necessity (see generally CPT Med. Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 87 [2007]). In opposition, plaintiff failed to raise a triable issue of fact. The medical affidavit submitted by plaintiff contained no indication that the generic conclusions reached by the affiant — a physician whose field of practice is unspecified — were based upon either a medical examination of plaintiff or a review of plaintiff’s medical records. Further, plaintiff’s affiant did not refer to, let alone rebut, the contrary findings made by defendant’s peer reviewer (see CPT Med. Servs. P.C., 18 Misc 3d at 88). Nor is the separate, unsigned medical report submitted by plaintiff properly considered (see CPLR 2106; Vista Surgical Supplies, Inc. v Travelers Ins. Co., 50 AD3d 778 [2008]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: February 16, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Katherine A. Levine, J.), entered March 23, 2010. The order, insofar as appealed from, in effect, denied defendant’s cross motion for summary judgment dismissing the complaint and found that plaintiff had established its prima facie case.

ORDERED that the order, insofar as appealed from, is modified by striking the provision thereof finding that plaintiff had established its prima facie case, and by providing that the branch of defendant’s cross motion seeking summary judgment dismissing plaintiff’s claims for dates of service from October 30, 2007 through January 30, 2008 is granted; as so modified, the order, insofar as appealed from, is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment or, in the alternative, for a finding for all purposes in the action, that plaintiff had established its prima facie case. Defendant cross-moved for summary judgment dismissing the complaint. Defendant appeals from so much of the order as denied its cross motion for summary judgment dismissing the complaint and found, implicitly pursuant to CPLR 3212 (g), that plaintiff had established its prima facie case. [*2]

We note initially that plaintiff failed to establish its prima facie entitlement to summary judgment since the affidavit of the president of its third-party biller was insufficient to establish that the documents annexed to plaintiff’s motion papers were admissible pursuant to CPLR 4518 (a) (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 31 Misc 3d 21 [App Term, 2d, 11th & 13th Jud Dists 2011]). Consequently, plaintiff was not entitled to a finding, pursuant to CPLR 3212 (g), that it had established its prima facie case.

In support of defendant’s cross motion for summary judgment, defendant submitted, among other things, an affidavit of its claims examiner, which established that the claim denial forms had been timely mailed in accordance with defendant’s standard office practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Defendant, however, did not proffer sufficient evidence to warrant the dismissal of plaintiff’s claim for the initial consultation on August 29, 2007 (see Raz Acupuncture, P.C. v AIG Indem. Ins. Co., 28 Misc 3d 127[A], 2010 NY Slip Op 51177[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009]), nor did it establish as a matter of law that the amounts sought by plaintiff for acupuncture treatment rendered from August 30, 2007 through October 25, 2007 were in excess of the amounts permitted by the workers’ compensation fee schedule (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2009]; see also Triboro Chiropractic and Acupuncture, PLLC v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d 145[A], 2007 NY Slip Op 51175[U] [App Term, 2d & 11th Jud Dists 2007]). Accordingly, the Civil Court properly denied the branch of defendant’s cross motion seeking the dismissal of these claims.

In support of its cross motion, defendant submitted a sworn report of the licensed acupuncurist/chiropractor who had conducted an independent medical examination of plaintiff’s assignor on October 16, 2007. The report set forth a factual basis and medical rationale for the examiner’s determination that there was no need for further acupuncture treatment. Since defendant’s showing that the services rendered from October 30, 2007 through January 30, 2008 were not medically necessary was unrebutted by plaintiff, defendant was entitled to summary judgment dismissing plaintiff’s claims for these dates of service (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Accordingly, the order of the Civil Court is modified by striking the provision thereof finding that plaintiff established a prima facie case and by providing that the branch of defendant’s cross motion for summary judgment seeking to dismiss plaintiff’s claims for dates of service from October 30, 2007 through January 30, 2008 is granted.

Pesce, P.J., Weston and Rios, JJ., concur. [*3]
Decision Date: February 14, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Peter Paul Sweeney, J.), dated November 6, 2009. The order granted defendant’s motion to amend its answer to add affirmative defenses.

