SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Andrea Phoenix, J.), entered December 17, 2007. The order, insofar as appealed from as limited by the brief, denied plaintiffs’ motion for summary judgment with respect to their no-fault claims which were denied by defendant on the ground that plaintiffs’ assignor failed to attend independent medical examinations.

Order, insofar as appealed from, reversed without costs, plaintiffs’ motion, insofar as it sought summary judgment upon the claims submitted by (1) plaintiff A.B. Medical Services, PLLC seeking to recover the sums of $443.92, $1,573.24, $376.32, $71.06, $125.44 and $130.32; (2) plaintiff D.A.V. Chiropractic, P.C. seeking to recover the sums of $235.90, $202.20 and $134.80; (3) plaintiff Lvov Acupuncture, P.C. seeking to recover the sums of $510.00, $510.00, $255.00, $510.00, and $170.00; and (4) plaintiff Sowell Chiropractic, P.C. seeking to recover the sum of $88.44, is granted, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees thereon.

In this action by providers to recover assigned first-party no-fault benefits, plaintiffs moved for summary judgment. Defendant opposed the motion, arguing, insofar as is relevant to this appeal, that plaintiffs’ assignor failed to appear for independent medical examinations (IMEs). The court denied plaintiffs’ motion, finding that plaintiffs failed to make out a prima facie case. This appeal by plaintiffs ensued.

Plaintiffs established their prima facie entitlement to summary judgment by proving the [*2]submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). We note that the affidavit submitted by plaintiffs’ billing manager demonstrated that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]).

Although defendant denied certain claims on the ground that plaintiffs’ assignor failed to attend scheduled IMEs (claims from A.B. Medical Services, PLLC in the amounts of $443.92, $1,573.24, $376.32, $71.06, $125.44 and $130.32; from D.A.V. Chiropractic, P.C. in the amounts of $235.90, $202.20 and $134.80; from Lvov Acupuncture, P.C. in the amounts of $510.00, $510.00, $255.00, $510.00, and $170.00; and from Sowell Chiropractic, P.C. in the amount of $88.44), the affidavits submitted by defendant were insufficient to establish proper mailing of the IME scheduling letters, which would give rise to a presumption that the items were received by the addressee (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2001]; see also Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Consequently, in light of defendant’s failure to timely deny said claims, it is precluded from interposing most defenses with respect to such claims, with exceptions not relevant in this case (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]). As a result, defendant failed to raise a triable issue of fact with regard to said claims, and plaintiffs are entitled to summary judgment upon the claims submitted by (1) plaintiff A.B. Medical Services, PLLC seeking to recover the sums of $443.92, $1,573.24, $376.32, $71.06, $125.44 ftlineand $130.32; (2) plaintiff D.A.V. Chiropractic, P.C. seeking to recover the sums of $235.90, $202.20 and $134.80; (3) plaintiff Lvov Acupuncture, P.C. seeking to recover the sums of $510.00, $510.00, $255.00, $510.00, and $170.00; and (4) plaintiff Sowell Chiropractic, P.C. seeking to recover the sum of $88.44, and the matter is remanded to the District Court for the calculation of statutory interest and an assessment of attorney’s fees due thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Tanenbaum, J.P., Molia and LaCava, JJ., concur.
Decision Date: April 01, 2009

[*1]

Civil Court of the City of New York, Kings County, March 31, 2009

APPEARANCES OF COUNSEL

Sylvain R. Jakabovics, Brooklyn, for plaintiff. Freiberg & Peck, LLP, New York City, for defendant.

{**24 Misc 3d at 521} OPINION OF THE COURT

Peter P. Sweeney, J.

{**24 Misc 3d at 522}In this action to recover assigned first-party no-fault benefits, both plaintiff and defendant moved for summary judgment. In opposition to plaintiff’s motion and in support of its cross motion, defendant argued, inter alia, that the action is premature and should be dismissed because plaintiff did not provide the medical reports which it had requested as additional verification of the claims. The novel question presented is whether plaintiff, in response to defendant’s requests for additional verification of the claims, was obligated to do more than just inform defendant that it was not in possession of the medical reports that had been requested.

Factual Background

The facts are essentially undisputed. Plaintiff D & R Medical Supply is a provider of medical equipment. Plaintiff submitted admissible proof in support of its motion for summary [*2]judgment demonstrating that it had submitted to the defendant two claims for assigned first-party no-fault benefits for medical equipment that it had provided to its assignor. The claims were submitted on July 9, 2007 and July 25, 2007.

By letter dated July 23, 2007, defendant acknowledged receipt of the first claim. In the letter defendant stated as follows: “[a] report from the referring physician is required with comment regarding the medical necessity of the medical equipment.”

Plaintiff responded to defendant’s letter by its own letter, dated July 26, 2007, stating:

“We are in receipt of your letter dated July 23rd, 2007. Unfortunately D & R Medical Supply, Inc. is unable to provide you with referring physician report and/or any medical records that you are requesting for the above named patient. This type of documentation is not in our possession. We are medical supply company and provide supplies in accordance to the doctor’s prescription. Please request it directly from the medical provider.”

Defendant mailed a second copy of its July 23, 2007 letter to the plaintiff on August 24, 2007.

By letter dated August 11, 2007, defendant acknowledged receipt of the second claim and again stated that “[a] report from the referring physician is required with comment regarding the medical necessity of the medical equipment.” Plaintiff again informed defendant that it did not have such a report in its possession. On September 13, 2007, defendant mailed a second copy of its August 11, 2007 letter to the plaintiff.{**24 Misc 3d at 523}

To date, plaintiff has not provided the defendant with a report from any physician attesting to the medical necessity of the equipment at issue; for its part, defendant neither paid nor denied the claims at issue.

