[*1]

Supreme Court, Appellate Term, Second Department, November 17, 2009

APPEARANCES OF COUNSEL

Law Offices of Eva Gaspari, PLLC, Brooklyn, and Mischel & Horn, P.C., New York City (Scott T. Horn of counsel), for appellant. Law Offices of Teresa M. Spina, Woodbury (Emilio A. Cacace of counsel), for respondent.

{**26 Misc 3d at 24} OPINION OF THE COURT

Memorandum.

Ordered that the judgment is affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant had partially paid plaintiff’s claim prior to the commencement of the action. At trial, the parties stipulated to plaintiff’s prima facie case and further agreed that defendant had timely denied the unpaid portion of the claim on the ground that the charges for acupuncture treatments exceeded the maximum fees under the appropriate fee schedule. Additionally, pursuant to the parties’ stipulation, the claim form and the denial of claim form were admitted into evidence. After a nonjury trial on the issue of the propriety of the fees charged, the Civil Court granted judgment to defendant dismissing the complaint, and this appeal by plaintiff ensued.

A person who seeks to practice acupuncture must be either licensed (Education Law § 8214) or certified (Education Law § 8216) to do so (see Education Law § 8212). The training to obtain a license remains the same even if the person seeking to practice acupuncture has a license in a different profession, such as a chiropractic license (see 8 NYCRR 52.16 [b]; cf. 8 NYCRR 52.16 [a]). Indeed, at trial, plaintiff’s witness, who was both a licensed acupuncturist and a licensed chiropractor, so testified. Accordingly, in light of the licensure requirements, we hold, as a matter of law, that an insurer may use the workers’ compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which a licensed acupuncturist is entitled to receive for such acupuncture services (see Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007]; see also AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 23 Misc 3d 140[A], 2009 NY Slip Op 51017[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007]; Ops Gen Counsel NY Ins Dept No. 04-10-03 [Oct. 2004] [http://www.ins.state.ny.us/ogco2004/rg041003.htm (accessed Nov. 25, 2009)]). Consequently, [*2]since it is undisputed that the instant defendant reimbursed{**26 Misc 3d at 25} plaintiff pursuant to the workers’ compensation fee schedule for acupuncture services rendered by a chiropractor, plaintiff is not entitled to any additional reimbursement. Accordingly, the judgment dismissing the complaint is affirmed.

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

—[*1] Wollerstein & Futoran (Sweetbaum & Sweetbaum, Lake Success, N.Y. [Marshall D. Sweetbaum], of counsel), for appellant.

In an action to recover assigned first-party no-fault benefits under an insurance contract, the defendant appeals, by permission, from an order of the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts, dated July 10, 2008, which affirmed an order of the Civil Court of the City of New York, Kings County (Chan J.), dated March 8, 2007, which granted the plaintiff’s motion for summary judgment on the complaint in the principal sum of $2,028.50 and denied its cross motion for summary judgment dismissing the complaint.

Ordered that the order dated July 10, 2008 is reversed, on the facts and in the exercise of discretion, with costs, the order of the Civil Court of the City of New York, Kings County, is reversed, the plaintiff’s motion for summary judgment on the complaint is denied, and the defendant’s cross motion for summary judgment dismissing the complaint is granted, without prejudice to commencement of a new action.

On November 15, 2000 Jermaine Thomson was injured in an automobile accident. At the time of the accident, the defendant Eveready Ins. Co. was Thomson’s no-fault insurance carrier. As a result of the accident, the plaintiff Infinity Health Products, Ltd., provided medical supplies to Thomson. On March 14, 2001 the plaintiff, as assignee of Thomson, submitted to the defendant a claim for payment for the medical supplies.

Seven days later, on March 21, 2001, the defendant sent a letter to the plaintiff acknowledging receipt of the bills and advising that it could not process the request until it received further verification of the claim. The plaintiff did not respond to this verification request. On April 17, 2001, 27 days after the first verification request was sent, the defendant sent a second verification request to the plaintiff. The plaintiff also did not respond to the second verification request.

In February 2005, the plaintiff commenced this action in the Civil Court of the City of New York, Kings County, inter alia, to recover the sum of $2,028.50, the cost of the medical [*2]supplies it provided to Thomson. The plaintiff moved for summary judgment on the complaint, arguing, among other things, that the defendant failed to pay or deny the claim within 30 days as required by 11 NYCRR former 65.15 (g) (3) (now 11 NYCRR 65-3.8 [c]). The defendant cross-moved for summary judgment dismissing the complaint, asserting, inter alia, that the action was “not ripe[ ] pending verification requests.”