ORDERED that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for leave to amend its answer, approximately four years after joinder of issue, to add affirmative defenses asserting the existence of a personal injury deductible in the insurance contract and denying that plaintiff’s assignor was an eligible injured person. The Civil Court granted the motion.

Plaintiff does not deny that the underlying insurance contract contains a deductible or that defendant’s timely NF-10 denial of claim forms asserted the existence of the deductible (see e.g. Carr v Ruffino, 6 Misc 3d 130[A], 2005 NY Slip Op 50071[U] [App Term, 2d & 11th Jud Dists 2005]). Although there was a lengthy period of time between the joinder of issue and the making of the motion to amend, lateness alone is not a barrier to amendment absent a showing of “significant” prejudice to the opposing party (Rodriguez v Panjo, 81 AD3d 805, 806 [2011]; see McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp., 59 NY2d 755, 757 [*2][1983]), or that the proposed defenses are “patently devoid of merit” or “palpably insufficient to state a . . . defense” (Lucido v Mancuso, 49 AD3d 220, 229 [2008]; see also Ingrami v Rovner, 45 AD3d 806, 808 [2007]; Sweetwater Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 24 Misc 3d 137[A], 2009 NY Slip Op 51570[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

In this case, while the delay was lengthy, plaintiff does not deny that discovery and trial postponements intervened to delay the action and for reasons unrelated to the motion’s merits. Since the defenses address the effect of contractual terms on recovery and since plaintiff does not deny defendant’s claim that its NF-10 forms invoked a deductible, the claim of surprise or prejudice so great as to warrant the motion’s denial is not established (e.g. Carr v Ruffino, 6 Misc 3d 130[A], 2005 NY Slip Op 50071[U]).

Since plaintiff as assignee stands in the shoes of the insured, plaintiff cannot claim ignorance of the terms of the very contract under which it alleges entitlement to no-fault benefits compensation (New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586 [2011]; John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d 59 [App Term, 9th & 10th Jud Dists 2011]; see Ops. Gen. Counsel NY Ins. Dept. No 08-04-16 [April 2008] [assignee-provider “may pursue all of the remedies that would have been available to the patient”]). Upon the record before us, we find that the Civil Court did not improvidently exercise its discretion in granting defendant leave to amend its answer to interpose the aforementioned affirmative defenses (CPLR 3025 [a]; see Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959 [1983]).

Accordingly, the order is affirmed.

Weston, J.P., Golia and Rios, JJ., concur.
Decision Date: February 09, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered May 28, 2009. The order denied plaintiff’s motion to, among other things, compel certain discovery and granted defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, without costs.

After plaintiff had commenced this action to recover assigned first-party no-fault benefits for medical services provided to its assignors, defendant commenced a declaratory judgment action in Supreme Court, Queens County, against various medical providers and their assignors, including plaintiff and its assignors herein. By order dated October 26, 2007, the Supreme Court granted defendant’s motion for entry of a declaratory judgment, on default, declaring that defendant had “no present or future obligation to furnish benefits under the Mandatory Personal Injury Protection coverage” to the parties named as defendants in the declaratory judgment action. In December 2007, plaintiff herein moved to compel certain discovery from defendant or, in the alternative, to strike defendant’s answer. Defendant cross-moved for summary judgment [*2]dismissing the complaint, contending that this action was barred by virtue of the October 26, 2007 order of the Supreme Court. The Civil Court denied plaintiff’s motion and granted defendant’s cross motion.

Based upon the October 26, 2007 order of the Supreme Court, the instant action is barred under the doctrine of res judicata (see Sabatino v Capco Trading, Inc., 27 AD3d 1019 [2006]; Pomona Med. Diagnostics, P.C. v Metropolitan Cas. Ins. Co., 29 Misc 3d 138[A], 2010 NY Slip Op 52039[U] [App Term, 1st Dept 2010]). To hold otherwise could result in a judgment in the instant action which would destroy or impair rights established by the order rendered by the Supreme Court in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). Contrary to plaintiff’s contention, the Supreme Court’s order is a conclusive final determination, notwithstanding that it was entered on default, and res judicata applies to an order or judgment taken by default which has not been vacated (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688 [2006]; Matter of Eagle Ins. Co. v Facey, 272 AD2d 399 [2000]). Furthermore, based on the Supreme Court’s order, plaintiff’s motion to compel discovery or, in the alternative, strike defendant’s answer was rendered moot, and, thus, properly denied. Plaintiff’s remaining contentions lack merit.

