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 (Margaret A. Chan, J.), entered October 5, 2007. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment established plaintiff’s prima facie entitlement to such relief (see Insurance Law § 5106; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; East Acupuncture, P.C. v Electric Ins. Co., 16 Misc 3d 128[A], 2007 NY Slip Op 51281[U] [App Term, 2d & 11th Jud Dists 2007]). Defendant did not submit papers opposing plaintiff’s motion. Consequently, the Civil Court improperly denied plaintiff’s unopposed motion for summary judgment.

Accordingly, the order is reversed, plaintiff’s motion for summary judgment is granted, and the matter is remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: July 09, 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.), dated March 24, 2008. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment dismissing the complaint.

Order, insofar as appealed from, reversed without costs and defendant’s cross motion for summary judgment dismissing the complaint granted.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court denied plaintiff’s motion for summary judgment and defendant’s cross motion for summary judgment dismissing the complaint, finding that there was a question of fact as to medical necessity. Defendant appeals from so much of the order as denied its cross motion.

Contrary to plaintiff’s contention, the affidavit of defendant’s claims representative sufficiently established the timely mailing of the denial of claim form, which had denied plaintiff’s claim based upon a peer review report, since the affidavit described in detail, on the affiant’s personal knowledge, defendant’s standard office practice or procedure used to ensure that the denial was 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]). The papers submitted in support of defendant’s cross motion for summary judgment dismissing the complaint include the sworn peer review report by defendant’s doctor, which sets forth a factual basis and medical rationale for the doctor’s opinion that the medical services provided were medically unnecessary (see A.B. Med. Servs., PLLC v American Tr. Ins. Co., 15 Misc 3d 132[A], 2007 NY Slip Op 50680[U] [App Term, 2d & 11th Jud Dists 2007]; Amaze Med. Supply Inc. v Allstate Ins. Co., 12 Misc 3d [*2]142[A], 2006 NY Slip Op 51412[U] [App Term, 2d & 11th Jud Dists 2006]). In addition, defendant’s papers contain the medical records and reports prepared by the assignor’s various providers, which documents were relied upon by defendant’s doctor to establish that there was a lack of medical necessity for the services at issue. In view of the foregoing, defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint (see e.g. Franchini v Palmieri, 1 NY3d 536 [2003]; Diaz v Anasco, 38 AD3d 295 [1st Dept 2007]; Tuna v Babendererde, 32 AD3d 574 [3d Dept 2006]) and shifted the burden to plaintiff, which stands in the shoes of its assignor (see Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 765 [2007]), to raise a triable issue of fact in opposition to defendant’s cross motion.

The affidavit submitted by plaintiff in opposition was insufficient as it merely consisted of a conclusory statement by the affiant that he disagreed with the opinion of defendant s peer review doctor that there was no medical necessity for the services rendered. The affiant did not meaningfully refer to, or discuss, the determination of defendant’s doctor. Plaintiff’s remaining contentions similarly lack merit. Accordingly, the order, insofar as appealed from, is reversed and defendant’s cross motion for summary judgment dismissing the complaint is granted (see 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]).
Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: July 09, 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 January 9, 2008. The order, insofar as appealed from as limited by the brief, granted so much of plaintiff’s motion as sought summary judgment upon its fifth cause of action.

Order, insofar as appealed from, reversed without costs and so much of plaintiff’s motion as sought summary judgment upon its fifth cause of action denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment, insofar as is relevant to this appeal, upon its fifth cause of action, involving a claim in the sum of $398.61. In opposition to plaintiff’s
motion, defendant argued that it never received said claim. As limited by its brief, defendant appeals from so much of the Civil Court order as granted plaintiff summary judgment on its fifth cause of action.

A provider generally establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). A provider ordinarily establishes the submission of the claim form by demonstrating proof of its proper mailing, which proof gives rise to the presumption that the claim form was received by the addressee. The presumption may be created either by proof of actual mailing, or by proof of a standard office practice or procedure designed to ensure that items are 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]). Here, in light of the contradictions between the affidavit of plaintiff’s billing manager and the annexed post office ledger, upon which the billing manager relied, plaintiff did not establish submission of the $398.61 claim to defendant (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]). Consequently, plaintiff failed to establish its prima facie entitlement [*2]to summary judgment on its fifth cause of action. Accordingly, the order, insofar as appealed from, is reversed and so much of plaintiff’s motion as sought summary judgment on its fifth cause of action is denied.

Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: July 09, 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 (Lila Gold, J.), entered November 26, 2007. The order denied the petition of 563 Grand Medical, P.C. to vacate a master arbitrator’s award and confirmed the award.

Order affirmed without costs.

563 Grand Medical, P.C. commenced this proceeding pursuant to CPLR 7511 to vacate a master arbitrator’s award which had upheld the denial of its claim for reimbursement of assigned first-party no-fault benefits. The Civil Court denied the petition, and this appeal ensued.

The papers submitted by petitioner to the Civil Court were insufficient on their face to warrant the granting of any relief (see Avanessov v State-Wide Ins. Co., 21 Misc
3d 132[A], 2008 NY Slip Op 52131[U] [App Term, 2d & 11th Jud Dists 2008]; SP
Med., P.C. v Country-Wide Ins. Co., 20 Misc 3d 126[A], 2008 NY Slip Op 51230[U] [App Term, 2d & 11th Jud Dists 2008]). The only document submitted by petitioner in support of the petition was a document that was denominated an “Affirmation in Support,” which was not affirmed “to be true under the penalties of perjury” (CPLR 2106). Indeed, the attorney who purportedly signed the document merely indicated that he “states as follows,” which is insufficient under the law (cf. Puntino v Chin, 288 AD2d 202 [2001]; Jones v Schmitt, 7 Misc 3d 47 [App Term, 2d & 11th Jud Dists 2005]; see also A.B. Med. Servs. PLLC v Prudential Prop. [*2]& Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504 [U] [App Term, 2d & 11th Jud Dists 2006]). Consequently, the document is insufficient as an affirmation (Avanessov, 21 Misc 3d 132[A], 2008 NY Slip Op 52131[U]; SP Med., P.C., 20 Misc 3d 126[A], 2008 NY Slip Op 51230[U]). In view of the foregoing, the order is affirmed, albeit on other grounds.

We note that a special proceeding should terminate in a judgment, not an order (see CPLR 411).

Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: July 09, 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 January 3, 2008, deemed from a judgment of the same court entered February 11, 2008 (see CPLR 5501 [c]). The judgment, entered pursuant to the January 3, 2008 order granting plaintiff’s motion for summary judgment and implicitly denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $1,864.25.

Judgment reversed without costs, order entered January 3, 2008 vacated, plaintiff’s motion for summary judgment denied and defendant’s cross motion for summary judgment dismissing the complaint granted.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion and cross-moved for summary judgment dismissing the complaint on the ground that the action was premature because it was commenced before defendant received responses to its outstanding verification requests. The Civil Court granted plaintiff’s motion and implicitly denied defendant’s cross motion. The instant appeal by defendant ensued. A judgment was subsequently entered (see CPLR 5501 [c]).

The record demonstrates that defendant timely mailed requests for verification and follow-up requests for verification (see Insurance Department Regulations [11 NYCRR] §§ 65-3.5 [b]; 65-3.6 [b]). Since plaintiff did not serve responses to the verification requests prior to the commencement of the action, defendant’s cross motion to dismiss the action as premature should have been granted, as defendant’s time to pay or deny the claim had not elapsed (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [a]; Central Suffolk Hosp. v New York [*2]Cent. Mut. Ins. Co., 24 AD3d 492 [2005]; Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]; Vista Surgical Supplies, Inc. v General Assur. Co., 12 Misc 3d 129[A], 2006 NY Slip Op 51034[U] [App Term, 2d & 11th Jud Dists 2006]).

