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

Civil Court of the City of New York, Bronx County

CV-030992-09/BX

For Plaintiff:

Michael C. Rosenberger of

Rapuzzi, Palumbo & Rosenberger, P.C.

For Defendant:

Diana Leahy of McDonnell & Adels, PLLC

Fernando Tapia, J.

In this no-fault action regarding the recurring issue of Examination Under Oath [“EUO”] letters and their presumption of mailing, this Court, after oral arguments and review of the motion papers, hereby GRANTS Defendant’s Pre-Answer Motion to Dismiss Plaintiff’s Complaint.

The above-captioned matter is demonstrative of other no-fault cases that have similar issues because the case at hand involves two topics that other motions seek to resolve: (1) violation of no-fault policy conditions and (2) unanswered verification requests. Those two main problems in turn spawn the ancillary issue regarding sufficient mailing procedures to make timely requests.

I. VIOLATION OF POLICY CONDITIONS

Defendant argues that Plaintiff’s Complaint must be dismissed as a matter of law because Plaintiff violated no-fault policy conditions when it failed to appear for its scheduled EUO. Plaintiff, in turn, claims that Defendant failed to provide a copy of the subject insurance policy in [*2]its moving papers as well as failed to show that the EUO letters were actually sent.

Section I of 11 NYCRR § 65-1.1 states the following with respect to conditions for proof of claim:

“Upon request by the Company, the eligible injured person or that person’s assignee orrepresentative shall:

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

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

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

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

In the instant case, Plaintiff claims that Defendant unnecessarily cited the aforementioned policy condition because “[t]he central issue here is derived from the terms contained within the written policy agreement between the parties.” See Pl.’s Aff. in Opp. at p. 6. Plaintiff therefore asserts that in order for Defendant to prevail on its motion, the State Farm policy itself should be included as part of the record instead of depending on the no-fault regulations under 11 NYCRR § 65-1.1. To support its argument, Plaintiff discusses Allstate Ins. Co. v. Ganesh, 8 Misc 3d 922 (Sup Ct, Bronx County 2005), a case dealing with a petitioner’s arbitration stay of an uninsured motorist claim.

In Ganesh, the respondent, the injured individual, sought coverage from the offending party’s insurance carrier [State Farm-petitioner]. State Farm disclaimed the coverage on the basis that the collision was not a motor vehicle accident [“MVA”], but instead, was an intentionally staged event, thereby constituting fraud. State Farm therefore disclaimed coverage to the injured party because per its written policy, intentionally caused losses are not covered. Id. at 923.

The Bronx Supreme Court held that State Farm did not validly disclaim coverage because it did not give sufficient admissible evidence that it was a staged event [i.e. offering the written policy as admissible evidence]. According to Hon. Billings, “[b]ecause no party introduced State Farm’s policy in evidence, State Farm never proved, most fundamentally, that the policy . . . excluded intentionally caused losses or losses involving particular conduct or imposed any conditions on anyone relating to a claimed loss.” Id. As such, the petitioner’s arbitration stay was granted and the respondent was allowed to seek coverage under State Farm’s policy.

Here, Plaintiff’s reliance on Ganesh is flawed because unlike Ganesh, this instant action deals with the issue of an EUO “no-show” which is expressly outlined in the no-fault regulations, guiding principles which written policies are based upon. Ganesh, on the other hand, dealt with the issue of coverage with respect to a questionably fraudulent claim that requires dissection of the written policy itself. Ganesh is also distinguishable from the case at bar because the relief sought in Ganesh was for a stay of arbitration of an uninsured motorist claim, as opposed to dismissal of the complaint based on non-compliance to policy conditions. As such, Ganesh fails to support Plaintiff’s claim that Defendant is required to provide the written policy as evidence. [*3]