The Civil Court granted the plaintiff’s motion and denied the defendant’s cross motion, holding that the defendant failed to precisely comply with regulations promulgated by the Superintendent of Insurance (hereinafter the Insurance regulations) because it did not wait a full 30 days (after the plaintiff failed to respond to the first verification request) before sending out a second verification request. The defendant appealed to the Appellate Term for the Second, Eleventh, and Thirteenth Judicial Districts, which affirmed the order in a 2-1 decision. The Appellate Term majority concluded, among other things, that the defendant’s follow-up verification demand, which was mailed 27 days after its initial demand, was “premature and without effect.”

Pursuant to Insurance Law § 5106 (a) and the Insurance regulations, an insurer must either pay or deny a claim for motor vehicle no-fault benefits, in whole or in part, within 30 days after an applicant’s proof of claim is received (see Insurance Law § 5106 [a]; 11 NYCRR former 65.15 [g] [3], now 11 NYCRR 65-3.8 [c]; see also 11 NYCRR 65-3.5) An insurer can extend the 30-day period within which to pay or deny a claim by making a timely demand for further verification of the claim (see 11 NYCRR former 65.15 [d] [2]).

There is no dispute here that the defendant timely requested initial verification by sending out its verification request within seven days (on Mar. 21, 2001) after receipt of the plaintiff’s claim (on Mar. 14, 2001). There also is no dispute that the plaintiff did not respond to the defendant’s timely initial verification request. An insurer does not have to pay or deny a claim until it has received verification of all of the relevant information requested (see 11 NYCRR former 65.15 [g] [1] [i]; [2] [iii]). The issue in this case is whether an insurer loses the toll of the 30-day rule to pay or deny the claim, which is afforded by an initial timely request for verification, simply because its follow-up verification request is sent 3 days before the expiration of a full 30 days after a plaintiff fails to respond to the initial request. The Insurance regulations stated, in pertinent part, that “if any requested verification has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was originally requested” (11 NYCRR former 65.15 [e] [2]).

Although the defendant in this case did not strictly comply with the time limitation set forth in the rule regarding the submission of a second verification request, under the circumstances of this case, the plaintiff is estopped from claiming that the defendant is precluded from asserting any defense to the claim. It would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent (see New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699 [2001]; see generally Chemical Bank v City of Jamestown, 122 AD2d 530 [1986]; Guberman v William Penn Life Ins. Co. of N.Y., 146 AD2d 8 [1989]). Indeed, in light of the particular factual circumstances herein, it would be incongruous to conclude that the Insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests. Such a result is not contemplated by the “no-fault law” or its regulations, which should be interpreted to promote the expeditious handling of verification requests and prompt claim resolution.

Furthermore, inasmuch as the plaintiff did not respond to either of the verification requests, the 30-day period within which the defendant was required to pay or deny the claim did not commence to run (see 11 NYCRR former 65.15 [g] [1] [i]; [2] [iii]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [1999]). Thus, the plaintiff’s action is premature (see Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903 [2007]; Hospital for Joint [*3]Diseases v ELRAC, Inc., 11 AD3d 432 [2004]).

Accordingly, the plaintiff was not entitled to summary judgment on the complaint, and the defendant’s cross motion for summary judgment dismissing the complaint should have been granted (see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d at 553; see generally Alvarez v Prospect Hosp., 68 NY2d 320 [1986]), without prejudice to commencement of a new action. Mastro, J.P., Santucci, Chambers and Lott, JJ., concur.

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 (Diane A. Lebedeff, J.), entered September 29, 2008, deemed from a judgment of the same court entered November 6, 2008 (see CPLR 5501 [c]). The judgment, entered pursuant to the September 29, 2008 order which denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiff’s cross motion for summary judgment, awarded plaintiff the principal sum of $168.50.

ORDERED that the judgment is reversed without costs, the order entered September 29, 2008 is vacated, defendant’s motion for summary judgment dismissing the complaint is granted, and plaintiff’s cross motion for summary judgment is denied.