In light of the foregoing, we reach no other issue.

Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: July 09, 2009

[*1]

Supreme Court, Appellate Term, Second Department, July 9, 2009

APPEARANCES OF COUNSEL

Short & Billy, P.C., New York City (Skip Short of counsel), for appellant. Cohen & Jaffe, LLP, Lake Success, for respondent.

{**25 Misc 3d at 20} OPINION OF THE COURT

Memorandum.

Judgment affirmed without costs.

Plaintiff Dr. Albert Davydov, DDS, commenced the instant action to recover assigned first-party no-fault benefits for dental services rendered. After a nonjury trial, the Civil Court rendered a decision in favor of plaintiff in the principal sum of $6,569.27. This appeal by defendant ensued. A judgment was subsequently entered.

Defendant’s contention that plaintiff lacks standing since the assignment of the no-fault benefits executed by plaintiff’s assignor was in favor of Dr. Albert Davydov, DDS, P.C. rather than Dr. Albert Davydov, DDS is without merit. A copy of the assignment accompanied plaintiff’s claim form, and the discrepancy was apparent on its face. Defendant did not seek verification with respect to the assignment, and its denial of claim form did not deny the claim on the ground that the assignment was defective. As a result, defendant is now precluded from litigating this issue (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; P.L.P. Acupuncture, P.C. v Travelers Indem. Co., 19 Misc 3d 126[A], 2008 NY Slip Op 50484[U] [App Term, 1st Dept 2008]).

A provider establishes a prima facie entitlement to judgment as a matter of law by submitting proof that the prescribed statutory billing forms were mailed and received, and that [*2]payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742{**25 Misc 3d at 21} [2004]). In the instant case, Dr. Davydov’s testimony and the exhibits admitted into evidence were sufficient to satisfy plaintiff’s burden. Contrary to defendant’s contention, the elements of a prima facie case to recover assigned first-party no-fault benefits do not differ based upon the nature of the services provided by the plaintiff provider (see Globe Surgical Supply v GEICO Ins. Co., 59 AD3d 129 [2008]; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; Mary Immaculate Hosp., 5 AD3d 742 [2004]).

Defendant contends that the trial court improperly curtailed defendant’s cross-examination and direct examination of Dr. Davydov. Defense counsel attempted to question Dr. Davydov regarding the medical necessity of the services rendered and whether the amount charged exceeded the amount set forth in the fee schedule. Since the parties did not stipulate to the timeliness of the denials, it was defendant’s burden to establish that it timely denied plaintiff’s claims so as to demonstrate that defendant’s proffered defenses were not precluded. Inasmuch as defendant called no witnesses and presented no evidence to show that its denials were timely mailed, defendant failed to establish that said defenses were not precluded (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Delta Diagnostic Radiology, P.C. v Republic W. Ins. Co., 15 Misc 3d 33 [App Term, 2d & 11th Jud Dists 2007]). Consequently, the court properly curtailed examination of the witness with respect thereto.

Accordingly, the judgment is affirmed.

Golia, J. (dissenting and voting to reverse the judgment and dismiss the complaint in the following memorandum). I find that plaintiff Dr. Albert Davydov, DDS was without standing to prosecute the instant proceeding. I conclude, contrary to the holding by the majority, that the factual circumstances of the instant matter are inapposite to the Court of Appeals’ holding in Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co. (9 NY3d 312 [2007]).

In Hospital for Joint Diseases, the plaintiff medical provider submitted a claim form along with an assignment of benefits form that did not contain any signature, but which stated that the patient’s signature was “on file.” The insurance carrier in that case did not ask for further verification or demand a copy of the original document containing the signature that was purportedly “on file.” It eventually denied the claim on the{**25 Misc 3d at 22} grounds that such assignment was invalid and therefore the plaintiff did not have standing to prosecute the claim. The Court of Appeals held that inasmuch as the carrier was precluded from raising any affirmative defense as to the validity of the assignment of benefits form due to its failure to timely seek verification, it could not now contest the validity of such assignment. Therefore, the plaintiff therein had standing to bring the action and the assignment was deemed to be valid.

There is, however, a vitally important difference between that case and this one. In Hospital for Joint Diseases, the assignment of benefits form was drawn to the benefit of the [*3]plaintiff “Hospital for Joint Diseases,” whereas in the present case the subject assignment of benefits form is drawn to the benefit of an entirely different entity than this plaintiff who now seeks to benefit from the assignment.

In that case, the Court of Appeals found the assignment cannot be assailed and must be deemed valid. In this case, in light of defendant’s failure to seek appropriate verification, I do not suggest that the subject assignment of benefits form was not valid. Quite the contrary, I accept its validity. Nevertheless, I take exception to the holding of the majority inasmuch as the “valid” assignment of benefits form does not inure to the benefit of the person who is prosecuting this claim, to wit: the named plaintiff herein, Dr. Albert Davydov, DDS, individually.

To overlook this important distinction would be to say that “John Jones,” the Chairman of the Board of the Hospital for Joint Diseases, could properly demand that Travelers Property and Casualty Insurance Company make payment to his personal account merely because the carrier chose not to seek a verification of an assignment made to the benefit of the Hospital for Joint Diseases.

This court should not discount the important distinction that the assignee and the claimant are two very different and independent entities simply because the individual plaintiff/claimant is Dr. Albert Davydov, DDS and the assignee is named Dr. Albert Davydov, DDS, P.C. I would suggest that Dr. Davydov himself would argue vociferously that he as an individual has no obligation to pay the debts or expenses that might be incurred by Dr. Albert Davydov, DDS, P.C. and vice versa. That would be his right, for which fault would not attend. However, since he has chosen to conduct his business affairs in a corporate status, he cannot now choose to prosecute the claims of that corporate entity in favor of himself individually.{**25 Misc 3d at 23}

There is only one assignee herein and that assignee is not the plaintiff.

Pesce, P.J., and Weston, J., concur; Golia, J., dissents in a separate memorandum.

Supreme Court, Westchester County

27003/2008

Kelley Drye & Warren LLP

Attorneys for Plaintiff

101 Park Avenue

New York, New York 10178

Schindel, Farman, Lipsius, Gardner & Rabinovich, LLP

Attorneys for Defendant

14 Penn Plaza, Suite 500

New York, New York 10122

William J. Giacomo, J.

Plaintiff John Hancock Life Insurance Company of New York (“John Hancock”) seeks a declaratory judgment that a life insurance policy (the “Policy”) it issued to defendant Shavy Hirsch (“Hirsch”) insuring the life of her stepmother Rivka Landau (“Landau”) is null and void and of no force or effect and that John Hancock has no obligation to pay any benefits or otherwise perform under the Policy. Alternatively John Hancock seeks judgment permitting it to rescind the Policy.

For the reasons set forth below this Court grants the plaintiff’s motion to the extent that the Policy is declared null and void because an express condition precedent to coverage under the Policy was not met.

[*2]FACTUAL & PROCEDURAL BACKGROUND

On December 4, 2006, Landau presented to her personal physician, David M. Ziemba, M.D. (“Dr. Ziemba”) complaining of soreness from a mass on her right breast. Subsequently, on December 11, 2006, Landau had a sonogram on her right breast, which confirmed the presence of a mass “suspicious for a malignancy” and she was referred for a biopsy.