Revisiting 11 NYCRR ｧ 65-1.1, that section is part of the revised no-fault regulations which took effect on April 5, 2002, and adopted the mandatory Personal Injury Protection [“PIP”] endorsement authorizing EUOs to be incorporated into insurance policies. In other words, compliance to a scheduled EUO is read into the written policy, and the insurer is not required to offer it as evidence to prove its claim.^[FN1] Likewise, in the case at hand, Defendant is not required to include its written policy as part of the record because its defense [of the EUO “no-show”] is found in the Endorsement. Thus, the mandatory Endorsement applies whether or not the written insurance policy actually contains it. Based on the moving papers, the date of accident was on August 27, 2008. According to NY Insurance Law ｧ 3425 (a)(8), “With respect to auto insurance, ‘required policy period’ means a period of one year from the date as of which a covered policy becomes effective after first issuance or voluntary renewal.” Furthermore, under SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A) (App Term 1st Dept 2005), the date of the written policy’s issuance determines if the Endorsement is applicable, and not the date when the plaintiff submits a claim. Applying the above to the instant action, the subject insurance policy contract could be deemed to have been issued/renewed well after April 5, 2002, given that the date of accident occurred well over six years after the effective Endorsement date. It would therefore be duplicative to submit a copy of the policy because its legislative intent was to read the Endorsement into all policies [post-April 5, 2002].^[FN2] As such, Defendant does not need to submit the policy contract because the insurance contact in effect incorporates the Endorsement that authorizes EUOs under 11 NYCRR ｧ 65-1.1.

Plaintiff in the case at bar is therefore in violation of the policy condition requiring submission of EUOs for verification purposes in order to make a determination of first-party benefits because Plaintiff did not appear at the two scheduled EUOs as required by the Endorsement. Accordingly, Plaintiff failed to submit valid proof of claim. The discussion now turns to the mailing mechanics involved in procuring such verifications.

II. VERIFICATION REQUESTS

A. Defendant’s contentions

According to 11 NYCRR § 65-3.5 (a), once the insurer receives the NF-2 application for benefits, the insurer “[s]hall forward to the parties . . . those prescribed verification forms it will [*4]require prior to payment of the initial claim.”^[FN3]

In this instant matter, the issue before the Court is whether the mailing of a letter via certified mail return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt. This Court determines that it is.

Here, Defendant argues that Plaintiff did not appear to the scheduled EUO despite timely notification to Plaintiff.^[FN4] To substantiate its argument, Defendant provided a sworn affidavit from a calendar clerk at the law office who explained that she was personally responsible for scheduling/handling EUOs. See Toyla Hogan Aff. at ¶ 1. Defendant also provided a sworn affidavit from a Claims Representative who attested her personal knowledge of State Farm’s mailing procedures of EUO letters via certified mail.^[FN5] See Alyson Johnson-Shaw Aff. at

¶¶ 3, 7.

Plaintiff counters that Defendant failed to meet its prima facie burden of proving that the two EUO letters were actually mailed because Defendant’s supporting affidavits are not from individuals who personally mailed the EUO letters. See Pl.’s Aff. in Opp. at pp. 6-7. Plaintiff further argues that Defendant’s affidavits “[a]re actually just a string of several irrelevant and/or conclusory assertions.” Id. at p. 10. To support its contentions, Plaintiff relies on Clark v. Columbian Mut. Life Ins. Co., 221 AD2d 227 (1st Dept 1995).

In Clark, the defendant moved for summary judgment on the basis that no triable issues of fact remained with respect to denying the plaintiff’s life insurance proceeds, especially after sending notices to the plaintiff to make payments so that his life insurance policy would remain active. The plaintiff denied receipt of those notices and further argued that the defendant’s deponent who testified on the regular office procedures of mailing the notices failed to show that he was aware of the computer-generated mailing log which listed the names of those receiving such notices. Id. at 228. The Court denied the motion, finding no presumption of receipt by the insured. Id. at 228-29.

Plaintiff’s reliance on Clark is misplaced because Defendant in the instant case submitted mail lists into evidence, whereas the deponent in Clark was not even aware of the computer-generated mail lists that were used for cross-referencing of the envelopes containing the notices. See Def.’s Reply Aff. at ¶ 6. In addition, the plaintiff in Clark expressly denied receipt of the notice. Here, Plaintiff, in its pleadings, did not explicitly or implicitly deny that it never received the EUO letters. Instead, Plaintiff contends that Defendant failed to show that the EUO letters were actually mailed. This Court therefore turns to the final issue of the presumption [*5]of mailing/receipt.

B. Plaintiff’s contentions

What constitutes “sufficient mailing” under no-fault regulations with respect to raising the presumption that an EUO letter was sent and received via certified mail, return receipt requested?

Here, Plaintiff contends that Defendant has the burden to show that the EUO requests were actually mailed. Based on Defendant’s sworn statements, the EUO letters were sent via certified mail. Thus, the question before the Court is whether the use of certified mail return receipt requested creates a more demanding presumption of mailing and receipt threshold above and beyond that of a letter sent via regular first-class USPS mail. The court finds that it does not.