Accordingly, the order of the Civil Court is affirmed.

Golia, J.P., Weston and Rios, JJ., concur.
Decision Date: February 09, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Alan Lebowitz, J.H.O.), entered September 22, 2009. The order, insofar as appealed from, granted the branches of defendant’s motion seeking to strike the action from the trial calendar and to compel plaintiff to produce plaintiff’s owner for an examination before trial, and denied plaintiff’s cross motions seeking, among other things, costs and sanctions.

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

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from so much of an order as granted the branches of defendant’s motion seeking to strike the action from the trial calendar and to compel plaintiff to produce plaintiff’s owner for an examination before trial, and denied plaintiff’s cross motions seeking, among other things, costs and sanctions.

Because the notice of trial and certificate of readiness filed by plaintiff contained the erroneous statement that discovery had been completed, the Civil Court properly granted the branch of defendant’s motion seeking to strike the matter from the trial calendar (see Citywide [*2]Social Work & Psychological Servs., PLLC v Autoone Ins. Co., 32 Misc 3d 130[A], 2011 NY Slip Op 51308[U] [App Term, 2d, 11th & 13th Jud Dists 2011]; Allstate Social Work & Psychological Svcs., PLLC v GEICO Gen. Ins. Co., 29 Misc 3d 142[A], 2010 NY Slip Op 52162[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). In addition, upon a review of the record, we see no basis to disturb so much of the Civil Court’s order as granted the branch of defendant’s motion seeking to compel plaintiff to produce plaintiff’s owner for an examination before trial. In light of the foregoing, plaintiff’s cross motions were properly denied.

Golia, J.P., Weston and Rios, JJ., concur.
Decision Date: February 09, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Cheree A. Buggs, J.), entered July 9, 2010. The order granted plaintiffs’ motion to restore the action to the trial calendar.

ORDERED that the order is affirmed, without costs.

In this action by providers to recover assigned first-party no-fault benefits, the Civil Court granted plaintiffs’ motion to restore the action to the trial calendar pursuant to Uniform Rules for New York City Civil Court (22 NYCRR) § 208.14 (c). The owner of plaintiff Exact Medical Services, P.C. was Dr. Ronald Collins, who passed away on September 15, 2008. Anna Val, Esq., was appointed as the administrator of the estate of Dr. Collins on September 9, 2009. Her role was to preserve the value of, and prevent loss to, the estate.

For the reasons stated in Eastern Star Acupuncture, P.C. v Allstate Ins. Co. ( Misc 3d , 2012 NY Slip Op [Appeal No. 2010-2113 Q C], decided herewith), the order is affirmed.

Weston, J.P., Pesce and Rios, JJ., concur.
Decision Date: February 02, 2012

District Court of Nassau County, First District

CV-050076-10

REPRESENTATION:

Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP

1111 Marcus Ave., Ste. LL08

Lake Success, NY 11042 (5160248-2929

The Law Firm of Kelly & Sheridan, LLP

150 Broadhollow Road

Melville, NY 11747 (631)547-5900

Terence P. Murphy, J.

The following named papers numbered 1 to 2

submitted on this motion

on November 9, 2011

papers numbered

________________________________________________________________ _____

Notice of Motion w/ supporting documents…………………………….1

Affirmation in Opposition w/ supporting documents…………………2

____________________________________________________________________ _

The defendant, State Farm Mutual Automobile Insurance Company, a no-fault insurance provider, moves for summary judgment dismissing the complaint pursuant to CPLR §3212. The plaintiff is the assignee of Rita Munlyn, a covered person under a policy of insurance issued by the Defendant. For the reasons set forth below, the motion is DENIED on the fee schedule issue and GRANTED on the issue of timely denial of claim.