On the same date Landau presented for the sonogram, December 11, 2006, a written application (the “Application”) for the aforementioned Policy was submitted to John Hancock seeking a $10 million life insurance policy on the life of Landau. The Application, as well as a “Health Questionnaire”, were signed by Hirsch, Landau and an independent life insurance broker. Landau and Hirsch acknowledged in the Application and Health Questionnaire the veracity and completeness of all their answers to inquiries in the Application and Health Questionnaire. In response to inquiries regarding Landau’s health, there was no disclosure of Landau’s complaint of pain and soreness to her breast, her visit to her personal physician, or the fact that she had a sonogram done. The Application also contained the following proviso also acknowledged by Landau and Hirsch:

Any life insurance policy issued as a result of this application will be effective on the later of the date the first premium has been paid in full and the date the policy has been delivered. The insurance will not be in effect if there has been any deterioration in the insurability of any proposed life insured(s) since the date of the application. [Application at Declarations ¶2(a).]

On December 14, 2006, Landau, afer undergoing a mammogram and biopsy, was diagnosed with breast cancer, and was immediately referred for a surgical consultation. No document submitted to John Hancock with the Application was ever amended or supplemented.

On December 22, 2006, John Hancock issued the Policy, which Policy was delivered on December 26, 2006 and the first premium was paid on December 28, 2006.

In 2008, as part of internal review, John Hancock procured medical records from Landau’s physicians pursuant to properly executed authorizations and discovered the cancer diagnosis.

On December 15, 2008, John Hancock commenced the instant action by the filing of its summons and complaint and simultaneously forwarded a letter to Hirsch informing that it was rescinding the Policy and requesting its return. John Hancock advised that it would accept no further premium payments and offered to tender all premiums already paid by defendants upon surrender of the Policy and acknowledgment of its rescission. The defendant declined John Hancock’s offer. On February 3, 3009, Hirsch served her answer and issue was joined.

Plaintiff now moves for summary judgment. Defendant opposes the motion. No discovery has been conducted in this matter.

DISCUSSION [*3]

It is well settled that summary judgment is a drastic remedy which should not be granted where there is any doubt about the existence of a triable issue of fact. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853, 487 NYS2d 316, 476 NE2d 642 (1985).

A party seeking summary judgment bears the initial burden of affirmatively demonstrating its entitlement to summary judgment as a matter of law. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853, 487 NYS2d 316, 476 NE2d 642 (1985); Alvarez v. Prospect Hospital, 68 NY2d 320, 508 NYS2d 923, 501 NE2d 572 (1986). To obtain summary judgment it is necessary that the movant establish its claim via the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor. CPLR 3212(b). Failure of a moving party to tender sufficient evidence to demonstrate as a matter of law its prima facie entitlement to summary judgment requires denial of the motion, regardless of the sufficiency of the opposing papers. McDonald v. Mauss, 38 AD3d 727, 832 NYS2d 291 (2nd Dept., 2007).

After a sufficient prima facie showing is made, the burden of proof then shifts to the the opposing party who must come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. CPLR 3212(b).

Was an Enforceable Contract of Insurance Created?

It is well settled that to create an enforceable contract of insurance there must be acceptance by the insurance company and communication of that acceptance to the applicant. Goldberg v. Colonial Life Ins. Co. of Am., 284 App.Div. 678, 134 NYS2d 865, (2nd Dept., 1954) app. dismissed, 308 NY 958, 127 NE2d 99(1955). Further, an enforceable contract of insurance also requires compliance with the terms of the application and compliance with the conditions precedent within the application, before the “ripening of the application into a policy of insurance.” Mendel v. U.S. Life Ins. Co. in City of New York, 248 AD2d 873, 875, 670 NYS2d 920, 922 (3rd Dept., 1998), lv. denied 92 NY2d 804, 677 NYS2d 779, 700 NE2d 318(1998); see also, Schmitt v. North American Co. for Life and Health Ins. of New York, 30 AD3d 1007, 817 NYS2d 462(4th Dept., 2006),

lv. denied 7 NY3d 712, 824 NYS2d 604 (2006).

Where an applicant for a life insurance policy knows of even a possible health problem after an application is submitted, but prior to the issuance of the policy, he is under an obligation to inform the insurance company of that information. Id.; see also, Meagher v. Executive Life Ins. Co. of NY, 200 AD2d 720, 721, 607 NYS2d 361(2nd Dept., 1994) and North Atlantic Life Ins. Co. of America v. Katz, 163 AD2d 283, 557 NYS2d 150(2nd Dept.,1990).

In Schmitt v. North American Co. for Life and Health Ins. of New York, it was undisputed that the applications for life insurance did not indicate that decedent had lymphoma and that he had been diagnosed with that condition prior to the delivery and payment of the first premium of the policy. The Court held that the

“decedent failed to comply with a condition precedent inasmuch as he failed to notify defendant of the change in the state of his health prior to the delivery of the respective policies and payment of the first premiums for each policy, and thus the policies never [*4]became effective.” Id. 30 AD3d at 1009, 817 NYS2d at 464.

Similarly, in North Atlantic Life Ins. Co. of America v. Katz, a life insurer brought an action to rescind a life insurance policy after it was discovered that the insured failed to inform the life insurer that he was suffering from a recurrence of lymphoma when he applied for a second policy. The Court held that

An insured cannot remain silent while cognizant that his insurance application contains misleading or incorrect information …In particular, he must notify his insurance company of nonapparent medical conditions which the company probably would consider relevant when deciding whether to issue a policy. Id., citing, Axelroad v. Metropolitan Life Ins. Co., 267 NY 437, 196 N.E. 388(1935); Wageman v. Metropolitan Life Ins. Co., 24 AD2d 67, 263 NYS2d 915(1st Dept., 1965), aff’d 18 NY2d 777, 274 NYS2d 908, 221 NE2d 566(1966).

Furthermore, whether or not Landau or defendant had actual knowledge of a cancer diagnosis is immaterial. All that was necessary was a showing that Landau’s health had “deteriorated” between the time of the submission of the Application and the issuance of the Policy. Levande v. Canada Life Assur. Co., 23 AD2d 669, 257 NYS2d 323 (2nd Dept., 1965) aff’d, 17 NY2d 645, 269 NYS2d 430, 216 NE2d 594 (1966). In Levande v. Canada Life Assur. Co., the Appellate Division held that where, between the time of medical examinations of insured by insurer and delivery of life policies, “the insured had visited doctors by reason of symptoms of disease-symptoms which were not trivial and which would ordinarily act as a warning or notice, even to a layman, that his health might be impaired” there was breach of condition precedent to taking effect of life policies. Id.

Based on the foregoing, the dispositive issue to be determined on this motion is whether (1) Landau and Hirsch failed to disclose material health information at the time of the Application and the submission of the Health Questionnaire, or (2) there had been a deteriorative change in Landau’s health between the time of the Application and the issuance of the Policy which required defendant to notify plaintiff of that information.

Either of the foregoing would constitute a breach of the condition precedent and render the Policy void.

Were the Terms of the Condition Precedent Satisfied?

In the instant matter, in order to prove the medical condition which is the basis for its argument that the Policy is void or should be rescinded, plaintiff submits the medical records of Landau which it obtained via the aforementioned duly executed authorizations. These records include: the illegible handwritten notes of Dr. Ziemba; a December 11, 2006 report of the sonogram performed by Martin I. Elsant, M.D. and addressed to Dr. Ziemba; two (2) December 14, 2006 mammogram reports from Julie Mitnick, M.D. addressed to Alisan Goldfarb, M.D.; and a December 19, 2006 MRI report from Barbara Baskin, M.D. addressed to Alisan Goldfarb, M.D.

These reports and records submitted by plaintiff in support of its motion for summary judgment, and notably without which it cannot meet its prima facie burden, are unsworn or unaffirmed, not certified nor have the requisite statutory foundation [*5]been laid for their admission as business records. Accordingly, defendant argues in opposition that these reports and records lack probative value and thus summary judgment must be denied on account of plaintiff’s failure to meet its initial burden of proof.