1. Legal presumption: a basic discussion

This Court finds that Defendant has met its burden because the Court adheres to the longstanding precept that a basic fact [i.e. a mailed letter] raises the existence of a presumed fact [i.e. receipt of the letter] until the presumption is rebutted by admissible evidence.

Under Rule 301 of the Federal Rules of Evidence, a “[p]resumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption . . .” Sufficient evidence can therefore be considered by a fact finder in order to rebut a presumption.^[FN6] The least sufficient approach to a presumption is the “permissible inference” one in which a fact finder may conclude that a presumed fact exists. See Black’s Law Dictionary, 8th ed 2004. A permissible presumption, then, allows someone to infer that a presumed fact does exist from a basic one. Applying this to the mailed letter example, it can therefore be presumed that proper mailing occurred and it is more likely than not that the letter was received.^[FN7]

Does the presumption of receipt by regular mail apply to items of sent certified mail?

2. Rebutting the presumption

Defendant established prima facie proof that it mailed requests for additional verification of the claim by providing sworn affidavits from two State Farm office employees as well as an employee from the office of Defendant’s lawyers, all who have personal knowledge of mailroom procedures of EUO letters. See Def.’s Reply Aff. at ¶¶ 10-11.

More importantly, Defendant submitted its mail list which is not only additional prima facie proof of mailing, but is key to creating the presumption of receipt.^[FN8] The very function of [*6]“return receipt” is to provide proof of delivery, as guaranteed by the U.S. Postal System.^[FN9]

Here, Plaintiff relies on State of New York v. International Fidelity Ins. Co.,

181 Misc 2d 595 (Sup Ct, Albany County 1999) to support its contention that Defendant failed to meet its prima facie burden to prove actual mailing of the EUO letters. In Int’l Fidelity —a non-no-fault case— the movant-plaintiff-NYS sought to prove that it never received the defendant’s cancellation notices about the terminated bonds which were sent via certified mail. The cross-movant-defendant-IFIC argued that it was entitled to summary judgment because NYS could not rebut the presumption of receipt of the cancellation notices. Id. at 599.

The Albany County Court held, inter alia, that routine office practices cannot create a presumption of receipt of letters sent via certified mail. Id. As the Court stated, “To create a presumption of receipt, IFIC has the burden of describing a standard office procedure used to ensure that items are properly mailed, or provide proof of the actual mailing.” Id.

Plaintiff’s reliance on Int’l Fidelity is misplaced because State Farm submitted both sworn affidavits from a claims representative with personal knowledge about mailroom procedures and proof of actual mailing to complement those affidavits, as previously mentioned in II.A. of this decision. See also Hernandez, supra. Furthermore, State Farm retained its mail lists, unlike the plaintiff [NYS] in Int’l Fidelity, who destroyed its mail logs. See Int’l Fidelity, 181 Misc 2d 595 at 598-99.

Also, in the case at hand, even if Ms. Johnson-Shaw, the State Farm Claims Representative, did not attest that she was personally responsible for preparing the EUO letters and mailing them via certified mail, return receipt, the fact that State Farm retained its mail lists serves as its safety net, thereby allowing it to create the presumption of receipt because those mail lists represent actual proof of mailing. Defendant should therefore not be punished for taking advantage of various mailing options which aim to ensure delivery from both the sender’s and recipient’s ends.

Mailing procedures’ technological developments, today, ensure that items are mailed and received so that presumptions can be eliminated. In fact, the USPS has the capacity to reproduce the image of the green return receipt card as a PDF attachment when certified mail is procured via the internet, or else when the sender did not receive the green card back and instead goes to the USPS to follow up on the status of the card. See FN. 9.

As footnoted earlier, the regulation is not specific about the means in which to send substantially equivalent written notices to the required parties; it merely instructs the insurer to “forward” them. See NYCRR § 65-3.5 (a). In fact, it may very well have been the legislative intent of the NY Insurance Department to be vague in order to avoid enforcement of a particular form of mailing in the event it becomes outdated, which would breed any problems regarding receipt. Until the no-fault regulations streamline its mailing requirement, it is presumed that a properly addressed letter that was mailed was duly delivered to the intended individual when using any method of mailing that the USPS offers, however basic or sophisticated that form of mailing is.

III. CONCLUSION [*7]

Satisfying no-fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.

WHEREFORE Defendant’s Pre-Answer Motion to Dismiss Plaintiff’s Complaint is hereby GRANTED.

This constitutes the decision and order of this Court.

Dated: July 2, 2009____________________________________

Bronx, NYHon. Fernando Tapia, J.C.C.