On its motion for summary judgment, plaintiff’s position is that it submitted its bills to the defendant who neither paid nor denied the claims pursuant to the No-Fault Law and regulations. In defense, and on its own cross motion, it is defendant’s position that the action on these claims is premature and must be dismissed. According to the defendant, the 30-day period within which it had to pay or deny the claims had not begun to run, inasmuch as plaintiff has yet to provide defendant with the reports of the referring physicians that had been timely requested as additional verification for each of the claims.

Analysis

Plaintiff established its prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary [*3]Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). The court notes that the affidavit submitted by plaintiff’s billing manager demonstrated that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d Dept 2006]). The burden thus shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendant failed to meet this burden.

There is no merit to defendant’s argument that the statutory time period within which it had to pay or deny the claim was tolled due to plaintiff’s failure to provide it with the materials it had requested as additional verification of the claims. Assuming that the letters sent to plaintiff by defendant constituted valid initial and follow-up demands for additional verification of the claims, plaintiff unequivocally advised defendant that it was not in possession of the medical reports that defendant was seeking. Certainly, there is no evidence before the court suggesting that these materials were ever in plaintiff’s care, custody or control.

Even under the liberal discovery provisions embodied in article 31 of the CPLR, a party to a lawsuit is required to produce only those items “which are in the possession, custody or control of the party” (CPLR 3120 [1] [i]; see generally Saferstein{**24 Misc 3d at 524} v Stark, 171 AD2d 856 [2d Dept 1991]; Corriel v Volkswagen of Am., 127 AD2d 729, 730 [2d Dept 1987]; Lear v New York Helicopter Corp., 190 AD2d 7, 11 [2d Dept 1993]). While the no-fault regulations provide that an “insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c]), this should not be construed as requiring a provider to provide materials over which it has no control. A contrary construction would violate the core objective of the No-Fault Law: “to assure claimants of expeditious compensation for their injuries through prompt payment of first-party benefits without regard to fault and without expense to them” (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]) and would frustrate one of the main purposes of the regulatory scheme, which is “to provide a tightly timed process of claim, disputation and payment” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]; see also New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429, 430 [2d Dept 2004]). Imposing upon a medical provider the obligation to provide an insurer with materials that are not in its care, custody or control would also be illogical.

Finally, it is worth noting that defendant had a means of obtaining the materials it was seeking as additional verification of the claims. The no-fault regulations, particularly 11 NYCRR 65-3.5 (c), entitle an insurer to receive items necessary to verify a claim directly from persons others than applicants for no-fault benefits (see Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42 [App Term, 2d Dept 2007]). In Doshi Diagnostic Imaging Servs., the appellate court held that the insurer acted within its rights when it sought medical necessity verification from the prescribing physician rather than from the plaintiff MRI provider and that the insurer’s request for verification to the prescribing physician tolled the statutory claim determination period (id. at 43-44). Pursuant to the holding in Doshi Diagnostic Imaging Servs., defendant could have requested the medical reports from the [*4]referring physicians, whom plaintiff had identified in the claim forms. Indeed, the court in Doshi Diagnostic Imaging Servs. suggested that the no-fault regulations would also allow an insurer to seek verification of a claim directly from the referring physician where the plaintiff applicant was a medical equipment provider who merely fills prescriptions, as is the case here (id. at 44).{**24 Misc 3d at 525}

The court has considered defendant’s remaining arguments in opposition to plaintiff’s motion and in support of its cross motion and finds them to be without merit.

Accordingly, it is hereby ordered that plaintiff’s motion for summary judgment is granted and plaintiff may enter judgment against the defendant in the amount of $2,448.13, together with interest and attorneys fees as provided for under the No-Fault Law, plus costs; and it is further ordered that defendant’s cross motion for summary judgment is denied.

—[*1] Joseph Henig, P.C., Bellmore, N.Y. (Mark Green of counsel), for appellant.

Bruno, Gerbino & Soriano, LLP, Melville, N.Y. (Charles W. Benton of counsel), for respondent.

In an action to recover no-fault medical benefits under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (Martin, J.), dated October 14, 2008, which denied its motion for summary judgment on the complaint.

Ordered that the order is reversed, on the law, with costs, and the motion is granted.

The plaintiff made a prima facie showing that it was entitled to judgment as a matter of law on its complaint to recover no-fault medical payments by submitting evidence that the prescribed statutory billing forms had been mailed and received, and that the defendant had failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.5; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317-318 [2007]; New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2006]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 100 [2005]; New York & Presbyt. Hosp. v AIU Ins. Co., 20 AD3d 515, 516 [2005]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]). In opposition, the defendant failed to raise a triable issue of fact.

Contrary to the defendant’s contention, the two letters it sent to the plaintiff on March 31, 2008, and April 30, 2008, respectively, advising the plaintiff that the processing of its claim was being held pending an investigation of the loss, which included verifying the claimant’s involvement [*2]in the motor vehicle accident and conducting examinations under oath of any individuals with personal knowledge of the facts, did not serve to toll the 30-day statutory period (see 11 NYCRR 65-3.5 [a]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535, 536 [2005]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [1999]; see also Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing, Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U] [2005]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [2004]). We also reject the defendant’s contention that the 30-day statutory period was tolled pending the defendant’s submission of a no-fault application, as 11 NYCRR 65-3.5 (g) specifically requires an insurer to accept a completed hospital facility form (NYS Form N-F 5), as was submitted here, “[i]n lieu of a prescribed application for motor vehicle no-fault benefits” (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d at 536).