This Court rejects defendant’s argument. First, these records and reports are not hearsay^[FN1] because they are not necessarily being offered for the truth of their content, but rather to establish that Landau did have these tests done and sought medical attention. See generally, Spensieri v. Lasky, 94 NY2d 231, 723 NE2d 544(1999)[When the Physicians Desk Reference is admitted into evidence “it is admitted solely to establish the existence of a warning, …the warning is not offered for the truth of its contents.”]; Stern v. Waldbaum, Inc., 234 AD2d 534, 535, 651 NYS2d 187 (2d Dep’t 1996)[Out-of-court statements by unknown declarants are admissible to establish notice of a dangerous condition, even where accuracy of statements is not established]; Oberle v. Caracappa, 133 AD2d 202, 518 NYS2d 989 (2nd Dept., 1987)[Testimony as to what subscribing witnesses said when presenting candidate’s designating petition for signature was not hearsay and was admissible, as it was introduced merely to demonstrate that statements were made, not truth of matter asserted in them]; Novak v. Greater New York Sav. Bank, 35 AD2d 541, 313 NYS2d 425 (2nd Dept., 1970)[In action to recover balance allegedly owing to depositor upon his account in defendant bank, allegedly forged withdrawal slip offered by bank in attempt to prove that it had exercised reasonable care in mistakenly making payment to one other than depositor was not hearsay as the slip was not offered for its truth]; Yee Sing Tung v. Mon-Leang Mui, 260 AD2d 294, 689 NYS2d 46 (1st Dep’t, 1999) [Out-of-court statements not admitted for the truth of their assertions but to explain the defendant’s actions].

Second, this Court holds that in this case the plaintiff may submit unsworn medical reports and records to support its motion.A party moving for summary judgment may “submit unsworn medical reports and records of an injured plaintiff’s physicians in support of a motion for summary judgment.”^[FN2] Meely v. 4 G’s Truck Renting Co., Inc., 16 AD3d 26, 789 NYS2d 277(2nd Dept., 2005); see also, Pagano v. Kingsbury, 182 AD2d 268, 587 NYS2d 692(2nd Dept., 1992)[threshold motion]; Arbour v. Commercial Life Ins. Co., 240 AD2d 1001, 659 NYS2d 525(3rd Dept., 1997)[action against insurer to recover permanent and total disability benefits]; A.B. Medical Services PLLC v. Travelers Property Cas. Corp., 5 Misc 3d 214, 783 NYS2d 244 (N.Y.City Civ.Ct., 2004)[action to recover first-party no-fault benefits]. Moreover, in the instant matter, the reports and records that plaintiff relies upon were obtained from Landau’s physicians pursuant to a duly executed authorization accompanied by a [*6]HIPAA release which insured their authenticity. See, Burnett v. Zito,252 AD2d 879, 676 NYS2d 318 (3rd Dept.,1998)[movant’s submission of unsworn medical reports from two of plaintiff’s physicians permitted as plaintiff’s authorization for release insured their authenticity]; Oeffler v. Miles Inc., 241 AD2d 822, 660 NYS2d 897(3rd Dept., 1997)[movant may rely upon records and reports of plaintiff’s own doctors for which it received releases on summary judgment motion].

Accordingly the court will consider all the medical reports and records submitted by the plaintiff in support of its motion for summary judgment.

Starting with the records of Dr. Ziemba, this Court will not consider the handwritten notes of Dr. Ziemba since they are illegible. No “translation” of these notes is included with the papers. It is not the Court’s obligation to decipher illegible documents or to guess as to what the meaning of the “shorthand” entries contained therein mean. Simply “a notation in a physician’s office record which is illegible is not admissible”. Wilson v. Bodian, 130 AD2d 221, 232, 519 NYS2d 126, 133 (2nd Dept., 1987), citing, Campbell v. Manhattan & Bronx Surface Tr. Operating Auth., 81 AD2d 529, 438 NYS2d 87(1st Dept., 1981).

The remaining medical reports and records, i.e. the December 11, 2006 report of the sonogram performed by Martin I. Elsant, M.D., the two (2) December 14, 2006 mammogram reports from Julie Mitnick, M.D., and the December 19, 2006 MRI report from Barbara Baskin, M.D. are legible.

The reports, all of which were issued prior to the issuance of the Policy, indicate that Landau and Hirsch knew at the very least of a possible health problem after the Application was submitted, but prior to the issuance of the policy, and thus they were under an obligation to inform the Plaintiff of that information. Schmitt v. North American Co. for Life and Health Ins. of New York, supra ; Meagher v. Executive Life Ins. Co. of NY, supra and North Atlantic Life Ins. Co. of America v. Katz, supra .

Based on the foregoing, plaintiff has established its prima facie entitlement to summary judgment as a matter of law.

In opposition, defendant fails to raise a triable issue of fact that would defeat the motion. Addressing defendant’s claim that summary judgment is inappropriate because there has been no discovery, the Court notes the defendant does not make any showing that facts sufficient to defeat the motion would be revealed during discovery; the mere hope that discovery may reveal such facts is insufficient to defeat a summary judgment motion. Companion Life Ins. Co. v. All State Abstract Co., 35 AD3d 519, 829 NYS2d 536 (2d Dept., 2006). Moreover, mere speculation cannot serve to defeat the motion. Leggio v. Gearhart, 294 AD2d 543, 743 NYS2d 135(2nd Dept., 2002).

On account of the foregoing, the motion for summary judgment is GRANTED. The Policy is hereby declared VOID.

Plaintiff is directed to return all premium paid pursuant to the Policy to defendant within thirty (30) days.

The foregoing shall constitute the decision, order and judgment of the Court.

Dated: White Plains, New York

July 8, 2009 [*7]

HON. WILLIAM J. GIACOMO, J.S.C.

cc:

Footnotes

Footnote 1:Hearsay is an out-of-court statement offered for the truth of the fact asserted. Richardson, Evidence [Prince, 10th ed.], § 200, p. 176.

Footnote 2:While the use of unsworn and unaffirmed medical reports and records by a defendant moving for summary judgment in a threshold case is well settled, this Court sees no reason why the same rule does not apply herein.

Civil Court of the City of New York, Richmond County

08R000954

Katherine A. Levine, J.

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

Defendant’s motion for summary judgment raises anew whether the recent Court of Appeals decision in Fair Price Medical Supply Corp. V. Travelers Indemnity Co., 10 NY3d 556 (2008) requires an insurer to deny a claim on the grounds that the assignor was involved in an accident while on the job and that workers compensation is hence primary within 30 days, or whether that defense is not subject to the preclusion rule.

Plaintiff Lenox Hill Radiology and MIA, P.C. A/A/O (“Lenox Radiology”

or “plaintiff”), a medical service provider, brought this action seeking reimbursement in the amount of $878.67 for medical services it provided to its assignor Zulfiqar Ahmad (“assignor or “Ahmad”) stemming from a motor vehicle accident that occurred on September 19, 2007. Plaintiff timely submitted its bill to defendant Global Liberty Insurance Co. (“defendant” or “Global”) which is a “licensed insurance carrier for vehicles for hire” (affidavit of Dwight Geddes -“Geddes affidavit” ). Global received the claim on November 2, 2007, and denied and mailed the claim on November 28, 2007 on the grounds of lack of medical necessity based upon a performed peer review report. ^[FN1] The denial did not list as a grounds lack of coverage based upon workers compensation being primary. [*2]

Defendant moved for summary of judgment on the grounds that there is no coverage since it “has reason to believe” that the assignor was in the course of his employment at the time of the accident and that therefore, workers compensation is primary and the assignor is not entitled to no -fault benefits. It further contends that the Workers Compensation Board (“Board”) is vested with the responsibility of resolving questions of fact or mixed questions of law and fact and that the Board hence has”primary and exclusive jurisdiction” to resolve questions of coverage. Thus, a no -fault insurer is only obligated to pay no-fault benefits if the workers compensation carrier denies liability for benefits. From these propositions, defendant argues that “there is no coverage” from an insurance company for no – fault benefits until the Board makes a determination that there is no workers compensation coverage and that hence, defendant’s time in which to issue a denial does not even commence until the Board makes its determination.