Footnotes

Footnote 1: See Dana Woolfson LMT, a/a/o Tania Rega v. GEICO, 20 Misc 3d 948 (Civ Ct, NY County 2008) (holding that an insurer does not need to produce the insurance policy at trial to show that the contract contained the Endorsement).

Footnote 2: See Eagle Chiropractic, P.C. a/a/o Annette Monk et. al. v. Chubb Indemnity Ins. Co., 19 Misc 3d 129(A), 2008 WL 712036 (NY Sup App Term 9th & 10th Jud Dists 2008) (stating that the Endorsement was required to be included in auto insurance policies issued or renewed after April 5, 2002).

Footnote 3: The regulation uses “forward” to describe the manner in which notification is to be effected. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.

Footnote 4: The EUO was requested with respect to the medical bill of $67.40 which was submitted after other bills were disclaimed. See Def.’s Aff. at ¶ 11. The sought-after EUO is for Theresa M. Hastava, D.C., the individual in question for being fraudulently involved with the healthcare practice. See Claudia Fulco Aff. at ¶ 19.

Footnote 5: Per 11 NYCRR ¶ 65-3.6 (b), timely verification requests are made either via phone calls or by mail. Defendant sent the first EUO letter via certified mail on or about October 29, 2008, with reference numbers 102808JK35 and 102808JK36. The second letter was sent on or about December 1, 2008, with reference numbers 120108JK24 and 120108JK25. See Def.’s Reply Aff. at ¶¶ 10-11.

Footnote 6: As per Notes of Committee on the Judiciary, House Report No. 93-650.

Footnote 7: See Nassau Ins. Co. v. Murray, 46 NY2d 828, 829 (NY 1978) where the 1st department held that “It is settled law that a properly addressed and stamped envelope placed in a U.S. mailbox is presumed to have been received by the addressee.”

Footnote 8: See Hernandez v. Merchants Mut. Ins. Co., 14 Misc 3d 1215(A) (Sup Ct, Bronx County 2006), where movant-defendant-insurer sought summary judgment to dismiss the plaintiff’s complaint, arguing it timely disclaimed coverage via written notice and quoting Residential Holding Corp. v. Scottsdale Ins., 286 A.D2d 679 (NYAD 2d Dept 2001) (where proof of actual mailing or proof of a standard office practice/procedure designed to ensure that items are properly addressed and mailed).

Footnote 9: See , accessed June 22, 2009.

—[*1] Brown & Kelly, LLP, Buffalo (H. Ward Hamlin, Jr., of counsel), for respondent-appellant.

Gross, Shuman, Brizdle & Gilfillan, P.C., Buffalo (David H. Elibol of counsel), for claimant-respondent.

Appeal from an order of the Supreme Court, Erie County (Christopher J. Burns, J.), entered November 20, 2008 in a proceeding pursuant to CPLR article 75. The order granted claimant’s motion and vacated an arbitration award.

It is hereby ordered that the order so appealed from is reversed on the law without costs, the motion is denied, and the arbitration award is confirmed.

Memorandum: Claimant was allegedly injured in an automobile accident and, following a hearing based on the denial by respondent, her insurer, of her request for no-fault benefits, the arbitrator awarded claimant the sum of $4,354.56. Claimant also sought supplementary uninsured motorists (SUM) benefits and, following a second hearing before a different arbitrator, the arbitrator denied her request for such benefits on the ground that her injuries were not caused by the accident. Claimant moved pursuant to CPLR article 75 to vacate or modify the SUM arbitration award contending, inter alia, that respondent was collaterally estopped from relitigating the issue of causation with respect to her injuries. Respondent, on the other hand, sought confirmation of the SUM arbitrator’s award. We agree with respondent that Supreme Court erred in granting claimant’s motion. The fact that a prior arbitration award is inconsistent with a subsequent award is not an enumerated ground in either subdivision (b) or (c) of CPLR 7511 for vacating or modifying the subsequent award (see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848 [1984]). As the court properly recognized, “[i]t was within the [SUM] arbitrator’s authority to determine the preclusive effect of the prior arbitration on the instant arbitration” (Matter of Progressive N. Ins. Co. v Sentry Ins. A Mut. Co., 51 AD3d 800, 801 [2008]). The court erred in noting, however, that it was unable to determine whether the SUM arbitrator even considered claimant’s contention with respect to collateral estoppel. Arbitrators are not required to provide reasons for their decisions (see Matter of Solow Bldg. Co. v Morgan Guar. Trust Co. of N.Y., 6 AD3d 356, 356-357 [2004], lv denied 3 NY3d 605 [2004], cert denied 543 US 1148 [2005]; Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40, 41 [1987]), and thus the SUM arbitrator was not required to state that he had considered that contention. [*2]

All concur except Peradotto and Gorski, JJ., who dissent and vote to affirm in the following memorandum.