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 the services rendered to plaintiff’s assignor were not medically necessary. Plaintiff opposed defendant’s motion and cross-moved for summary judgment. The Civil Court denied defendant’s motion, finding that defendant had failed to show that it had timely denied plaintiff’s claims, and granted plaintiff’s cross motion for summary judgment. Defendant appeals from the order. A judgment was subsequently entered, from which the appeal is deemed to be taken (see CPLR 5501 [c]).

Contrary to the finding of the Civil Court, defendant demonstrated, based upon its standard office practice and procedure used to ensure that claim denial forms are properly addressed and mailed, that it timely mailed the denial of claim forms at issue (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; AJS Chiropractic, P.C. v Mercury Ins. Co., 22 Misc 3d 133[A], 2009 NY Slip Op 50208[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Moreover, the report of the independent chiropractic/acupuncture examination performed on plaintiff’s assignor, accompanied by the examiner’s affidavit, was in admissible form, and provided a factual basis and medical rationale for defendant’s chiropractor’s opinion that the services at issue were not medically necessary (see AJS Chiropractic, P.C., 22 [*2]Misc 3d 133[A], 2009 NY Slip Op 50208[U]; Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 21 Misc 3d 142[A], 2008 NY Slip Op 52450[U] [App Term, 2d & 11th Jud Dists 2008]).

Since the affidavit of plaintiff’s chiropractor, which did not meaningfully refer to or discuss the conclusion of defendant’s chiropractor, was insufficient to rebut defendant’s prima facie showing (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]), defendant’s motion for summary judgment dismissing the complaint should have been granted (see Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 21 Misc 3d 142[A], 2008 NY Slip Op 52450[U]; 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]).

Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: November 13, 2009

Civil Court of the City of New York, Richmond County

13134/07

Counsel for Plaintiff:

Joseph Sparacio

2555 Richmond Avenue

Staten Island, New York 10314

(718) 966-0055

Counsel for Defendant:

Diamond, Rutman, Costello & Si

291 Broadway, Suite 1100

New York, New York 10007

(212) 267-4731

Katherine A. Levine, J.

This case calls upon the court to again examine whether an expert witness called by a defendant insurance company may rely upon medical records, prepared by an entity other than the plaintiff medical service provider, to formulate an opinion as to the medical necessity of services provided by the plaintiff.

Plaintiff Popular Imaging, P.C., (“plaintiff” or “Popular Imaging”), a medical service provider, seeks to recover r payments from defendant State Farm Insurance Co. (“defendant” or “State Farm”) for an MRI of the lumbar spine that it provided to the assignor Belquis Perez (“assignor” or “Perez”) as a result of the injuries that she sustained in an automobile accident. Defendant claims that the services were medically unnecessary. At the trial, the parties stipulated to plaintiff’s prima facie case and to defendant’s timely denial of the claim. Therefore, the only issue before the court was whether the medical services provided was medically necessary. [*2]

Dr .James B. Sarno (“Dr. Sarno”), who is a board certified neurosurgeon, prepared a peer review report and testified that the MRI performed on the assignor’s lumbar spine was medically unnecessary. At the outset of Dr. Sarno’s testimony, plaintiff refused to stipulate into evidence the peer review report prepared by and medical records reviewed by Dr. Sarno, contending that this court should not consider Dr. Sarno’s opinion since it was based upon medical records and reports that were not in evidence and for which no evidence was submitted as to their reliability. pursuant to the leading case of Wagman v. Bradshaw, 292 AD2d 84 ( 2d Dpt 2002). The court reserved decision on this objection to Dr. Sarno’s testimony.

Dr. Sarno’s testimony referred, for the most part, to the records and reports of Dr. Noel Fleisher, a board certified neurologist, who was the assignor’s treating physician and who referred the assignor to the plaintiff for an MRI. On August 23, 2002, Dr. Fleisher issued a report as to the results of his neurological consultation with the assignor some two weeks after the accident. He set forth as his impressions post concussion syndrome, traumatic cervical radiculopathy, traumatic lumbar radiculopathy, and myofacial pain syndrome. He indicated that he would consider a MRI scan and/or EMG studies. He listed the prognosis as guarded. Dr. Sarno also listed on his peer review the March 7, 2003 letter from plaintiff to Dr. Fleisher explaining the results of the MRI of the lumbar spine.The peer review report also lists a number of other reports, letters or diagnosis from other entities that were independent of both Dr. Fleisher and plaintiff (“independent reports’) such as New York Neurology, P.C.; Central Park Physical Medicine and Rehabilitation, etc.