Plaintiff cross moved for summary judgment on the ground that the defense that a “claimant is eligible for workers compensation” is not a coverage defense but rather a “statutory offset” which must be contained in a timely denial. Plaintiff contends that there are only four “coverage defenses” that are not subject to preclusion even if not raised in a timely denial and that the instant defense is not included in this group. Since defendant did not preserve this defense by issuing a timely denial, plaintiff contends it is entitled to partial summary judgment.

In response, defendant contends that if in fact the Board were to determine that the assignor was not working at the time of the accident but rather was using the vehicle for personal reasons, this would be in violation of his policy of insurance or “contract” with Global and would constitute a “material misrepresentation” by the insured so as to warrant a forfeiture of his rights under the policy. Defendant further contends that “misrepresentation by an insured and a material breach of the contract of insurance result in the vitiation of coverage.”

To grant summary judgment, “it must clearly appear that no material and triable issue of fact is presented” Forrest v. Jewish Guild for the Blind, 3 NY3d 295 (2004); Zuckerman v, City of New York, 49 NY2d 557 (1980). A plaintiff establishes a prima facie entitlement to judgment as a matter of law “by submitting evidentiary proof that the prescribed statutory billing form has been mailed and received, and that payment of no -fault benefits was overdue.” Mary Immaculate Hosp. v. Allstate Ins.,, 5 AD3d 742, 743 (2d Dept. 2004); Second Medical v. Auto

One Ins., 20 Misc 3d 291, 293 (Civil Ct., Kings Co. 2008).

The burden then shifts to the defendant in a no fault case to show a triable issue of fact. Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). To defeat an award of summary judgment to plaintiff, defendant must provide proof, in evidentiary form, that it either paid or denied the claim within 30 days of receipt or that it asserts a non- precludable defense. Carle Place Chiropractic v. NY Central Mutual Fire Ins. Co., 2008 NY Slip Op 51065U; 19 Misc 3d 1139A (Dist. Ct. Nass. Co. 2008). District supra at 8. See Central General Hospital v. Chubb Insurance Co, 90 NY2d 195 (1997); Presbyterian Hosp. City of NY v. Maryland Casualty Co., 90 NY2d 274 (1997). [*3]

In Fair Price Medical v. Travelers Ins., 10 NY3d 556 (2008), the Court of Appeals clarified when an insurance company would not be precluded from offering a defense to its refusal to pay no – fault benefits even though it denied the claims beyond the 30 day period. There, Travelers issued its denial nearly two years after receiving the claim, based upon the assignor’s statement that he had never received medical supplies from the plaintiff. The Civil Court denied plaintiff’s motion for summary judgment, finding that defendant was not precluded by the 30 day rule since it had asserted fraud as a defense. The Appellate Division affirmed the Appellate Term’s reversal of the lower court’s order denying plaintiff summary judgment on the grounds that :

in this case, unlike a staged accident case, there was an actual automobile accident, which

caused Nivelo to sustain actual injuries, for which he was treated by actual health care providers, who issued actual prescriptions for medical supplies to treat his injuries. Nivelo’s undisputably real accident had resulting injuries triggered with the coverage provided for in his insurance policy with the defendant” Fair Price Med. Supply Corp. V. Travelers Indem. Co. 42 AD3d 277, 284 (2d Dept. 2007) affg 9 Misc 3d 76 (App. Term 2d and 11th Jud. Dist 2005).

In sum, the Appellate Division concluded that while Travelers could contest the assignor’s claim as fraudulent, it must do so within the tight deadlines imposed by the no -fault system. 42 AD3d at 286.

The Court of Appeals affirmed . It first cited to its recent review of the legal framework behind the No – Fault Law in Hospital for Joint Diseases v. Travelers Prop. Cas. Ins., 9 NY3d 312, 317 (2007); namely that the no fault insurance system was designed to ensure “prompt compensation for losses incurred by accident victims without regard to fault or negligence,” to reduce the burden on the courts, and to provide substantial premium savings to New York motorists. ” Citing to its prior decision in Central General Hospital, supra, the Court cautioned that there was only one “narrow” exception to the preclusion rule for those situations where an insurance company raises the defense of lack of coverage. 9 NY3d at 318 . The Court explained that in such cases “an insurer who fails to issue a timely disclaimer is not prohibited from later raising the defense because the insurance policy does not contemplate coverage in the

first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed. Fair Price, 10 NY3d at at 563 citing Joint Diseases, 9 NY3d at 318. See, e.g. Tahir v. Progressive Casualty Ins. Co., 12 Misc 3d 657, 662 (Civil Ct., NY Co., 2006) (“staged accident fraud” actually posed an issue of non coverage as opposed to fraud because under no -fault concepts, insurance coverage is limited to an “accident”).

Thus, the “key issue” in every case is whether the “facts fit within the narrow no-coverage exception to the preclusion rule” 10 NY3d at 564. A court, in determining whether a specific defense is precluded under the 30 day rule or falls within the exception entails a judgment as to whether the defense is more like a “normal exception ” from coverage such as a policy exclusion or a lack of coverage in the first instance, i.e. a defense “implicating a coverage matter.” 10 NY3d at 565. [*4]

In Westchester Medical Center v. Lincoln General Ins. Co., 60 AD3d 1045 (2d Dept. 2009), the Second Department found that the defendant failed to raise a triable issue of fact solely based on the hearsay statement of its investigator, as to whether the accident was covered by Workers Compensation benefits. The court then added that “defendant’s possible entitlement to offset any no-fault benefits it pays by any recovery pursuant to a workers compensation claim does not constitute a defense of lack of coverage, which is not subject to the requirement that there be a timely service of the disclaimer” Id at 1046 citing Fair Price supra.,

The Second Department decision in Westchester, supra, despite its brevity, controls the instant matter. Furthermore, as set forth above, the Second Department has previously enunciated its position on the preclusion rule in Fair Price, supra wherein it declared that as long as there was an actual automobile accident, which caused the assignor to sustain actual injuries for which he was treated by an actual health care provider, the case would not fall within the narrow exception to the preclusion rule. Defendant does not contend otherwise but merely argues that workers compensation is “primary” and that there is no coverage for no fault benefits until and unless a workers compensation board makes a determination that the assignor is not covered by workers compensation at which point the no – fault insurer is obligated to pay first party benefits.

Defendant cannot escape this rule by now claiming that there was “fraud ” or “misrepresentation” by as the assignor in obtaining the policy. Defendant fails to allege the type of fraud which will warrant the suspension of the preclusion. This distinction was aptly drawn in

Carnegie Hill Orthopedic Servs. P.C. v. GEICO Ins. Co., 2008 NY Slip Op 50639U, 19 Misc 3d 1111A, 862 N.Y.S.2d 813 (NY Sup. Ct. 2008) wherein the court stated that “(t)he defense of fraud based upon “staged accidents” or intentional collisions are considered defenses premised on lack of coverage, and have been found not subject to the rigorous 30-day rule because there was, in fact, no “accident.” See, Mtr. of Allstate Ins. Co v Massre, 14 AD3d 610 (2nd Dept. 2005); State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490 (2nd Dept. 2003); Metro Medical Diagnostics, P.C. v Eagle Ins. Co., 293 AD2d 751 (2nd Dept. 2002). On the other hand, cases involving fraudulent billing or excessive treatment are considered claims of “provider fraud” and can be precluded by the 30-day rule. Carnegie Hill, supra at 4 . See, Careplus Medical Supply Inc v State-Wide Ins. Co., 11 Misc 3d 29 (App Term, 2nd & 11th Jud Dists 2005); MGM Psychiatry Care PC v Utica Mutual Ins. Co., 12 Misc 3d 137(A), 824 N.Y.S.2d 763,(App Term, 2nd & 11th Jud Dists 2006).