The within law suit alleges that plaintiff’s assignor was involved in a motor vehicle accident on December 30, 2009 and received health services from plaintiff/assignee at its office based surgery facility on May 6, 2010. There is no dispute that this action is one that falls under the “Comprehensive Motor Vehicle Insurance Reparations Act”, New York’s no-fault insurance law (NY Ins Law, Art. 51 et. seq.). Under such authority, a no fault bill was issued by plaintiff in [*2]the amount of $4,791.39 which defendant claims it timely denied. The basis of Defendant’s denial is that the fees claimed were not in compliance with the New York Workers’ Compensation Board Schedule of Medical Fees and/or Regulation 68, Appendix 17-C, in that the plaintiff is not listed as a Public Health Law Article 28 facility. Defendant claims the only basis for reimbursement to the plaintiff for a facility fee is under the New York Workers’ Compensation Board schedule.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]; Winegrad v. New York University Med. Ctr., 64 NY2d 851 [1985]). Once the movant has demonstrated a prima facie showing of entitlement to judgment, the burden shifts to the party opposing the motion, to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (see Zuckerman v. City of New York, 49 NY2d 557 [1980]).

With respect to timely service, the defendant must demonstrate “either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that the items are properly addressed and mailed” (Residential Holding Corp. v. Scottsdale Insurance Company, 286 AD2d 679 [2d Dept 2001]), or one “geared so as to ensure the likelihood that a notice … is always properly addressed and mailed”(Nassau Insurance Company v. Murray, 46 NY2d 828 [1978]). A no-fault insurance carrier may prove timely mailing of the denial of claim form by submitting an affidavit made by the person who actually prepared and mailed the denial attesting to the preparation and mailing of same, or by submitting an affidavit from an employee with knowledge of its office practice or procedures designed to ensure the denial of claim form was timely generated, addressed and mailed and those procedures were followed in connection with the notice involving plaintiff’s claim (St. Vincent’s Hospital of Richmond v. Government Employees Ins. Co., 50 AD3d 1123 [2d Dept 2008]).

Plaintiff’s bill dated June 2, 2010 for its services rendered on May 6, 2010 was received by defendant on June 7, 2010. The defendant alleges that it timely served its NF-10 denial form in response to the plaintiff’s claim for $4,791.39 on June 21, 2010.

Regarding Defendant’s basis for denying the claim, the Defendant annexes two affidavits. In the first affidavit sworn to August 30, 2011 (Exhibit C), Jerold Greenzang, Defendant’s claims representative in the No-Fault Department, indicates that he is fully familiar with the business practices employed by defendant in the routine and regular course of its receiving, reviewing and processing No-Fault claims. He details the regular course of business of the office and states that the bill in the amount of $4,791.39 was timely denied. The Defendant also provides an affidavit of George Perry, sworn to on January 17, 2011 (Exhibit D), a Claims Support Services Supervisor for the defendant’s Ballston Spa, NY claims office. Mr. Perry outlines in detail the general procedure for how claims are prepared for mailing. These affidavits demonstrate that the denial of claim NF-10 form had been timely mailed pursuant to defendant’s standard office practices and procedures. (See St. Vincent’s Hosp. of Richmond v. Government Employees Ins. [*3]Co., 50 AD3d 1123; Delta Diagnostic Radiology, P.C. v. Chubb Group of Insurance, 17 Misc 3d 16). The plaintiff failed to submit evidence in rebuttal sufficient to raise a triable issue of fact with regard to the mailing and receipt of the denial form.

Defendant further submits an affidavit of Mercy Acuna, sworn to September 3, 2011 (Exhibit F), which indicates that she is a certified professional coder employed by Signet Claim Solutions, LLC. She avers that she was requested to conduct a review of the bills listed from plaintiff in the within action and to indicate whether the correct CPT codes were applied and billed correctly. It was her finding that “Under the NY State Workers’ Compensation Board, facility fees are paid under the PAS (Products of Ambulatory Surgery). A fee cannot be assigned since the facility (Upper East Side Surgical PLLC, 62 E 88th St. New York, NY 10128) is not listed with the NY State Workers’ Compensation Board Ambulatory Surgery Center. If Upper East Side Surgical PLLC can produce documentation that the facility is registered, then reimbursement will be in accordance with The Products of Ambulatory Surgery (PAS) classification system.”