The defendant also 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. Moreover, the 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 timely service of the disclaimer (see 11 NYCRR 65-3.5 [a]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007]; cf. Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997] [question of fact as to whether injuries were sustained in a separate, work-related accident]). Where, as here, the defendant’s denial of liability also was based upon an alleged breach of a policy condition, to wit, the failure of the plaintiff’s assignor to appear at an examination under oath, such an alleged breach does not serve to vitiate the medical provider’s right to recover no fault benefits or to toll the 30-day statutory period (see Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [1999]). Rather, such denial was subject to the preclusion remedy (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199; Zappone v Home Ins. Co., 55 NY2d 131, 136-137 [1982]; cf. Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 279-280 [1997]). Skelos, J.P., Fisher, Santucci and Balkin, JJ., concur.

Supreme Court, Nassau County

018936/08

For the Plaintiff

Joseph Henig, P.C.

1598 Bellmore Avenue

Bellmore, New York 11710

(516) 785-3116

Randy Sue Marber, J.

The Defendant, by Order to Show Cause, moves for an order 1) vacating the judgment granted on default and entered by the clerk on December 12, 2008; 2) extending the Defendant’s time to answer the Plaintiff’s complaint; and 3) compelling the Plaintiff to accept the Defendant’s answer. The Plaintiff opposes the Order to Show Cause.

The Plaintiff, WESTCHESTER MEDICAL CENTER seeks to recover $345,472.88 for medical services provided to its assignor, Jamel Harris. The complaint in this action alleges that the Defendant insured the Plaintiff’s assignor under an automobile liability policy which contained a New York no-fault endorsement. On or about April 12, 2008, the Plaintiff’s assignor, Jamel Harris, was injured when he hit a tree while driving a 2005 Ford. The Plaintiff alleges that Jamel Harris, as the insured, was a covered person under the automobile policy issued by the Defendant and was entitled to reimbursement from the Defendant for health services rendered by the Plaintiff. The Plaintiff claims that the no-fault benefits for health services provided were duly assigned to the Plaintiff. The Plaintiff claims the Defendant is responsible for the payment of the assignor’s health services rendered to him in the amount of $330,925.85, plus interest.

On or about October 27, 2008, the Plaintiff served the Summons and Complaint in this matter upon the Defendant by serving the New York State Insurance Department in Albany. The Defendant alleges that The Insurance Department then sent the Summons and Complaint to [*2]Allstate’s agent, C.T. Corp., by regular mail, on October 28, 2008 and it was received by C.T. Corp. on November 3, 2008. Subsequently, the Defendant’s counsel alleges, C.T. Corp. sent the Summons and Complaint to Allstate’s offices in Hauppauge, New York, by overnight mail.

In an affidavit sworn to on January 23, 2009, Charles Jaekle, a Front Line Performance Leader employed by the Defendant, alleges that the Summons and Complaint in this action was then misindexed by an employee who “did not realize the time sensitive nature of the documents”. As a result, the Summons and Complaint was not received by the appropriate office to prepare responsive pleadings until January 5, 2009.

The default judgment had already been entered on December 12, 2008. The Defendant claims that the delay in answering the Summons and Complaint was not willful or deliberate nor was it extensive and the Defendant acted quickly to fix the situation once it was discovered.

The Plaintiff’s counsel opposes the motion and argues that the Defendant fails to provide a reasonable excuse for the default. The Plaintiff’s counsel argues that the Defendant has failed to substantiate its allegations and that same are “vague and unsubstantiated” explanations which do not rise to the level of reasonable excuse. The Plaintiff’s counsel cites Stoltz v. Playquest Theater Company, 257 AD2d 758, 683 NYS2d 339 (3d Dept. 1999) to support his argument that the Defendant’s failure to understand the need to respond in a timely fashion to the summons and complaint did not constitute excusable neglect. Such reliance is misguided as the facts in the Stoltz matter are distinguishable from the facts in the instant case. In Stoltz, the defendant sought legal advise upon being served with the summons and chose not to respond. Additionally, the Defendant in Stoltz did not attempt to vacate the default until collection proceedings were undertaken more than a year after entry of the default and the defendant ceased operations and vacated its business premises.

The Plaintiff’s counsel further relies on Harcztark v. Drive Variety, Inc., 21 AD3d 876, 800 NYS2d 613 (2d Dept. 2005), specifically stating in his Affirmation, dated February 17, 2009, that the Court refused to vacate a default of two months based upon “insurance company delay”. He further cites Harcztark quoting the Appellate Court as ruling, “This excuse has been rejected in this court time and again”. The Plaintiff’s counsel has misrepresented the ruling of the majority in the Harcztark matter. The Court in Harcztark rejected the premise that delay by an insurance company may never constitute all or part of a reasonable excuse by and insured for a default. The Court went on to say that determining whether there is a reasonable excuse for a default is a discretionary, sui generis determination to be made by the court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits. (id at 877).