The Carnegie court noted that the ” key distinction is that in the first circumstance the insurance carrier demonstrated that an issue existed as to whether there was any coverage at all, whereas in the second the courts were presented with an exclusion under the policy, which does not mean that there was no contractual obligation in the first instance. In the latter, the 30-day rule still applies”. Id at 4 citing Fair Price Supply Corp., supra at 42 AD3d 277.

In fact, in Fair Price, supra, the Second Department specifically stated that the exception [*5]to the preclusion rule was carved out specifically where an insurer failed to timely pay or deny fraudulent claims that arise out of staged automobile accidents. 42 AD3d at 283. The rationale for such a holding was that “a deliberate collision that is caused in furtherance of an insurance fraud scheme is simply not an “accident” covered by the subject insurance policy.” Id. To that end, no matter how “egregious” the alleged fraud was in the case before it ( medical supply company’s claim was fraudulent as medical supplies were never delivered), it was not related to the existence of coverage in the first instance. Id. at 284.

Nor does the fraudulent misrepresentation raised by defendant herein fall into the category of fraudulent incorporation A defendant is not precluded from raising its defense that plaintiff may be fraudulently incorporated since it is ” possibly” owned by both a physician and non physician, the latter of which is prohibited by both the Business Incorporation Law, the No – fault regulations and the seminal case of State Farm Mutual Auto Ins. V. Mallela, 4 NY3d 313 (2005).^[FN2]

In Eastern Medical P.C. v. Allstate Ins. Co., 19 Misc 3d 775 (Dist. Ct. Nassau Co. 2008), the court rejected Allstate’s contention that Fair Price had reshaped the analysis of fraud based defenses so as to make a Mallela fraudulent incorporation defense untimely if not made within the 30 day denial period. See, Manhattan Medical Imaging, P,C, v, State Farm Auto Ins,., 2008 NY Slip Op. 51844 (U), 20 Misc 3d 1144 (A) (Civil Ct., Richmond Co. 2008). The court found that the Mallela defense was not predicated upon a policy exclusion or the extent of coverage provided by a contract of insurance but rather upon a statutory defense arising from a claimant’s failure to comply with applicable sections of the Business Corporation, Limited Liability and Education Laws. Id at 779-780. Hence, the challenged regulation in Mallela did not create a new category of exclusion but rather was “a condition precedent with which all claimants must comply in order to receive benefits.” Id at 780 citing 4 NY3d at 321 n.3. Therefore, Fair Price did not

alter, much less address prior precedent that a fraudulent incorporation defense “is a non- waivable defense .and is therefore not subject to the 30-day preclusion rule” ( Midwood Acupuncture P.C. v. State Farm Mutual Auto, 14 Misc 3d 131A, 2007 N.Y Slip Op 50052 U

( App. Term, 2d Dept. 2007). Id at 781. Nor was such a defense waived by the failure to assert it in a denial of claim form. Multiquest v. Allstate Ins. Co., 17 Misc 3d 37, 39 ( App. Term, 2d Dept. 2007).

Since the instant defendant’s claim of fraud does not fall into the category of fraud in pursuance of a staged accident or fraudulent incorporation, it does not fall within the exception to [*6]the preclusion. Having failed to raise the defense that claimant is eligible for workers compensation or that workers compensation is primary in a timely denial, plaintiff is entitled to partial summary judgment. However, since defendant timely mailed its denial based on lack of medical necessity and annexes a sufficient peer review report in support of its denial, this matter will proceed to trial on the issue of medical necessity.

In sum, defendant’s motion for summary judgment is denied and plaintiff’s cross-motion for summary judgment is granted solely with respect to the defense of workers compensation.

DATED: July 6, 2009

KATHERINE A. LEVINE

JUDGE, CIVIL COURT

ASNbyon

Footnotes

Footnote 1:The court finds that the defendant established that it generated and then mailed out a timely denial based on lack of medical necessity on November 28, 2007 in accordance with its well established procedures and through the personal knowledge of the mail clerk at Global.

Footnote 2:This defense is typically referred to as the “Malella defense” or “fraudulent incorporation” defense.

Civil Court of the City of New York, Queens County

88511/08

Cheree A. Buggs, J.

Defendant Global Liberty Insurance Company of New York (“defendant”) filed a motion for summary judgment pursuant to Civil Practice Law and Rules (CPLR) § 3212 and § 3211 [a] [7] on grounds that No-Fault Insurance does not cover a claim submitted by plaintiff Corona Comprehensive Medical Care (“plaintiff”). Plaintiff, the assignee of medical benefits of the operator of a for-hire vehicle, filed a $1,333.24 claim for no-fault insurance benefits for medical services provided to the vehicle operator for injuries arising from an automobile accident. Defendant’s contention is that the for-hire vehicle operator was working when the accident occurred on March 20, 2007, and therefore the plaintiff’s claim is payable through Workers’ Compensation Insurance from the New York Black Car Operators’ Injury Compensation Fund and not under the No Fault Insurance Law. Plaintiff opposes the defendant’s motion on several grounds, chief among them are that defendant’s claim is not a lack of coverage defense, and therefore, must be raised in a timely denial; that the defendant failed to show that a timely denial was mailed, or that such denial was mailed in duplicate; and lastly, that the existence of workers’ compensation coverage does not prevent a person from recovering no-fault benefits.

Background

It is undisputed that on March 20, 2007, the plaintiff’s assignor, Maria Cruz Martinezwasinvolved in a vehicular accident. Defendant alleges that the assignor was about to join the livery vehicle passenger pickup line on Broad Street off of Pearl Street in Lower Manhattan when the accident occurred. Plaintiff provided medical services to Ms. Martinez (the nature of which are not specified in any of the papers herein), and as assignee of Ms. Martinez, submitted a claim to the defendant for payment. Defendant insurance company alleges that although a timely denial was not required, a timely denial of claim form (“NF-10”) was issued on June 12, 2007.

[*2]DiscussionThe movant on a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, proffering sufficient evidence to eliminate all material issues of fact from the case (see Winegrad v New York Univ. Med.Ctr., 64 NY2d 851 [1985]).

In support of its motion, defendant has offered the sworn affidavits of Mahmoud Ragab, its Vice President of Underwriting and of Dwight Geddes, its Fault Claims Manager. Mr. Geddes attested that the defendant is a licensed insurance carrier for three categories of vehicles for hire, e.g.,”black car,” luxury and car service vehicles, and is not licensed to insure private vehicles. According to both affidavits, the assignor was a member of Corporate Transportation Group, LTD, CTG/Optimum Car and Limo dispatch, which is a member of the New York Black Car Operators Injury Compensation Fund as required by the New York City Taxi and Limousine Commission and Executive Law § 160-cc, et seq. The affidavits indicate that the plaintiff’s assignor’s license plate number was “T484693C,” and that the “T” and “C” on a New York license plate indicate a for-hire vehicle under the New York City Taxi and Limousine Commission. According to Mr. Ragab’s affidavit, black car operators must be affiliated with a dispatch or base, and the base must provide Workers’ Compensation Insurance if a driver is injured while working.