Plaintiff acknowledges in its Affirmation in Opposition that it is not listed, registered or certified with the NY State Workers’ Compensation Board Ambulatory Surgery Center, nor does it hold itself out as an Public Health Law Art. 28 facility.

Plaintiff does assert, however, that there is no requirement in the Regulations that NYS Public Health Law Article 28 licensure is a prerequisite to No-Fault Claims reimbursement. The current applicable law, New York’s Office Based Surgery (OBS) Law passed on July 14, 2007 (Public Health Law § 230-d), requires merely that an office-based surgery facility must obtain and maintain full accredited status by a national-recognized accrediting agency approved by the Commissioner of Health. As to proof of same, Plaintiff provides as its Exhibit A, its certification that it was accredited from 02/27/2010 to 02/27/2011 by the American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF), which included the time period of this claim. Under PHL § 230-d, AAAASF, is one of three accreditation entities which has been approved by the Commissioner. No claim is made by the Defendant that the Plaintiff provider is not in full compliance with the required registrations, certifications or accreditations to conduct its office-based surgery business under the applicable laws of New York, particularly PHL § 230-d..

The Court notes that while there is a movement in the New York State Legislature to amend PHL § 230-d to provide authorization for an office based surgery facility to seek reimbursement for a facility fee if the health plan provides for reimbursement when the service is performed at an ambulatory surgery center or hospital, it has not yet been adopted by the Legislature.

The No-Fault Law was enacted to and allows for recovery of basic economic loss to “eliminate the vast majority of auto accident negligence suits,” and, concomitantly, to decrease premiums (Governor’s Approval Mem, Bill Jacket, L 1973, ch 13, at 31, 1973 McKinney’s [*4]Session Laws of NY, at 2335).

Basic economic loss is defined, as pertinent here, as all necessary expenditures incurred for medical and surgical services (Ins Law § 5102[a][1]), with reimbursement limited to the amount permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents (Ins Law § 5108[a]).

This Court finds that the Plaintiff is not authorized to be reimbursed for the medical/surgical services it provided to its assignor under the “facility fee” schedule in accordance with The Products of Ambulatory Surgery (PAS) classification system because it is not an Art. 28 facility. Plaintiff is, however, entitled to reimbursement under Insurance Law § 5102(a)(1) for the medical/surgical services it provided to its assignor (c.f. Great Wall Acupuncture v. GEICO Gen. Ins. Co., 16 Misc 3d 23 (App. Tm., 2d Dept, 2007)

The next question for the Court to answer is, “What is the rate of reimbursement?”. The facility fees set forth by the NY State Workers’ Compensation Board are specifically set for facilities that are listed with the NY State Workers’ Compensation Board and certified to perform ambulatory surgery services under PHL Art. 28. Plaintiff concedes in its opposition papers that it is not so listed. Therefore, the fees set forth are not applicable to it, nor are there any fees adopted or established applicable to this plaintiff and its status as an office based surgery facility.

Under 11 NYCRR 68, (Regulation 83) 68.5, subd. 1(b):

If a professional health service is performed which is reimbursable under section 5102(a)(1) of the Insurance Law, but is not set forth in fee schedules adopted or established by the superintendent, and:

* * *

(b) if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent.

Accordingly, inasmuch as no proof has been submitted that the Superintendent of Insurance has adopted or established a fee schedule applicable to the plaintiff/provider, a question of facts exists as to the amount of the charge for services. Moreover, no proof has been submitted as to the local geographic prevailing fee, which plaintiff provider would be entitled to be reimbursed for its services. While in certain instances, the workers’ compensation fee schedules have been utilized to established local prevailing fees, such is not the case with regard to a facility fee for office based surgery facilities, at least as far as the Court can discern. Thus, a trial of the issue is necessary. [*5]

SO ORDERED:

DISTRICT COURT JUDGE

Dated: February 2, 2012

CC:Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP

Attorneys for the Plaintiff

Kelly & Sheridan, LLP, Attorneys for the Defendant