It is well settled that when records are prepared by a plaintiff medical service provider’s own principal, who treated the claimant and conducted the tests in questions, a plaintiff cannot viably argue that a defendant’s expert opinion “was not derived from a professional reliable source or to otherwise challenge the reliability of its own medical records and reports which were used as proof of its claim”. Andrew Carothers, M.D. (Martinez) v. GEICO, 2008 NY Slip Op 50456U, 18 Misc 3d 1147A (Civil Ct., Kings Co. 2008);. See, Cross Continental Medical v. Allstate, 13 Misc 3d 10 (App. Term 1st Dept. 2006).

In Velen Medical Supply Inc. V. Travelers Ins. Co., 20 Misc 3d 781 (Civil Ct., Queens Co. 2008), the court extended this ruling to permit testimony by a defendant’s expert based upon medical records and reports prepared by entities other than the plaintiff. The court first found that the records at issue fell within the fourth category of admissible opinion evidence set forth in the leading case of Wagman v. Bradshaw. 292 AD2d 84, 86-87 ( 2d Dept. 2002) : “material not in evidence provided the out- of-court material is accompanied by evidence establishing its reliability.” The court then cited to Hambsch v. N.Y.C. Transit Auth., 63 NY2d 723, 726 (1884) where the Court of Appeals held that an expert “may rely on out-of-court material if it is of a kind accepted in the profession as reliable in forming a professional opinion’ or if it comes from a witness subject to full cross examination.'”.

As to the Wagman issue, the Velen court found that in the context of no-fault, a plaintiff could not challenge the reliability of the assignors’ medical records and reports, even if those [*3]reports were not prepared by the plaintiff, if they were provided by plaintiff in response to defendant’s verification requests and were affirmatively relied upon by plaintiff as proof of claim. 20 Misc 3d at 784.See, Home Care Ortho. Med. Supply Inc., v. American MFRS. Mut. Ins. Co., 2007 NY Slip Op 50302[U] , 14 Misc 3d 139A (App. Term,1st Dept. 2007). Subsequently, Judge Sweeney extended this reasoning to the situation where the plaintiff’s assignor, rather than the plaintiff, provided the medical records to the defendant in response to a verification request. See, Primary Psychiatric Health, P.C., v. State Farm Mutual, 2007 NY Slip Op 50583U, 15 Misc 3d 1111A (Civil Ct., Kings Co. 2007). In fact, the Appellate Term has recently ruled that a defendant’s expert may not be precluded from testifying even though his opinion was based upon medical records prepared by physicians other than the plaintiff relating to treatment provided to the assignor. Bronx Expert Radiology v. NY Central Mutual, 2009 NY Slip Op 514575U, 2009 NY Misc. LEXIS 1796 ( App. Term, 1st Dept. 2009).

Here, the assignor’s physician, Dr. Fleisher , recommended that a MRI be performed; this is confirmed by Dr. Fleisher’s records. Dr. Sarno testified that in formulating an opinion he relied primarily upon Dr. Fleisher’s August 23, 2002 report of his neurological consultation with the assignor^[FN1] and Dr. Fleisher’s EMG/NCV testing of September 13, 2002. Since plaintiff performed the MRI based upon the records and referral from the assignor’s treating physician, who apparently deemed the test to be medically necessary, and since plaintiff sent the results and explanation of the MRI back to Fleisher, plaintiff cannot now be heard to challenge the reliability and authenticity of Dr. Fleisher’s records.

As to the requirement that the material be generally accepted in the profession as reliable and there be evidence establishing its reliability, Dr. Sarno testified that these are the types of reports that a doctor would review to offer an opinion on the necessity of a lumbar MRI. Dr. Sarno uses other doctors’ reports in formulating a medical opinion about his own patients and that it is a generally accepted standard in the medical profession to form an opinion based in part on other doctors reports. He testified that he takes these reports at face value. Dr. Sarno’s testimony is consistent with set precedent that a physician’s office records are admissible as evidence at trial to the extent they are germane to diagnosis and treatment. Hazel Bruce Bishop v. Jafar, 302 AD2d 345 (2d Dept. 2003). Furthermore, an expert is entitled to rely upon facts set forth in medical records so long as he did not base his opinions upon the conclusions contained in the records. Meagan Murray v. Weisenfeld 37 AD3d 432, 434 (2d Dept. 2007); Bruce Bishop v. Jafar, supra. [*4]