Peradotto and Gorski, JJ. (dissenting). We respectfully dissent and would affirm. Although collateral estoppel “is not a basis on which [Supreme C]ourt may, under CPLR 7511, vacate an arbitration award” (Matter of Globus Coffee, LLC v SJN, Inc., 47 AD3d 713, 714 [2008]; see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848 [1984]), vacatur is permitted where the award ” ‘violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power’ ” (Matter of Mays-Carr [State Farm Ins. Co.], 43 AD3d 1439, 1439 [2007], quoting Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; see generally CPLR 7511 [b] [1] [iii]). In our view, the arbitrator who issued the award with respect to supplementary uninsured motorists (SUM) benefits exceeded his power by disregarding the preclusive effect of a prior arbitration award and instead issuing a different determination with respect to causation, involving the same parties and based upon the same facts (see Matter of American Honda Motor Co. v Dennis, 259 AD2d 613 [1999]; Motor Veh. Acc. Indem. Corp. v Travelers Ins. Co., 246 AD2d 420, 422 [1998]).

We agree with the majority that it generally is within the arbitrator’s discretion to determine the preclusive effect of a prior arbitration award on the instant arbitration (see City School Dist. of City of Tonawanda, 63 NY2d at 848). In a number of the cases setting forth that general proposition, however, there are factual issues whether the prior award should be given preclusive effect, either because the parties are not identical (see e.g. id., 63 NY2d at 847-848; Board of Educ. of Patchogue-Medford Union Free School Dist. v Patchogue-Medford Congress of Teachers, 48 NY2d 812, 813 [1979]), or it is not clear whether the disputed issue was resolved in the prior proceeding (see e.g. Globus Coffee, LLC, 47 AD3d at 714; Matter of Town of Newburgh v Civil Serv. Empls. Assn., 272 AD2d 405 [2000]; Matter of Medina Power Co. [Small Power Producers], 241 AD2d 915 [1997]). Here, there are no such factual issues. The SUM arbitrator was thus barred from relitigating the issue of causation between the identical parties, inasmuch as it was ” ‘actually contested and therefore determined by the [prior] award’ ” (Medina Power Co., 241 AD2d 915 [1997]).

Further, we note that “strong public policy considerations favor finality in the resolution of disputes of all kinds to assure that parties will not be vexed by further litigation” (Merrill Lynch, Pierce, Fenner & Smith v Benjamin, 1 AD3d 39, 40 [2003]), and that “[t]he object of arbitration is to achieve a final disposition of differences between parties in an easier, more expeditious and less expensive manner” (Matter of Maye [Bluestein], 40 NY2d 113, 117-118 [1976]). Just as a court may not redetermine an issue conclusively decided in a prior arbitration proceeding between the same parties (see Clemens v Apple, 65 NY2d 746, 748-749 [1985]), despite having the same discretion as an arbitrator with respect to collateral estoppel determinations (see Rembrandt Indus. v Hodges Intl., 38 NY2d 502, 504 [1976]), an arbitrator is similarly precluded from redetermining an issue previously settled between the parties pursuant to an arbitration award (see American Honda Motor Co., 259 AD2d 613 [1999]). To conclude otherwise would “defeat[ ] . . . two of arbitration’s primary virtues, speed and finality” (Matter of Weinrott [Carp], 32 NY2d 190, 198 [1973]), and would instead encourage parties to seek that finality by way of the court system. Present—Smith, J.P., Centra, Peradotto, Green and Gorski, JJ.

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Mitchell J. Danziger, J.), entered February 9, 2007, which granted plaintiff’s motion for summary judgment.

Per Curiam.

Order (Mitchell J. Danziger, J.), entered February 9, 2007, affirmed, without costs.

In this action to recover first party no-fault benefits, defendant’s submission in support of its staged accident defense was insufficient to establish a “founded belief that the alleged injury [did] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; see Vista Surgical Supplies, Inc. v Utica Mut. Ins. Co., 2009 NY Slip Op 50493[U] [2009]). To the extent that defendant purports to rely upon a policy exclusion, any such defense is precluded in view of defendant’s failure to timely deny the claims (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: June 30, 2009

[*1]

Civil Court of the City of New York, Richmond County, June 30, 2009

APPEARANCES OF COUNSEL

Barry & Associates, L.L.C., Plainview, for defendant.[*2] Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**25 Misc 3d at 244} OPINION OF THE COURT

Katherine A. Levine, J.