In order to vacate a default, the defaulting party must demonstrate that they had a reasonable excuse for the delay, that they have provided a meritorious defense, that the default was not willful, and that the plaintiff will not be prejudiced. Lichtman v. Sears, Roebuck & Co., 236 AD2d 373, 653 NYS2d 25 (2d Dept. 1997). A default by a defendant should be vacated where there is “minimal prejudice caused by the defendant’s short delay in answering, as well as the public policy in favor of resolving the cases on the merits.” Classie v. Stratton Oakmont, Inc., 236 AD2d 505, 653 NYS2d 377 (2d Dep’t 1997). Furthermore, “it is within the sound discretion of the Court to determine whether the proffered excuse and the statement of the merits are sufficient.” Navarro v. A. Trenkman Estate, Inc., 279 AD2d 257 719 NYS2d 34 (1st Dept. 2001) citing Mediavilla v. Gurman, 272 AD2d 146, 707 NYS2d 432 (1st Dept. 2001). The court also has discretion to consider whether the defendant acted promptly in curing the default without delay or prejudice to the [*3]plaintiff. Statewide Ins. Co. v. Bradham, 301 AD2d 606, 753 NYS2d 861, (2d Dept. 2003) citing Matter of Statewide Ins. Co. v. Bradham, 301 AD2d 606, 753 NYS2d 861 (2d Dept. 2003).

The Plaintiff’s counsel argues that the Defendant has failed to submit an affidavit of merit which demonstrates a meritorious defense to the action. Plaintiff’s counsel argues that the Defendant’s attorney does not have personal knowledge of the facts and the submission of her affirmation alone is insufficient to vacate a default judgment. In response to this argument, the Defendant’s counsel points out that an attorney’s affirmation can be submitted in lieu of an affidavit of merit if all the material allegations of the pleading are within the attorney’s personal knowledge. Additionally, the Defendant’s attorney further points out that her affirmation is supported by the affidavit of Charles Jaekle, who has personal knowledge of the facts. The Defendant’s attorney also alleges that she has personal knowledge that the Plaintiff’s assignor is not covered under the subject insurance policy based on the subject insurance policy itself.

In support of the requirement that there be a meritorious defense, the Defendant argues that the Plaintiff’s assignor was not covered by the Defendant’s insurance policy and that there exists no contractual relationship between the Plaintiff and the Defendant and that the Defendant has no obligation to pay the Plaintiff’s claims. The Defendant’s attorney asserts that the vehicle the Plaintiff’s assignor was driving on the date of the accident, a 2005 Ford, was not a covered vehicle under the subject policy. The Defendant’s attorney asserts that the subject policy covers a 1999 Nissan Maxima and a 1997 Acura. Additionally, the Defendant’s attorney asserts that the insurance policy issued to the Plaintiff’s assignor’s grandmother, Esther Harris, lists her address as 36 Peter Way, Kiamesha, New York whereas the police report for the accident involving Jamel Harris lists his address as 1120 Clay Avenue, Apt. 4A, Bronx, New York. As such, the Defendant’s attorney asserts that the Plaintiff’s assignor did not reside in the insured’s household and is not an “eligible injured person” under the policy.

The Plaintiff’s attorney argues that the defense to the action that the Defendant raises is precluded due to Allstate’s failure to have issued a Denial of Claim. In response to this argument, the Defendant’s attorney asserts that the insurer’s failure to timely disclaim coverage does not preclude it from later denying liability on the ground that the insurance agreement itself does not cover the particular automobile or person. In support of this proposition, the Defendant’s counsel cites Zappone v. Home Ins. Co., 55 NY2d 131, 138 (1982). Additionally, the Defendant’s counsel points out that at no time did the Defendant ever admit that it provided coverage for the subject vehicle. The affirmation submitted by the Defendant’s counsel, dated January 26, 2009, in support of the Order to Show Cause specifically states in paragraphs 14 and 15 that the Plaintiff’s assignor drove a 2005 Ford and that the policy insured a 1999 Nissan Maxima and a 1997 Acura. The Defendant’s counsel argues that the Plaintiff has failed to put forth any evidence to show that the Plaintiff’s assignor was an eligible injured person covered under the subject policy.

This Court, in its discretion, accepts the Defendant’s explanation for the delay incurred in answering the Summons and Complaint in this matter as an excusable delay. Additionally, the Defendant has provided a meritorious defense and sufficient evidence that the default was not willful. The delay was short and the Plaintiff will not be prejudiced by allowing the Defendant to interpose an answer.

Accordingly, the Defendant’s motion to vacate the default judgment is GRANTED. The Defendant’s proposed answer is deemed served and the preliminary conference in this matter shall be held on April 21, 2009 at 9:30 a.m. at the courthouse lower level.

This decision constitutes the order of the court. [*4]

DATED:Mineola, New York

March 25, 2009

______________________________

Hon. Randy Sue Marber, J.S.C.

[*1]

Supreme Court, Nassau County, March 23, 2009

APPEARANCES OF COUNSEL

Picciano & Scahill, P.C., Westbury (Jason Tenenbaum of counsel), for Interboro Mutual Indemnity Insurance Company. New York Liquidation Bureau, New York City (James E. d’Auguste, Andrew J. Lorin and Judy H. Kim of counsel), for Superintendent of Insurance of the State of New York. Ariel Aminov, PLLC, Forest Hills, for Grand Central Medical, P.C.