Dr. Sarno then testified that it is generally accepted medical procedure to send a patient for a lumbar MRI where there is actual evidence of radiculopathy, irregularities in the neurological exam or failure to respond to conservative treatment. None of these factors were present in the documents reviewed by Dr. Sarno so as to justify the medical necessity of the lumbar MRI. On cross examination. Dr. Sarno reiterated that there were no actual neurological findings in the lower extremities to support a finding of radiculopathy He also testified that no EMG/NCV studies were even performed in the lumbar area of the body. Plaintiff presented no evidence or testimony in this matter, choosing instead to rely upon the aforementioned argument concerning the ability of Dr. Sarno to render an opinion and its cross examination of Dr. Sarno. Plaintiff has failed to refute the expert testimony and opinion and failed to produce evidence to rebut the lack of medical necessity for the lumbar MRI. As such, judgment is rendered in favor of defendant

.

Dated: November 5, 2009

KATHERINE A. LEVINE

JUDGE, CIVIL COURT

Footnotes

Footnote 1:(Since Dr. Sarno relied for the most part upon Dr. Fleisher’s records, it is not necessary for this court to render an opinion about the admissibility of the panoply of reports from other doctors that were reviewed by Dr. Sarno and which accompanied his peer review report. However, it appears that these reports were provided to Sarno by DND – a third party- who apparently received all the records from plaintiff as a result of defendant’s verification request (defendant’s 2). As such, in accordance with the aforementioned precedent, Dr. Sarno could also properly rely upon these records in formulating an opinion.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Rhonda E. Fischer, J.), entered September 8, 2008. The order, upon a motion by plaintiff for summary judgment, dismissed the complaint and referred the matter to the Workers’ Compensation Board.

ORDERED that the order is reversed without costs, the complaint is reinstated and plaintiff’s motion is remitted to the District Court to be held in abeyance pending a prompt application to the Workers’ Compensation Board for a determination of the parties’ rights under the Workers’ Compensation Law. In the event plaintiff fails to file proof with the District Court of such application within 90 days of the date of the order entered hereon, the District Court shall deny plaintiff’s motion and grant summary judgment in favor of defendant dismissing the complaint unless plaintiff shows good cause why the complaint should not be dismissed.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion on the ground that it had timely denied plaintiff’s claim based upon the assignor’s eligibility for workers’ compensation benefits. The District Court dismissed the complaint and referred the matter to the Workers’ Compensation Board. This appeal by plaintiff ensued.

Contrary to plaintiff’s contention, the Workers’ Compensation Board has the authority to determine whether plaintiff’s assignor is entitled to Workers’ Compensation benefits (see A.B. Med. Servs., PLLC v American Tr. Ins. Co., 24 Misc 3d 75 [App Term, 9th & 10th Jud Dists 2009]). However, the District Court should not have dismissed the complaint and referred the [*2]matter to the Workers’ Compensation Board but, rather, should have held plaintiff’s motion in abeyance. Accordingly, the order is reversed, the complaint reinstated and plaintiff’s motion remitted to the District Court to be held in abeyance pending a prompt application to the Workers’ Compensation Board for a determination of the parties’ rights under the Workers’ Compensation Law.

Nicolai, P.J., Molia and LaCava, JJ., concur.
Decision Date: November 05, 2009

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 (Kathy J. King, J.), dated August 14, 2008. 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 moved for summary judgment dismissing the complaint on the ground of lack of medical necessity. The Civil Court denied defendant’s motion. The instant appeal by defendant ensued.

Contrary to plaintiff’s contention, the affidavit of defendant’s claims representative established that the denial of claim forms, which denied the subject claims on the ground of lack of medical necessity based upon two peer review reports, were timely mailed in accordance with defendant’s standard office practice or procedure used to ensure that the denials were properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]).