{**25 Misc 3d at 245}This case calls the court to reconcile the seeming anomaly between precedent and the insurance regulations as to what repercussions attach to an insurance carrier’s failure to adhere to the time limits for requesting follow-up verification in no-fault insurance cases. Since the regulations only address the repercussion that attaches to an insurer’s late submission of an additional verification request,^[FN1] and the tenets of statutory construction mandate that different parts of one statute are to be construed together, this court concludes that an insurance carrier should not be subject to greater penalties for submitting a late follow-up verification request than for submitting a late additional verification request.

Plaintiff Pine Hollow Medical, P.C., a medical service provider, brings this action pursuant to Insurance Law § 5106 (a) to recover $699.34 for services it provided to its assignor Jonathan Aurelien, for injuries he allegedly sustained in an automobile accident. Defendant Global Liberty Insurance moved for summary judgment on the grounds that plaintiff’s lawsuit was premature since plaintiff failed to comply with defendant’s verification requests. Plaintiff does not dispute defendant’s assertion that it never provided the requested information, but asserts that defendant’s follow-up verification request was late because it was made on the 11th day after 30 days had already transpired since defendant’s first request for verification, in violation of 11 NYCRR 65-3.6 (b).

Aurelien was allegedly injured in an automobile accident and received medical treatment at Pine Hollow on March 23, 2006. Global sent a verification request to plaintiff’s attorney for a [*3]letter of medical necessity from the referring physician on April 6, 2006. Having received no response, defendant mailed a second verification request dated May 17, 2006, requesting the same letter of medical necessity. It appears that defendant was thus one day late in requesting the follow-up verification.

Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.5, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim or it will be precluded from offering any defenses at trial. (Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889, 890 [2d Dept 2007]; see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997].) An insurer may toll the 30-day period by properly{**25 Misc 3d at 246} requesting additional verification^[FN2] within 15 days from the receipt of the no-fault insurance claim forms (NF-3 or claim form). (Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004]; 11 NYCRR 65-3.5 [b].^[FN3]) If the “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 requested” (11 NYCRR 65-3.6 [b]).^[FN4] If the insurer does not receive the verification request after its follow-up request is sent, its time to pay or deny the claim is tolled pending submission of the requested information. “A claim need not be paid or denied until all demanded verification is provided” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999]). The insurer must pay or deny the claim within 30 days after it receives verification of all relevant information it requested pursuant to its original request for additional information (11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1];^[FN5] Westchester County Med. Ctr. at 554).

In Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co. (233 AD2d 431, 432 [2d Dept 1996]) the court found that the follow-up requirements for verification requests, as contained in 11 NYCRR 65.15 (e) (2) (the predecessor to 11 NYCRR 65-3.6 [b]), must be “strictly[*4] construed” so that “when an insurance company has not received ‘verification’ within 30 days after requesting it, [the insurer] must, within the ensuing 10 days, ‘follow up’ with a second request, documenting the second request in the file and notifying the applicant or the applicant’s attorney.” In Presbyterian (supra) the insurer, after not receiving{**25 Misc 3d at 247} a response to its request for additional verification, failed to make any follow-up request and merely waited three months until it received the requested records after which it issued a denial. The Second Department found that the 30-day period within which the carrier should have paid or denied the claim had run ” ‘even before verification [was] obtained’, due to the carrier’s ‘lack of diligence in obtaining the verification’ ” (233 AD2d at 433, quoting Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 154 [2d Dept 1986]).

There have been divergent opinions on whether the defendant insurance company must wait until 30 days have expired before sending out the follow-up verification request. In Psych. & Massage Therapy Assoc., PLLC (5 Misc 3d at 724-725), the court found that the regulations do not mandate that the insurer wait 30 days before sending a follow-up request since the time frame of 30 days was a limit to the amount of time an insurer may wait before sending a follow-up request. This expeditious handling of the verification follow up was consistent with the case law and the goals of the No-Fault Law.^[FN6] In Park Slope Med. & Surgical Supply, Inc. v Country-Wide Ins. Co. (19 Misc 3d 1138[A], 2008 NY Slip Op 51063[U] [Civ Ct, Richmond County 2008]), this court adopted the reasoning of Psych. & Massage Therapy Assoc. (supra) and held that defendant is allowed to send a follow-up verification request on the 30th day after the original request for verification.