{**24 Misc 3d at 1003} OPINION OF THE COURT

Edward W. McCarty, III, J. [*2]

{**24 Misc 3d at 1004}Motion by order to show cause by Interboro Insurance Company for: (1) an order pursuant to CPLR 2221 (a) (1) and (e) granting leave to renew the order of this court, dated February 1, 2007, and upon renewal, modifying said order by: (a) adding a tenth decretal paragraph decreeing: “No-fault interest shall not apply to claims that were submitted to Interboro Mutual Indemnity Insurance Company and to the New York State Liquidation Bureau as Rehabilitator prior to February 1, 2007, the date Interboro Mutual Indemnity Insurance Company exited rehabilitation”; (b) adding an eleventh decretal paragraph decreeing: “The failure to transmit timely or valid denials, as set forth in Insurance Law [§ ] 5106 (a) and 11 NYCRR 65-3.8 shall not apply to claims received or adjusted between April 4 [sic], 2004 and February 1, 2007″; and (c) adding a twelfth decretal paragraph decreeing: “All actions or arbitrations brought against Interboro Mutual Indemnity Insurance Company during the period of rehabilitation, commencing from April 4 [sic], 2004 and terminating on February 1, 2007 shall be dismissed as violating the stay order that was in effect prior to Interboro Mutual Indemnity Insurance Company’s exiting rehabilitation”; (2) an order compelling Grand Central Medical, P.C. to be named as a necessary party for the limited purpose of contesting the issue raised herein as to whether a no-fault penalty rate interest should be assessed against claims adjusted prior to Interboro Mutual Indemnity Insurance Company’s exiting rehabilitation; and (3) such other and further relief as this court deems just and proper, is granted, to the extent set forth herein.

On April 6, 2004, Interboro Mutual Indemnity Insurance Company was placed in rehabilitation and the New York State Superintendent of Insurance was appointed as rehabilitator, pursuant to article 74 of the Insurance Law. A plan of rehabilitation was adopted and approved by this court in an order dated February 1, 2007 and the rehabilitation terminated with the emergence of Interboro Insurance Company. The plan of rehabilitation approved by this court provided for certain payments to creditors during the claims administration period in full satisfaction of their claims. No provision for the payment of interest to any claimant was included in the plan of rehabilitation.

In 2007, subsequent to Interboro’s emergence from rehabilitation, Grand Central commenced an action in Civil Court, Queens County, against Interboro to recover no-fault medical payments. The payments at issue were due in 1999. Denials were not timely made, and, as a result, Grand Central seeks{**24 Misc 3d at 1005} interest from the time payments were due in 1999, pursuant to Insurance Law § 5106 (a).

Payment of no-fault interest to Grand Central for the period preceding and during the rehabilitation period would be inconsistent with the terms of the plan of rehabilitation, the policies and practice of the Superintendent of Insurance, and the purpose of Insurance Law § 5106 (a) in prohibiting any reward to a dilatory insurance company.

This application was properly brought to modify this court’s February 1, 2007 order, to clarify that interest is not available on claims due before or during the rehabilitation period. [*3]Moreover, Grand Central was properly made a party hereto for the limited purpose of clarifying this issue.

So much of Interboro’s motion as seeks to add a decretal paragraph that no-fault interest shall not apply to claims submitted to Interboro prior to February 1, 2007 is granted.

So much of Interboro’s motion as seeks to add a decretal paragraph that the failure to transmit denials shall not apply to claims received or adjusted during the rehabilitation period is also granted.

It should be noted that Interboro has withdrawn so much of its motion as seeks to dismiss all actions or arbitrations brought against it during the rehabilitation period.

Submit amended order, with notice of settlement.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Rhonda E. Fischer, J.), dated March 27, 2008. The order denied plaintiffs’ motion for summary judgment.

Order modified by providing that plaintiffs’ motion is granted insofar as it seeks summary judgment upon the claims submitted by Gentle Care Acupuncture, P.C. seeking to recover the sums of $1,045, $1,500, $1,375, $1,090, $350.56 and $250, and the claims submitted by Craigg Total Health Family Chiropractic Care, P.C. seeking to recover the sums of $88.44, $370.70, $404.40, $235.90, $269.60 and $67.40, and matter remanded to the District Court for the calculation of statutory interest and attorney’s fees thereon, and for all further proceedings on the remaining claims; as so modified, affirmed without costs.

In this action by providers to recover assigned first-party no-fault benefits, defendant served plaintiffs with various discovery demands. Thereafter, plaintiffs moved for summary judgment. In opposition, defendant argued that plaintiff RLC Medical, P.C. (RLC) was not entitled to summary judgment since RLC had failed to respond to defendant’s discovery demands which sought information as to whether RLC was ineligible for reimbursement of no-fault benefits because it was a fraudulently incorporated medical provider. Defendant also asserted that the billing submitted by plaintiffs Gentle Care Acupuncture, P.C. (Gentle Care) and Craigg Total Health Family Chiropractic Care, P.C. (Craigg) contained material misrepresentations regarding the services rendered to the assignor. The District Court denied plaintiffs’ motion, holding that defendant established that plaintiffs’ motion was premature because there was [*2]outstanding discovery and that, in any event, defendant raised issues of fact as to whether plaintiff RLC was ineligible for reimbursement of no-fault benefits. This appeal by plaintiffs ensued.

Plaintiffs established their prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). We note that the affidavit submitted by plaintiffs’ billing manager demonstrated that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]).

In opposition to plaintiffs’ motion, defendant established that while facts may exist that are essential to justify denial of the branch of the summary judgment motion seeking to recover upon claims submitted by RLC, defendant was unable to set forth sufficient facts to establish the defense of fraudulent incorporation (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) since such information was within RLC’s possession and RLC had not complied with defendant’s discovery demands therefor (see CPLR 3212 [f]). Consequently, the District Court properly denied the branch of the motion for summary judgment upon the claims submitted by RLC (see id.; Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 15 Misc 3d 110 [App Term, 2d & 11th Jud Dists 2007]; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58 [App Term, 2d & 11th Jud Dists 2006]).