The New York Black Car Operators’ Injury Compensation Fund is a not-for-profit corporation, which was created by statute in order to ensure that black car operators who are injured while performing duties on behalf of central dispatch facilities receive workers’ compensation benefits. The central dispatch facilities are required to be members of the fund as a condition to obtaining or retaining their licenses (See NY Exec Law § 160-dd, et seq.). Pursuant to NY Executive Law § 160-cc [1], a ” [b]lack car operator’ means the registered owner of a for-hire vehicle, or a driver designated by such registered owner to operate the registered owner’s for-hire vehicle as the registered owner’s authorized designee, whose injury arose out of and in the course of providing covered services to a central dispatch facility that is a registered member of the New York black car operators’ injury compensation fund, inc.” According to Executive Law § 160-cc [4] ” covered services’ means, with respect to dispatches from or by a central dispatch facility located in the state, all dispatches from such central dispatch facility regardless of where the pick-up or discharge occurs, and, with respect to dispatches from or by a central dispatch facility located outside the state, all dispatches involving a pick-up in the state, regardless of where the discharge occurs.”

Defendant alleges that because the vehicle operator was involved in a motor vehicle accident while on duty, plaintiff is entitled to be reimbursed under Workers’ Compensation Insurance from the New York Black Car Operators’ Injury Compensation Fund, and not under the no-fault law. Insurance Law §§5102 [b] and [b][2] state “first party benefits” are payments meant to “reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle less amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers’ compensation benefits…” Pursuant to Insurance Law § 5102 [b][2], workers’ compensation benefits “serve as an offset against first-party benefits payable under no-fault as compensation for basic economic loss” (see also Arvatz v Empire Mutual Ins. Co., 171 AD2d 262, 268 [1991]). It is solely within the jurisdiction of the Workers’ Compensation Board to determine whether claimed injuries occurred while in the course of one’s employment (see Liss v Trans Auto Sys., 68 NY2d 15 [1986]; O’Rourke v Long, 41 NY2d 219 [1976]; O’Hurley-Pitts v Diocese of Rockville Centre, 57 AD3d 633 [2008]; [*3]Mattaldi v Beth Israel Med. Ctr., 297 AD2d 234, 235 [2002]). Workers’ Compensation Law § 142 [7] states that “[w]here there has been a motor vehicle accident which caused personal injury and there is a dispute as to whether the injury occurred in the course of employment, the Workers’ Compensation Board shall … hold an expedited hearing … whether the accident occurred within the course of employment”. (See also Jing Huo Lac v American Transit Ins. Co., 19 Misc 3d 1146[A], 2008 NY Slip Op 51177 [U] [Civ Ct, Richmond County 2008].)

Further, the defendant alleges that even if the plaintiff’s claim was not timely denied, the absence of such timely denial would not bar the defense of lack of coverage based upon the Workers’ Compensation Law, and there would be no need for the defendant insurer to issue a timely denial (see Hosp. For Joint Diseases v Travelers Prop. Cas. Ins., 9 NY3d 312, 318 [2007]; Central Gen. Hosp. v Chubb Group of Ins. Co., 90 NY2d 195 [1997]).

However, defendant’s contention that there was a valid lack of coverage defense to the plaintiff’s claim based upon workers’ compensation being the “primary” provider of benefits in the instant matter is misplaced, since the Second Department has held to the contrary. An argument of workers’ compensation being primary is not deemed to be a lack of coverage defense, but rather, a statutory offset subject to preclusion if not timely raised (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]).

In accordance with Insurance Law and regulations, an insurer has thirty days from the receipt

of a claim to either pay or deny the claim (see Insurance Law §5106 [a];11 NYCRR 65-3.8 [c]). Inasmuch as defendant’s principal focus in the matter herein is the workers’ compensation issue, with a presumption that such issue constitutes a lack of coverage defense, it failed to submit admissible proof that the denial was actually mailed. Although defendant contends that it issued a timely denial, it has not proffered an affidavit from an employee with either actual knowledge of the mailing of the NF-10 denial of claim form or from an employee familiar with standard office practices and procedures, which would be sufficient to establish mailing (see New York & Presbyterian Hosp. v Allstate ins. Co., 30 AD3d 492 [2006], Ying Eastern Acupuncture v Global Liberty Ins., 20 Misc 3d 144 [A], 2008 NY Slip Op 51863 [U] [App Term, 2d & 11th Jud Dists 2008]; cf. St. Vincent’s Hosp. v Geico, 50 AD3d 1123, 1124 [2008]; Midisland Med., PLLC v Allstate Ins. Co., 20 Misc 3d 144 [A], 2008 NY Slip Op 51861 [U] [App Term, 2d & 11th Jud Dists 2008].) In his affidavit, defendant’s claims manager, Mr. Geddes attested to the receipt of mail/claims and processing of claims, but failed to attest to when the denial was mailed or what the standard office practices are regarding actual mailing. Therefore, defendant has not presented evidence that the workers’ compensation defense was preserved in a timely denial.

Although in the case at bar, the defendant has proffered some admissible evidence regarding the workers’ compensation defense, in the absence of proof of the defendant’s mailing of a timely denial based upon this defense, the Court cannot address whether there is “potential merit” of its claim that the plaintiff’s assignor, Ms. Martinez, was acting within the course of her employment at the time of the accident (see A. B. Med. Servs., PLLC v American Transit Ins. Co., 8 Misc 3d 127 [A], 2005 NY Slip Op 50959 [U] [App Term 2d & 11th Jud Dist 2005]; Lenox Hill Radiology, P.C. v American Transit Ins. Co., 18 Misc 3d 1136 [A], 2008 NY Slip Op 50330 [U] [Civ Ct, New York County 2008]).

Based upon the foregoing, the Court finds that the defendant has failed to meet the required prima facie showing of entitlement to judgment as a matter of law to support its summary judgment [*4]motion. Consequently, defendant’s motion for summary judgment is denied in its entirety.

This constitutes the decision and order of this Court.

____________________________________________________________________

Date““““““Hon. Chereé A. Buggs

Judge, Civil Court

District Court of Nassau County, Third District

4787/04

Attorneys: Israel, Israel & Purdy, LLP for Plaintiff

Carman, Callahan & Ingham, LLP for Defendant

Fred J. Hirsh, J.

BACKGROUND

Defendant moves to compel the deposition of German Laufer (“Laufer”) more than 3 years after the filing and service of the Notice of Trial and Certificate of Readiness for Trial. Laufer is the principal of the plaintiff Media Neurology P.C. (“Media”).

Media provided medical treatment to Jerome Ajodhasingh for injuries he sustained in a motor vehicle accident that occurred on May 17, 2004. Ajodhasingh assigned his right to receive no-fault benefits for this treatment and testing to Media.

On or about July 16, 2004, Media submitted its bill for this treatment to Liberty Mutual Insurance Company (“Liberty”) for payment. Liberty denied payment of the bill

on the grounds the services were not medically necessary.

Liberty did not serve a notice to take the deposition of Laufer as part of its discovery demands.

Discovery was completed. Media filed a Notice of Trial and Certificate of Readiness for Trial on March 27, 2006.^[FN1]

In November 2008, Laufer was indicted in Queens County on charges of no-fault insurance fraud and on other charges. The indictment alleges inter alia Laufer’s billed no-fault insurance carriers for services he did not perform or for tests he did not [*2]conduct.

DISCUSSION

A party has 20 days from service of the Notice of Trial and Certificate of Readiness for trial to move to vacate same on the grounds discovery is not complete. 22 NYCRR 212.17(c). This motion was made substantially more than 20 day after the Notice of Trial was served and filed.

In order to obtain discovery after the filing of the Notice of Trial, the party seeking discovery must demonstrate unusual and unanticipated circumstances developed after the filing of the Notice of Trial necessitating the discovery. Futersak v. Brinen, 265 AD2d 452 (2nd Dept. 1999). Generally, discovery is not permitted after a Notice of Trial is filed. Bilotti v. City of New York, 199 AD2d 297 (2nd Dept. 1993). Liberty asserts Laufer’s indictment for his alleged filing of fraudulent no-fault claims provides the unusual and unanticipated circumstances necessitating the deposition.