Based upon the aforementioned precedent, it would appear that since defendant was one day outside the 10-day window period in which it had to mail its follow-up verification request, defendant could not take advantage of the tolling period and hence could not argue that the instant lawsuit was premature. However, unlike the arguments presented in the aforementioned cases, defendant here raises the somewhat novel argument that even if its follow-up verification request was untimely, “such untimeliness is not fatal but would merely reduce the number of days it has to either pay or deny the claim.” Specifically, defendant argues that since it was only one day late in mailing its{**25 Misc 3d at 248} follow-up verification request, the 30-day time period it had to pay or deny the claim would still begin to run after it received all of the requested verification but would be reduced by one day to 29 days. Defendant does not cite any authority for this proposition. [*5]

11 NYCRR 65-3.8 (j) states that “[f]or the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue . . . , with the exception of section 65-3.6 of this subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” Section 65-3.6 (b), as set forth above, governs the follow-up requirements for verification requests if any verification has not been supplied to the insurer pursuant to the additional request.

There appears to be no higher court analysis of what the phrase “with the exception of section 65-3.6” means within the context of ascertaining what repercussions, if any, attach to an insurer’s late submission of a follow-up verification. However, in Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co. (262 AD2d 553 [1999]), the Second Department found that under the old regulations, a follow-up letter that was sent beyond the 10-day window period was timely and that the insured was entitled to the tolling of the 30 days as contained in 11 NYCRR 65.15 (g). Since the plaintiff never responded to the follow-up verification letter, the 30-day period in which defendant had to pay or deny the claim never commenced and defendant’s denial of the claim was not untimely.

There, the defendant received the claim on April 28, 1997, and made a timely demand for additional verification on May 1. Having not received verification within 30 days, the defendant then made a “timely demand” for follow-up verification on June 13. (262 AD2d at 555.) The defendant thereupon denied the claim on June 19. In its brief before the Second Department, the defendant insurer argued that even assuming June 13^[FN7] was the date it mailed the follow-up request, its denial was still timely on the grounds that the regulations (11 NYCRR 65.15 [g] [10]) only addressed the repercussions if the initial{**25 Misc 3d at 249} (additional) verification request was not timely sent, and then did not require preclusion of the defense but only a reduction of the 30-day period in which the insurer had to pay or deny the claim, after receiving the verification material, by the amount of the delay. Without commenting on defendant’s reasoning, the Second Department found that defendant had submitted a timely follow-up request.

Subsequently, in Liberty Queens Med. v Tri-State Consumer Ins. (188 Misc 2d 835 [Nassau Dist Ct 2001]), the court dealt directly with the apparent inconsistency between the Appellate Division precedent that the verification requirements must be strictly complied with [*6]and the regulatory language which provided for an extension of time in which a defendant insurer had to pay or deny a claim based upon outstanding verification pursuant to 11 NYCRR 65.15 (d) (2) and (g) (1) (under the new regulations—11 NYCRR 65-3.6 [b] and 65-3.8 [j]). There, the defendant insurer made the additional verification request 11 days after receiving the claim and hence was one day late in making the request pursuant to 11 NYCRR 65.15 (d) (2).

The plaintiff argued that because the request for additional verification was untimely, the defendant insurer waived its right to extend the 30-day period and therefore was required to make a determination on the claim within 30 days of the initial submission, citing Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co. (233 AD2d 431 [1996]). The Liberty court first distinguished the matter before it from Presbyterian where the court was not required by the facts before it to focus on the “specific issue presented here,” i.e., the tolling provision of section 65.15 (g) (10). (188 Misc 2d at 839.) Therefore, the “broad general language” utilized by the Presbyterian court should not be construed as determinative of how the court should rule upon a one-day delay in complying with the specific regulation before it. (Id.)

Addressing the insured’s “one-day deviation” from the requirement that it send its additional verification request within 10 days, the court found that the purpose of the No-Fault Law—”avoiding prejudice to insureds by providing for prompt payment or disclaimers of claims”—was sufficiently served by “truncating the presumptive 30-day period which the insurer itself would otherwise have to eventually review the proof submitted” as set forth in 11 NYCRR 65.15 (g) (10). (Liberty at 840.) To impose the “draconian result” requested by plaintiff for a “one-day deviation” from the promulgated standards{**25 Misc 3d at 250} would deprive the insurer entirely of its right to obtain and review the needed proof and would “contravene rather than implement the statutory intent.” (Id.)