However, defendant failed to demonstrate the existence of an issue of fact with regard to claims from Gentle Care, in the amounts of $1,045, $1,500, $1,375, $1,090 and $250, and claims from Craigg, in the amounts of $88.44, $370.70, $404.40, $235.90 and $67.40. Defendant denied said claims on the ground that the “injured person” failed to attend scheduled examinations under oath (EUOs). However, defendant’s opposition papers allege that plaintiffs’ assignor appeared at the EUO. Consequently, since defendant’s stated reason for the denials of said claims is not supported by the record, defendant failed to raise a triable issue of fact with respect thereto.

Defendant denied Craigg’s $269.60 claim based upon the assignor’s EUO testimony. Since the purported EUO transcript annexed to defendant’s opposition papers is not in admissible form, we decline to consider it. Accordingly, Craigg was entitled to summary judgment upon said claim.

With regard to the $350.56 claim from Gentle Care, defendant denied it on the basis of Gentle Care’s failure to establish a prima facie case of medical necessity. However, defendant’s opposing papers did not contain any support for such defense (see Amaze Med. Supply, 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U]). Accordingly, Gentle Care was entitled to summary judgment upon said claim.

In light of the foregoing, we do not reach plaintiffs’ remaining contentions.

Accordingly, the order is modified by providing that plaintiffs’ motion for summary judgment is granted to the extent of granting Gentle Care summary judgment on its claims [*3]seeking to recover the sums of $1,045, $1,500, $1,375, $1,090, $350.56 and $250, and granting Craigg summary judgment on its claims seeking to recover the sums of $88.44, $370.70, $404.40, $235.90, $269.60 and $67.40, the matter is remanded to the District Court for the calculation of statutory interest and attorney’s fees thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.

Tanenbaum, J.P., Molia and LaCava, JJ., concur.
Decision Date: March 19, 2009

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Rhonda E. Fischer, J.), entered April 14, 2008. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed plaintiff’s motion, arguing that it had a founded belief that the subject incident was a staged loss. District Court denied plaintiff’s motion, finding that plaintiff failed to prove its prima facie entitlement to summary judgment because, inter alia, the supporting affidavit did not lay a proper foundation for the admissibility of plaintiff’s business records. The instant appeal by plaintiff ensued.

Plaintiff established its prima facie entitlement to summary judgment by proving submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). We note that the affidavit submitted by plaintiff established that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]).

In opposition to plaintiff’s motion, defendant asserted that the alleged injuries did not arise out of an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005]). We find that defendant’s submissions were sufficient to demonstrate that defendant possessed a “founded belief that the [*2]alleged injur[ies] do[] not arise out of an insured incident” (see Central Gen. Hosp., 90 NY2d at 199). Accordingly, the order denying plaintiff’s motion for summary judgment is affirmed, albeit on other grounds.

Tanenbaum, J.P., Molia and LaCava, JJ., concur.
Decision Date: March 19, 2009

Supreme Court, Nassau County

15212/08

TO:Joseph Henig, PC

Attorneys for Plaintiffs

1598 Bellmore Avnue

Bellmore, NY 11710

Jaffe & Koumourdas, LLP

Attorneys for Defendant

40 Wall Street, 12th Floor

New York, NY 10005

William R. LaMarca, J.

Relief Requested

Plaintiffs, THE NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS a/a/o TOPAZ CASTRO (hereinafter referred to as “NYU QUEENS”), and ST. VINCENT’S HOSPITAL & MEDICAL CENTER a/a/o RONNY MUNOZ (hereinafter referred to as “ST. VINCENT’S”), move for an order, pursuant to CPLR §3212, granting them summary judgment on the first and second cause of action against defendant, COUNTRYWIDE INSURANCE COMPANY (hereinafter referred to as “COUNTRYWIDE”), on the ground that COUNTRYWIDE has failed to make timely payment on the claims submitted under the subject policy of insurance and that plaintiffs are entitled to interest and attorneys fees because of the delay in payment. COUNTRYWIDE opposes the motion and cross-moves for summary judgment dismissing the complaint on the ground that the claims are premature and that plaintiffs fail to state a cause of action. The motion and cross-motion are determined as follows:

This matter arises out of the alleged failure of COUNTRYWIDE to pay two (2) separate no-fault billings and counsel for plaintiffs states that the actions are joined pursuant to CPLR §1002(a) as the claims arise out of a uniform contract of insurance and involve the interpretation of the same no-fault provisions of the Insurance Law, citing [*2]Hempstead General Hospital v Liberty Mutual Insurance Company, 134 AD2d 569, 521 NYS2d 469 (2nd Dept. 1987).