In support of defendant’s motion for summary judgment dismissing the complaint, defendant annexed an affirmed peer review report by a doctor as well as an affidavit executed by the chiropractor who performed the second peer review. Since the foregoing documents set forth a factual basis and medical rationale for the peer reviewers’ opinions that the medical equipment provided was not medically necessary, defendant established, prima facie, a lack of medical necessity for the equipment in question (see e.g. 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 [*2]Dists 2009]; Amaze Med. Supply Inc. v Allstate Ins. Co., 12 Misc 3d 142[A], 2006 NY Slip Op 51412[U] [App Term, 2d & 11th Jud Dists 2006]). As plaintiff failed to submit any evidence to rebut defendant’s showing of a lack of medical necessity and as plaintiff’s objections to defendant’s papers lack merit, defendant’s motion should have been granted (see e.g. Delta Diagnostic Radiology, P.C., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U]; 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]; see also Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; PLP Acupuncture, P.C. v Progressive Cas. Ins. Co., 22 Misc 3d 142[A], 2009 NY Slip Op 50491[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

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

Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: November 05, 2009

—[*1] McDonnell & Adels, PLLC, Garden City, N.Y. (Martha S. Henley and Short & Billy [Skip Short], of counsel), for appellant.

Joseph Henig, P.C., Bellmore, N.Y., for respondent.

In an action to recover no-fault medical payments under two insurance contracts, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Woodard, J.), entered September 25, 2008, as denied that branch of its motion which was pursuant to CPLR 5015 to vacate so much of a judgment of the same court entered May 15, 2008, as, upon its default in appearing or answering the complaint, is in favor of the plaintiff St. Barnabas Hospital, as assignee of Patrick Bateman, and against it in the principal sum of $4,309.64.

Ordered that the order is affirmed insofar as appealed from, with costs.

A defendant seeking to vacate a judgment entered upon its default in appearing or answering the complaint must demonstrate a reasonable excuse for its delay in appearing or answering, as well as a meritorious defense to the action (see CPLR 5015 [a] [1]; Westchester Med. Ctr. v Hartford Cas. Ins. Co., 58 AD3d 832, 832 [2009]; Verde Elec. Corp. v Federal Ins. Co., 50 AD3d 672, 672-673 [2008]).

“A proper denial of [a] claim [for no-fault benefits] must include the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]) and must ‘promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’ ” (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664 [2004], quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]). However, a timely denial of a no-fault insurance medical claim alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague, or otherwise involves a defense which has no merit as a matter of law (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005]).

The defendant insurer, Allstate Insurance Company (hereinafter Allstate), issued a timely denial of claim within 30 days of its receipt of the completed hospital facility form (NYS Form N-F 5) from the plaintiff St. Barnabas Hospital, as assignee of Patrick Bateman (hereinafter the plaintiff) (see 11 NYCRR 65-3.5 [g]; 65-3.8 [c]). Contrary to Allstate’s contention, however, the Supreme Court properly determined that the denial of claim, which incorrectly stated the amount of the claim and gave an invalid reason for the denial (see 11 NYCRR 65-3.3 [d]; 65-3.5 [g]; see also Westchester Med. Ctr. v Lincoln [*2]Gen. Ins. Co., 60 AD3d 1045, 1046 [2009]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535, 536 [2005]), was fatally defective (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d at 565; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d at 665; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996]). Thus, Allstate failed to demonstrate the existence of a meritorious defense (see CPLR 5015 [a] [1]).

Accordingly, the Supreme Court properly denied that branch of Allstate’s motion which was pursuant to CPLR 5015 to vacate so much of a judgment of the same court entered May 15, 2008, as, upon its default in appearing or answering the complaint, is in favor of the plaintiff and against it in the principal sum of $4,309.64. Skelos, J.P., Covello, Santucci and Balkin, JJ., concur.

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 December 16, 2008, deemed from a judgment of the same court entered January 15, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the December 16, 2008 order which, inter alia, granted plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $878.67.

ORDERED that the judgment is affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant argued, in opposition to plaintiff’s motion for summary judgment and in support of its cross motion for summary judgment, that plaintiff’s claim was untimely because it was submitted more than 45 days after the services at issue were rendered, and that plaintiff’s motion was premature because plaintiff had failed to respond to defendant’s discovery demands. Defendant appeals from so much of the Civil Court’s order as granted plaintiff’s motion for summary judgment. The appeal is deemed to be from the judgment which was subsequently entered (see CPLR 5501 [c]).

Contrary to defendant’s contention, although plaintiff’s claim was submitted more than 45 days after the services at issue were rendered, defendant waived its reliance on the 45-day rule (Insurance Department Regulations [11 NYCRR] § 65-1.1) as a basis to deny the claim because defendant had failed to communicate to plaintiff, as required by the No-Fault Regulations, that late submission of the proof of claim will be excused where the applicant can provide a reasonable justification for the late submission (see Insurance Department Regulations [11 NYCRR] § 65-3.3 [e]; SZ Med. P.C. v Country-Wide Ins. Co., 12 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2006]). Further, defendant failed to demonstrate that discovery was needed in [*2]order to show the existence of a triable issue of fact (see CPLR 3212 [f]).