While a post Notice of Trial indictment of a principal of the plaintiff would ordinarily be an unusual and unanticipated circumstance permitting a deposition, it is not in this case.

A no-fault insurance carrier must either pay or deny a claim with 30 days of receipt of the claim. Kingsbrook Jewish Medical Center v. Allstate Ins. Co., 61 AD3d 13 (2nd Dept. 2009); and 11 NYCRR 65-3.8(a)(1). Except for certain limited exception, that are not applicable in this case, an insurance carrier is precluded from rasing a defense to a no-fault claim not stated in a timely served denial. Hospital for Joint Disease v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007); and Presbyterian Hosp. in the City of NY v. Maryland Cas. Co., 90 NY2d 274 (1997). While a no-fault carrier may deny a claim on the grounds the claim is fraudulent, it must do so in a timely served denial. Fair Price Medical Supply Corp. V. Travelers Ins. Co., 10 NY3d 556 (2008). Liberty did not deny the claim on the grounds of fraud. Therefore, Liberty is precluded from raising fraud as a defense to this action at trial. Id.

CPLR 3101(a) requires “…full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” The terms “material” and “necessary” are to be liberally construed to provide for disclosure fo all factual material having a bearing on the case which will assist in preparing for trial. Allen v. Crowell-Collier Publishing Co., 21 NY2d 403 (1968); and Wall v. Villa Roma Resort Lodges, Inc., 299 AD2d 351 (2nd Dept. 2002).

Information is “material and relevant” for the purposes of CPLR 3101(a) if it, “…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 Publishing Co., supra at 406.. The demanded material must be produced if it can be used as evidence in chief, for rebuttal or for cross-examination. Allen v. Crowell-Collier Publishing Co., supra ; and Wind v. Eli Lilly & Co., 164 AD2d 885 (2nd Dept., 1990).

The deposition of Laufer is not material or relevant to this action. Since Liberty did not assert fraud as a basis for the denial of the claim filed by Media which is the subject of this action, Liberty is precluded from raising fraud as a defense to this action at trial. Fair Price Medical Supply Corp. v. Travelers Ins. Co., supra .

Laufer may not testify at trial. Media can establish its prima facie case without Laufer’s testimony. [*3]

Plaintiff establishes a prima facie case in an action for first party no-fault benefits through “…evidentiary proof that the prescribed statutory billing forms have been mailed and received, and that the payment of the no-fault benefits was overdue (citations omitted).” Westchester Med. Ctr. v. AIG, Inc., 36 AD3d 900 (2nd Dept. 2007); Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2nd Dept. 2004); and Bajaj v. General Assurance Co., 18 Misc 3d 25 (App.Term 2nd & 11th Jud. Dists. 2007).

The testimony from someone working in Media’s office other than Laufer could establish the bill submitted to Liberty in this case was a business record. William Conover, Inc. v. Waldorf, 251 AD2d 727 (3rd Dept. 1998); Craigg Total Health Family Health Chiropractic Care, P.C. v. QBE Insurance Corp., 20 Misc 3d 1118(A) (Dist. Ct. Nassau Co. 2008); and Lenox Hill Radiology v. New York Cent. Mut. Fire Ins. Co., 20 Misc 3d 851 (Dist.Ct. Nassau Co. 2008). Someone other than Laufer could testify to establish the bill was submitted timely. Careplus Med. Supply Inc. v. Travelers Home & Mar. Ins. Co., 7 Misc 3d 133(a) (App.Term. 2nd & 11th Jud. Dists. 2005); and King’s Medical Supply, Inc. v. Progressive Ins., 3 Misc 3d 126(a) (App.Term. 2nd & 11th Jud. Dists. 2004).

Timely submission of a no-fault claim creates a presumption of medical necessity. All County Open MRI & Diagnostic Radiology. P.C. v. Travelers Ins. Co., 11 Misc 3d 131(a) (App.Term 9th & 10th Jud. Dists. 2006).

The only purpose for which the charges alleged in the Queens County indictment could be used would be for impeachment if Laufer testifies at trial. CPLR 3117(a)(1).

If Laufer were to be convicted at trial or plead guilty to the Queens County charges prior to the trial of this action, Laufer could be asked if he testified at the trial of this action if he has been convicted of a crime and questioned regarding the facts underlying the conviction, People v. Sorge, 301 NY 198 (1950); and CPLR 4513.

Laufer could be cross-examined at trail regarding the allegations contained in the indictment or any other uncharged acts if those acts are criminal, immoral or vicious. People v. Walker, 83 NY2d 455 (1994); and People v. Schwartzman, 24 NY2d 214, cert. dnd. 396 U.S. 846 (1969). Laufer could also be cross-examined regarding these facts underlying the indictment or any other acts not charged in the indictment if they indicated an untruthful bend or a willingness to place his interests above those of society. People v. Walker, supra . If Laufer is acquitted, he could not be questioned regarding any of the facts alleged in the indictment. People v. Santiago, 15 NY2d 640 (1964); and People v. Parsons, 6 AD3d 364 (1st Dept. 2004).

If this court ordered Laufer to appear for deposition, Laufer could assert his Fifth Amendment right at the deposition. Dibble v. Consolidated Rail Corp., 181 AD2d 1040 (4th Dept. 1992); White v. Martins, 100 AD2d 805 (1st Dept. 1984); Ferraro v. New York Telephone Co., 94 AD2d 784 (2nd Dept. 1983); Watson v. State of New York, 53 AD2d 798 (3rd Dept. 1976); and Mora v. St. Vincent’s Catholic Med. Ctr. of New York, 8 Misc 3d 868 (Sup.Ct. N.Y.Co. 2005). Thus, even if the court were to order Laufer to appear for deposition there is a strong likelihood that Laufer would refuse to answer the questions posed to him by Liberty’s attorney.

The determination of whether unusual or unanticipated circumstances exist permitting discovery after the filing of the Notice of Trial is one addressed to the discretion of the trial court. Meadow Lane Equities Corp. v. Hill, -A.D.3d -, 879 NYS2d [*4]725 (2nd Dept. 2009).

Since the testimony that could be elicited at deposition could only be used only for the limited purpose of impeachment on cross-examination of a witness who might not even testify at trial and would could refuse to answer the questions by invoking his Fifth Amendment right, defendant has not establish unusual or unanticipated circumstances exist that would permit defendant to take the deposition of Laufer three years after the Notice of Trial was filed. Schissler v. Brookdale Hosp. Ctr., 289 AD2d 469 (2nd Dept. 2001).

The court notes that if Laufer is convicted of insurance fraud and this claim is a fraudulent claim, Laufer could be compelled to make restitution as part of his plea or sentence. Penal Law §60.27.

For the foregoing reasons, defendant’s motion for an order compelling German Laufer to appear for deposition is denied.

The attorneys for the parties are directed to appear for a pre-trial conference in Civil Part 3 on August 11, 2009 at 9:30 a.m.

SO ORDERED:

Hon. Fred J. Hirsh

District Court Judge

Dated: July 6 , 2009

cc:Israel, Israel & Purdy, LLP

Carman, Callahan & Ingham, LLP

Footnotes

Footnote 1:Since the recovery sought was less than $6000, the action had to proceed to mandatory arbitration. 22 NYCRR Part 28. Although the Notice of Trial was filed in March 2006, the action did not proceed to arbitration until June 24, 2008. A copy of the arbitrator’s award was mailed to the attorneys for the parties on July 7, 2008. 22 NYCRR 28.11. The Demand for a Trial De Novo was filed and the required fee was paid on July 15, 2008. 22 NYCRR 28.12.

The trial of this action was further delayed by the closing of the Third District Courthouse at the end of 2008 resulting in the action be reassigned to Civil Part 3 in Hempstead