The Statute

11 NYCRR, Part 65, the regulations implementing the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault Law, provides that “No- Fault Benefits are overdue if not paid within 30 calendar days after the insurer receives proof of Claim…”. (11 NYCRR 65-3.8[a][1]). Within thirty (30) days of receiving a claim, the insurer is required to either pay or deny the claim in whole or in part (see, Insurance Law §5106[a]; 11 NYCRR 65-3.8 [c]). However, this thirty (30) day period may be extended by a timely demand by the insurance company for further verification of a claim (see, 11 NYCRR 65-3.5). Within 10 business days after receipt of the completed application for no fault benefits, the insurer must forward, to the parties required to complete them, the prescribed verification forms it will require prior to payment of the initial claim (see, 11 NYCRR 65-3.5[a]). If the demanded verification is not received within thirty (30) days, the insurance company must follow up within ten (10) calendar days of the claimant’s failure to respond, either by telephone call or mail (see, 11 NYCRR § 65-3.6[b]); New York Hospital Medical Center of Queens v State Farm Mutual Automobile Insurance Company, 293 AD2d 588, 741 NYS2d 86 [2nd Dept. 2002]). As a complete proof of claim is a prerequisite to receiving no-fault benefits, a claim need not be paid or denied until all demanded verification is provided (see, 11 NYCRR 65-3.5[c]; Montefiore Medical Center v New York Central Mutual Fire Insurance Company, 9 AD3d 354, 780 NYS2d 161 (2nd Dept. 2004); New York & Presbyterian Hospital v American Transit Insurance Co., 287 AD2d 699, 733 NYS2d 80 (2nd Dept. 2001); Hospital for Joint Diseases v Elrac, Inc., 11 AD3d 432, 783 NYS2d 612 (2nd Dept. 2004). Statutory interest and attorneys fees may be directed If payment is not timely made on a completed claim. See, Insurance Law § 5106(a), 11 NYCRR §65-3.9 and §3.10.

In viewing motions for summary judgment, it is well settled that summary judgment is a drastic remedy which may only be granted where there is no clear triable issue of fact (see, Andre v Pomeroy, 35 NY2d 361, 362 NYS2d 131, 320 NE2d 853 [C.A. 1974]; Mosheyev v Pilevsky, 283 AD2d 469, 725 NYS2d 206 [2nd Dept. 2001]. Indeed, “[e]ven the color of a triable issue, forecloses the remedy” Rudnitsky v Robbins, 191 AD2d 488, 594 NYS2d 354 [2nd Dept. 1993]). Moreover “[i]t is axiomatic that summary judgment requires issue finding rather than issue-determination and that resolution of issues of credibility is not appropriate” (Greco v Posillico, 290 AD2d 532, 736 NYS2d 418 [2nd Dept. 2002]; Judice v DeAngelo, 272 AD2d 583, 709 NYS2d 817 [2nd Dept. 2000]; see also S.J. Capelin Associates, Inc. v Globe Mfg. Corp., 34 NY2d 338, 357 NYS2d 478, 313 NE2d 776 [C.A.1974]). Further, on a motion for summary judgment, the submissions of the opposing party’s pleadings must be accepted as true (see Glover v City of New York, 298 AD2d 428, 748 NYS2d 393 [2nd Dept. 2002]). As is often stated, the facts must be viewed in a light most favorable to the non-moving party. (See, Mosheyev v Pilevsky, supra ). The burden on the moving party for summary judgment is to demonstrate a prima facie entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issue of fact (Ayotte v Gervasio, 81 NY2d 1062, 601 NYS2d 463, 619 NE2d 400 [C.A.1993]; Winegrad v New York University Medical Center, 64 NY2d 851, 487 [*3]NYS2d 316, 476 NE2d 642 [C.A. 1985]; Drago v King, 283 AD2d 603, 725 NYS2d 859 [2nd Dept. 2001]). If the initial burden is met, the burden then shifts to the non-moving party to come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. (CPLR§ 3212, subd [b]; see also GTF Marketing, Inc. v Colonial Aluminum Sales, Inc., 66 NY2d 965, 498 NYS2d 786, 489 NE2d 755 [C.A. 1985]; Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595, 404 NE2d 718 [C.A. 1980]). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. (Mgrditchian v Donato, 141 AD2d 513, 529 NYS2d 134 [2nd Dept. 1988]).

First Cause of Action: TOPAZ CASTRO

Plaintiff, NYU QUEENS, is the assignee for health services rendered to TOPAZ CASTRO during the period from March 3, 2008 through March 5, 2008, arising out of an automobile accident that occurred on March 3, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on April 17, 2008, in the sum of $4,188.25, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on April 18, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on April 18, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. It appears that, on May 15, 2008, COUNTRYWIDE issued verification requests that sought the completed NF-2, question #

20, on the revised form, the NF-5 on the revised form, signed, no stamps, and the assignment of benefits on the revised form, which were requested again on June 14, 2008 A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, it is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Finally, plaintiff states that a copy of the signed assignment of benefits was faxed to COUNTRYWIDE on May 29, 2008, and this action was commenced on August 18, 2008, when the claim was overdue and unpaid.

After a careful reading of the submissions herein, it is the judgment of the Court that NYU QUEENS established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay [*4]the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for NYU QUEENS that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Second Cause of Action: RONNY MUNOZ

Plaintiff, ST. VINCENT’S, is the assignee for health services rendered to RONNY MUNOZ, during the period from April 29, 2008 through May 1, 2008, arising out of an automobile accident that occurred on April 29, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on June 12, 2008, in the sum of $10,508.72, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on June 16, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on June 16, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. COUNTRYWIDE claims that, on July 16, 2008, it sent a verification request for the NF-5 on the revised form, the assignment of benefits on the revised form and the “in linear calculation sheet”. It is claimed that, when the plaintiff failed to respond, on August 15, 2008, is issued a second verification request. A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form [*5]that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Moreover, counsel for plaintiff argues that COUNTRYWIDE’s verification requests are defective because the verification requests are untimely. Counsel contends that although the bill was received on June 16, 2008, COUNTRYWIDE’s verification requests are dated July 16, 2008 and August 15, 2008, respectively, and are both beyond the statutory deadlines. 11 NYCRR §63-3.5(b), §65-3.6(b).