As defendant’s papers failed to establish any other basis to deny plaintiff’s motion, the judgment in favor of plaintiff is affirmed.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: October 23, 2009

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 (Diane A. Lebedeff, J.), entered October 8, 2008. The order, insofar as appealed from as limited by the brief, granted the branches of defendant’s motion seeking to amend the answer to include the defense of fraudulent incorporation and to compel plaintiff to produce its owner, Valentina Anikeyeva, for a deposition.

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, the Civil Court granted so much of a motion by defendant as sought leave to amend its answer, pursuant to CPLR 3025 (b), to assert the affirmative defense that plaintiff was a fraudulently incorporated medical provider (see State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]), and to compel plaintiff to produce its owner, Valentina Anikeyeva, for a deposition. Plaintiff appeals, as limited by its brief, from so much of the Civil Court’s order as granted said branches of defendant’s motion.

The Civil Court did not improvidently exercise its discretion in granting defendant’s application for leave to amend its answer in order to interpose the affirmative defense of fraudulent incorporation, in the absence of any showing that prejudice or surprise would result [*2]therefrom (see McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp., 59 NY2d 755 [1983]; Tomasino v American Tobacco Co., 57 AD3d 652 [2008]; Mackenzie v Croce, 54 AD3d 825 [2008]), and since the proposed affirmative defense was neither devoid of merit nor palpably insufficient as a matter of law (see CPLR 3025 [b]; Ingrami v Rovner, 45 AD3d 806, 808 [2007]; Hill v 2016 Realty Assoc., 42 AD3d 432, 433 [2007]). Plaintiff’s contention, that the defense of fraudulent incorporation must be asserted in a timely denial of claim form, is without merit (Multiquest, P.L.L.C. v Allstate Ins. Co., 17 Misc 3d 37, 38-39 [App Term, 2d & 11th Jud Dists 2007]). Moreover, defendant sufficiently demonstrated that the deposition testimony of Ms. Anikeyeva regarding plaintiff’s corporate structure was material and necessary (see CPLR 3101), so as to warrant the granting of the branch of its motion seeking to compel Ms. Anikeyeva’s deposition.

Pesce, P.J., and Steinhardt, J., concur.

Golia, J., concurs in a separate memorandum.

Golia, J., concurs in the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I strenuously disagree with the majority gratuitously raising a nonexistent issue, namely that a Mallela defense (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) may be disallowed if “prejudice or surprise would result therefrom.” This impression was created by the majority in choosing here to excise an important requirement with regard to the law of amending an answer. The actual statement by the Court of Appeals in McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp. (59 NY2d 755, 757 [1983] [emphasis added, citations and internal quotations marks omitted]) is that, “Leave to amend the pleadings shall be freely given absent prejudice or surprise resulting directly from the delay.”

Inasmuch as it is inconceivable that a Mallela defense of fraudulent incorporation could ever create prejudice or surprise that resulted directly from the delay in raising such defense, it is clear that such analysis is unwarranted.

To me, it is extremely unlikely that an individual who creates a fraudulent entity for the purpose of defrauding an insurance company would forget that he/she did so and be prejudiced or surprised when it was discovered. Such would be akin to a person running a “Ponzi” scheme deciding to invest in his own firm because it was obtaining such good results.
Decision Date: October 23, 2009

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 April 30, 2008. The order granted plaintiff’s motion for summary judgment.

ORDERED that the order is reversed without costs and plaintiff’s motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff established its prima facie entitlement to summary judgment (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). The burden then shifted to defendant to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

Contrary to plaintiff’s contention, the affidavit submitted by defendant sufficiently established that the denial of claim forms were 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, 1124 [2008]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). For the reasons stated in Great Wall Acupuncture v GEICO Gen. Ins. Co. (16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007]), it was proper for [*2]defendant to use the workers’ compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which plaintiff was entitled to receive (see AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007]). Consequently, defendant raised a triable issue of fact and plaintiff’s motion for summary judgment should have been denied.

We decline defendant’s request that we search the record and grant defendant summary judgment (see e.g. New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2007]).

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: October 23, 2009