Based upon the two aforementioned precedents, it is clear that defendant should not be deprived entirely of the opportunity to review and obtain the needed proof by dint of its one-day tardiness in submitting its follow-up request. 11 NYCRR 65-3.8 (j) only addresses the repercussions of an insurer’s failure to request the additional verification within the set time lines, since it expressly excludes section 65-3.6, which discusses follow-up verification requests, and then sets forth that any deviation from the time frame shall reduce the 30 calendar days allowed in which to pay or deny the claim. As such, the regulations do not even contain a punitive provision for an insurer who does not make a follow-up verification request within the 10-day period.

“A statute or legislative act is to be construed as a whole, and all parts of an act are to be read and construed together to determine the legislative intent” (McKinney’s Cons Laws of NY, Book 1, Statutes § 97; Frank v Meadowlakes Dev. Corp., 6 NY3d 687, 691 [2006]) and construed so as to harmonize [*7]with one another (Anglin v Anglin, 80 NY2d 553, 558 [1992]). In the interpretative context, a court “must read the entire law and accord respect to the interlocking and interrelated features of all its parts.” (Anglin at 558.) Furthermore, even apparently conflicting provisions of a statute must be reconciled in a manner most consistent with the overall legislative intent. (Statutes § 98; Schulman v Group Health Inc., 39 AD3d 223 [1st Dept 2007].) Finally, the common mandate of statutory construction is to assume that the Legislature “did not intend a patently absurd result.” (Covington v Walker, 307 AD2d 908, 909 [2d Dept 2003]; see Statutes § 145; In re Adamo, 619 F2d 216, 219 [2d Cir 1980].)

It would be patently absurd and contravene the meaning of 11 NYCRR 65-3.8 (j) to impose a more draconian punishment on an insurer who is one day late in requesting follow-up verification than on an insurer who is one day late in requesting additional verification. Since in the latter situation, the only repercussion to the insurer’s tardiness is the diminution in the time it has to issue a denial or pay the claim, it begs all credulity to impose the more drastic remedy of precluding the insurer from even issuing a denial because of its tardiness in requesting follow-up verification. If anything, the aforementioned regulation{**25 Misc 3d at 251} imposes no repercussion upon the insurer who is tardy in requesting follow up.

Since defendant has yet to receive any response to its verification requests, its 30-day period in which to deny or pay the claim has not yet commenced and the instant action is premature. In light of the above, it is not necessary for this court to determine whether the defendant’s time to deny or pay the claim, once it does receive the requested information, is diminished by one day.

Defendant’s motion for summary judgment is granted and the case is dismissed.

Footnotes

Footnote 1: As will be explained below, an additional verification request precedes a follow-up verification request under the no-fault insurance regulations.

Footnote 2: The additional verification request is to be distinguished from the initial verification forms (including the claim form or NF-3) which must be forwarded by the insurer to the parties required to complete them within 10 days of receipt of the completed application for no-fault benefits (NF-2).

Footnote 3: This opinion will also cite to the analogous provisions under the old no-fault regulations (old regulations) which were effective through December 31, 2002, since many of the operative cases were brought under the old regulations. The analogous provision to section 65-3.5 (b) under the old regulations is 11 NYCRR 65.15 (d) (1), which provided that an insurer shall request additional verification within 10 days of receiving the prescribed verification forms.

Footnote 4: The analogous provision under the old regulations is 11 NYCRR 65.15 (e) (2).

Footnote 5: The analogous provision under the old regulations is 11 NYCRR 65.15 (g) (1).

Footnote 6: However, in Sea Side Med., P.C. v State Farm Mut. Auto Ins. Co. (12 Misc 3d 1127 [Civ Ct, Richmond County 2006]), Judge Sweeney found that the clear language of 11 NYCRR 65-3.6 (b) required the insurer to “follow up with the plaintiff for the verification at least once in the 10-day period specified therein” (id. at 1131). By sending the follow-up verification request only 28 days after the first verification request had been mailed, defendant failed to mail the follow-up request within the 10 days and “the toll occasioned by defendant’s initial requests for verification dissipated ab initio” (id.).

Footnote 7: (See reply brief for defendant-appellant in Westchester, available at 1999 WL 34593237 [briefs and other related documents].) In their briefs, the parties differed as to when the insurer sent the follow-up verification request; the plaintiff contended that it was sent on June 13 while the defendant insurer argued it was sent on June 3. The Appellate Division adopted June 13 as the date that the follow-up verification request was sent and this court will presume that the Appellate Division, after considering all the evidence, properly ascertained the operative date.