After a careful reading of the submissions herein, it is the judgment of the Court that ST. VINCENT’S established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for ST. VINCENT’S that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Conclusion

Based on the foregoing, it is hereby

ORDERED, that plaintiff’s motion for summary judgment on the first and second causes of action is granted; and it is further

ORDERED, that defendant’s cross-motion for summary judgment on the first and second causes of action is denied.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court. Settle Judgment on Notice.

Dated: March 17, 2009 [*6]

_________________________

WILLIAM R. LaMARCA, J.S.C.

nyhospaaocastro,stvincentsaaomunoz,#

1,#

2/sumjudg

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Alice Fisher Rubin, J.), entered September 11, 2007, deemed from a judgment of the same court entered December 13, 2007 (see CPLR 5501 [c]). The judgment, entered pursuant to the September 11, 2007 order denying defendant’s motion to dismiss the complaint pursuant to CPLR 3126 and granting plaintiff’s cross motion for summary judgment, awarded plaintiff the principal sum of $612.69.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, insofar as is relevant to this appeal, plaintiff moved for summary judgment. Defendant opposed the motion, arguing that the alleged injuries did not arise from an insured incident and that the assignor failed to comply with a condition precedent to coverage. The Civil Court granted plaintiff’s motion, holding that defendant did not plead fraud with the requisite particularity and that it did not establish a founded belief that the accident at issue was intentional. The instant appeal ensued. A judgment was subsequently entered (see CPLR 5501 [c]).

In its answer, defendant asserted, as an affirmative defense, that “the accident that is alleged in plaintiff’s complaint was not an accident, but a staged, intentional act, for which there is no insurance coverage.” We need not determine whether this affirmative defense, which has been treated as a lack of coverage defense (see Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2005]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]; see also Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), is, for the purpose of CPLR 3016 (b), based upon fraud, such that the rule’s pleading requirements are triggered, since, in any event, the defense was stated with particularity. To the extent that defendant’s [*2]conclusory allegations of “illegal and/or fraudulent conduct,” and “material misrepresentations [made] in the presentation of the claim,” may have applied to circumstances other than its staged accident defense, defendant failed to meet the pleading requirements of CPLR 3016 (b) or to raise such defenses in opposition to plaintiff’s motion for summary judgment (see First Trust Natl. Assn. v DeLuca, 284 AD2d 494 [2001]).

In view of the foregoing, in order to successfully oppose plaintiff’s motion, defendant was required to establish “the fact or founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005]). Mere “unsubstantiated assertions or speculations” are insufficient (Alvarez v Prospect Hosp., 68 NY2d 320, 327 [1986]). The affidavit submitted by defendant’s investigator, the testimony given by plaintiff’s assignor and the driver during their examinations under oath, and the unsworn statement of the adverse driver submitted by defendant were insufficient to establish a founded belief that the alleged injuries did not arise out of a covered accident (see Central Gen. Hosp., 90 NY2d 195).

Defendant argues that plaintiff’s assignor failed to provide his personal income tax returns, which defendant claims to have requested in order to substantiate the assignor’s alleged lost wages claim, and thus failed to comply with a condition precedent to coverage. We need not determine whether plaintiff’s assignor failed to comply with a condition precedent since, in light of the “confidential and private nature” of an individual’s income tax returns (see Walter Karl, Inc. v Wood, 161 AD2d 704 [1990]), which contain information far broader than that sought by defendant, defendant failed to make a sufficient showing of special circumstances to warrant their production (see Dore v Allstate Indem. Co., 264 AD2d 804 [1999]), especially given the fact that the information sought could have been obtained through other, more focused, means.

Accordingly, the judgment is affirmed.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: March 17, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Alice Fisher Rubin, J.), entered July 9, 2007. The order granted defendant’s motion for summary judgment dismissing the complaint.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment, asserting, inter alia, that the services rendered were not medically necessary. In opposition, plaintiff argued, inter alia, that defendant failed to make a prima facie showing that the services at issue were not medically necessary. The Civil Court granted defendant’s motion for summary judgment dismissing the complaint, holding that defendant established a lack of medical necessity and that defendant’s denial of claim form interposing said defense was timely. The instant appeal by plaintiff ensued.

Contrary to plaintiff’s contention, defendant demonstrated that it timely mailed the denial of claim form at issue based upon its standard office practice or procedure designed to ensure that items are properly addressed and mailed (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 18 [App Term, 2d & 11th Jud Dists 2007]). Defendant’s affirmed peer review report and the affidavit of its peer review acupuncturist established prima facie that there was no medical necessity for the services provided by plaintiff. We note that as some of the medical reports relied upon by defendant’s acupuncturist in his peer review report were prepared by plaintiff, plaintiff could not challenge the reliability of its own medical records and reports (see Cross Cont. Med., P.C. v Allstate Ins. Co., 13 Misc 3d 10 [App Term, 1st Dept 2006]; see also Home [*2]Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139[A], 2007 NY Slip Op 50302[U] [App Term, 1st Dept 2007]). Furthermore, since it has been held that an “expert witness’s testimony of reliance upon out-of-court material to form an opinion may be received in evidence, provided there is proof of reliability” (Wagman v Bradshaw, 292 AD2d 84, 85-86 [2002]), the fact that defendant’s peer reviewer relied upon medical reports from other medical providers in forming his opinion as to the medical necessity of the service performed does not render the peer review report insufficient to establish a lack of medical necessity. Inasmuch as plaintiff failed to rebut said showing, defendant was entitled to summary judgment dismissing the complaint (see A Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Plaintiff’s remaining contention lacks merit.

Weston Patterson, J.P., Golia and Steinhardt, JJ., concur.
Decision Date: March 17, 2009